英文【世界銀行】技術(shù)脫鉤？美國限制對企業(yè)創(chuàng)新的影響

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PolicyResearchWorkingPaper10950

TechnologicalDecoupling?

TheImpactonInnovationofUSRestrictionsonChineseFirms

YuCao

FrancescadeNicola

AadityaMattoo

JonathanTimmis

WORLDBANKGROUP

EastAsiaandthePacificRegionOfficeoftheChiefEconomist

October2024

PolicyResearchWorkingPaper10950

Abstract

RecentU.S.-Chinatensionshaveraisedthespecteroftech-nologicaldecoupling.ThispaperexaminestheimpactofU.S.exportrestrictionsandtechnologylicensingonChi-nesefirms’innovation.ItfindsthatU.S.sanctionsreducethequantityandqualityofpatentoutputsoftargetedChi-nesefirms,primarilyduetodecreasedcollaborationwith

U.S.inventors.However,firmswithhigherinitialpatentstockorinsectorswithasmallertechnologicaldistancetotheU.S.arelessaffected.SanctionsinspecifictechnologyfieldsleadtoadeclineinthepatentoutputofbothChinesefirmswithU.S.collaboratorsandU.S.firmswithChinesecollaborators.

ThispaperisaproductoftheOfficeoftheChiefEconomist,EastAsiaandthePacificRegion.ItispartofalargereffortbytheWorldBanktoprovideopenaccesstoitsresearchandmakeacontributiontodevelopmentpolicydiscussionsaroundtheworld.PolicyResearchWorkingPapersarealsopostedontheWebat

/prwp.Theauthorsmay

becontactedatycao5@,fdenicola@,amattoo@,andjtimmis@.

ThePolicyResearchWorkingPaperSeriesdisseminatesthefindingsofworkinprogresstoencouragetheexchangeofideasaboutdevelopmentissues.Anobjectiveoftheseriesistogetthefindingsoutquickly,evenifthepresentationsarelessthanfullypolished.Thepaperscarrythenamesoftheauthorsandshouldbecitedaccordingly.Thefindings,interpretations,andconclusionsexpressedinthispaperareentirelythoseoftheauthors.TheydonotnecessarilyrepresenttheviewsoftheInternationalBankforReconstructionandDevelopment/WorldBankanditsaffiliatedorganizations,orthoseoftheExecutiveDirectorsoftheWorldBankorthegovernmentstheyrepresent.

ProducedbytheResearchSupportTeam

TechnologicalDecoupling?TheImpactonInnovationofUSRestrictionsonChineseFirms

YuCao*FrancescadeNicolatAadityaMattoo?JonathanTimmis§

Keywords:Innovation,EntityList,DecouplingJELCodes:O33,O38,O47

*WorldBank,ChiefEconomist’sOfficeforEastAsiaandPacific,ycao5@

tInternationalFinanceCorporation-WorldBankGroup,EconomicResearchUnit,fdeni-

col.,oiefEconomist’sOfficeforEastAsiaandPacific,amattoo@

§WorldBank,ChiefEconomist’sOfficeforEastAsiaandPacific,jtimmis@

Thefindings,interpretations,andconclusionsexpressedinthispaperareentirelythoseoftheauthors.TheydonotnecessarilyrepresenttheviewsoftheInternationalBankforReconstructionandDevelopment/WorldBankanditsaffiliatedorganizations,orthoseoftheExecutiveDirectorsoftheWorldBankorthegovern-mentstheyrepresent.

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1Introduction

ChinahasmadesignificantstridesininnovationsinceitaccededtotheWTOandopeneditsmarketstointernationalflowsoftrade,investment,people,andideas.Internationalintegrationcatalyzedaperiodofrapidgrowth,withforeignfirmsplayingakeyroleinfacil-itatingthediffusionofadvancedtechnologiesandenhancingChina’sinnovationcapacities(L.G.Branstetteretal.2023;Fangetal.2020;Jiangetal.2024andWeietal.2017).TheshareofpatentsfiledbyChineseassigneesintheUnitedStatesPatentandTrademarkOffice(USPTO)increasedfrom0.2%in2000to7.2%in2022.1Thisremarkablegrowthinpatentactivity,drivenbybothtechnologytransfersandlearningbydoingthroughsupplychainre-location,demonstratestheimportanceofglobalintegrationandinternationalcollaborationforChina’sinnovationecosystem.

