Multi-level and Multi-route Innovation Policies in China: A Programme Evaluation Based on Firm-level Data

Abstract

Since the Chinese government’s rapid increase in expenditures on science and technology (S&T) during the 2000s, numerous related policies have been implemented by national-, provincial-, city-and prefecture-level governments in China. Each level of government aims to promote innovation activities; however, few empirical evaluations have been conducted for each policy level and category. This study estimates the treatment effects of innovation policies at each government level and category by using firm-level survey data from Chengdu, an inland city. Results suggest that aggregated S&T policies stimulate effective firm-level innovation activities, in particular, city-level policies and various government services. On the other hand, some policy categories, including tax incentives, seem to be inefficient and these results are also consistent with related studies. Restructuring the current policy menu and establishing further feedback mechanisms for S&T policy will improve the efficacy of such spending.