Are anti-dumping investigations against China ineffective in curbing innovation? Evidence from firms’ patent filings.

This paper empirically investigates the effect of anti-dumping investigations on export firm innovation performance using Chinese firm-level patent filings data and anti-dumping case from 2000 to 2013. By employing the staggered difference-in-differences strategy, our empirical evidence shows that anti-dumping investigations imposed on firms lead to an improvement in innovation rather than suppression. Further examination identifies that the trade diversion effect is a crucial mechanism through which anti-dumping investigations affect firm innovation. We find that firms are experiencing a significant increase in exports of investigated products to non-involved countries, while also expanding their export destinations and diversifying the range of exported products. Heterogeneity analysis indicates that anti-dumping charges significantly promote innovation in high-productivity firms and multi-product exporting enterprises, while financial constraints are identified as a crucial factor restricting innovation. [ABSTRACT FROM AUTHOR]