Technologyhas,however,becomeasourceoftensionbetweentheU.S.andChina–raisingtheprospectoftechnologicaldecoupling.TheU.S.DepartmentofCommercehasincreasinglyutilizeditsEntityListtoregulatethetechnologytransferandexportsofgoodscontainingU.S.componentstoChineseentities.TheEntityListsubjectsselectedforeignentitiestolicensingrequirementsfortheexport,reexport,and/ortransferofcertaintechnologiesandgoods.Forexample,theinclusionofHuaweiintheEntityListin2019prohibitedGooglefromprovidingitsservicestoHuawei.ThisrestrictiondirectlyimpactedHuawei’ssmartphonebusinessandledtothecompanydevelopingitsownoperatingsystem(Reuters2019).ThenumberofChinesefirmsonthislisthasincreaseddramaticallyfrom3in1997to345in2022,withasignificantincreasein2018.DespitetheextensivediscussionoftheseU.S.sanctionsinthemedia,thereislittleresearchexploringtheireffectsonChinesefirms’innovation.

ThispaperexamineshowinclusionintheU.S.EntityListaffectstheinnovationactivitiesofChinesefirms.DatafromPATSTAT,apatentdatabase,isusedtomeasurefirms’innova-tionoutputanditsqualitybyexaminingpatentapplicationsandcitations.Thekeyfinding

isthatinclusionontheEntityListreducesthequantityandqualityofafirm’spatentoutput.

1BasedondatafromWIPOIPStatisticsDataCenter.

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Theresultisrobusttoavarietyofempiricalstrategies-difference-in-difference(DID)andeventstudydesignaccountingforstaggeredtreatment(followingCallawayandSant’Anna2021)-wheresanctionedfirmsarematchedtonon-sanctionedfirmswithsimilarinitialfirmcharacteristicsandpatentportfolios,byapplyingpropensityscoreweights.Theeventstudyplotssuggestcommon(pre-sanction)trendsbetweenourtreatmentandmatchedcontrolgroupfirms,andweshowbalancealsoincovariatelevels.

Toinvestigatetheunderlyingmechanism,wedrawuponexistingliteratureontheimpor-tanceofU.S.collaborationsforChineseresearch(Veugelers2017;Aghionetal.2023).WefirstshowthatChinesefirms’innovationoutputispositivelycorrelatedwithcollaborationwithU.S.inventors,moresothancollaborationwithinventorsinEuropeoradvancedEastAsia.Secondly,inclusionintheEntityListreducesChinesefirms’U.S.collaborationsintheirsubsequentpatenting.Finally,thedeclineinpatentoutputduetoinclusionontheEntityListisdrivenentirelybyChinesefirmswithpriorU.S.collaborators.

Wealsoexaminewhetherdomesticinnovationcapacitycanmitigatetheeffectofsanctionsandfindsomeevidenceinsupportofthishypothesis.Specifically,moreinnovativefirms,i.e.,thosewithahigherinitialpatentstock,sufferasmallerdecreaseinpatentoutputfollowingtheimpositionofU.S.sanctions.WealsoexaminetheroleoftechnologicaldistancefromtheU.S.,bythestockofChinesepatentsrelativetotheU.S.,asdonebyAkcigitetal.2024.FirmsinsectorswithasmallertechnologydistancetotheU.S.experiencedasmallerdeclineinpatentoutputcomparedtofirmsinothersectors.

Afterexaminingtheimpactonsanctionedfirms,weconsiderspilloversonnon-sanctionedfirmsinChinaandtheU.S.thatoperateinthesameprimarytechnologyfieldsassanctionedfirms.2WefindthattheinfluenceoftheU.S.EntityListextendsbeyondthedirectlytargetedfirms.Thetreatmentgroupconsistsoffirmsoperatinginthesanctionedfield,whilethecontrolgroupincludessimilarfirmsinnon-sanctionedfieldsmatchedusingpropensityscore2Toestimatethesespillovereffects,weassignfirmstoasingletechnologyfieldusingthemostcommon

fieldoftheirpatents.Sanctionedtechnologyfieldsaredefinedusingthesanctionedfirms’primarytechnologyfields.

