Comments by Quoc Huy Vu,  on R&D Performance in High-Tech Firms in China

Quoc Huy Vu: The paper uses a data set of 230 firms form the years 2008, 2009, and 2010 to analyze the effectiveness of R&D spending of high-tech firms in China. Using a panel regression model the authors reach the following main conclusions. First, the number of patent applications submitted by a firm depends on the amount of R&D it performs, showing that incentives given by the Chinese government to encourage R&D in the high-tech sector may work. Second, internal R&D results in more patent applications than does external R&D. Finally, ownership matters: State-owned enterprises (SOEs) are less efficient in terms of using resources for R&D activities than private and foreign-invested enterprises, especially those have a links with Hong Kong, Macau, and Taiwan (HMT). Implications are quite straightforward: According to the authors, privatization of high-tech firms and opening up the economy are crucial to promote industrial upgrading in China because...