Impact of government policies on private R&D investment in agricultural biotechnology: Evidence from chemical and pesticide firms in China

Abstract

China has put in place a series of policies to support private companies to engage in biotechnology research. This study uses data from a survey of 103 major agribusiness firms in the agricultural chemical and seed industries in China to evaluate the impact of government policies on private R&D investment in biotechnology. The results show that firms with positive profit expectation, public R&D subsidies, R&D collaboration with universities/research institutes or state-owned enterprises are more likely to embark on biotechnology research activities. Past patenting activity, R&D subsidies and collaboration with public sector research increase firms' biotechnology R&D investment while firms already selling genetically modified products and firms that are state-owned spend less on R&D. Our findings suggest that government policy does have an important impact on firms' biotechnology R&D investment.