Antidumping Duties and Manufacturing Firm Innovation: Theory and Evidence from Chinese Listed Firms

This paper introduced export tax and product quality into the firm innovation decision-making model and tried to analyze the impacts of antidumping duties on firm’s R&D investment and innovation output. Our model shows that the increase in export tax will reduce the demand and price of the product,which will “force”firm to increase R&D investment. Extended analysis shows that the higher the quality-innovation elasticity of the firm,the higher the marginal income of innovation brought by the impact of antidumping duties, and the more the firm will invest in innovation. We also empirically tested the impacts of antidumping on R&D investment and innovation output by using Chinese listed firm data from 2002 to 2015 and the World Bank antidumping data. We find that antidumping have a“forced”effects on firm innovation,and there is a certain degree of lag effects. This result can only be found among exporters which have a high proportion of oversea business,midstream and downstream firms. Antidumping duties would increase the number of utility model patent in the short term,and significantly increased invention patent in the long run. What’s more,thus effects are more significant in private firms and high-tech industries,which prove the conclusion in extended analysis.After excluding the impact of financial crisis,controlling time trend,controlling productyear fixed effect, using PSM method, dropping the non-affected firms, using counterfactual test and other robustness checks,and solving the endogeneity problems,our results still remained. The conclusions of this paper might provide some suggestions on firms’ development under current international environment,and how to achieve high quality development.