Trade Induced Technological Change: Did Chinese Competition Increase Innovation in Europe?

Douglas Campbell and Karsten Mau

No w0252, Working Papers from New Economic School (NES)

Abstract: Bloom, Draca, and Van Reenen (2016) find that Chinese competition induced a rise in patenting, IT adoption, and TFP by 30% of the total increase in Europe in the early 2000s. We find that the average patents per firm fell by 94% for the most Chinacompeting firms in their sample, but also by 94% for non-competing firms (starting from an initially higher level), and that various intuitive controls, such as controls for sectoral trends, renders the impact on patents-per-firm insignificant. We also find that while TFP appears to be positively correlated with the rise in Chinese competition, IV estimates are inconclusive, and other measures of productivity, such as value-added per worker and profits, are not correlated. Various instrumental and proxy variable approaches also do not support a positive impact of the rise of China on European patents.

Keywords: Patents; China; Europe; Textiles; Trade Shocks; Manufacturing (search for similar items in EconPapers)
JEL-codes: F13 F14 L25 L60 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2019-05
New Economics Papers: this item is included in nep-cna, nep-com, nep-cse, nep-eff, nep-ino, nep-int and nep-tra
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Working Paper: Trade Induced Technological Change: Did Chinese Competition Increase Innovation in Europe? (2019)
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