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matching.OurempiricalanalysisshowsamodestbutsignificantnegativespillovereffectontheinnovationoutputofChinesefirmsinsanctionedtechnologyfields.NocomparablespillovereffectwasdetectedforU.S.firms.However,ChinesefirmswithpreviousU.S.collaboratorsandU.S.firmswithpreviousChinesecollaboratorssawasignificantdecreaseinpatentactivityfollowingthesanctioningoftheirprimarytechnologyfields.

Thespillovereffectisnotlimitedtofirmsinthesanctionedtechnologyfieldbutalsoaffectsfirmsinunsanctionedtechnologyfieldsthroughtheinnovationnetwork.Usingpatentcitations,wemapoutforwardandbackwardlinkagesofeachtechnologyfieldwithintheinnovationnetwork.WefindthatChinesefirmsindownstreamtechnologyfields–thoseusingtechnologiesproducedbysanctionedfields–experienceadeclineinpatentoutput.However,Chinesefirmsinupstreamfields–thoseproducingtechnologiesthatwereutilizedbythesanctionedfields–sawamodestincreaseintheirpatentoutput.ThisfindingsuggeststhatU.S.sanctionsmaystimulatedomesticinnovationinsectorspositionedupstreamofsanctionedtechnologies.

Thispapercontributestotwomainareasofexistingliterature.Firstly,itestimatestheimpactoftheintensifyingtensionbetweentheU.S.andChinaoninnovation.Mostexistingresearchhasfocusedontheacademicoutputofscientistsandresearchpublications(forinstance,seeAghionetal.2023;Flynnetal.2024andJiaetal.2022).BothAghionetal.2023andJiaetal.2022examinetheimpactofthe“ChinaInitiative”launchedbytheTrumpadministration,withtheformerfocusingontheimpactonChinesescientistsandthelatteronU.S.scientists.3OurstudyfocusesontheinnovationoutputofChinesefirmsasaresultoftheEntityList.Assuch,thispapercomplementstheevidencefromHanetal.2020,whoidentifiedadverseeffectsontheperformanceofChinesefirmsoperatingwithinsanctionedtechnologyfields.Weaddtotheiranalysisbyconsideringthedirectconsequencesonthe

3TheU.S.DepartmentofJusticedescribesits“ChinaInitiative”asreflectingthestrategicpriorityofcounteringChinesenationalsecuritythreatsandreinforcingthePresident’soverallnationalsecuritystrategy.TheU.S.AdministrationseekstoreachmultiplegoalsthroughtheInitiative:(i)identifyingandprosecutingthoseengagedintradesecrettheft,hacking,andeconomicespionage;(ii)protectingcriticalinfrastructureagainstexternalthreatsthroughforeigndirectinvestmentandsupplychaincompromises;and(iii)combatingcoverteffortstoinfluencetheAmericanpublicandpolicymakerswithoutpropertransparency.

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firmstargetedbyEntityListsanctionsanddiscussingthemechanismsthroughwhichthesesanctionscouldaffecttargetedfirms.

