Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/316719 
Year of Publication: 
2025
Series/Report no.: 
IZA Discussion Papers No. 17764
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper investigates the relationship between China's import competition and the innovation strategies of domestic firms. Using firm level data from Italy spanning 2005-2010 and employing IV fixed effects estimation techniques, we find that the impact of China's import competition on innovation varies depending on the type of goods imported (intermediate vs. final). Specifically, imports of final goods boost both product and process innovation, while imports of intermediate goods reduce both. Additionally, we extend the analysis to consider the role of unions in moderating these responses. We find that, in unionized firms, imports' impact on innovation is mitigated, specifically to protect workers' employment prospects.
Subjects: 
IV fixed effects estimations
China's import competition
final and intermediate goods
product and process innovation
unions
JEL: 
C33
L25
F14
F60
O30
J50
Document Type: 
Working Paper

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