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Foreign Competition and Domestic Innovation: Evidence from U.S. Patents

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

No 7865, CESifo Working Paper Series from CESifo Group Munich

Abstract: Manufacturing accounts for more than three-quarters of U.S. corporate patents. The competitive shock to this sector emanating from China’s economic ascent could in theory either augment or stifle U.S. innovation. Using three decades of U.S. 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 U.S. firms. Accounting for confounding sectoral patenting trends, we find that U.S. patent production declines in sectors facing greater import competition. This adverse effect is larger among initially less profitable and less capital-intensive firms.

Keywords: innovation; patents; trade (search for similar items in EconPapers)
JEL-codes: F10 O31 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-com, nep-cse, nep-ino, nep-sbm and nep-tid
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Related works:
Working Paper: Foreign Competition and Domestic Innovation: Evidence from U.S. Patents (2019) Downloads
Working Paper: Foreign Competition and Domestic Innovation: Evidence from U.S. Patents (2018) Downloads
Working Paper: Foreign Competition and Domestic Innovation: Evidence from U.S. Patents (2016) Downloads
Working Paper: Foreign Competition and Domestic Innovation: Evidence from U.S. Patents (2016) Downloads
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