Additionally,thisstudycontributestotheliteratureontheimportanceofinternationalcollaborationinfosteringinnovation,especiallythecollaborationandinnovationnetworksbetweentheU.S.andChina.Previousstudiessuggestedthatcollaboratingwithinventorsfromtechnologicallymoreadvancedeconomiescanprovidefirmsinlessdevelopedeconomiesaccesstocutting-edgeknowledge,therebyenhancingtheirinnovationcapacity(MontobbioandSterzi2013,Giulianietal.2016).Thesecollaborationsalsobringlong-termbenefitsbyenablinginventorstocontinuallyproducehigh-impactinnovations(L.Branstetteretal.2015,Azoulay,Greenblatt,etal.2021).Priorresearch,highlightedtheimportanceofU.S.connectionsforChineseresearchers,suchasthatbyVeugelers2017.4XieandFreeman2023findthatU.S.-ChinacollaborationsarelinkedtoahigherqualityofbothU.S.andChineseresearch5.TheynotethatthepreviouslygrowingshareofU.S.orChinesepaperswithU.S.-Chinacollaborationshasfallensince2018.Flynnetal.2024findthatfrom2016,ChinesescientificresearcherswerelesslikelytociteU.S.papers(comparedtoUKpapers),whichtheyattributetorisingU.S.-Chinageopoliticaltensions.6Aghionetal.2023documentadeclineinpublicationsbyChineseresearcherswhopreviouslycollaboratedwithU.S.colleaguesfollowingthe“ChinaInitiative”.Ourpaperexpandsonthesefindingsbyanalyzingtheimpactoninnovationatthefirmandsectorlevels,evaluatingtheimportanceofU.S.collaborationsforChinesefirms’innovation.

Theremainderofthepaperisstructuredasfollows.Section2givesanoverviewofChina’sinnovationtrendsandcollaborationpatterns.Section3discussesthedataweused

intheanalysis.Section4presentsempiricalevidenceontheimpactofU.S.sanctionson

4Azoulay,Qiu,etal.2022andAzoulay,Qiu,etal.2024highlightfrictionsinthedisseminationofChinesescientificresearchbeyondofChina,asChineseresearchdemonstratesastronghome-biasincitationsandislesslikelytobecitedbyU.S.paperscomparedtosimilarqualityresearchfromothercountries.

5ForChineseresearchhavingreturneeChineseco-authorspreviouslyeducatedintheU.S.isassociatedwithhighercitations(aproxyforquality),apositivecorrelationisobservedalsowithChinesediasporaco-authorsforU.S.research.

6NoteFlynnetal.2024donotobserveadeclineinChinesecitationsfromU.S.research.

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Chinesefirms’innovation.Section5discussesthepotentialmechanism.Section6teststhespillovereffectonindirectlyaffectedfirmsandsection7concludes.

2RecentTrendsinChinesePatenting

Chinahasrapidlyenhanceditsinnovationcapabilitysince2006(Figure1).Chineseap-plicantsfiledfewerthan140,000patentapplicationsannuallyinthe1990s.However,thisfiguresurgedtonearly1.6millionby2022,with120,000patentsfiledabroad.In2022,almost14%ofpatentsfiledtotheEuropeanPatentOffice(EPO),UnitedStatesPatentandTrademarkOffice(USPTO),andunderthePatentCooperationTreaty(PCT)werefiledbyChineseapplicants.TheliteraturesuggeststhattheliberalizationofdomesticmarketsandforeigndirectinvestmenthavesignificantlycontributedtothesurgeinpatentfilingsamongChinesefirms(HuandJefferson2009).KnowledgespilloversfrommultinationalcompanieshaveincreasedtheinnovationcapacitiesofdomesticChineseapplicantsthrougheitherdirecttechnologytransfersorcollaborations(Holmesetal.2015).

ThequalityofChineseinnovationhasalsoseenaconsistentupwardtrajectory.TheproportionofChinesepatents(i.e.,patentsfiledbyChineseapplicants)amongthetop1%mostcitedpatentsgrantedbytheEPO,USPTO,andunderPCThasincreasedfromamere0.2%in1998toapproximately8%in2020(Figure2,leftpanel).TheimprovementinthequalityofChinesepatentsvariesacrosstechnologyfields(Figure2,rightpanel).Overall,themedianrelativequalityofChinesepatents–measuredbytheaveragenumberofcitationseachChinesepatentreceivesrelativetoU.S.patents–hasshownsignificantgrowthfrom2007to2016acrossalltechnologyfields.Theslightdeclineinmedianpatentqualityafter2016maybeaconsequenceoftheescalatingUS-Chinatension.Nevertheless,intechnologysectorswhereChinahasalreadysurpassedtheU.S.,Chinacontinuestoexhibitrapidgrowthinquality.Patentsinfieldssuchasautonomousvehicles,computervision,andbatterytechnologyareapproachingthehighestqualityinnovationworldwide(Bergeaudand

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Verluise2022).

