The impact of trade on R&D: Evidence from UK firms
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Authors
S, Minkyu.
Publication Date
2021-07-08Series
Cambridge Working Papers in Economics
Cambridge-INET Working Paper Series
Publisher
Faculty of Economics, University of Cambridge
Type
Working Paper
Previous Version(s)
Metadata
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S, M. (2021). The impact of trade on R&D: Evidence from UK firms. https://doi.org/10.17863/CAM.79588
Abstract
Using matched UK administrative data, this paper examines how global trade expansion during 2002-2011 affected R&D investment of British firms. We find that Chinese import competition significantly discouraged firm R&D. Booming export demand, by contrast, stimulated their innovation efforts, mitigating the adverse competition effect. Our findings further reveal heterogeneity. More productive firms increased R&D spending by more in response to foreign demand. Exporting firms were less hurt by Chinese penetration than non-exporters. These together indicate the uneven consequences of globalization over the past decades for firm innovation, more detrimental to domestic and less profitable firms.
Keywords
R&D, Chinese competition, Export demand, Firm-level trade
Identifiers
CWPE2151
This record's DOI: https://doi.org/10.17863/CAM.79588
This record's URL: https://www.repository.cam.ac.uk/handle/1810/332142
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