Economics

U.S.-China trade conflicts and R&D investment: evidence from the BIS entity lists

H. Hu, S. Yang, et al.

This research investigates how U.S.-China trade conflicts affect R&D investments in Chinese enterprises. Remarkably, export restrictions led to a 16.58% increase in R&D intensity the following year, driven by government subsidies and risk-taking, according to the findings by Han Hu, Shihui Yang, Lin Zeng, and Xuesi Zhang.

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Abstract

This paper investigates the impact of U.S.-China trade conflicts on Chinese enterprises' R&D investment. Using data from Chinese publicly listed manufacturing firms and the Bureau of Industry and Security (BIS) entity lists, a difference-in-differences (DID) approach reveals that export restrictions increase R&D investment intensity by 16.58% in the following year. This effect is driven by increased government subsidies, inventory adjustments, and risk-taking. However, the impact on innovation outputs is minimal or negative.

Publisher

HUMANITIES AND SOCIAL SCIENCES COMMUNICATIONS

Published On

Jun 25, 2024

Authors

Han Hu, Shihui Yang, Lin Zeng, Xuesi Zhang

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