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On ‘Trade Induced Technical Change: The Impact of Chinese Imports on Innovation, IT and Productivity’

Author

Listed:
  • Campbell, Douglas L.
  • Mau, Karsten

    (RS: GSBE other - not theme-related research, Macro, International & Labour Economics)

Abstract

Bloom, Draca, and Van Reenen (2016) find that Chinese import competition induced a rise in patenting, IT adoption, and TFP by up to 30% of the total increase in Europe in the late 1990s and early 2000s. We uncover several coding errors in an important robustness check of their patent results. When corrected, we find no statistically significant relationship between Chinese competition and patents. Other specifications in the original paper use a problematic log(1+patents) transformation. This normalization induces bias given low average patent counts for firms in China-competing sectors, and rapidly declining patents across the sample.

Suggested Citation

  • Campbell, Douglas L. & Mau, Karsten, 2020. "On ‘Trade Induced Technical Change: The Impact of Chinese Imports on Innovation, IT and Productivity’," Research Memorandum 019, Maastricht University, Graduate School of Business and Economics (GSBE).
    • Handle: RePEc:unm:umagsb:2020019
    DOI: 10.26481/umagsb.2020019
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    References listed on IDEAS

    as
    1. Nicholas Bloom & Mirko Draca & John Van Reenen, 2016. "Trade Induced Technical Change? The Impact of Chinese Imports on Innovation, IT and Productivity," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 83(1), pages 87-117.
    2. Hausman, Jerry & Hall, Bronwyn H & Griliches, Zvi, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," Econometrica, Econometric Society, vol. 52(4), pages 909-938, July.
    3. Marc F. Bellemare & Casey J. Wichman, 2020. "Elasticities and the Inverse Hyperbolic Sine Transformation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(1), pages 50-61, February.
    4. Christophe BELLEGO & Louis-Daniel PAPE, 2019. "Dealing with the log of zero in regression models," Working Papers 2019-13, Center for Research in Economics and Statistics.
    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. 2:00PM Water Cooler 7/7/2020
      by ? in Naked Capitalism on 2020-07-07 18:00:56

    Citations

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    Cited by:

    1. Ziyu Meng & Wen-Bo Li & Chaofan Chen & Chenghua Guan, 2023. "Carbon Emission Reduction Effects of the Digital Economy: Mechanisms and Evidence from 282 Cities in China," Land, MDPI, vol. 12(4), pages 1-21, March.
    2. Gu, Grace & Malik, Samreen & Pozzoli, Dario & Rocha, Vera, 2024. "Worker reallocation, firm innovation, and Chinese import competition," Journal of International Economics, Elsevier, vol. 151(C).
    3. Wang, Kunlun & Zheng, Leven J. & Lin, Boqiang, 2024. "Demand-side incentives, competition, and firms’ innovative activities: Evidence from automobile industry in China," Energy Economics, Elsevier, vol. 132(C).
    4. Nicholas Bloom & Mirko Draca & John Van Reenen, 2021. "A Reply to Campbell and Mau [Trade Induced Technical Change? The Impact of Chinese Imports on Innovation, IT and Productivity]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(5), pages 2560-2563.
    5. Toshiyuki Matsuura, 2022. "Heterogeneous impact of import competition on firm organisation: Evidence from Japanese firm‐level data," The World Economy, Wiley Blackwell, vol. 45(7), pages 2251-2269, July.
    6. Gu, Grace & Malik, Samreen & Pozzoli, Dario & Rocha, Vera, 2021. "Worker Reallocation, Firm Innovation, and Chinese Import Competition," Working Papers 9-2021, Copenhagen Business School, Department of Economics.
    7. Flora Bellone & Cilem Selin Hazir & Toshiyuki Matsuura, 2022. "Adjusting to China competition: Evidence from Japanese plant‐product‐level data," Review of International Economics, Wiley Blackwell, vol. 30(3), pages 732-763, August.

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    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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