Public funding and private investment for R&D: a survey in China’s pharmaceutical industry

Health Research Policy and Systems

Yi-Tao Wang²  Hao Hu²  Deng-Yu Lu¹  Zi-Ya Chen¹  Lan Qiu¹ 

[1] International Business Faculty, Beijing Normal University, Jinfeng Road, Tangjia Wan, Zhuhai, Guangdong 519085, China;State Key Laboratory of Quality Research in Chinese Medicine, Institute of Chinese Medical Sciences, Block 3–406, University of Macau, Av. Padre Tomás Pereira Taipa, Macao, China

关键词: Research and development;    Public funding;    Private investment;    Pharmaceutical industry;    China;   

Others  :  802261
DOI  :  10.1186/1478-4505-12-27

 received in 2013-07-05, accepted in 2014-05-28,  发布年份 2014

【 摘 要 】

Background

In recent years, China has experienced tremendous growth in its pharmaceutical industry. Both the Chinese government and private investors are motivated to invest into pharmaceutical research and development (R&D). However, studies regarding the different behaviors of public and private investment in pharmaceutical R&D are scarce. Therefore, this paper aims to investigate the current situation of public funding and private investment into Chinese pharmaceutical R&D.

Methods

The primary data used in the research were obtained from the China High-tech Industry Statistics Yearbook (2002–2012) and China Statistical Yearbook of Science and Technology (2002–2012). We analyzed public funding and private investment in five aspects: total investment in the industry, funding sources of the whole industry, differences between provinces, difference in subsectors, and private equity/venture capital investment.

Results

The vast majority of R&D investment was from private sources. There is a significantly positive correlation between public funding and private investment in different provinces of China. However, public funding was likely to be invested into less developed provinces with abundant natural herbal resources. Compared with the chemical medicine subsector, traditional Chinese medicine and biopharmaceutical subsectors obtained more public funding. Further, the effect of the government was focused on private equity and venture capital investment although private fund is the mainstream of this type of investment.

Conclusions

Public funding and private investment play different but complementary roles in pharmaceutical R&D in China. While being less than private investment, public funding shows its significance in R&D investment. With rapid growth of the industry, the pharmaceutical R&D investment in China is expected to increase steadily from both public and private sources.

【 授权许可】

   
2014 Qiu et al.; licensee BioMed Central Ltd.

【 图 表 】

Figure 1.

Figure 2.

Figure 3.

Figure 4.

Figure 5.

Figure 6.

Figure 7.

Figure 8.

Figure 10.

