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The Impact of Emerging Market Competition on Innovation and Business Strategy

Lorenz Kueng, Nicholas Li () and Mu-Jeung Yang

No 22840, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: How do firms in high-income countries adjust to emerging market competition? We estimate how a representative panel of Canadian firms adjusts innovation activities, business strategies, and exit in response to large increases in Chinese imports between 1999 and 2005. On average, process innovation declines more strongly than product innovation. In addition, initially more differentiated firms that survive the increase in competition have better performance ex-post, but are ex-ante more likely to exit. Differentiation therefore does not ensure insulation against competitive shocks but instead increases risk.

JEL-codes: F14 L2 O3 (search for similar items in EconPapers)
Date: 2016-11
New Economics Papers: this item is included in nep-bec, nep-com, nep-cse, nep-ino, nep-sbm and nep-tid
Note: CF EFG PR
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Working Paper: The Impact of Emerging Market Competition on Innovation and Business Strategy (2020) Downloads
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