Foreign Competition and Domestic Innovation: Evidence from US Patents

David Autor, David Dorn, Gordon Hanson, Gary Pisano and Pian Shu

American Economic Review: Insights, 2020, vol. 2, issue 3, 357-74

Abstract: Manufacturing accounts for more than three-quarters of US corporate patents. The competitive shock to this sector emanating from China's economic ascent could in theory either augment or stifle US innovation. Using three decades of US patents matched to corporate owners, we quantify how foreign competition affects domestic innovation. Rising import exposure intensifies competitive pressure, reducing sales, profitability, and R&D expenditure at US firms. Accounting for confounding sectoral patenting trends, we find that US patent production declines in sectors facing greater import competition. This adverse effect is larger among initially less profitable and less capital-intensive firms.

JEL-codes: F14 L11 L60 O19 O31 O34 P33 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (149)

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Related works:
Working Paper: Foreign Competition and Domestic Innovation: Evidence from U.S. Patents (2019)
Working Paper: Foreign Competition and Domestic Innovation: Evidence from U.S. Patents (2019)
Working Paper: Foreign Competition and Domestic Innovation: Evidence from U.S. Patents (2018)
Working Paper: Foreign Competition and Domestic Innovation: Evidence from U.S. Patents (2016)
Working Paper: Foreign Competition and Domestic Innovation: Evidence from U.S. Patents (2016)
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DOI: 10.1257/aeri.20180481

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