RESEARCH | Mysite

CURRENT RESEARCH (SELECTION)

The Misuse of China's R&D Subsidies: Estimating Treatment Effects With One-Sided Non-compliance

(with B. Peters)

We investigate the misuse of R&D subsidies and evaluate its consequences for policy effectiveness. Developing a theoretical framework and using Chinese firm-level data for 2001-2011, we identify that 42% of grantees misappropriated R&D subsidies for non-R&D purposes, accounting for 53% of total R&D subsidies. Misuse leads to a substantial loss in the causal impact of R&D subsidies, as measured by the difference between the intention-to-treat and complier average causal effect. R&D expenditures could have been stimulated beyond the subsidy amount (additionality), but misuse (noncompliance) resulted in medium-level partial crowding out, reducing the effectiveness of China’s R&D policy by more than half.

The Anatomy of Chinese Innovation: Insights on Patent Quality and Ownership Funded by BMBF

(with L. Brandt, R. Dai, K. Lim, B. Peters)

We study the evolution of patenting in China from 1985-2019. We use a Large Language Model to measure patent importance based on patent abstracts and classify patent ownership using a comprehensive business registry. We highlight four insights. First, average patent importance declined from 2000-2010 but has increased more recently. Second, private Chinese firms account for most of patenting growth whereas overseas patentees have played a diminishing role. Third, patentees have greatly reduced their dependence on foreign knowledge. Finally, Chinese and foreign patentinghave become more similar in technological composition, but differences persist within technology classes as revealed by abstract similarities.

Technological Influence of Inventions: Analyzing Countries in Global Comparison (3rd revise & resubmit with Research Policy) Funded by BMBF

(with E. Mueller)

We introduce a conceptual framework of global technological impact that assesses a country's unilateral impact on another country’s knowledge base and, in turn, derives its bilateral and global impact. To implement this framework empirically, we develop novel measures of technological impact using citation data from International Search Reports (ISR) in the universe of Patent Cooperation Treaty (PCT) applications over the past two decades. For the leading innovating countries, we document substantial heterogeneity in positions along the spectrum from technological independence to dependence. The US exhibits the highest level of global technological independence, followed by Japan and Korea, while Europe and China are globally dependent. Over time, the US and Korea remain relatively stable, Japan declines after an earlier increase, Europe increases gradually, and China shows the largest increase from a low initial level. Additional analysis based on international trade data shows that China has reached a leading position, highlighting an important difference between innovation and production.