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Trade Induced Technical Change? The Impact of Chinese Imports on Innovation, IT and Productivity

Bloom, Nicholas, Draca, Mirko, Van Reenen, John·2016·The Review of Economic Studies

Abstract

We examine the impact of Chinese import competition on broad measures of technical change—patenting, IT, and TFP—using new panel data across twelve European countries from 1996 to 2007. In particular, we establish that the absolute volume of innovation increases within the firms most affected by Chinese imports in their output markets. We correct for endogeneity using the removal of product-specific quotas following China's entry into the World Trade Organization in 2001. Chinese import competition led to increased technical change within firms and reallocated employment between firms towards more technologically advanced firms. These within and between effects were about equal in magnitude, and account for 14% of European technology upgrading over 2000–7 (and even more when we allow for offshoring to China). Rising Chinese import competition also led to falls in employment and the share of unskilled workers. In contrast to low-wage nations like China, developed countries had no significant effect on innovation.

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Research works printed but not linked: 2

  1. BRAMBILLA I. KHANDEWAL A. SCHOTT P. Feenstra R. Wei S.-J. (2010), “China's Experience under the Multi-Fiber Agreement (MFA) and the Agreement on Textile and Clothing (ATC)”, China's Growing Role in World Trade (Chicago: Chicago University Press) 345–387.
  2. FREEMAN, 2005, The Last American Shoe Manufacturers, Industrial Relations, 44, 307, 10.1111/j.0019-8676.2005.00385.x · doi:10.1111/j.0019-8676.2005.00385.x

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Metadata

Authors
Bloom, N., Draca, M., & Van Reenen, J.
Venue
The Review of Economic Studies
Published
2015-09-17
Volume
83
Issue
1
Pages
87-117
ISSN
  • 0034-6527 (ISSN-L)
  • 1467-937X
OpenAlex
W1879687480
Cited by
1,521
References
115
FWCI
323.44
Type
journal article
Language
en
Open access
closed

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CoChat. (2026). Citation check: Trade Induced Technical Change? The Impact of Chinese Imports on Innovation, IT and Productivity. https://app.cochat.ai/papers/10.1093/restud/rdv039
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Bloom, N., Draca, M., & Van Reenen, J. (2016). Trade Induced Technical Change? The Impact of Chinese Imports on Innovation, IT and Productivity. The Review of Economic Studies. https://doi.org/10.1093/restud/rdv039

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