Import Tariff Reduction And Enterprise Innovation:Evidence From Chinese Manufacturing Firms

In recent years,General Secretary Xi Jinping has repeatedly stressed the need to accelerate the formation of a new pattern of development in which the domestic cycle is the mainstay and both domestic and international cycles reinforce each other.Despite the impact of external uncertainties,China’s opening up is still accelerating.Therefore,this paper takes China’s accession to the WTO as the background,uses the data of Chinese manufacturing enterprises from 1998 to 2007,adopts the Difference Difference Method(DID)and a series of relevant tests to study the heterogeneity of the impact of import tariff reduction brought about by trade liberalization on the innovation of Chinese manufacturing enterprises at the micro level.Research results show that:in the beginning of China’s WTO accession,in spite of reduced tariffs on the whole,is not conducive to enterprise innovation,but under certain conditions showed some beneficial impact,heterogeneity embodies in five aspects;(1)the types of tariffs to the enterprise heterogeneity on the impact of innovation:compared with the final goods tariffs,tariff intermediates more influence on enterprise innovation;(2)Heterogeneity of the impact of tariff reduction on innovation:the larger the tariff reduction,the smaller the negative impact on innovation,and the marginal effect of tariff reduction shows a decreasing trend;(3)Heterogeneity of reaction time:product innovation has a longer lag period than process innovation;(4)Individual heterogeneity of enterprises:tariff reduction forces the transformation and upgrading of traditional industries,promotes the development of emerging industries,technology-intensive enterprises and export enterprises,and promotes the adjustment and upgrading of the industrial structure of the manufacturing industry through the effect of resource reallocation;(5)Heterogeneity of mechanism of action:industrial concentration is the channel through which tariff decline affects product innovation,regional marketization is the channel through which tariff decline affects process innovation,and firm entry and exit play a moderating role between tariff and innovation.The research results of this paper have certain reference value for understanding the conditions of the impact of tariff reduction on the innovation of local enterprises and choosing targeted policies.An important conclusion from the research conclusion is that,although the tariff reduction fails to promote enterprise innovation on the whole,the heterogeneity analysis shows that openness significantly promotes the structural optimization and adjustment of the manufacturing industry through the effect of resource reallocation,which undoubtedly contributes to an objective and accurate assessment of the economic effects of trade liberalization.At the same time,the adjustment of tariff policies in developing countries has important policy implications.