Forced to innovate? Consequences of United States' anti-dumping sanctions on innovations of Chinese exporters

Kenneth G. Huang, Nan Jia and Yeyanran Ge

Research Policy, 2024, vol. 53, issue 1

Abstract: This study examines how trade protection, particularly anti-dumping sanctions on foreign exports, impacts innovations developed by affected foreign firms. Using data on anti-dumping sanctions levied by the United States (US) government on Chinese exports and on domestic patents associated with the sanctioned products developed by Chinese firms in China, our difference-in-differences estimates show that such anti-dumping sanctions imposed by the US on Chinese products significantly increased the total number of patented innovations produced by the firms exporting from China targeted by the sanctions. This effect is boosted during the pro-innovation national policy period launched by China in 2006. Moreover, we ascertain a critical scope condition that targeted exporting firms increase more-substantive innovations, rather than more-marginal ones, that likely increase the value-added of their products. Overall, these findings suggest that anti-dumping sanctions could lead to an unintended consequence of prompting targeted exporting firms to enhance their innovations in order to elevate the value-added of their products, thus enabling these firms to escape the price competition of lower value-added products and mitigate the risk of future anti-dumping sanctions. This outcome means that, in an effort to protect lower-end domestic manufacturers, protectionist policies could actually intensify the competition faced by higher-end domestic manufacturers via increasing the innovations of affected foreign firms. These outcomes might not only alter the structure of product-market competition, but also contribute to greater technological competition in the future.

Keywords: Anti-dumping sanctions; U.S.–China trade conflict; Innovation; Patents; Products (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S004873332300183X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:53:y:2024:i:1:s004873332300183x

DOI: 10.1016/j.respol.2023.104899

Access Statistics for this article

Research Policy is currently edited by M. Bell, B. Martin, W.E. Steinmueller, A. Arora, M. Callon, M. Kenney, S. Kuhlmann, Keun Lee and F. Murray

More articles in Research Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().