IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v85y2025icp1830-1845.html
   My bibliography  Save this article

Balancing export intensity and innovation: Uncovering the inverted-U relationship in Chinese manufacturing firms

Author

Listed:
  • Zhou, Hua
  • Zhang, Xiaodong
  • Yang, Lun

Abstract

Understanding the trade-innovation relationship is crucial for assessing how exporting firms in developing countries adapt to global markets. This paper examines how export intensity (EXI) influences innovation using data from 854,925 Chinese manufacturing firms (1998–2014). We identify two opposing forces: a learning effect, where knowledge spillovers facilitate technology adoption and skill upgrading, and a capture effect, where competition from advanced firms constrains innovation. Using human capital and technology gaps as moderators, we find that at low EXI levels, firms with higher human capital benefit more from knowledge diffusion, boosting innovation. However, as EXI exceeds 50 %, the capture effect dominates, limiting innovation. Our findings reveal an inverted-U relationship between EXI and innovation, highlighting the need for firms to strategically manage export intensity to maximize learning while mitigating competitive pressures.

Suggested Citation

  • Zhou, Hua & Zhang, Xiaodong & Yang, Lun, 2025. "Balancing export intensity and innovation: Uncovering the inverted-U relationship in Chinese manufacturing firms," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 1830-1845.
    • Handle: RePEc:eee:ecanpo:v:85:y:2025:i:c:p:1830-1845
    DOI: 10.1016/j.eap.2025.02.028
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592625000578
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2025.02.028?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Export intensity; Innovation; Inverted-U relationship;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecanpo:v:85:y:2025:i:c:p:1830-1845. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.