Can Innovation Help U.S. Manufacturing Firms Escape Import Competition from China?
By J. Hombert, Adrien Matray. Journal of Finance, 2015
274 citations recorded by the source corpus.
We study whether R&D-intensive firms are more resilient to trade shocks. We correct for the endogeneity of R&D using tax-induced changes to the cost of R&D. On average across US manufacturing firms, rising imports from China lead to slower sales growth and lower profitability. These effects are, however, significantly smaller for firms with a larger stock of R&D -- by about half when moving from the 25th percentile to the 75th percentile of the R&D stock distribution. As a result, while the average firm in import-competing industries cuts capital expenditures and employment, R&D-intensive firms downsize considerably less.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/2a5cb40529b0d78000354c2b1acc3017d414e409
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In Economics and Econometrics
Citations in the corpus
- Service innovation implementation: a systematic review and research agenda (2020, unknown): “…that firms’ performance, financial or otherwise, is moderated by its ability to create and adopt innovative products, services, technologies, and processes (Dwyer & Mellor, 1993; Hombert & Matray, 2018; Koellinger, 2008; Singh, Chauhan, & Dhir, 2019; Sterlacchini, 1999; Wadho & Chaudhry, 2018).”
- From Good to Bad Concentration? US Industries over the Past 30 Years (2019, background): “Hombert and Matray (2015) studies within-industry variation with a focus on firm-level R&D intensity.”