【 参考文献 】

• [1]Institute of Economics Chinese Academy of Social Sciences: Report of China’s Pharmaceutical Market. Beijing: Social Sciences Academic Press; 2012.
• [2]The Central People’s Government of the People’s Republic of China: The Twelfth Five-Year Plan for National Economic and Social Development of the People’s Republic of China. [http://www.gov.cn/gongbao/content/2006/content_268766.htm webcite]
• [3]National Bureau of Statistics of China: Bulletin of Science and Technology Funds in 2011. [http://www.mof.gov.cn/zhengwuxinxi/caizhengxinwen/201210/t20121025_690008.html webcite]
• [4]Romer PM: Endogenous technological change. J Pol Econ 1990, 98:71-102.
• [5]Garcia-Quevedo J: Do public subsidies complement business R&D? A meta-analysis of the econometric evidence. J Ind Econ 2004, 2:87-102.
• [6]Lichtenberg FR: The effect of government funding on private industrial research and development: a re-assessment. J Ind Econ 1987, 36(1):97-104.
• [7]David PA, Hall DH, Toole AA: Is public R&D a complement or substitute for private R&D? A review of the econometric evidence. Res Policy 2000, 3:497-529.
• [8]Link AN: An analysis of the composition of R&D spending. Southern Econ J 1982, 2:14-35.
• [9]Hamberg D: R&D: Essays on the Economics of Research & Development. New York: Random House; 1966.
• [10]Guellec D, Van Pottlesberghe B: The impact of public R&D expenditure on business R&D. Econ Innov New Tech 2003, 12:225-243.
• [11]Toole AA: Does public scientific research complement private investment in research and development in the pharmaceutical industry? J Law Econ 2007, 50:81-104.
• [12]Xu C, Liu Y: Analysis on the discretionary approaches of technology spillover and government subsidies on enterprise’s R&D action. Sci Sci Manag S&T 2005, 1:25-29.
• [13]Liu N, Du YP: Research on excitation effect of government subsidy on enterprise’s innovation. Sci Tech Progress Policy 2005, 11:16-19.
• [14]Sun Y, Sun LH: Empirical analysis on the effect of pharmaceutical scientific & technological investment from government on pharmaceutical R&D expenditure. China Pharm 2011, 22:771-774.
• [15]Gu YY, Shen KR: The effect of local governments’ behavior on corporate R&D investment: empirical analysis based on China’s provincial panel data. China Ind Econ 2012, 10:77-88.
• [16]Zhao YD: The study on the effect of government's investment in R&D activities on the enterprises' technological innovation: take Guangdong province as example. Reform Stgy 2012, 8:40-44.
• [17]McGuire JL, Hasskarl H, Bode G, Klingmann I, Zahn M: Pharmaceuticals, general survey. In Ullmann's Encyclopedia of Chemical Technology. 7th edition. Weinheim: Wiley VCH; 2007.
• [18]National Bureau of Statistics of China: Statistics Catalogue of High-technology Industry Classifications. 2002. [http://www.stats.gov.cn/tjsj/tjbz/201310/P020131021347576415205.pdf webcite]
• [19]National Center for Science and Engineering Statistics: Research and Development: National Trends and International Linkages. In National Science Board: Science and Engineering Indicators (NSB). Arlington: National Center for Science and Engineering Statistics; 2010. [http://www.nsf.gov/statistics/seind10/c4/c4s3.htm webcite]
• [20]Jessie Z: Zero2IPO Data: PE Funds Raise US$25.31B in 2012. [http://www.pedaily.cn/Item.aspx?id=219235 webcite]
• [21]Van Auken H, Kaufmann J, Herrmann P: An empirical analysis of the relationship between capital acquisition and bankruptcy laws. J Small Bus Manag 2009, 47:23-37.
• [22]Kortum S, Lerner J: Assessing the contribution of venture capital to innovation. J Econ 2000, 31(4):674-692.
• [23]Zhang YP, Deng MM: Enforcing pharmaceutical and biotech patent rights in China. Nat Biotechnol 2008, 26:1235-1240.
• [24]Chu SZ, Han ZJ, Meng XY: Research on the risk investment of Chinese pharmaceutical industrial cluster. Econ Manag 2010, 32:46-50.
• [25]Valentin F, Jensen RL, Dahlgren H: How venture capital shapes emerging bio-clusters: a cross-country comparison. Eur Plan Studies 2008, 16:441-463.
• [26]Hughes B: China spurs pharma innovation. Nat Rev Drug Discov 2010, 9:581-582.
• [27]Zhang WW: Binhai New Area Raised Nearly 100 Million to Support Technology-Based ‘Little Giant’ Enterprises and Leading Enterprises. [http://b2b.toocle.com/detail--5132888.html webcite]
• [28]China IRN: Statistics of China’s API export in first half of 2013. [http://www.chinairn.com/news/20130821/114152981.html webcite]
• [29]Ministry of Commerce of the People’s Republic of China: Over-Capacity of API becomes a Big Problem in Export. [http://intl.ce.cn/zgysj/201103/31/t20110331_22339068.shtml webcite]
• [30]New EDL Expands by more than 60%, Six Listed Companies become Big Winners. [http://health.sohu.com/20130318/n369221875.shtml webcite]
• [31]Ministry of Science and Technology of the People’s Republic of China, Ministry of Commerce of the People’s Republic of China, National Development Bank: Venture Capital Development in China 2013. Beijing: Economy & Management Press;