 Balancing export intensity and innovation: Uncovering the inverted-U relationship in Chinese manufacturing firmsHua Zhou, Xiaodong Zhang and Lun Yang Economic Analysis and Policy, 2025, vol. 85, issue C, 1830-1845 Abstract: Understanding the trade-innovation relationship is crucial for assessing how exporting firms in developing countries adapt to global markets. This paper examines how export intensity (EXI) influences innovation using data from 854,925 Chinese manufacturing firms (1998–2014). We identify two opposing forces: a learning effect, where knowledge spillovers facilitate technology adoption and skill upgrading, and a capture effect, where competition from advanced firms constrains innovation. Using human capital and technology gaps as moderators, we find that at low EXI levels, firms with higher human capital benefit more from knowledge diffusion, boosting innovation. However, as EXI exceeds 50 %, the capture effect dominates, limiting innovation. Our findings reveal an inverted-U relationship between EXI and innovation, highlighting the need for firms to strategically manage export intensity to maximize learning while mitigating competitive pressures. Keywords: Export intensity; Innovation; Inverted-U relationship (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:85:y:2025:i:c:p:1830-1845 DOI: 10.1016/j.eap.2025.02.028 Access Statistics for this article Economic Analysis and Policy is currently edited by Clevo Wilson More articles in Economic Analysis and Policy from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.