The Impact of the Trade War: Divergence in Chinese and US Innovations in the Post-Conflict Era
Release time：26 May 2025
May
30
|
Time & Date
|
10:30 am
-
12:00 pm,
May
30,
2025
(Friday)
|
| Topic: | The Impact of the Trade War: Divergence in Chinese and US Innovations in the Post-Conflict Era |
| Time&Date: | 10:30 am -12:00 pm, May 30, 2025 (Friday) |
| Venue | Room 904, Teaching Complex D Building |
| Speaker: |
Yiran Zhang Fudan University |
| Abstract: | This paper examines the impact of the US-China trade war on the innovation intensity and direction in China. Using a textual analysis method to break down patent abstracts into technical terms, we compare the innovation directions of Chinese and US firms by evaluating the similarity of these terms in their patents. We find that increased exposure to US import tariffs reduces this similarity, particularly with more recent US patents. Additionally, we observe that higher US import tariffs lead to a decrease in patent filings in China. To explain these effects, particularly in terms of innovation direction, we develop a quantitative model in which firms make endogenous decisions about their innovation efforts across different product features (corresponding to technical terms in patents) and also determine their export strategies. The quantification analysis shows that the demand channel accounts for 28% of the decline in China-US innovation similarity due to tariff shocks. Moreover, changes in innovation intensity and direction choices following the trade war lead to a 6% reduction in Chinese firms' exports by 2021, with direction alone responsible for 1.68%. |
| Biography: | Zhang Yiran is an assistant professor at the School of Economics at Fudan University since the beginning of Fall 2021. She obtained her Ph.D. in Economics from the Chinese University of Hong Kong in 2021. Her research primarily concentrates on topics of innovation, economic growth, and the Chinese economy. Her work has been published in journals including the Journal of Public Economics, the Economic Research Journal (Chinese), and The Journal of World Economy (Chinese). |
