Import and innovation: Evidence from Chinese firms

Chen, Zhi-yuan; Zhang, Jie; Zheng, Wenping

doi:10.1016/j.euroecorev.2017.02.008

Cited by 95 publications

(53 citation statements)

References 25 publications

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“…So far in this paper we have used the former approach to examine the innovation effect of international talent, because R&D investment measures firms' independent innovation investment and is thus regarded as a more representative indicator. It is especially true in the case of China since Chinese firms are reluctant to apply for patents due to weak intellectual property rights protection (Chen et al, 2017). However, there is a shortcoming, namely, the unavailability of R&D data--the time range of our study so far is from 2004 to 2007.…”

Section: Further Analysis Using Patent Datamentioning

confidence: 99%

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International talent inflow and R&D investment: Firm-level evidence from China

2020

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Using firm-level R&D data with regional international talent data, we find that international talent increases the R&D investment of Chinese manufacturing firms, a result that is further confirmed with patent data and under a number of robustness checks. These findings stem from two mechanisms: international talent boosts human capital accumulation and provides a diversified labor force. Further, the R&D promoting effect is stronger if firms are located in eastern China rather than in other regions, of small and medium-sized rather than large-sized, of domestic ownership rather than foreign ownership. The policy implication is, the introduction of international talent can be a new way to promoting R&D investment, especially for skilled-labor constrained countries. and examine the impact of ITI on firms' R&D investment in China. The results indicate that ITI increases the R&D investment of Chinese manufacturing firms, and the promoting effect is stronger if the firms are located in eastern China. Further, ITI increases the R&D investment of small and medium-sized firms (SMEs) more than large-sized firms, and increases the R&D investment of domestic firms but not foreign firms. In addition, using patent data, we confirm the positive effect of ITI on firm-level innovation. These findings suggest that the introduction of international talent is a new way to promoting firm-level R&D investment, and it is especially important for SMEs and domestic firms which are more resource constrained.In the theoretical literature, several mechanisms, such as a human capital accumulation effect and a labor force diversity effect, have been posited to explain the influence of immigration on innovation. On the one hand, the former effect states that ITI increases the number of research workers and enriches the local knowledge base,

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Section: Further Analysis Using Patent Datamentioning

confidence: 99%

“…If these factors are omitted, their effects on firms' R&D investment are included in the error term, causing an endogenous problem. To address this, we include region fixed effects in all regressions (Gagliardi, 2015;Chen et al, 2017).…”

Section: Endogeneity Issuesmentioning

confidence: 99%

International talent inflow and R&D investment: Firm-level evidence from China

2020

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“…Given that there are four potentially endogenous variables, we calculate the instrumental variable for each variable using the share of intermediate imports, final imports, intermediate exports, and final exports as weight respectively. Following Hummels, Jørgensen, Munch, and Xiang (), Carluccio, Fougère, and Gautier (), and Chen, Zhang, and Zheng (), we include the full set of instruments in all first‐stage regressions. The instrumental variables can be expressed as follows:

{G O I}_{i t}^{m} = \underset{c}{false\sum} s_{i c}^{m} {G O I}_{i c t}

{E X R}_{i t}^{m} = \underset{c}{false\sum} {s_{i c}^{m} E X R}_{c t}

where

{G O I}_{i t}^{m}

is the m ‐weighted average gross output indicator of China's trade partners, and

m \in ({}|, normali normaln normalt normale normalr normalm normale normald normali normala normalt normale normali normalm normalp normalo normalr normalt, normalf normali normaln normala normall normali normalm normalp normalo normalr normalt, normali normaln normalt normale normalr normalm normale normald normali normala normalt normale normale normalx normalp normalo normalr normalt, normalf normali normaln normala normall normale normalx normalp normalo normalr normalt)

.…”

Section: Second‐stage Estimation: Globalization and The Wage Premiummentioning

confidence: 99%

“…Since our sample starts in 2003, we set the year 2002 as pre‐sample year. The use of pre‐sample weights can eliminate the potential endogeneity problem caused by contemporaneous shocks that may affect both the import/export composition with trade partners and wage setting (Hummels, Jørgensen, Munch, & Xiang, ; Chen, Zhang, & Zheng, ). Therefore, our instrumental variables rely on predetermined variations in trade composition across industries and exogenous variations in gross output (exchange rates) of trade partners.…”

Section: Second‐stage Estimation: Globalization and The Wage Premiummentioning

confidence: 99%

Globalization and inter‐industry wage differentials in China

Wang

Milner

Scheffel

2017

Rev International Economics

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This paper explores the relationship between globalization and inter-industry wage differentials in China by using a two-stage estimation approach. Taking advantage of a rich household survey dataset, this paper estimates the wage premium for each industry in the first stage conditional on individual worker and firm characteristics. Alternative measures of globalization are considered in the second stage: trade openness and capital openness. A disaggregation of trade into trade in final and intermediate goods shows that increases in import (export) shares of final goods reduce (increase) the wage premia significantly, whereas imports or exports of intermediate goods do not explain differences in industry wage premia. This finding is supported by stronger effects for final goods trade in coastal than noncoastal regions. Our results also show a positive relationship between capital openness and industrial wage premia, though this finding is less robust when potential endogeneity issues are allowed for.

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“…A recent study by Chen, Z et al(2017) also investigated the relationship between imports and innovation by importing firms. We first construct a theoretical model in which imports stimulate innovation through cost-reducing knowledge spillovers.…”

Section: 11patterns Of Innovation Growthmentioning

confidence: 99%

China’s economy growth prospects and its potential drivers of future

Nguema¹

2017

Preprint

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The purpose of this paper is to apply China's economy growth prospects and its potential drivers of future. China's fast rise and its growth model have accelerated important existing structural trends in the global economy and made them decisive characteristics of the world economy. China's role in the world economy over the coming decades, an exercise which would not be possible without an investigation of the prospects for China's continued economic rise. On the one hand, China is a large export market for the United States. A lot of U.S. firms use China as the final destination of assembly in their global supply chain networks. China's huge holdings of U.S. Treasury securities support the federal government finance its budget failures. However, some analysts contend that China consolidates a number of distortive economic policies such as protectionist industrial policies and an undervalued currency that undermine U.S. economic interests.They warn that efforts by the Chinese government to promote indigenous innovation, often through the use of subsidies and other distortive measures, could negatively affect many leading U.S. industries.

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Import and innovation: Evidence from Chinese firms

Cited by 95 publications

References 25 publications

International talent inflow and R&D investment: Firm-level evidence from China

International talent inflow and R&D investment: Firm-level evidence from China

Globalization and inter‐industry wage differentials in China

China’s economy growth prospects and its potential drivers of future

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Import and innovation: Evidence from Chinese firms

Cited by 95 publications

References 25 publications

International talent inflow and R&D investment: Firm-level evidence from China

International talent inflow and R&D investment: Firm-level evidence from China

Globalization and inter‐industry wage differentials in China

China&rsquo;s economy growth prospects and its potential drivers of future

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Product

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China’s economy growth prospects and its potential drivers of future