Have China’s Unconverted Research Institutes Been Left Behind?

Beginning in 1999, the Chinese government initiated a substantial restructuring of its roughly 4,000 research institutes. While many were given specific classifications to designate their institute objectives, many were left unconverted. We use a novel, fifteen-year panel dataset on China’s system of research institutes to examine if unconverted institutes were disadvantaged relative to their converted counterparts. Unconverted institutes had a higher risk of exiting the research institute system and lower productivity growth than converted research institutes. However, their revenue growth kept pace with converted institutes and they continued to patent at similar rates. Finally, their publication of scientific papers declined relative to converted institutes. We conclude that the restructuring program has not left the unconverted institutes behind