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Trade induced technical change? The impact of Chinese imports on innovation, IT and productivity
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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
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Official URL: http://dx.doi.org/10.1093/restud/rdv039
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 |
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| 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: |
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| 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 | ||||||||
| Funder: | Economic and Social Research Council (Great Britain) (ESRC), National Science Foundation (U.S.) (NSF) |
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