Does Import Competition Induce R&D Reallocation? Evidence from the U.S.

Does Import Competition Induce R&D Reallocation? Evidence from the U.S.
Author :
Publisher : International Monetary Fund
Total Pages : 44
Release :
ISBN-10 : 9781484329528
ISBN-13 : 148432952X
Rating : 4/5 (52X Downloads)

Book Synopsis Does Import Competition Induce R&D Reallocation? Evidence from the U.S. by : Rui Xu

Download or read book Does Import Competition Induce R&D Reallocation? Evidence from the U.S. written by Rui Xu and published by International Monetary Fund. This book was released on 2017-11-16 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the impact of rising import competition from China on U.S. innovative activities. Using Compustat data, we find that import competition induces R&D expenditures to be reallocated towards more productive and more profitable firms within each industry. Such reallocation effect has the potential to offset the average drop in firm-level R&D identified in the previous literature. Indeed, our quantitative analysis shows no adverse impact of import competition on aggregate R&D expenditures. Taking the analysis beyond manufacturing, we find that import competition has led to reallocation of researchers towards booming service industries, including business and repairs, personal services, and financial services.


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