Innovation Spillovers from Trade Shocks

30 Pages Posted: 1 Jul 2020

See all articles by Francisco Urzúa I.

Francisco Urzúa I.

City, University of London - Bayes Business School

Date Written: June 9, 2020

Abstract

Do trade shocks affect non-manufacturing industries? Using China’s entry into the World Trade Organization in 2001 as a trade shock and an identification strategy based on manufacturers and non-manufacturers with common shareholders, I show that non-manufacturing firms become more innovative as a response to the shock. That is, they have more patents and are more likely to begin patenting. I find that my results rely on shareholders having large enough stakes in both firms and also on the presence of shared managers.

Keywords: innovation spillovers, common ownership, trade shocks

JEL Classification: F1, G3

Suggested Citation

Urzua, Francisco, Innovation Spillovers from Trade Shocks (June 9, 2020). Available at SSRN: https://ssrn.com/abstract=3623010 or http://dx.doi.org/10.2139/ssrn.3623010

Francisco Urzua (Contact Author)

City, University of London - Bayes Business School ( email )

United Kingdom

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