Trade Induced Technical Change? The Impact of Chinese Imports on Innovation, IT and Productivity

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ID: 294914
2015
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Abstract
We examine the impact of Chinese import competition on broad measures of technical change—patenting, IT, and TFP—using new panel data across twelve European countries from 1996 to 2007. In particular, we establish that the absolute volume of innovation increases within the firms most affected by Chinese imports in their output markets. We correct for endogeneity using the removal of product-specific quotas following China's entry into the World Trade Organization in 2001. Chinese import competition led to increased technical change within firms and reallocated employment between firms towards more technologically advanced firms. These within and between effects were about equal in magnitude, and account for 14% of European technology upgrading over 2000–7 (and even more when we allow for offshoring to China). Rising Chinese import competition also led to falls in employment and the share of unskilled workers. In contrast to low-wage nations like China, developed countries had no significant effect on innovation.
Reference Key
openalex_W1879687480 Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors Nicholas Bloom, Mirko Draca, John Van Reenen
Journal The Review of Economic Studies
Year 2015
DOI
10.1093/restud/rdv039
URL
https://doi.org/10.1093/restud/rdv039
Keywords Keywords not found

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