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The Rise of the People’s Republic of China and its Competition Effects on Innovation in Japan

Author

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  • Yamashita, Nobuaki

    (Asian Development Bank Institute)

  • Yamauchi, Isamu

    (Asian Development Bank Institute)

Abstract

This paper empirically examines the “defensive innovation” hypothesis that firms with higher exposure to low-wage economy import competition intensively undertake more innovative activity by using a high quality Japanese firm-level panel dataset over the period 1994–2005. The novel feature of the analysis is the relation of firm-level variations of patent usage to import competition. The results suggest that intensified import competition from the People’s Republic of China has resulted in greater innovative activity by Japanese firms, consistent with the findings of European firms in Bloom et al. (2016). Moreover, such competition has also led to an increase in non-used patents.

Suggested Citation

  • Yamashita, Nobuaki & Yamauchi, Isamu, 2019. "The Rise of the People’s Republic of China and its Competition Effects on Innovation in Japan," ADBI Working Papers 939, Asian Development Bank Institute.
    • Handle: RePEc:ris:adbiwp:0939
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    defensive innovation; import competition; innovative activity;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O00 - Economic Development, Innovation, Technological Change, and Growth - - General - - - General

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    This paper has been announced in the following NEP Reports:

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