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ID144853
Title ProperInternational trade and r&d investment
Other Title Informationevidence from Chinese manufacturing firms
LanguageENG
AuthorSong, Ligang ;  Zhou, Yixiao
Summary / Abstract (Note)A current concern for China's long-term growth prospect is whether China can become an innovative economy and achieve industrial upgrading to compensate for the gradually declining competitiveness resulting from low-cost labor. The present study examines this issue by exploring how trade participation impacts on the R&D investment of manufacturing firms through various channels. Merging China's Annual Manufacturing Survey Dataset and the Chinese Customs Dataset allows us to study such a relationship at the individual firm level. The empirical results suggest that channels such as geographical diversification of export markets, share of imports from high-income countries, average unit value of imports, number of intermediate goods and capital goods imports, and the trade regime are significant factors that influence firm-level R&D investment. The study discusses the policy implications of the empirical findings in relation to industrial and trade policies that may be potentially beneficial for China's transition towards an innovative economy.
`In' analytical NoteChina and World Economy Vol. 24, No.1; Jan-Feb 2016: p.63–84
Journal SourceChina and World Economy 2016-02 24, 1
Key WordsTrade ;  Chinese Economy ;  R&D Investment ;  Firm Behavior