R&D status and the performance of domestic firms in China's coal mining industry

Sun, Sizhong, and Anwar, Sajid (2015) R&D status and the performance of domestic firms in China's coal mining industry. Energy Policy, 79. pp. 99-103.

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Abstract

Coal use accounts for a very large proportion of electricity production in China. Using a recently developed coarsened exact matching (CEM) technique, this paper examines the impact of research and development (R&D) activities on the performance of firms in China's coal mining industry. Our empirical results reveal that firms in China's coal industry that conduct R&D are more productive and their sales are higher. However, as far as the firm profitability and market shares are concerned, whether or not a firm in China's coal industry conducts R&D makes no difference. We find that foreign direct investment in China's coal mining industry leads to a significant decrease in the market share of domestic firms and its impact on productivity, sales and profitability of domestic firms is insignificant. The empirical results presented in this paper suggest that policies that encourage domestic firms in China's coal mining industries to conduct R&D can increase domestic production thereby reducing reliance on imports. Furthermore, productivity gains arising from R&D activities can also help Chinese mining firms to improve their competitive position in the international market. However, there is a need for restricting foreign direct investment in China's coal mining industry.

Item ID: 42026
Item Type: Article (Research - C1)
ISSN: 1873-6777
Keywords: R&D activities; coal mining industry; productivity; coarsened exact matching; China
Date Deposited: 08 Dec 2015 18:37
FoR Codes: 14 ECONOMICS > 1402 Applied Economics > 140205 Environment and Resource Economics @ 60%
14 ECONOMICS > 1402 Applied Economics > 140209 Industry Economics and Industrial Organisation @ 40%
SEO Codes: 91 ECONOMIC FRAMEWORK > 9102 Microeconomics > 910210 Production @ 100%
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