Education resource reallocation and innovation: Evidence from university mergers in China

Abstract

Based on the university mergers policy in China that began in the 1990s, this paper uses a DID regression model to study the impact of higher education resource reallocation on university R&D. It reveals that the university mergers have significantly increased the output of R&D, and the conclusion is consistent in a series of robustness tests. The mechanism analysis results show that the university mergers can affect the R&D by increasing the scientific research funding input in universities, improving the discipline development, and increasing the ability of basic R&D. Heterogeneity test results show that the complementary mergers have a greater impact on R&D in universities. These findings reveal an important mechanism that is conducive to deepening the reform of higher education and catching up with the first-class universities and disciplines.