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The Empirical Evidence of the Effect on the Enterprises R&D from Government Subsidies, Political Connections and Rent-Seeking

  • Dongliang CaiEmail author
  • Zhen Yang
  • Wu Jiang
  • Qiuhua Xu
Conference paper
Part of the Lecture Notes on Multidisciplinary Industrial Engineering book series (LNMUINEN)

Abstract

This study investigates the impact of rent-seeking behavior, political connections, and government science and technology (S&T) subsidies on the research and development (R&D) of private listed enterprises. Based on empirical data of China’s private listed enterprises between 2008 and 2012, this paper performs validation at three levels and obtains suggestive conclusions. First of all, the purpose to obtain more S&T subsidies motivates private listed enterprises to take rent-seeking activities which can facilitate them in establishing political connections (PCs). Secondly, rent-seeking activities could eventually result in crowing-out effect of the R&D input, especially for the local PCs. Thirdly, the side effect of rent-seeking is more significant for enterprises located in provinces of high corruption levels, which weakens the availability of government S&T subsidies. The improper intervention of government distorts the market resources allocation.

Keywords

Rent-seeking Political connections Government subsidy Research and development 

Notes

Acknowledgements

This research was supported by the project of Research Center for System Sciences and Enterprise Development (Grant No. Xq16C03).

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Copyright information

© Springer International Publishing AG 2018

Authors and Affiliations

  1. 1.School of FinanceSouthwestern University of Finance and EconomicsChengduPeople’s Republic of China
  2. 2.Department of Finance, Hanqing Advanced Institute of Economics and FinanceRenmin University of ChinaBeijingPeople’s Republic of China

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