No abstract

Bloom, Draca, and Van Reenen (2016) find that Chinese import competition induced a rise in patenting, IT adoption, and TFP by up to 30% of the total increase in Europe in the late 1990s and early 2000s. We uncover several coding errors in an important robustness check of their patent results. When corrected, we find no statistically significant relationship between Chinese competition and patents. Other specifications in the original paper use a problematic log(1 + patents) transformation. This normalization induces bias given low average patent counts for firms in China-competing sectors, and rapidly declining patents across the sample.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThe paper offers a novel explanation for China's manufacturing exports performance after WTO entry. Building on stylized facts about low-wage country exporters, a theoretical model is developed to analyze reduced trade policy uncertainty. A global (non-destination specific) component of exporting fixed costs facilitates transmission of bilateral policy changes to multilateral export performance. The empirical analysis exploits the removal of US tariff uncertainty in conjunction with China's WTO accession, and examines its effect on China's exports to the EU. The results reveal that: (i) the structure of China's export boom to the EU conforms to the pattern of US tariff uncertainty; (ii) the adjustment takes place at the extensive margin; and (iii) the effect phases out after a few years. These findings have implications for the scope of international policy negotiations and provide suggestive evidence on the nature of fixed costs manufacturing firms in low-wage countries must overcome.JEL-Classification: F13, F14, D84, O24

The so-called geoeconomic turn stands for the increased tendency of countries to use economic policy instruments to promote or defend national interests vis-à-vis trading partners or rival powers. Scholars note a similar shift in trade and investment policies of the European Union (“EU”). However, there are few studies that examine whether this proclaimed shift at the policy level is reflected in outcomes. Against this background, this chapter examines the EU’s ability to position itself as a defensive geoeconomic actor. Based on three exploratory case studies—investment screening, Most-Favoured Nations clauses in Free Trade Agreements (“FTAs”), and the EU’s (non-)response to China’s Belt and Road Initiative (“BRI”)—we find that the EU’s ability to act in line with its own geoeconomic ambitions varies across the policy initiatives studied. In particular, lack of alignment of individual EU Member States with a common EU policy stance serves as a possible challenge for implementing defensive geoeconomic policies. At the same time, we also find that that the EU’s own framing of what makes a policy initiative “geoeconomic” varies widely, and does not always correspond to the legal design or economic implications of a given initiative. These findings contribute to debates on the EU’s evolving relevance as a global actor and shed new light on recent conceptualizations of the geoeconomic turn.