Topic: R&D Misallocation in China
Speaker: Zheng (Michael) Song, Professor of Economics, Department of Economics, The Chinese University of Hong Kong
Date: October 14th (Friday.)
Time: 2:30-4:00pm
Location: Building 1, Room 301
Language: English
Abstract:
China's R&D expenditure has been growing very rapidly over the past two decades. It remains unclear to what extent R&D resources are misallocated and how big welfare losses can be caused by R&D misallocation. We first develop a theoretical framework that incorporates innovation and imitation decisions at the firm level. The mechanism that sorts innovation by the distance to frontier becomes a key to identify R&D misallocation. Using China's and Taiwan's industrial firms survey data, we show that (i) the sorting mechanism is much weaker in China, suggesting severe misallocation of R&D resources; (ii) R&D misallocation in China can lower the aggregate TFP growth by two percent.
About the speaker:
Zheng (Michael) Song is currently Professor at Department of Economics in The Chinese University of Hong Kong. He was formerly an Assisting Professor at Booth School of Business in University of Chicago. Before joining the University of Chicago, he was a visiting Assistant Professor at The Chinese University of Hong Kong from 2009 to 2011 and a Research Fellow at School of Economics in Fudan University from 2005 to 2011. He received his Ph.D. in Economics from Stockholm University in 2005. Professor Song’s research interests are in the areas of macroeconomics, Chinese Economy, political economy. He has published research papers in top economics journals including American Economic Review, Review of Economic Dynamics, International Economic Review, Econometrica, Journal of Economic Theory, IMF Economic Review etc. He was an associate editor at Journal of European Economic Association and won the Sun Yefang Prize in 2013.
