The Impact of Government R&D Support on SMEs Financial Growth: Evidence from China

Hongxing Peng; Yingmin Yu

doi:doi:10.11648/j.ijefm.20130105.11

| Peer-Reviewed

The Impact of Government R&D Support on SMEs Financial Growth: Evidence from China

Hongxing Peng, Yingmin Yu

Published in International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 5)

Received: 15 August 2013 Published: 20 September 2013

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

This paper investigates the impact of government R&D support on financial growth of SMEs, and analyzes the significant different supportive effect for the enterprises with different nature of control rights. We take 516 listed companies from the SMEs’ board on Shenzhen stock market as sample, using the data from 2006 to 2011 and implementing the method of Propensity Score Matching to relieve the sample selection bias. The empirical results indicate that: On the whole, government R&D support can effectively improve the financial growth of SMEs, and demonstrates an 1-2 year-lagged-effect; the property of enterprises’ ultimate controller also has extraordinary impact on R&D supportive effect, financial growth of non-state-holding companies which have accepted R&D support will turn out to be more significant improvement, while that of the state-controlled enterprises have not been significantly enhanced in the short-term, or even fared-worse than the matched samples.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 5)
DOI	10.11648/j.ijefm.20130105.11
Page(s)	205-214
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2013. Published by Science Publishing Group

