Property rights protection and corporate RandD : evidence from China

Following the recent literature on institutions and economic growth, we examine the effects of property rights protection on corporate RandD. Using a unique 2003 World Bank survey of over 2400 firms in 18 Chinese cities, we obtain the following findings: (1) property rights protection is positively and significantly related to corporate RandD activity (for both process and product RandD); (2) government services and helping hand are conducive to corporate RandD, while informal payments to government officials are not; and (3) government ownership of firms and direct appointment of CEOs are negatively associated with corporate RandD activities. We also find that corporate RandD is positively related to firm size, and access to finance, but negatively related to product market competition and firm age