HIGH-TECH INDUSTRIAL DEVELOPMENT ZONE POLICY AND FIRM INNOVATION ACTIVITIES: EVIDENCE FROM CHINA

Abstract

This thesis investigates whether high-tech industrial development zone policy affects firm innovation activities in China. We find the impact of the policy on firm patents is more significant in firms with fewer patents in the pretreatment period. We also find the policy has more effective impacts on firm patents in non-SOEs, small firms, and firms in developed regions. Besides, we provide two extensions. First, we show the policy has little effect on increasing the number of high-quality patents. Second, we show the policy has a significant positive influence on firm R&D expenditure, and the impact is more significant than on successful firm patent applications. The results indicate such a policy in China may have effective impacts on increasing innovation activities in certain firms, but the effects could be limited to meeting the requirements of the policy while having a relatively little influence on increasing firms’ high-quality innovation outputs.