Original scientific paper
https://doi.org/10.1080/1331677X.2023.2170901
Is technological innovation a push for trade friction?
Qian Zhao
Chi-Wei Su
Marilen Gabriel Pirtea
Florin Costea
Abstract
This study analyses the interrelation between technological innovation
(TI) and trade friction (TF) by applying the bootstrap rollingwindow
full- and subsample Granger causality test from China in
a sample from January 2002 to December 2021. Results show
that the influence of TI on TF is twofold. On the one hand, TI is a
push for TF. This finding is consistent with the ‘income effect’,
which postulates that TI leads to more TF by affecting the income
of other countries. On the other hand, TI has a negative influence
on TF. This result confirms the ‘substitute effect’, implying that TI
can benefit consumers by providing more high-quality and
cheaper products. In turn, TF can hinder TI by reducing exporters’
profits. Based on these findings, governments should coordinate
their efforts toward innovation and trade policies. At the same
time, firms should master core technology and develop their
high-performance products to avoid the risk of TF.
Keywords
Technological innovation; trade friction; rollingwindow; bootstrap
Hrčak ID:
321732
URI
Publication date:
16.4.2024.
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