Foreign Competition and Domestic Innovation: Evidence from U.S. Patents

David Autor, David Dorn, Gordon Hanson, Gary Pisano and Pian Shu ()
Additional contact information
Gary Pisano: Harvard University
Pian Shu: Georgia Institute of Technology

No 12638, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Manufacturing accounts for more than three-quarters of U.S. corporate patents. The competitive shock to this sector emanating from China's economic ascent could in theory either augment or stifle U.S. innovation. Using three decades of U.S. patents matched to corporate owners, we quantify how foreign competition affects domestic innovation. Rising import exposure intensifies competitive pressure, reducing sales, profitability, and R&D expenditure at U.S. firms. Accounting for confounding sectoral patenting trends, we find that U.S. patent production declines in sectors facing greater import competition. This adverse effect is larger among initially less profitable and less capital-intensive firms.

Keywords: patents; innovation; trade (search for similar items in EconPapers)
JEL-codes: F14 O30 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2019-09
New Economics Papers: this item is included in nep-cna, nep-cse, nep-ind, nep-int, nep-ipr and nep-sbm
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Citations: View citations in EconPapers (8)

Published - published in: American Economic Review: Insights, 2020, 2 (3), 357-374

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https://docs.iza.org/dp12638.pdf (application/pdf)

Related works:
Journal Article: Foreign Competition and Domestic Innovation: Evidence from US Patents (2020)
Working Paper: Foreign Competition and Domestic Innovation: Evidence from U.S. Patents (2019)
Working Paper: Foreign Competition and Domestic Innovation: Evidence from U.S. Patents (2018)
Working Paper: Foreign Competition and Domestic Innovation: Evidence from U.S. Patents (2016)
Working Paper: Foreign Competition and Domestic Innovation: Evidence from U.S. Patents (2016)
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