The impacts of government R&D expenditure on innovation in chinese provinces: what's the role of corruption

Abstract

We investigate the moderating role of corruption on the effect of government research and development (R&D) expenditure on enterprise innovation in China, using annual data from 2002 to 2013 in a panel of 30 provinces. Our findings show that R&D expenditure does not influence the number of patent applications, but it does influence the number of patents granted. When considering official corruption, the interaction term of R&D expenditure and corruption has a statistically significantly positive effect on the numbers of patent applications and patents granted, with corruption having significantly positive effects on the ratio of the number of patents granted to the number of patent applications.