Mapping U.S.-China Technology Decoupling: Policies, Innovation, and Firm Performance

98 Pages Posted: 18 Feb 2021 Last revised: 5 Apr 2024

See all articles by Pengfei Han

Pengfei Han

Peking University, Guanghua School of Management

Wei Jiang

Emory University Goizueta Business School; ECGI; NBER

Danqing Mei

Cheung Kong Graduate School of Business

Date Written: December 2, 2020

Abstract

We develop measures of technology decoupling and dependence between the United States and China based on combined patent data. The first two decades of the century witnessed a steady increase in technology integration (or less decoupling), but China’s dependence on the United States increased (decreased) during the first (second) decade. Firms covered by China’s Strategic Emerging Industries policies became less decoupled with the United States, gained cash flows, and gained valuation, but they saw no improvement in either innovation output/quality or productivity. Post-U.S. sanctions, firms in sanctioned sectors and their downstream suffered in performance but also became less decoupled with the United States. However, firms in the upstream of the sanctioned sectors improved productivity and produced more high-quality innovations.

Keywords: Technology Decoupling, Innovation, R&D, Patent, Firm Performance

JEL Classification: O31, O33, F02, O25

Suggested Citation

Han, Pengfei and Jiang, Wei and Mei, Danqing, Mapping U.S.-China Technology Decoupling: Policies, Innovation, and Firm Performance (December 2, 2020). Management Science Forthcoming, Columbia Business School Research Paper Forthcoming, Available at SSRN: https://ssrn.com/abstract=3779452 or http://dx.doi.org/10.2139/ssrn.3779452

Pengfei Han (Contact Author)

Peking University, Guanghua School of Management ( email )

No 5 Yiheyuan Road, Haidian District
Beijing 100871
China

HOME PAGE: http://https://sites.google.com/view/pengfeihan/home

Wei Jiang

Emory University Goizueta Business School ( email )

1300 Clifton Rd
Atlanta, GA 30322
United States

ECGI ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Danqing Mei

Cheung Kong Graduate School of Business ( email )

1017, Oriental Plaza 1
No.1 Dong Chang'an Street
Beijing
China

HOME PAGE: http://danqingmei.com

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