The Chinese government has been using various subsidies to encourage innovations by Chinese firms. This paper examines the allocation and impacts of innovation subsidies, using the data from the China Employer Employee Survey (CEES). We find that the innovation subsidies are preferentially...

The Chinese government has been using various subsidies to encourage innovations by Chinese firms. This paper examines the allocation and impacts of innovation subsidies, using the data from the China Employer Employee Survey (CEES). We find that the innovation subsidies are preferentially...

This paper addresses the puzzle of how Chinese small and medium-sized enterprises (SMEs) in the mobile handset industry overcome an environment of “structured uncertainty” and innovate. We find that a combination of the global fragmentation of production and a tacit alliance between local...