Multilevel innovation policy mix in China: do local programmes complement national programmes?

Abstract Chinese governments at all levels have been using various policies to encourage innovation by firms. However, few studies considered the superimposed effects of multilevel innovation policies. Based on the panel data of 443 Chinese innovation–oriented firms from 2008 to 2011, this study investigates the complementarities between national and local science and technology programmes. The heterogeneous effects across stages of the innovation process are also considered. Results show that the national science and technology (S&T) programmes significantly increase firms’ external research and development (R&D) expenditure but inhibit the commercialisation. In addition, the national and local S&T programmes complement each other in promoting external R&D expenditure while presenting substitutive in increasing patent outputs. This paper further finds that national and local programmes are more likely to be complementary at high subsidy intensity. This study contributes to the development of policy mix theory and has manifold implications for designing pertinent innovation policy systems