Maria Socorro Gochoco-Bautista, University of the Philippines: The aim of this paper is to assess the effect of national science and technology (S&T) programs on firms’ innovation investment, output, and efficiency performance using a sample of innovative firms in China from 2008 to 2011. The empirical work examines whether firms undertake incremental research and development (R&D) expenditure (input and output additionality) because of government subsidy and investigates the differential efficiency effects of government-funded R&D versus firm-funded R&D (Table 1). The selection of firms in China's national S&T programs depends on firms’ knowledge stock, knowledge infrastructure, and experience in undertaking or joining a program. State-owned enterprises (SOEs) still have a higher chance of participating in a national S&T program, while firm size has a U-shaped relationship with the possibility of being selected.
The paper finds that the effect of national S&T programs may be over-estimated in general. Before matching, input and...