Can Private Enterprises Improve Their Technological Innovation by Joining the Military Business? Evidence from China


  • Jingyu Yang School of Philosophy, Wuhan University, China
  • Renfang Liu Academic Periodical Office, Chongqing Technology and Business University, China



military-civilian integration, military-industrial development, technological innovation, defence engineering


Military-civilian integration is an effective way to promote the development of defence engineering, but existing studies have not given a clear answer whether the participation of private enterprises in military business is conducive to promoting technological innovation of enterprises. In this study, A-shared listed companies in China from 2001 to 2018 were sampled, and the influence of their participation in military business on technological innovation was investigated using a multi-period difference-in-difference (DID) method. Results show that: (1) by joining the military business, private enterprises can significantly strengthen their R&D inputs and substantive innovation, thus promoting their technological innovation. (2) The participation of enterprises in military business acts upon substantive innovation outputs and further affects their technological innovation through R&D input intensity. (3) Participation in military business exerts a stronger positive promoting effect on enterprises in regions with a high marketization level than in regions with a low marketization degree. By joining the military business, SMEs are driven to enlarge their R&D inputs, while large enterprises can enhance their innovation outputs. The policy implications of the obtained conclusions indicate that it requires to be strengthened for private enterprises participating in military business to help reduce their technological innovation risks and improve the construction level of defence engineering projects.

Author Biographies

Jingyu Yang, School of Philosophy, Wuhan University, China

Jingyu Yang, Ph.D. candidate, is currently working in the School of Philosophy at Wuhan University. His research interests focus on the philosophy of science and technology

Renfang Liu, Academic Periodical Office, Chongqing Technology and Business University, China

Renfang Liu (Corresponding author), Ph.D., is currently working in Academic Periodical Office at Chongqing Technology and Business University. Her research interests focus on corporate finance.

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