TY  - JOUR
AU  - Bloom,Nicholas
AU  - Draca,Mirko
AU  - Reenen,John Van
TI  - Trade Induced Technical Change? The Impact of Chinese Imports on Innovation, IT and Productivity
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 16717
PY  - 2011
Y2  - January 2011
UR  - http://www.nber.org/papers/w16717
L1  - http://www.nber.org/papers/w16717.pdf
N1  - Author contact info:
Nicholas Bloom
Stanford University
Department of Economics
579 Serra Mall
Stanford, CA 94305-6072
Tel: 650/725-3266
Fax: 650/725-5702
E-Mail: nbloom@stanford.edu

Mirko Draca
London School of Economics
Centre for Economic Performance
Houghton Street
London WC2A 2AE
ENGLAND
E-Mail: m.draca@lse.ac.uk

John Van Reenen
Department of Economics
London School of Economics
Centre for Economic Performance
Houghton Street
London WC2A 2AE
UNITED KINGDOM
Tel: 00 44 207/955-6976
Fax: 00 44 207/955-6848
E-Mail: j.vanreenen@lse.ac.uk
M2  - featured in NBER digest on 2011-08-01
AB  - We examine the impact of Chinese import competition on patenting, IT, R&D and TFP using a panel of up to half a million firms over 1996-2007 across twelve European countries. We correct for endogeneity using the removal of product-specific quotas following China’s entry into the World Trade Organization. Chinese import competition had two effects: first, it led to increases in R&D, patenting, IT and TFP within firms; and second it reallocated employment between firms towards more innovative and technologically advanced firms. These within and between effects were about equal in magnitude, and appear to account for around 15% of European technology upgrading between 2000-2007. Rising Chinese import competition also led to falls in employment, profits, prices and the skill share. By contrast, import competition from developed countries had no effect on innovation. We develop a simple “trapped factor” model of innovation that is consistent with these empirical findings.
ER  -