Keywords

Government R&D Support, SMEs, Financial Growth, Propensity Score Matching

References

[1]	Arrow, J. K. (1962). "The Economic implications of learning by doing", The Review of Economic Studies, 29(3):pp.155-173.
[2]	Alecke B., T. Mitze. (2011). "Does Firm Size make a Difference? Analysing the Effectiveness of R&D Subsidies in East Germany", German Economic Review, 13(2): pp.174-195.
[3]	Boardman, C. M., W. Bartley and Richard L. Ratliff. (1981). "Small business growth characteristics", American Journal of Small Business, 5(3): pp.33-45.
[4]	Becchetti, L. and G. Trovato. (2002). "The determinants of growth for small and medium sized firms. The role of the availability of external finance", Small Business Economics, 19(4):pp.291-306.
[5]	Boubakri, N., J. Cosset and O. Guedhami. (2005). "Liberalization, corporate governance and the performance of newly privatized firms", Journal of Corporate Finance, 11: pp.767-790.
[6]	Becker, S., A. Ichino. (2002). "Estimation of Average Treatment Effects based on Propensity Scores", Stata Journal, 2(4): pp.358-377.
[7]	Corley, E. A. (2007). "A use-and-transformation model for evaluating public R&D: Illustrations from polycystic ovarian syndrome (PCOS) research", Evaluation and Program Planning, 30: pp.21-35.
[8]	Colombo, M.G., L. Grilli, S. Murtinu et al. (2009). "Effects of international R&D alliances on performance of high-tech start-ups: a longitudinal analysis", Strategic Entrepreneurship Journal, 3: pp.348-370.
[9]	Czarnitzki, D., G. Licht. (2006). "Additionality of public R&D grants in a transition economy: the case of Eastern Germany", Economics of Transition, 14: pp.101-131.
[10]	Czarnitzki D., P. Hanel and J. M. Rosa. (2011). "Evaluating the impact of R&D tax credits on innovation: A microeconometric study on Canadian ﬁrms", Research Policy, 40:pp.217-229.
[11]	Chen X., P. Hu. (2005). "The reason and impact of opportunism exist in innovation fund", Science of Science and Management of S.& T., 12:pp.98-101.陈旭东,胡萍.创新基金中存在机会主义行为的原因及影响[J].科学学与科学技术管理,2005(12):98-101.
[12]	Cerulli Giovanni and B. Potì. (2012). "Evaluating the Robustness of the Effectiveness of Public Subsidies on Firms’ R&D: an Application to Italy", Journal of Applied Economics, Vol XV (2):pp.287-320.
[13]	David M. B. and G. J. Stigler. (1957). "The Demand and Supply of Scientific Personnel", NBER Books, National Bureau of Economic Research, Inc, NEW YORK.
[14]	Dehejia, R. H. and S. Wahba. (2002). "Propensity Score-Matching Methods for Nonexperimental Causal Studies", Review of Economics and Statistics, 84 (1):pp.151-161.
[15]	Delmar F., P. Davidsson and W. B. Gartner. (2003). "Arriving at the high-growth firm", Journal of Business Venturing, 18(2):pp.189-216.
[16]	Foreman-Peck, J. (2012). "Effectiveness and efficiency of SME innovation policy", (unpublished) Available at IDEAS: http://ideas.repec.org/p/cdf/wpaper/2012-4.html
[17]	Goolsbee, A. (1998). "Does Government R&D Policy Mainly Benefit Scientists and Engineers?" NBER Working Paper No. 6532. (unpublished) Available from: http://www.nber.org/papers/w6532
[18]	Gelabert, L., A.Fosfuri, and J. A. Tribo. (2009). "Does the Effect of Public Support for R&D Depend on the Degree of Appropriability?" Journal of Industrial Economics, 57(4): pp.736-767.
[19]	Gu Y., L. Fang. (2006). "Studies on the problems of SME supporting policies system: an empirical analysis on Shanxi exprience", Enterprises Economy, 18:pp.82-89.顾颖, 房路生.中小企业支持政策体系问题研究:基于陕西省经验的实证分析[J].经济管理,2006(18):82-89.
[20]	Grilli, L. and S. Murtinu. (2012). "Government, Venture Capital and the Growth of European High-Tech Start-Ups: A Firm-Level Panel Data Analysis", (unpublished) Available at SSRN: http://ssrn.com/abstract=2066867
[21]	Hsu, F.-M., C.-C. Hsueh. (2009). "Measuring relative efficiency of government- sponsored R&D projects: A three-stage approach", Evaluation and Program Planning, 32:pp.178-186.
[22]	Herrera, L., Edna R. Bravo. Ibarra. (2010). "Distribution and effect of R&D subsidies: A comparative analysis according to firm size", Intangible Capital, 6(2):pp.272-299.
[23]	Konings, J. (1997). "Firm Growth and Ownership in Transition Countries", Economics Letters, 55: pp.414.
[24]	Kole, S., Mulherin, J.H. (1997). "The government as a shareholder: a case from the United States", Journal of Law and Economics, 40:pp.1-22.
[25]	Konings, J., S. Estrin, Z. Zolkiewski et al. (2002). "The Effect of Ownership and Competitive Pressure on Firm Performance in Transition Countries: Micro Evidence from Bulgaria, Romania and Poland",William Davidson Institute Working Paper No.434(unpublished).Available at SSRN: http://ssrn.com/abstract=307088 or http://dx.doi.org/10.2139/ssrn.307088
[26]	Klette, T. J., J. Moen, & Z. Griliches. (2000). "Do Subsidies to Commercial R&D Reduce Market Failures? Microeconometric Evaluation Studies", Research Policy, 29(4-5):pp.471-495.
[27]	Lerner, J. (2002). "When bureaucrats meet entrepreneurs: The design of effective ‘public venture capital’ programmes", The Economic Journal, 112: pp.73-84.
[28]	Lian Y., Z. Su and Y. Gu. (2011). "Evaluating the effects of equity incentives using PSM: evidence from China", Frontiers of Business Research in China, 5(2): pp.266-290.
[29]	Li H., H. Shao. (2012). "The more Government R&D subsidies, the better? A comparative study based on ownership", Productivity Research, 7:pp.5-9.李泓桥,邵海静. 政府给予企业研发补贴越多越好吗? :基于所有制的比较研究[J].生产力研究,2012(7):5-9.
[30]	Marcus, N. and P. Howard. (2003). "Industrial Policy in an Era of Globalization: Lessons from Asia", Institute for International Economics. Available from: http://bookstore.piie.com/book-store/358.html
[31]	Okeh U. M., I. E. Ogah, U. S. Okeh and A. Agwu. (2012). "The Use of Receiver Operating Characteristic (Roc) Analysis in the Evaluation of The Performance of Two Binary Diagnostic Tests of Gestational Diabetes Mellitus", International Journal of Asian Social Science, 2(1):pp.35-43.
[32]	Penrose, E. T. (1995). "The theory of the growth of the firm", Oxford: Oxford University press.
[33]	Rubin, D. B. (1977). "Assignment to treatment group on the basis of covariate", Journal of Educational Statistics, 2:pp.1-26.
[34]	Rosenbaum, P. R. and D. B. Rubin. (1983). "Assessing sensitivity to an unobserved binary covariate in an observationalStudy with binary outcome", Journal of the Royal Statistical Society, 45(2): pp.212-218.
[35]	Ruegg, R. and I. Feller. (2003). "A toolkit for evaluating public R&D investment models, methods, and findings from ATP’s first decade", Gaithersburg, MD: National Institute of Standards and Technology. NISTGCP 03-857.
[36]	Storey, D. J. (1994). "New firm growth and bank financing", Small Business Economics, 6:pp.139-150.
[37]	Stein, R. (2005). "The relationship between default prediction and lending profits: Integrating ROC analysis and loan pricing", Journal of Banking and Finance, 29(5):pp.1213-1236.
[38]	Tassey, G. (2004). "Policy Issues for R&D investment in a knowledge-based economy", Journal of Technology Transfer, 29(2): pp.153-185.
[39]	Wallsten, S. J. (2000). "The effects of government-industry R&D programs on private R&D: the case of the small business innovation research program", RAND Journal of Economics, 31:pp.82-100.
[40]	Xiao J. and L. Xu. (2007). "Proposed the policy of our government to support SMEs technological innovation", Literary Circles of Cpc History, 10:pp.54-55.肖居孝,徐腊梅.对我国政府支持中小企业技术创新的政策建议[J].党史文苑,2007(10):54-55.
[41]	Yuan H. and X. Chen. (2012). "China’s SME policy environment for the growth of SMEs: based on the 384 SMEs empirical data", Enterprises Economy, 2:pp.176-180.袁红林,陈小锋.我国中小企业政策与中小企业成长环境的相关性:基于384家中小企业的实证[J].公共管理,2012(2):176-180.
[42]	Zhu P., W. Xu. (2003). "The impact of government’s S&T incentive policy on the R&D input and its patent output of large and medium-sized industrial enterprises in Shanghai", Economic Research Journal, 6:pp.45-53.朱平芳,徐伟民.政府的科技激励政策对大中型工业企业R&D投入及其专利产出的影响:上海市的实证研究[J].经济研究,2003,(6):45-53.

