Intermediate input imports and innovations: Evidence from Chinese firms' patent filings
By Qing Liu, Larry D. Qiu. 2016
443 citations recorded by the source corpus.
Innovation plays a key role in economic growth. In this paper, we investigate the effects of intermediate input tariff reduction on the innovation activities of domestic firms. Input tariff reduction has two opposite effects on the innovation decision of a firm: it may promote innovation because the cost of innovation activities decreases, but it may also result in a decrease in innovation because foreign technologies become cheaper. We use Chinese firm-level data from 1998 to 2007, which features a drastic input tariff cut in 2002 because of China's WTO accession, and find that input tariff cut results in less innovation undertaken by Chinese firms. The findings are obtained using the difference-in-differences technique and are robust to various specifications checks of the model. We also provide a theoretical framework to generate insights to the empirical findings.
Subfields: Economics and Econometrics, Strategy and Management
View Paper: https://www.semanticscholar.org/paper/86c68a45476859840650cfcd9a225a4dcede32e8
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In Economics and Econometrics
In Strategy and Management
Citations in the corpus
- How Do Firms Respond to COVID-19? First Evidence from Suzhou, China (2020, methodology): “The DID estimate strategy is employed by comparing different treatment and control groups (Liu and Qiu 2016; Viard and Fu 2015).”