NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Foreign Competition and Domestic Innovation: Evidence from U.S. Patents

David Autor, David Dorn, Gordon H. Hanson, Gary Pisano, Pian Shu

NBER Working Paper No. 22879
Issued in December 2016, Revised in December 2017
NBER Program(s):International Trade and Investment, Productivity, Innovation, and Entrepreneurship

The competitive shock to the U.S. manufacturing sector spurred by rising China import competition could either catalyze or stifle innovation. Using three distinct sources of variation to identify rising trade exposure, we provide a causal analysis of the effect of surging import competition on U.S. innovative activities. Applying a novel internet-based matching algorithm to map all U.S. utility patents granted by 2013 to firm-level data, and carefully accounting for the shifting concentration of patenting activity across sectors, we document a robust, negative impact of rising Chinese competition on firm-level and technology class-level patent production. Accompanying this fall in innovation, global employment, sales, profitability, and R&D expenditure all decline within trade-exposed firms. The trade-induced contraction along all margins of adjustment and for all measures of valuation suggest that the primary response of firms to greater import competition is to scale back their global operations.

download in pdf format
   (1019 K)

email paper

A non-technical summary of this paper is available in the February 2017 NBER digest.  You can sign up to receive the NBER Digest by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w22879

Users who downloaded this paper also downloaded* these:
Autor, Dorn, and Hanson w21906 The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade
Acemoglu, Akcigit, and Kerr w22783 Innovation Network
Piketty, Saez, and Zucman w22945 Distributional National Accounts: Methods and Estimates for the United States
Coelli, Moxnes, and Ulltveit-Moe w22647 Better, Faster, Stronger: Global Innovation and Trade Liberalization
GutiƩrrez and Philippon w22897 Investment-less Growth: An Empirical Investigation
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us