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Does the Sino–US Trade Friction Promote Firm Innovation? The Role of the Export Grab Effect

Author

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  • Zhen Xu

    (Business School, Beijing Normal University, Beijing 100875, China)

  • Xin Zhong

    (Business School, Beijing Normal University, Beijing 100875, China)

  • Zhongyan Zhang

    (Department of Economics and Management, Taiyuan Institute of Technology, Taiyuan City 030008, China)

Abstract

We examine and explain changes of firm innovation following the Sino–US trade frictions. Specifically, we use the unique microdata of Chinese technology and innovation firms from 2016 to 2019 to identify the response of firm innovation to the shock of the Sino–US trade friction and investigate the changes in firm innovation before and after the outbreak of the Sino–US trade friction. We found that, on average, export firms significantly increased innovation after the Sino–US trade friction. In particular, firms in the advanced manufacturing industry perform significantly better than firms in other technical fields. To explain this phenomenon, we compare firms’ export performance in different technical fields and conduct a detailed mechanism test. It is found that the Sino–US trade friction has led to the export grab phenomenon in some technical fields, and the export grab effect is the reason for the significant increase in the innovation of export firms. The direct effect of export grab promotes the innovation of sustainable export firms, and the indirect effect of export grab leads to an increase in innovation by reducing the threshold of the export market. We verified the direct and indirect effects of export grab on firm innovation following the Sino–US trade frictions.

Suggested Citation

  • Zhen Xu & Xin Zhong & Zhongyan Zhang, 2022. "Does the Sino–US Trade Friction Promote Firm Innovation? The Role of the Export Grab Effect," Sustainability, MDPI, vol. 14(5), pages 1-20, February.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:5:p:2709-:d:759202
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    Cited by:

    1. Yanfang LYU & Linhui ZHAO & Dong WANG, 2023. "An Analysis of the Impact of US-China Trade Frictions on Chinese Manufacturing Industries from the Perspective of Trade Gains," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 43-56, December.
    2. Mengzhou Qin & Zijie Fan & Yuan Zhong, 2022. "The Global Value Chain and Welfare Effects of Tariffs—Counterfactual Analysis of Sino–US Economic and Trade Frictions," Sustainability, MDPI, vol. 14(14), pages 1-22, July.

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