Do government grants promote innovation efficiency in China's high-tech industries?

J. Hong, B. Feng, Yanrui Wu, L. Wang

Research output: Contribution to journalArticlepeer-review

213 Citations (Scopus)


© 2016 Elsevier LtdDespite extensive discussion about the important role of government in enterprise development, the function of government grants in the innovation activities of high-technology (high-tech) industries is still unclear. In this paper, the stochastic frontier model and a unique panel data set of 17 high-tech industries in China spanning the 2001–2011 period are applied to explore how government grants affect the innovation performance of these industries. Results indicate that the innovation efficiency of high-tech industries rapidly improved in the past decade. However, it is found that government grants exert a negative influence on innovation efficiency of high-tech industries. However, the impact of private R&D funding is significant and positive. Furthermore, when the high-tech industries are grouped into five sub-industries, the results show that government grants had different effects on the innovation in each sub-industry.
Original languageEnglish
Pages (from-to)4-13
Number of pages10
Publication statusPublished - 1 Nov 2016


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