ThepatternsofChinesecollaborationhaveshiftedrecently.Duringthe2000s,ChineseinnovationwasheavilyreliantoncollaborationswithU.S.inventors,whichcontributedtoaround6%ofChinesepatentsgrantedinCNIPAand33%ofChinesepatentsgrantedinEPO,USPTO,andunderPCT(Figure3,leftpanel)from2002to2012.However,since2012,therehasbeenanoticeablechangeinthedynamicsofU.S.andotherforeigncollaborations.TherelativeimportanceofU.S.collaboratorshasdeclined,withChineseapplicantsincreasinglyturningtoinventorsfromadvancedEastAsiaandEurope(Figure3,rightpanel).Theimportanceofinventorsfromtheseregionshasgrown,especiallyafter2016,implyingadiversificationinChina’sinternationalcollaborationnetworkpossiblyinresponsetotheintensifiedtensionwiththeU.S.

3Data

3.1DataSourceandSample

WeanalyzetheimpactofbeingincludedintheEntityListonafirm’sinnovationoutput.TheprimarydatasourceusedinouranalysisisthePATSTATGlobal2022SpringVersion.PATSTATcategorizespatentapplicantsasgovernmententities,companies,individuals,orunknowns.Forapplicantslabeledasunknown,weemployfirm-specificidentifiers(suchas“company”,“group”,“l(fā)td”)intheirnametodeterminetheirstatusasfirms.Forouranalysis,weonlyretainentitiesidentifiedasfirms.

Therearethreemajorpatentcategoriesgrantedglobally:invention,utilitymodels,andindustrydesign.Weexcludeindustrialdesignpatentsfromouranalysisduetotheirlimitedscientificvalue.Giventhevariedgrantrequirementsandtheabsenceofutilitymodelsincertainpatentoffices(e.g.,USPTOandCanada),ouranalysisfocusessolelyoninventionpatents.Furthermore,Chinaimplementedasignificantreforminitsintellectualpropertyandpatentsystemin2006.Tomitigatethepotentialimpactofthesepolicychangesonour

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analysis,weonlyconsiderpatentapplicationsfiledafter2006.

Oursampleprimarilyincludesfirmsthatengageinongoinginnovationactivities.Weexcludefirmsthathavenotfiledpatentsandthosewithfewerthanthreeyearsofpatentingactivities(whichneednotbeconsecutive)from2006to2021.Additionally,firmsthathadnotfiledpatentsintheChinesepatentofficeduringthisperiodwerealsodropped.Afterthedatacleaning,ourfinalsampleconsistsofapproximately28,000Chinesefirms.

ToestimatetheimpactofU.S.sanctions,werelyontheEntityListissuedbytheU.S.DepartmentofCommerce.TheEntityListisanimportantpartoftheU.S.exportcontrolsystem.ItisusedbytheU.S.governmenttoimposesanctionsagainstforeignpersonsorentities,includinggovernmentorganizations,researchinstitutes,companies,andindividuals.EntitiesincludedintheEntityListneedtofulfillU.S.licenserequirementstoreceivecertainexports,reexports,ortransfersofitems(includingtechnologies)fromtheU.S.WeobtainedthehistoricalEntityListfromtheFederalRegisterfrom1997to2021.

Entities/personsaretypicallyincludedintheEntityListiftheyarebelievedtobein-volvedinactivitiescontrarytoU.S.nationalsecurityinterests.Aftercleaning,wehave375uniqueChineseentities,includingfirms,universities,researchinstitutes,andgovern-mentagencies.TheEntityListcoversentitiesoperatinginvariousdomains.Forexample,China’sbiggestsmartphonevendor,Huawei,and68ofitsnon-USaffiliateswereaddedtotheListin2019.Thatyear,HiSilicon,Huawei’schipdesignarm,wasalsoaddedtotheList.ThesemeasureshavecutaccesstonewerchipsetsfromthemostadvancedchipsetmakerssuchasTSMCandSamsung,erodingmarketsharesofHuaweiandHiSilicon.In2021,sevensupercomputersmanufacturerswereaddedtotheblacklist:TianjinPhytiumInformationTechnology,SunwayMicroelectronics,ShanghaiCenterforHigh-PerformanceIntegratedCircuitDesign,andtheNationalSupercomputerCentersofJinan,Shenzhen,Wuxi,Zhengzhou.

