Notice of RetractionPublic R&D Subsidies, Firm Innovation and Firm Performance - Empirical Evidence from Listed Companies in China´s SME Board

Notice of Retraction

After careful and considered review of the content of this paper by a duly constituted expert committee, this paper has been found to be in violation of IEEE´s Publication Principles.

We hereby retract the content of this paper. Reasonable effort should be made to remove all past references to this paper.

The presenting author of this paper has the option to appeal this decision by contacting TPII@ieee.org.

One of the features of R&D investment is that the output has the properties of public goods, and its private rate of return to be lower than its social rate of return. Therefore, public R&D subsidies play an important role in the performance of SMEs. In this paper, we study the effects of public R&D subsidies on firm innovation in the transition economies, and verify whether public R&D subsidies can directly impact on the SME performance. We undertake this empirical research on the role of public R&D subsidies among SMEs in China. The empirical evidence based on a data set (2007-2008) from the Listed Companies in China´s SME Board. The regression analyses show significant positive effects of public R&D subsidies on firm innovation but not directly effects on firm performance. At the same time, this result also indicates that there is a strong link between firm innovation and firm performance. Although its direct contribution to firm performance is insignificant, public R&D subsidies contributes indirectly to firm performance by promoting firm innovative expenditure.