Do government R&D subsidies cultivate enterprises' voluntary national/industry standard-setting for sustainable development?

Abstract

This study investigates the effects of government subsidies for R&D on resource and environmental enterprises' voluntary national/industry standard- (N/IS-) setting, which is critical to sustainable development. Based on innovation motivation and capability theory, we propose a research framework and hypothesis, using a panel dataset on 11,556 Chinese resource and environmental enterprises from 2011 to 2013 to test our hypotheses. We find that government subsidies for R&D have a U-shaped relationship with N/IS-setting for sustainable development. Moreover, we also find that state ownership, position in industry, and patent properties are contingency factors suggesting that non-state-owned enterprises, industry-following enterprises, or enterprises with more patents come up with N/IS-settings of significantly greater value than state-owned enterprises, leading enterprises, or enterprises with fewer patents. Endogeneity issues are addressed by utilizing two-stage estimations with instrumental variables (IVs).