Fact of the Week: A Major Study that Found that Chinese Imports Increased European Patent Growth Up to 30 Percent Between 1996-2005 Had Major Flaws, Reversing the Result

Caleb Foote July 13, 2020
July 13, 2020

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Source: Douglas L. Campbell and Karsten Mau, “On ‘Trade Induced Technical Change: The Impact of Chinese Imports on Innovation, IT and Productivity’,” NES Working Paper No 264, June 2020.

Commentary: It is widely believed that increased competition nearly universally spurs innovation by increasing the incentives to develop new and better products. In 2016, a study found just that, showing that the rise in Chinese imports in Europe between 1996 and 2005 increased patent growth over that period by up to 30 percent, garnering over 1,100 citations (including by ITIF). However, when other researchers attempted to replicate their results, they found several coding errors. Without those errors, instead of showing consistent growth in productivity and measures of innovation, the correctly interpreted data shows a mixture of negative and insignificant changes due to Chinese competition.