Firm innovation under import competition from low‐wage countries
Why this work is in the frame
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Bibliographic record
Abstract
Abstract In recent years, manufacturing firms in the United States have faced increasing import competition from low‐wage countries, especially China. Does this competition hurt or help firm innovation? This paper studies the effect of the surge in imports from China on innovation by US manufacturing firms. We first propose a theoretical framework that generates an inverted‐U‐shaped curve of innovation on imitation, which is based on the endogenous price elasticity of demand for the product in a Cournot model. We then take the theoretical prediction to data on publicly listed firms in the Compustat data set from 1990 to 2010. We find consistent evidence that Chinese import competition had an inverted‐U effect on firm innovation, as measured by patent counts and citation‐weighted patents. Our result suggests that when import penetration is less than 60% it positively affects firm innovation, but when it is more than 60%, this positive effect is inverted. This inverted‐U relation persists when we instrument import competition in the United States by using Chinese import penetration in the United Kingdom and when we test the robustness of the results by including sector‐specific trends. We find that the inverted‐U relationship is steeper for firms in high‐tech industries.
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Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.000 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.001 | 0.001 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.001 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.003 | 0.019 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it