Demand Forces of Technical Change Evidence from the Chinese Manufacturing Industry

Andreas Beerli, Franziska Weiss, Fabrizio Zilibotti and Josef Zweimüller ()

VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order from Verein für Socialpolitik / German Economic Association

Abstract: This paper investigates the effect of market size on innovation activities across different durable good industries in the Chinese manufacturing sector. We use a potential market size measure driven only by changes in the Chinese income distribution which is exogenous to changes in prices and qualities of durable goods to instrument for actual future market size. Results indicate that an increase in market size by one percentage point leads to an increase of 4.4% in R&D inputs, an increase in labour productivity by 6.5% and an increase in the likelihood of a successful product innovation by about 1.1 percentage points. These findings are robust controlling for export behaviour of firms and supply side drivers of R&D.

JEL-codes: L16 O31 O33 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-eff, nep-ind, nep-ino, nep-tid and nep-tra
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Related works:
Journal Article: Demand forces of technical change evidence from the Chinese manufacturing industry (2020)
Working Paper: Demand forces of technical change: evidence from the Chinese manufacturing industry (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc13:79980

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