Cite This Article

Plain Text BibTeX RIS

APA Style

Hongxing Peng, Yingmin Yu. (2013). The Impact of Government R&D Support on SMEs Financial Growth: Evidence from China. International Journal of Economics, Finance and Management Sciences, 1(5), 205-214. https://doi.org/10.11648/j.ijefm.20130105.11

Copy | Download

ACS Style

Hongxing Peng; Yingmin Yu. The Impact of Government R&D Support on SMEs Financial Growth: Evidence from China. Int. J. Econ. Finance Manag. Sci. 2013, 1(5), 205-214. doi: 10.11648/j.ijefm.20130105.11

Copy | Download

AMA Style

Hongxing Peng, Yingmin Yu. The Impact of Government R&D Support on SMEs Financial Growth: Evidence from China. Int J Econ Finance Manag Sci. 2013;1(5):205-214. doi: 10.11648/j.ijefm.20130105.11

Copy | Download

@article{10.11648/j.ijefm.20130105.11,
  author = {Hongxing Peng and Yingmin Yu},
  title = {The Impact of Government R&D Support on SMEs Financial Growth: Evidence from China},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {1},
  number = {5},
  pages = {205-214},
  doi = {10.11648/j.ijefm.20130105.11},
  url = {https://doi.org/10.11648/j.ijefm.20130105.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20130105.11},
  abstract = {This paper investigates the impact of government R&D support on financial growth of SMEs, and analyzes the significant different supportive effect for the enterprises with different nature of control rights. We take 516 listed companies from the SMEs’ board on Shenzhen stock market as sample, using the data from 2006 to 2011 and implementing the method of Propensity Score Matching to relieve the sample selection bias. The empirical results indicate that: On the whole, government R&D support can effectively improve the financial growth of SMEs, and demonstrates an 1-2 year-lagged-effect; the property of enterprises’ ultimate controller also has extraordinary impact on R&D supportive effect, financial growth of non-state-holding companies which have accepted R&D support will turn out to be more significant improvement, while that of the state-controlled enterprises have not been significantly enhanced in the short-term, or even fared-worse than the matched samples.},
 year = {2013}
}

