Import competition and firm innovation: Evidence from China

By Qing Liu, Ruosi Lu, Yi Lu, Tuan Anh Luong. 2021

117 citations recorded by the source corpus.

Abstract This paper investigates whether and how import competition affects firm innovation. Using China's World Trade Organization (WTO) accession as a quasi-natural experiment, we find that import competition reduces firm innovation, which is consistent with the Schumpeterian effect. We also find heterogeneous treatment effects across firm productivity and patent types in a way consistent with preference and knowledge spillover effects, but not with escape-competition and trapped-factor effects.

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/c761f480ce2b9f6aec858c621b3d49c132a9ea74