Did government R&D subsidies increase Chinese firms' trade margins? Evidence from Innofund program

This study investigates the effects of government R&D subsidies on firms' trade margins using a panel dataset for Chinese manufacturing firms during the period between 2001 ndto 2014. This study finds that an R&D subsidy increases Chinese firms' propensity to begin exporting and increases existing exporters' sales from export (across-firm trade margins). After disentangling firms' export value at the product-country transaction level, this study further finds that government R&D subsidy increases firms' both intensive margin and extensive margin (within-firm trade margins).