Copy | Download

TY  - JOUR
T1  - The Impact of Government R&D Support on SMEs Financial Growth: Evidence from China
AU  - Hongxing Peng
AU  - Yingmin Yu
Y1  - 2013/09/20
PY  - 2013
N1  - https://doi.org/10.11648/j.ijefm.20130105.11
DO  - 10.11648/j.ijefm.20130105.11
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 205
EP  - 214
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20130105.11
AB  - This paper investigates the impact of government R&D support on financial growth of SMEs, and analyzes the significant different supportive effect for the enterprises with different nature of control rights. We take 516 listed companies from the SMEs’ board on Shenzhen stock market as sample, using the data from 2006 to 2011 and implementing the method of Propensity Score Matching to relieve the sample selection bias. The empirical results indicate that: On the whole, government R&D support can effectively improve the financial growth of SMEs, and demonstrates an 1-2 year-lagged-effect; the property of enterprises’ ultimate controller also has extraordinary impact on R&D supportive effect, financial growth of non-state-holding companies which have accepted R&D support will turn out to be more significant improvement, while that of the state-controlled enterprises have not been significantly enhanced in the short-term, or even fared-worse than the matched samples.
VL  - 1
IS  - 5
ER  -

Copy | Download

Author Information

Hongxing Peng

School of Accountancy, Central University of Finance and Economics, Beijing, China
Yingmin Yu

School of Accountancy, Central University of Finance and Economics, Beijing, China

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Hongxing Peng, Yingmin Yu. (2013). The Impact of Government R&D Support on SMEs Financial Growth: Evidence from China. International Journal of Economics, Finance and Management Sciences, 1(5), 205-214. https://doi.org/10.11648/j.ijefm.20130105.11

Copy | Download

ACS Style

Hongxing Peng; Yingmin Yu. The Impact of Government R&D Support on SMEs Financial Growth: Evidence from China. Int. J. Econ. Finance Manag. Sci. 2013, 1(5), 205-214. doi: 10.11648/j.ijefm.20130105.11

Copy | Download

AMA Style

Hongxing Peng, Yingmin Yu. The Impact of Government R&D Support on SMEs Financial Growth: Evidence from China. Int J Econ Finance Manag Sci. 2013;1(5):205-214. doi: 10.11648/j.ijefm.20130105.11

Copy | Download

@article{10.11648/j.ijefm.20130105.11,
  author = {Hongxing Peng and Yingmin Yu},
  title = {The Impact of Government R&D Support on SMEs Financial Growth: Evidence from China},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {1},
  number = {5},
  pages = {205-214},
  doi = {10.11648/j.ijefm.20130105.11},
  url = {https://doi.org/10.11648/j.ijefm.20130105.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20130105.11},
  abstract = {This paper investigates the impact of government R&D support on financial growth of SMEs, and analyzes the significant different supportive effect for the enterprises with different nature of control rights. We take 516 listed companies from the SMEs’ board on Shenzhen stock market as sample, using the data from 2006 to 2011 and implementing the method of Propensity Score Matching to relieve the sample selection bias. The empirical results indicate that: On the whole, government R&D support can effectively improve the financial growth of SMEs, and demonstrates an 1-2 year-lagged-effect; the property of enterprises’ ultimate controller also has extraordinary impact on R&D supportive effect, financial growth of non-state-holding companies which have accepted R&D support will turn out to be more significant improvement, while that of the state-controlled enterprises have not been significantly enhanced in the short-term, or even fared-worse than the matched samples.},
 year = {2013}
}

Copy | Download

TY  - JOUR
T1  - The Impact of Government R&D Support on SMEs Financial Growth: Evidence from China
AU  - Hongxing Peng
AU  - Yingmin Yu
Y1  - 2013/09/20
PY  - 2013
N1  - https://doi.org/10.11648/j.ijefm.20130105.11
DO  - 10.11648/j.ijefm.20130105.11
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 205
EP  - 214
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20130105.11
AB  - This paper investigates the impact of government R&D support on financial growth of SMEs, and analyzes the significant different supportive effect for the enterprises with different nature of control rights. We take 516 listed companies from the SMEs’ board on Shenzhen stock market as sample, using the data from 2006 to 2011 and implementing the method of Propensity Score Matching to relieve the sample selection bias. The empirical results indicate that: On the whole, government R&D support can effectively improve the financial growth of SMEs, and demonstrates an 1-2 year-lagged-effect; the property of enterprises’ ultimate controller also has extraordinary impact on R&D supportive effect, financial growth of non-state-holding companies which have accepted R&D support will turn out to be more significant improvement, while that of the state-controlled enterprises have not been significantly enhanced in the short-term, or even fared-worse than the matched samples.
VL  - 1
IS  - 5
ER  -

Copy | Download