Empirical Research On Factors Affecting R&D Investment Based On EBA Approach

Aimed at the robustness of the factors affecting R&D investment, empirical research was made in this paper. The inter-provincial data of China from2006to2010and data from1999to2009of BRICS were selected as the study sample. Firstly, analysis of research status of R&D investment and its influencing factors was made. And the related theory and methods were systematically studied. Secondly, using the Extreme-Bounds-Analysis approach, set R&D investment intensity as the dependent variable, set human capital accumulation and the number of scientific researchers as the core explanatory variables, also set the international technology transfer through foreign direct investment, and patent rights protection strength, and economic growth as the concerned explanatory variables, while introduce the population density, the share of government R&D execution on total R&D investment, as well as other macroeconomic variables, such as the growth rate of fixed capital formation, the proportion of GDP accounted for fixed capital formation, the share of industrial production in the gross regional production, inflation rate, and interest rate, as control variables. Then establish the analysis model of extreme-bounds-analysis and analyze the robustness of factors influencing R&D investment. On this basis, three hypotheses aimed at the three concerned influence factors were proposed. The first hypothesis is that the benefit from foreign R&D activities can be transmitted through foreign direct investment and influence decisions of domestic R&D investment. The second hypothesis is patent right protection hypothesis, which states that R&D investment is positively correlated with intellectual property protection and patent right protection strength. The last hypothesis is about revenue growth, which argues that changes in income is closely related to R&D investment intensity.The results showed that tertiary education and the proportion of scientific researchers in a province or a country were robust determinants that had positive impacts on R&D investment intensity. Technology inflow through foreign direct investment and revenue growth rate had no significant effect on R&D investment intensity of a province or a country. Patent protection intensity had a robust positive impact on the decision of R&D investment intensity of a province or a country. The results of this analysis verified the first hypothesis partially that international technology transfer by foreign direct investment had not only inhibition effects but also spillover effects on domestic R&D investment. It also verified the second hypothesis that patent rights protection had a significant positive correlation with R&D investment intensity. Finally, the empirical results negated the third hypothesis, which stated that R&D investment intensity had no significant positive or negative relationship with economic growth.