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China’s Import Competition, Innovation and the Role of Unions

Author

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  • Matano, Alessia

    (University of Barcelona)

  • Naticchioni, Paolo

    (Roma Tre University)

Abstract

This paper investigates the relationship between China’s import competition and the innovation strategies of domestic firms. Using firm level data from Italy spanning 2005-2010 and employing IV fixed effects estimation techniques, we find that the impact of China’s import competition on innovation varies depending on the type of goods imported (intermediate vs. final). Specifically, imports of final goods boost both product and process innovation, while imports of intermediate goods reduce both. Additionally, we extend the analysis to consider the role of unions in moderating these responses. We find that, in unionized firms, imports' impact on innovation is mitigated, specifically to protect workers' employment prospects.

Suggested Citation

  • Matano, Alessia & Naticchioni, Paolo, 2025. "China’s Import Competition, Innovation and the Role of Unions," IZA Discussion Papers 17764, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17764
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    More about this item

    Keywords

    unions; product and process innovation; final and intermediate goods; China’s import competition; IV fixed effects estimations;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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