The impact of the U.S. export controls on Chinese firms' innovation: Evidence from Chinese high-tech firms

Haomin Shen, Yuan Gao, Xiaoke Cheng and Qi Wang

International Review of Financial Analysis, 2024, vol. 95, issue PC

Abstract: Using a sample of Chinese high-tech firms from 2007 to 2020, this study investigates the impact of U.S. export control regulations (ECRs) on Chinese high-tech firms' innovation. The results reveal that U.S. ECRs force Chinese firms to increase their R&D inputs and outputs. Moreover, the findings illustrate that technology dependence and import competition act as mechanisms to mediate such trade effects. Our cross-sectional analyses indicate that the positive relationship between U.S. ECRs and Chinese firms' innovation strengthens in firms importing more high-tech products, with better innovation accumulation, with fewer financial constraints, or with more financial subsidies. Fundamentally, this study complements the literature on the U.S.-China trade war and offers policy implications for the Chinese government.

Keywords: Export control regulation; Innovation; Trade policy (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:95:y:2024:i:pc:s1057521924004423

DOI: 10.1016/j.irfa.2024.103510

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