Steering Science Through State Support - The Effect of PRC Government Grants on the Research Direction of Chinese Economists

During the last quarter century states across the world have increasingly sought to actively shape the direction of scientific research through public science funding. This phenomenon is especially evident in China, where science policy plays an important role in pursuing national developmental goals. In this paper, I examine how science grants funded by the central government of the People’s Republic of China (PRC) affect the research direction of Chinese economists using a staggered difference-in-differences approach. In particular, I empirically assess whether the awarding of two distinct types of grants – open and targeted - induces researchers to redirect their publications toward state funding priorities. Overall, I provide evidence for the existence of such thematic steering effect shifting economists’ publications towards government priorities. This effect, while limited to China’s national science system, is prevalent over the whole analyzed time period (2000-2025) and across different stages of academic seniority. In addition, it is strongest for policy-relevant and ideological topics. Given, however, scientists’ generally rather limited change in research trajectory over their career, Chinese state steering of science through grant funding results in incremental thematic shifts rather than research agenda setting.