Government R&D Subsidies and Technological Collaborations: Distinguishing the Effects of Central and Local Programs in China

ABSTRACT There exist systematic differences in policy orientation and implementation mechanisms between central and local R&D subsidies in China, which in turn exert heterogeneous effects on firms' innovation behaviors. However,it remains unclear what differential impacts the two types of subsidies have on firms' willingness to engage in technological cooperation and their underlying influencing mechanisms. The current study investigates this question by using the 2008-2023 date for listed firms. The study finds that both central and local subsidies significantly boost firms' technological Collaborations willingness. Central subsidies are numerically stronger, yet no statistically meaningful difference exists between the two. Multiple robustness tests further validate the reliability of these findings. Mechanism analysis indicates that both types of subsidies can facilitate technological collaborations willingness by strengthening firms' technology signaling platform effects and enhancing their knowledge management capabilities. Furthermore, we articulated central subsidies exert a more prominent boosting effect on state-owned firms, large-scale firms and enterprises in eastern regions, with no evident heterogeneous impacts across firms of different maturity levels, while local subsidies are more effective for private firms, small and medium-sized firms as well as mature firms. The findings deepens the understanding of the incentive effects of central and local R&D subsidies on corporate innovative behaviors, and provides micro-level empirical evidence for promoting open innovation in China.