WematchtheEntityListtothePATSTATdatasetusingentitynames.Toidentifytheaffectedcorporations,wematchtheexactentitiesontheEntityList,aswellastheir

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subsidiariesoraffiliatedentitiesmentionedontheEntityList.Forexample,ChinaAerospaceScienceandIndustryCorporation(CASIC)wasaddedtotheEntityListin2018.WeidentifiedallPATSTAT-listedfirmsassociatedwithCASICasasanctionedentityfrom2018onwards.Sinceourprimaryfocusisonchangesinsanctionedfirms’innovationbehavior,wedropallresearchinstitutesandgovernmentagenciesinoursample.However,iftheresearchinstitutesorgovernmentagencieshaveaffiliatedfirmsorsubsidiariesidentifiedasfirms,thesesubsidiariesoraffiliatedfirmsareincludedinoursampleandidentifiedassanctionedfirms.Aftermatching,weidentify182sanctionedfirmsinPATSTAT.

3.2OutcomeVariable

Weusethepatentcountattimettomeasureinnovationoutcomesinthatyear.Applicantscanfilepatentsacrossmultiplepatentoffices,suchasJPO,EPO,USPTO,andWIPO.Usingpatentsfiledinonepatentofficemightnotfullyreflectapplicants’innovationactivities.Toavoiddoublecountinginpatentcounts,wetracktheearliestfilingIDofeachpatent,ensuringtheuniquenessofpatentsinourcount.Thismeansapatent’sinitialfilingIDisusedincalculatingafirm’sannualpatentfilings.Moreover,beingaddedtotheEntityListcoulddistinctivelyimpactafirm’spatentfilingdomesticallyandinforeignoffices.TheinclusionintheEntityListmayreduceafirm’smarketshareinternationally,potentiallyreducingitsincentivetofilepatentsinforeignpatentoffices.Tounderstandthesedynamics,weanalyzeafirm’spatentapplicationsinitshomecountry,aswellasintheUSPTO,EPO,andWIPO.

WealsoevaluatetheU.S.sanction’simpactonthescientificsignificanceofafirm’spatentfilings.Wecounteachfirm’smostimportantpatentfilingseachyear,usingthreeproxies.First,weconsiderthenumberofhigh-technologypatents,classifiedaccordingtotheEPOcriteriabasedoneachpatent’sIPCcode.Second,wecount“triadicpatents”,whichareconcurrentlyfiledintheEPO,USPTO,andJPO.Thesepatents,knownfortheirhighnoveltystandards,representafirm’smostimportantinventionsannually.RelativelyfewChinesefirmshavefiled“triadicpatents”.Asanalternativemeasure,weuseinternational

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patents,thatispatentsfiledeitheratEPO,USPTO,orWIPO.

Patentcountscouldbeabiasedproxyforinnovationoutcomesduetothevaryingdiffi-cultyandcriteriainvolvedinobtainingapatentacrossdifferenttechnologyfields.Tomakepatentscomparableacrossdifferenttechnologyfieldsandlevelsoftechnologicalcomplexities,wealsousequality-adjustedpatentcounts.Weusepatent-forwardcitationstomeasureapatent’squalityandscientificvalue.Patentcitationaccumulationtrajectoryvariesacrossindustries,nations,andpatentoffices,duetofactorsliketruncationissues(i.e.,morerecentpatentshavelesstimetoaccumulatecitations),heterogeneousexaminationpractices,homebias(becauseofpatent-examinationofficers’bias,orbecausedomesticinventorsaremorelikelytocitepatentsappliedtothehomecountryoffice),languagebarriers,etc.(BoeingandMueller2016).Toaddresstruncationissues,apatent’scitationiscalculatedasthetotalnumberofforwardcitationseachpatentreceivedwithinthreeyearsofitspublicationdate.7Toaccountforheterogeneityincitationaccumulation,wefurtheradjustpatentcitationbydividingmeancitationperpatentinthesameapplication-year-tech-class-patent-office-domesticcohort.Thisnormalizationcontrolsforthetruncationandhomebiasproblems.Italsoadjustsfortheshiftsinaccumulationtrajectorycausedbypatentpolicyandtechnolog-icalfluctuation.

