Economics, Econometrics and Finance
4 years ago

Exporting Boosts Innovation in Chinese Firms, Driving Economic Growth.

SSRN Electronic Journal
From Export to Innovation: Evidence from Chinese Listed Firms
Douglas J. Cumming, Shuyu Xue, Sili Zhou

Paper Summary

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Exporting can boost innovation in Chinese firms. A study looked at data from 2002 to 2016 and found that companies in China create more patents when there is demand from other countries. They confirmed this by looking at a change in exchange rate policy in 2005. After this change, multinational companies in China increased their innovation more than local companies. This increase in innovation was especially strong for firms with financial difficulties and those located in areas with good access to talent, technology, and supportive institutions. Overall, exporting has a positive impact on corporate innovation in China.