The effect of the US–China trade war on Chinese new firm entry

Chuantao Cui and Leona Shao-Zhi Li ()

Economics Letters, 2021, vol. 203, issue C

Abstract: This study offers new empirical evidence on the connection between international trade and domestic entrepreneurial activities. Exploiting the tariff variation across industries and time during the recent US–China trade war, we find that the US import tariff increases are associated with relative reductions in Chinese new firm entry rates. The negative impact is more pronounced among industries that are dependent on US exports and with a higher irreversible investment ratio. Heterogeneity across regions with varying institutional quality is also identified. Robustness tests are provided.

Keywords: International trade; US–China trade war; Tariff shocks; Firm entry; Entrepreneurship (search for similar items in EconPapers)
JEL-codes: F14 F63 L26 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:203:y:2021:i:c:s0165176521001233

DOI: 10.1016/j.econlet.2021.109846

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