The impact of R&D intensity on firm performance in an emerging market: Evidence from China’s electronics manufacturing firms

The impact pattern of R&D intensity on firm performance is an interesting but not explicitlyuntangled topic in the emerging market. This study explores the topic in the context ofChina using a unique unbalanced panel data set for the China’s electronics manufacturingfirms. In order to strengthen the robustness of the statistical results, this study employs twocoherent models: pooled-OLS regression and pooled-quantile regression techniques. Thepooled-OLS regressions focusing on mean effects present the robust evidence of a positiverelationship between R&D intensity on firm performance, and the further pooled-quantileregressions portraying the relative importance of explanatory variables at different points ofthe performance distribution show that the R&D intensity exhibits a stronger impact on thebetter-performance firms. Our study presents some new evidence for the impact of R&Dintensity on firm performance in the emerging market.