Bloom, Nicholas, Draca, Mirko and Van Reenen, John (2016) Trade induced technical change? The impact of Chinese imports on innovation, IT and productivity. The Review of Economic Studies, 83 (1). pp. 87-117. doi:10.1093/restud/rdv039 ISSN 0034-6527.

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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.

Item Type:	Journal Article
Subjects:	H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	International trade -- China, International trade -- European Union, International trade -- United States, World Trade Organization, Industrial productivity
Journal or Publication Title:	The Review of Economic Studies
Publisher:	Oxford University Press
ISSN:	0034-6527
Official Date:	January 2016
Dates:	Date Event January 2016 Published 1 January 2015 Accepted 17 September 2015 Available
Volume:	83
Number:	1
Page Range:	pp. 87-117
DOI:	10.1093/restud/rdv039
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access
Date of first compliant deposit:	21 December 2016
Date of first compliant Open Access:	17 September 2017
Funder:	Economic and Social Research Council (Great Britain) (ESRC), National Science Foundation (U.S.) (NSF)

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