Patentstockiscalculatedasadeflatedsumofpastcitation-adjustedpatentapplicationsuptothatyear.Weusetheapplicationyearinsteadofthegrantedyearastheknowledgeisalreadyembodiedwhenanapplicantappliesforpatents.Wealsodiscardpatentapplicationsbefore1945andafter2019toavoidtruncationissuesatthebeginningandendofthesample.FollowingHalletal.2001,wecalculateapatentstockusinga15%depreciationrate.

FurtherdetailsonthedataconstructionaregiveninAppendixA.

7Wealsouseafive-yearwindowasarobustnesscheck,andtheresultsarequalitativelysimilar.

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3.3DescriptiveStatistics

Table1presentsdescriptivestatisticsforkeyoutcomevariablesbeforethe2018expansionoftheEntityList.Onaverage,sanctionedfirms(firmsontheEntityListfrom1997to2021)filednotablymorepatentsbetween2006and2017,bothdomesticallyandinternation-ally,comparedtootherChinesefirmsinoursample.Wealsoobservehigherfilingratesintriadicpatentsandhigh-technologypatentsforsanctionedfirms.Thisindicatesthatsanc-tionedfirmshaveastrongerfocusonglobalinnovationandhaveabroaderglobalmarketpresence.ThistrendalsosuggestslargerR&Dcapabilitiesinsanctionedfirmscomparedtotheirunsanctionedcounterparts.Thesepre-existingdifferencesbetweensanctionedandnon-sanctionedfirmsmotivateourmatchingapproach,discussedinthenextsection.

WeevaluatepatentqualitybasedonfilingsintheUSPTO,EPO,andWIPOonly,duetotheirmorecomprehensivepatentcitationrecords.Eachfirm’saveragepatentqualityperyearwascalculatedastheratioofcitation-adjustedtototalunadjustedpatentcounts.SanctionedfirmsexhibitmarginallylowerpatentqualitythanotherChinesefirms,butthedifferenceisnotstatisticallysignificant.Theprioraveragepatentapplicationsarecomputedastheannualpatentfilingsforeachfirmbefore2002.Itreflectsafirm’spre-sampleinnovationcapacity.Sanctionedfirmshaveaslightlyhigherpre-samplepatentapplicationrate,yettheiraveragepatentageisshorterthanthatofunsanctionedfirms.

4Results

Inthissection,wepresentourempiricalapproachandresults.Wefirstpresentourbench-markresultsDIDestimatesofU.S.entitylistsanctionsonthelogpatentsofChinesefirms.Thesecondsubsectionpresentsrobustnesstoalternativestothelogpatentsspecification.

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4.1BenchmarkEmpiricalModels

OurbenchmarkmodelestimatestheimpactofU.S.sanctionsonChinesefirms’innovationoutput,logpatents,throughaDIDstrategy.Theinnovationcapacityandpatentingac-tivityoffirmsinandoutsidetheEntityListdiffersubstantially(Table1).Wethusrelyonpropensityscorematchingtomakethetreatment(sanctionedfirms)andcontrolgroupcomparable.8WematcheachfirmintheEntityListwithafirminthesamesectorthatsharessimilarpatenttrajectoriesasthesanctionedfirmbeforethetreatedfirmisincludedintheEntityList.Weuseafirm’spatentage,logofpatentstock,andlogofthepreviousyear’spatentapplicationstocharacterizeitspatenttrajectory.WeuseweightscomputedbasedontheentropybalancingmethodinHainmuellerandXu2013toimprovethebalancebetweenthetreatmentandcontrolgroups.Weestimatethefollowing