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DESCRIPTION:Economics presents:&nbsp\;Kevin Lim\,&nbsp\;Assistant Professor
  of Economics\, University of TorontoEscaping\nthe Competition: The Impact
  of China’s Exports on Chinese and Global Innovation\n\nAuthors:\nKevin Li
 m\, Daniel Trefler\,\nand Miaojie\nYu This paper\nstudies the effects of t
 rade on firm-level innovation in China. Using both\neconometrics and a cal
 ibrated structural model\, we disentangle the mechanisms\nvia which trade 
 affects innovation\, focusing on scale effects (impact on market\nsize) an
 d competition effects (impact on markups). The structural model also\nstud
 ies a new mechanism for competition effects: firms can escape the\ncompeti
 tion\, by innovating into a market segment where competition is less\ninte
 nse. The econometric estimates and simulations of the calibrated structura
 l\nmodel indicate that both scale and competition effects are important fo
 r\nunderstanding how trade affects innovation in China. In particular\, wh
 en firms\ncan innovate to escape the competition\, greater competition ind
 uced by lower\ntrade barriers can lead firms to increase innovation rather
  than reduce it.For\ninformation on accessibility\, or to request accommod
 ation\, please contact Marc\nAlbert 315-443-9248Sponsored by the Moynihan 
 Institute of Global Affairs 
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SUMMARY:Kevin Lim - Escaping the Competition: The Impact of China’s Exports
  on Chinese and Global Innovation - Economics 
UID:RFCALITEM639090485219780436
X-ALT-DESC;FMTTYPE=text/html:<p>Economics presents:&nbsp\;</p><p><strong>Ke
 vin Lim\,</strong>&nbsp\;<em>Assistant Professor of Economics\, University
  of Toronto</em></p><strong>Escaping\nthe Competition: The Impact of China
 ’s Exports on Chinese and Global Innovation</strong><p>\n\n</p><p><strong>
 Authors:\n</strong>Kevin Lim\, Daniel Trefler\,\nand Miaojie\nYu </p><p>Th
 is paper\nstudies the effects of trade on firm-level innovation in China. 
 Using both\neconometrics and a calibrated structural model\, we disentangl
 e the mechanisms\nvia which trade affects innovation\, focusing on scale e
 ffects (impact on market\nsize) and competition effects (impact on markups
 ). The structural model also\nstudies a new mechanism for competition effe
 cts: firms can escape the\ncompetition\, by innovating into a market segme
 nt where competition is less\nintense. The econometric estimates and simul
 ations of the calibrated structural\nmodel indicate that both scale and co
 mpetition effects are important for\nunderstanding how trade affects innov
 ation in China. In particular\, when firms\ncan innovate to escape the com
 petition\, greater competition induced by lower\ntrade barriers can lead f
 irms to increase innovation rather than reduce it.</p><p>For\ninformation 
 on accessibility\, or to request accommodation\, please contact Marc\nAlbe
 rt 315-443-9248</p><p><em><strong>Sponsored by the Moynihan Institute of G
 lobal Affairs</strong></em> </p>
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