Government Intervention and Technovation Performance: An Empirical Study of SOEs from Mainland China

We investigate whether government intervention, both project funding and tax break, have any impact on technovation performance by Chinese state-owned enterprises (SOEs). We use a comprehensive provincial-level panel data set of 30 provinces during 2005-2012. Our result show that project funding and tax break at the provincial level have no impact on new products sales. Project funding has a negative impact on invention patents, by constrast, tax break has a positive impact on invention patents. The interaction term of project funding and tax break has a postive impact on new products sales, but the interaction term has no impact on invention patent.