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Are U.S. export controls an effective policy for innovation?

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  • Grzana, Marta Helena

Abstract

Who bears the predominant cost of U.S. semiconductor export controls? Using CPI and import price data, and a difference-in-differences design, I conclude that it is the U.S. government. I find that export controls decreased the price paid by customers for semiconductor-based electronics yet increased the import price of semiconductors. I adapt theoretical frameworks by Mazzucato and Atkinson & Ezell to evaluate how policymakers can shape innovation markets through positive and negative measures. I evaluate export controls as an innovation policy and their effect on domestic and foreign innovation processes. My findings suggest that there should be greater consideration of foreign policy reactions in shaping innovation policy.

Suggested Citation

  • Grzana, Marta Helena, 2025. "Are U.S. export controls an effective policy for innovation?," LSE Research Online Documents on Economics 129662, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:129662
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    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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