Can government R&D expenditure promote innovation? New evidence from 37 OECD countries
This research employs a fixed effect model to empirically estimate panel data from 37 OECD countries spanning 2000 to 2021, revisiting the influence of government R&D expenditure on innovation within the theory of marginal diminishing effect. Results reveal a significant positive effect of gover...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Taylor & Francis
2024
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| Online Access: | http://psasir.upm.edu.my/id/eprint/118608/ http://psasir.upm.edu.my/id/eprint/118608/1/118608.pdf |
| _version_ | 1848867554440773632 |
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| author | Lee, Chin Yemin, Ding Fengchun, Yin Kun, Zhou |
| author_facet | Lee, Chin Yemin, Ding Fengchun, Yin Kun, Zhou |
| author_sort | Lee, Chin |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | This research employs a fixed effect model to empirically estimate panel data from 37 OECD countries spanning 2000 to 2021, revisiting the influence of government R&D expenditure on innovation within the theory of marginal diminishing effect. Results reveal a significant positive effect of government R&D expenditure on national innovation capacity, and this influence remains robust under robustness checks. Then, quantile regression uncovers a nuanced pattern, indicating that as a country’s innovation capacity strengthens, the stimulative effect of government R&D expenditure initially rises and subsequently declines. Additionally, incorporating lags of the independent variable at different periods affirms the time lag effect of government R&D expenditure on national innovation capacity. Deeper scrutiny using two fixed effect models including interaction terms reveals a multifaceted mechanism, where government R&D expenditure fosters innovation by promoting bank credit, yet simultaneously suppresses innovation by hindering non-governmental R&D intensity. Lastly, heterogeneity analysis affirms that government efficiency, democracy, ruling party ideology, political stability, and economic freedom moderate the link between government R&D expenditure and national innovation capacity. These insights offer new references for governments to promote innovation. |
| first_indexed | 2025-11-15T14:38:21Z |
| format | Article |
| id | upm-118608 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T14:38:21Z |
| publishDate | 2024 |
| publisher | Taylor & Francis |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-1186082025-07-18T03:25:54Z http://psasir.upm.edu.my/id/eprint/118608/ Can government R&D expenditure promote innovation? New evidence from 37 OECD countries Lee, Chin Yemin, Ding Fengchun, Yin Kun, Zhou This research employs a fixed effect model to empirically estimate panel data from 37 OECD countries spanning 2000 to 2021, revisiting the influence of government R&D expenditure on innovation within the theory of marginal diminishing effect. Results reveal a significant positive effect of government R&D expenditure on national innovation capacity, and this influence remains robust under robustness checks. Then, quantile regression uncovers a nuanced pattern, indicating that as a country’s innovation capacity strengthens, the stimulative effect of government R&D expenditure initially rises and subsequently declines. Additionally, incorporating lags of the independent variable at different periods affirms the time lag effect of government R&D expenditure on national innovation capacity. Deeper scrutiny using two fixed effect models including interaction terms reveals a multifaceted mechanism, where government R&D expenditure fosters innovation by promoting bank credit, yet simultaneously suppresses innovation by hindering non-governmental R&D intensity. Lastly, heterogeneity analysis affirms that government efficiency, democracy, ruling party ideology, political stability, and economic freedom moderate the link between government R&D expenditure and national innovation capacity. These insights offer new references for governments to promote innovation. Taylor & Francis 2024-10-23 Article PeerReviewed text en cc_by_4 http://psasir.upm.edu.my/id/eprint/118608/1/118608.pdf Lee, Chin and Yemin, Ding and Fengchun, Yin and Kun, Zhou (2024) Can government R&D expenditure promote innovation? New evidence from 37 OECD countries. Technological and Economic Development of Economy, 31 (2). pp. 572-596. ISSN 2029-4913; eISSN: 2029-4921 https://doi.org/10.3846/tede.2024.22293 10.3846/tede.2024.22293 |
| spellingShingle | Lee, Chin Yemin, Ding Fengchun, Yin Kun, Zhou Can government R&D expenditure promote innovation? New evidence from 37 OECD countries |
| title | Can government R&D expenditure promote innovation? New evidence from 37 OECD countries |
| title_full | Can government R&D expenditure promote innovation? New evidence from 37 OECD countries |
| title_fullStr | Can government R&D expenditure promote innovation? New evidence from 37 OECD countries |
| title_full_unstemmed | Can government R&D expenditure promote innovation? New evidence from 37 OECD countries |
| title_short | Can government R&D expenditure promote innovation? New evidence from 37 OECD countries |
| title_sort | can government r&d expenditure promote innovation? new evidence from 37 oecd countries |
| url | http://psasir.upm.edu.my/id/eprint/118608/ http://psasir.upm.edu.my/id/eprint/118608/ http://psasir.upm.edu.my/id/eprint/118608/ http://psasir.upm.edu.my/id/eprint/118608/1/118608.pdf |