Selective R&D subsidies and firms' application strategies. Issue 11 (25th June 2022)

• Record Type: Journal Article
• Authors: Sun, Yahui; Luo, Shougui
• Is Part Of: Applied economics letters. Volume 29:Issue 11(2022)
• Page Start: 979
• Page End: 982
• Publication Date: 2022-06-25
• Subjects: Selective R&D subsidy -- application strategy -- major innovation -- minor innovation; L53 -- O31 -- O38; Economics -- Periodicals; Economics, Mathematical -- Periodicals; 330
• DOI: 10.1080/13504851.2021.1904100
• Languages: English
• ISSNs: 1350-4851

Abstract

ABSTRACT: 'Picking-the-winners' selective R&D subsidies are provided to a few firms with high innovation capabilities. Thus, the applicants for subsidies might send misleading signals to stand out from others. This paper explores firms' application strategies and finds that firms tend to increase the quantity of their R&D outputs as a signal of being highly innovative, even at the expense of reducing innovation quality.