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It highlights institutional quality mechanisms, including government deregulation and the effectiveness of local contracting institutions, and links them to corporate R&D intensity. The study also identifies a key contingency based on a firm’s country/ownership identity, showing stronger effects in indigenous firms and international joint ventures than in wholly owned foreign subsidiaries, informing future research.",{"@graph":63,"@context":119},[64,80,102],{"@type":65,"itemListElement":66},"BreadcrumbList",[67,71,74,77],{"item":68,"name":69,"@type":70,"position":9},"https://docshare.wps.com","Home","ListItem",{"item":72,"name":10,"@type":70,"position":73},"https://docshare.wps.com/template/",2,{"item":75,"name":11,"@type":70,"position":76},"https://docshare.wps.com/template/presentations/",3,{"item":78,"name":59,"@type":70,"position":79},"https://docshare.wps.com/template/how-and-when-do-subnational-institutions-matter-for-rd-investment-evidence-from-the-chinese-pharmaceutical-sector/200790/",4,{"url":78,"name":59,"@type":81,"image":82,"author":87,"headline":59,"publisher":90,"fileFormat":93,"inLanguage":57,"description":61,"dateModified":94,"datePublished":95,"encodingFormat":93,"isAccessibleForFree":96,"interactionStatistic":97},"DigitalDocument",{"url":83,"@type":84,"width":85,"height":86},"https://docshare.wps.com/thumbnails/how-and-when-do-subnational-institutions-matter-for-rd-investment-evidence-from-the-chinese-pharmaceutical-sector/200790.png","ImageObject",442,249,{"name":88,"@type":89},"Miles","Person",{"url":68,"name":91,"@type":92},"DocShare","Organization","application/vnd.openxmlformats-officedocument.wordprocessingml.document","2026-10-28","2026-09-04",true,{"@type":98,"interactionType":99,"userInteractionCount":101},"InteractionCounter",{"@type":100},"ViewAction",10,{"@type":103,"mainEntity":104},"FAQPage",[105,111,115],{"name":106,"@type":107,"acceptedAnswer":108},"How do subnational institutions affect corporate R&D investment?","Question",{"text":109,"@type":110},"The paper finds that the quality of subnational institutions—such as government deregulation and local contracting institution effectiveness—has a significantly positive impact on corporate R&D intensity.","Answer",{"name":112,"@type":107,"acceptedAnswer":113},"What contingency determines when the institutional effect is stronger?",{"text":114,"@type":110},"The institutional effect is more salient in indigenous firms and international joint ventures than in wholly owned foreign subsidiaries, indicating that country/ownership identity matters.",{"name":116,"@type":107,"acceptedAnswer":117},"Why is the study focused on China’s pharmaceutical sector?",{"text":118,"@type":110},"China’s pharmaceutical sector is used as the empirical context to test the relationship between subnational institutional quality and corporate R&D investment in an emerging economy setting.","https://schema.org",{"og:url":78,"og:type":121,"og:title":59,"og:site_name":91,"og:description":61},"article",{"robots":123,"canonical":78},"index,follow",{"doc_id":125,"site_id":56},200790,1791739618,{"code":4,"msg":5,"data":128},{"doc_id":125,"user_id":129,"nickname":88,"user_avatar":130,"doc_module":9,"category_id":8,"category_name":11,"doc_title":59,"doc_description":61,"doc_content":131,"file_id":132,"file_url":133,"file_type":134,"file_size":135,"view_count":101,"is_deleted":4,"is_public":9,"is_downloadable":9,"audit_status":9,"page_count":37,"language":136,"language_code":57,"site_id":56,"html_lang":57,"table_of_contents":137,"faqs":138,"seo_title":139,"seo_description":61,"update_tm":140,"read_time":20},13056703019404,"https://ap-avatar.wpscdn.com/davatar_29158cc5080c5b710cf443261637dec0","How and When Do Subnational Institutions Matter for R&D Investment? Evidence from the Chinese Pharmaceutical Sector\nPei SUN\nSchool of Management, Fudan University\n670 Guoshun Road, Shanghai 200433, China\nEmail: sunpei@fudan.edu.cn\nTel: +86 21 2501 1114; Fax: +86 21 6564 2411\nZhe QU*\nSchool of Management, Fudan University\n670 Guoshun Road, Shanghai 200433, China\nEmail: \u0013 HYPERLINK \"mailto:quz@fudan.edu.cn\" \u0014quz@fudan.edu.cn\u0015\nTel: +86 21 2501 1213\nZhixiang LIAO\nChina Union Pay Data Services Co. Ltd.\n1899 Gutang Road, Shanghai 201201, China\nEmail: zxliao@cupdata.com\n* Corresponding author.