Abstract
This paper explores the impact of political connection on the efficient use of government R&D subsidies to generate innovation outputs. Using a sample of Chinese listed companies from 2008-2017, we find that the association between government R&D subsidies and innovation outputs is significantly smaller for politically connected firms, suggesting that political connection is negatively associated with the efficiency of government R&D subsidies. We further find that the negative impact of political connection on the efficiency of government R&D subsidies is more severe when the political uncertainty is high. Our results are shown to be robust.
| Original language | English |
|---|---|
| Article number | 102953 |
| Number of pages | 9 |
| Journal | Finance Research Letters |
| Volume | 48 |
| DOIs | |
| Publication status | Published - Aug 2022 |
| Externally published | Yes |
Keywords
- Government R&D subsidies
- Innovation efficiency
- Political connection
ASJC Scopus subject areas
- Finance