Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/251919 
Year of Publication: 
2022
Series/Report no.: 
ZEW Discussion Papers No. 21-081
Version Description: 
This Version: April 2022
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
We investigate the misappropriation of R&D subsidies and evaluate its consequences for policy effectiveness. Using Chinese firm-level data for 2001-2011, we identify that 42% of grantees misused R&D subsidies, accounting for 53% of total R&D subsidies. Misappropriation leads to a substantial loss of the causal impact of R&D subsidies, as measured by the difference of the intention-to-treat effect and complier average causal effect. Results show that R&D expenditures could have been stimulated beyond the subsidy amount (additionality), but noncompliance has resulted in medium-level partial crowding out. Overall, misappropriation has reduced the effectiveness of China’s R&D policy by more than half.
Subjects: 
R&D subsidies
policy evaluation
misappropriation
China
JEL: 
O31
O38
C21
H21
Document Type: 
Working Paper

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