International Trade and R&D Investment: Evidence from Chinese Manufacturing Firms

A current concern for China's long-term growth prospect is whether China can become an innovative economy and achieve industrial upgrading to compensate for the gradually declining competitiveness resulting from low-cost labor. The present study examines this issue by exploring how trade partic...

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Main Authors: Zhou, Yixiao, Song, L.
Format: Journal Article
Published: 2016
Online Access:http://hdl.handle.net/20.500.11937/16990
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author Zhou, Yixiao
Song, L.
author_facet Zhou, Yixiao
Song, L.
author_sort Zhou, Yixiao
building Curtin Institutional Repository
collection Online Access
description A current concern for China's long-term growth prospect is whether China can become an innovative economy and achieve industrial upgrading to compensate for the gradually declining competitiveness resulting from low-cost labor. The present study examines this issue by exploring how trade participation impacts on the R&D investment of manufacturing firms through various channels. Merging China's Annual Manufacturing Survey Dataset and the Chinese Customs Dataset allows us to study such a relationship at the individual firm level. The empirical results suggest that channels such as geographical diversification of export markets, share of imports from high-income countries, average unit value of imports, number of intermediate goods and capital goods imports, and the trade regime are significant factors that influence firm-level R&D investment. The study discusses the policy implications of the empirical findings in relation to industrial and trade policies that may be potentially beneficial for China's transition towards an innovative economy.
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institution Curtin University Malaysia
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spelling curtin-20.500.11937-169902017-09-13T15:43:06Z International Trade and R&D Investment: Evidence from Chinese Manufacturing Firms Zhou, Yixiao Song, L. A current concern for China's long-term growth prospect is whether China can become an innovative economy and achieve industrial upgrading to compensate for the gradually declining competitiveness resulting from low-cost labor. The present study examines this issue by exploring how trade participation impacts on the R&D investment of manufacturing firms through various channels. Merging China's Annual Manufacturing Survey Dataset and the Chinese Customs Dataset allows us to study such a relationship at the individual firm level. The empirical results suggest that channels such as geographical diversification of export markets, share of imports from high-income countries, average unit value of imports, number of intermediate goods and capital goods imports, and the trade regime are significant factors that influence firm-level R&D investment. The study discusses the policy implications of the empirical findings in relation to industrial and trade policies that may be potentially beneficial for China's transition towards an innovative economy. 2016 Journal Article http://hdl.handle.net/20.500.11937/16990 10.1111/cwe.12144 restricted
spellingShingle Zhou, Yixiao
Song, L.
International Trade and R&D Investment: Evidence from Chinese Manufacturing Firms
title International Trade and R&D Investment: Evidence from Chinese Manufacturing Firms
title_full International Trade and R&D Investment: Evidence from Chinese Manufacturing Firms
title_fullStr International Trade and R&D Investment: Evidence from Chinese Manufacturing Firms
title_full_unstemmed International Trade and R&D Investment: Evidence from Chinese Manufacturing Firms
title_short International Trade and R&D Investment: Evidence from Chinese Manufacturing Firms
title_sort international trade and r&d investment: evidence from chinese manufacturing firms
url http://hdl.handle.net/20.500.11937/16990