Research On The Effect Of Trade Friction In Factor Market On Firm Innovation

As the world’s most influential science superpower,China has ranked first in the number of patent applications in past ten years,and Huawei Technologies Co.,Ltd.has been ahead of other companies in the number of patent applications in past five years.Despite the significant progress made by high-tech firms such as Huawei,high-tech firms have also attracted the attention from western countries represented by the United States.The United States imposes all-round trade restrictions on Chinese high-tech firms to curb China’s technological development.As the core subject of technological development,will high-tech firms dampen their innovation ability,or improve the quality of innovation under the trade restrictions? From the perspective of relevant academic research,academic discussions on the economic consequences of trade frictions mainly focus on product market trade frictions.The research on economic consequences of factor market trade frictions,especially that on high-tech firms needs to be further advanced.Therefore,it is of great practical and theoretical significance to investigate how high-tech firms adjust innovation activities under the condition that the circulation of key elements is limited.This paper first adopts the normative analysis method,combined with resource dependence theory,financial constraints theory,technology spillover theory,path dependence theory and Schumpeter hypothesis theory to analyze the impact of factor market trade friction on firm innovation.Then I construct the proxy of factor market trade friction and use 2007 to 2020 A-share list high-tech firms as research samples to discuss the following problems.First,the paper discusses the effect of factor market trade friction on firm innovation financing.The study finds that factor market trade friction aggravates the innovation financing constraints faced by high-tech firms.Furthermore,factor market trade friction exacerbates innovation financial constraints by inhibiting corporate debt financing and equity financing.Second,the paper discusses the effect of factor market trade friction on firm innovation inputs.I find that factor market trade friction increases innovation inputs.Through the mediation effect test,I find that factor market trade friction increases innovation inputs by reducing firms’ dependence on foreign technology and alleviating import competition.Furthermore,factor market trade friction has more significant effect on innovation inputs in firms with more imported high-tech products,better scientific research foundation,lower financial constraints,and higher government subsidies.Third,the paper discusses the effect of factor market trade friction on firm innovation outputs.I find that factor market trade friction increases innovation outputs.After distinguishing the type of innovation outputs,I find that the factor market trade friction only promotes substantive innovation outputs.Through the mediation effect test,I find that factor market trade friction increases innovation outputs and substantive innovation outputs by reducing firms’ dependence on foreign technology and alleviating import competition.Furthermore,factor market trade friction has more significant effect on innovation outputs and substantive innovation outputs in firms with more imported high-tech products,better scientific research foundation,lower financial constraints,and higher government subsidies.Fourth,the paper discusses the effect of factor market trade friction on firm innovation efficiency.I find that factor market trade friction increases innovation efficiency.Through the mediation effect test,I find that factor market trade friction increases innovation efficiency by reducing firms’ dependence on foreign technology and alleviating import competition.Furthermore,factor market trade friction has more significant effect on innovation efficiency in firms with more imported high-tech products,better scientific research foundation,lower financial constraints,and higher government subsidies.Lastly,the paper discusses the effect of factor market trade friction on firm production efficiency.I find that factor market trade friction increases firm production efficiency.Through the mediation effect test,I find that factor market trade friction increases firm production efficiency by promoting firm innovation.Furthermore,factor market trade friction has more significant effect on production efficiency in firms with more imported high-tech products,better scientific research foundation,lower financial constraints,and higher government subsidies.In terms of theoretical contribution,this paper enriches the research connotation of trade friction from the perspective of the factor market,broaden the study of the influence factors of high-tech firms’ innovation in terms of the international environment,and provide empirical evidence on the economic consequences of factor market trade friction to micro enterprise level.The paper is of high practical significance.It is helpful to provide theoretical suggestions for the government to deepen the cognition and understanding of trade frictions and improve macro-control measures and industrial policies to deal with trade frictions;it is helpful to provide theoretical references for high-tech enterprises to properly cope with the challenges brought by trade frictions in factor markets;it is helpful to provide theoretical guidance for capital market participants to assess the impact of trade frictions more accurately and optimize investment strategies.