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The ripple effect: How trade policy shocks impact innovation of Chinese firms

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  • Ning Meng
  • Yining Ni
  • Yeqing Ma

Abstract

This article examines how trade policy shocks impact firm innovation indirectly through information sharing across firms. Using a unique dataset of Chinese firms between 2000 and 2013, we identify connections between firms by exploiting spillover effects of antidumping. Empirical results show that antidumping has negative spillover effects on firm innovation through information exchanges across firms in market or product networks. Trade restrictions on extensive and intensive margins work as important channels through which the networks impact firm innovation. Our findings provide new empirical evidence on indirect effects of antidumping on firm innovation and better understanding on channels of trade policy shocks.

Suggested Citation

  • Ning Meng & Yining Ni & Yeqing Ma, 2024. "The ripple effect: How trade policy shocks impact innovation of Chinese firms," Review of International Economics, Wiley Blackwell, vol. 32(4), pages 1868-1900, September.
    • Handle: RePEc:bla:reviec:v:32:y:2024:i:4:p:1868-1900
    DOI: 10.1111/roie.12757
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