\nAcknowledgements: We are indebted to Nitin Joglekar (the Departmental Editor) and the anonymous reviewers for their insightful and constructive comments. We also acknowledge the audience of our presentations on the Academy of International Business (AIB) Annual Conference in Vancouver, Canada, June 2014, and on the Strategic Management Society (SMS) 34th Annual International Conference in Madrid, Spain, September 2014, for their valuable comments on an early version of the paper. Pei Sun acknowledges financial supports from China’s National Nature Science Foundation (Grant number: 71672040) and the Shanghai Shuguang Scholar Program. Zhe Qu acknowledges financial supports from Shanghai Philosophy and Social Science Plan (2017BGL019).\nHow and When Do Subnational Institutions Matter for R&D Investment? Evidence from the Chinese Pharmaceutical Sector\nKeywords: R&D; subnational institutions; innovation; emerging economies; China\nAbstract\nDrawing on new institutional economics and the innovation literature, this paper examines how subnational institutions can impact corporate R&D investment in emerging economies. The study further investigates a key contingency of this institutional effect: a firm’s country/ownership identity. Using China’s pharmaceutical sector as the empirical context, we find that the quality of subnational institutions, such as the degree of government deregulation and the effectiveness of local contracting institutions, has a significantly positive impact on corporate R&D intensity. Moreover, this institutional effect is more salient in indigenous firms and international joint ventures than in wholly owned foreign subsidiaries. This study serves to shed light on future research on how multifaceted subnational institutions shape innovation activities across different types of business organizations in emerging economies.\nIntroduction\nDo institutions matter for corporate R&D investment? Conventional wisdom, which is informed by the literature on the appropriability of innovation \u0013 ADDIN EN.CITE \u0013 ADDIN EN.CITE.DATA \u0015\u0014[1-3]\u0015, holds that a robust system of intellectual property rights (IPR) protection is critical to ensuring that firms make adequate investment in innovation activities \u0013 ADDIN EN.CITE \u003CEndNote>\u003CCite>\u003CAuthor>Allred\u003C/Author>\u003CYear>2007\u003C/Year>\u003CIDText>The influence of patent protection on firm innovation investment in manufacturing industries\u003C/IDText>\u003CDisplayText>[4, 5]\u003C/DisplayText>\u003Crecord>\u003Cisbn>1075-4253\u003C/isbn>\u003Ctitles>\u003Ctitle>The influence of patent protection on firm innovation investment in manufacturing industries\u003C/title>\u003Csecondary-title>Journal of International Management\u003C/secondary-title>\u003C/titles>\u003Cpages>91-109\u003C/pages>\u003Cnumber>2\u003C/number>\u003Ccontributors>\u003Cauthors>\u003Cauthor>Allred, Brent B.\u003C/author>\u003Cauthor>Park, Walter G.\u003C/author>\u003C/authors>\u003C/contributors>\u003Cadded-date format=\"utc\">1475479926\u003C/added-date>\u003Cref-type name=\"Journal Article\">17\u003C/ref-type>\u003Cdates>\u003Cyear>2007\u003C/year>\u003C/dates>\u003Crec-number>934\u003C/rec-number>\u003Cpublisher>Elsevier\u003C/publisher>\u003Clast-updated-date format=\"utc\">1475479926\u003C/last-updated-date>\u003Cvolume>13\u003C/volume>\u003C/record>\u003C/Cite>\u003CCite>\u003CAuthor>Khoury\u003C/Author>\u003CYear>2011\u003C/Year>\u003CIDText>Does institutional reform of intellectual property rights lead to more inbound FDI? Evidence from Latin America and the Caribbean\u003C/IDText>\u003Crecord>\u003Cisbn>1090-9516\u003C/isbn>\u003Ctitles>\u003Ctitle>Does institutional reform of intellectual property rights lead","cbCaiaqjikPqsCKc","https://ap.wps.com/l/cbCaiaqjikPqsCKc","docx",376758,"English","# Acknowledgements\n# Introduction\n## Research question and motivation\n## Institutional mechanisms and prior work","[{\"question\":\"How do subnational institutions affect corporate R\\u0026D investment?\",\"answer\":\"The paper finds that the quality of subnational institutions—such as government deregulation and local contracting institution effectiveness—has a significantly positive impact on corporate R\\u0026D intensity.\"},{\"question\":\"What contingency determines when the institutional effect is stronger?\",\"answer\":\"The institutional effect is more salient in indigenous firms and international joint ventures than in wholly owned foreign subsidiaries, indicating that country/ownership identity matters.\"},{\"question\":\"Why is the study focused on China’s pharmaceutical sector?\",\"answer\":\"China’s pharmaceutical sector is used as the empirical context to test the relationship between subnational institutional quality and corporate R\\u0026D investment in an emerging economy setting.\"}]","How and When Do Subnational Institutions Matter for R&D Investment - Evidence from the Chinese Pharmaceutical Sector | DOCX",1788513323]