Beyond funding: The moderating role of firms' R&D human capital on government support and venture capital for regional innovation in China

Abstract

Technological innovation is a cornerstone of economic growth. It is a crucial determinant of regions' competitiveness, especially for rapidly developing emerging economies. Past research remained inconclusive on whether venture capital and government subsidies to firms have a significant effect on innovation performance at the regional level. In this article, we show the determining role of investment by firms in R&D human capital. We use panel data from 31 provinces in China, covering the period 1999–2015. The results reveal that government support for firms and venture capital do not have a significant direct impact on regional innovation performance. This effect is strongly moderated by R&D human capital. The findings of this study offer practical implications for policymakers and private investors, guiding them on how to maximize the efficiency of their R&D investments for regional economic growth. They also show the importance of investment in R&D human capital for the management of technology and innovation at the firm level.