Purpose - This paper investigates how high-technology industry exports respond to trade protection by studying the US-China tech-war in 2018. Design/Methodology/Approach - To identify the effects of a tech-war on high-tech industry exporting behavior, we explore the tech-war episodes to conduct a DID analysis, using monthly customs data in China from January 2017 to December 2019. Findings - We find that the launch of the tech-war by using an increasing tariff against Chinese high-technology industry exports by the US had an insignificant positive effect on Chinese high-tech industries total exports to the US. Further decomposition shows that this insignificantly positive influence in exports is mostly explained by an increase in quantity but a price decrease. At the same time, a tech-war using the means of additional tariffs has no significant effect on exports to the world. Research Implications - Existing literature on tech wars mostly focuses on rough case analysis and does not conduct empirical research. This paper has largely filled the gap in the existing literature in this regard. In addition, the findings in this paper illustrate the irrationality of the US government and further add Chinese technology giants onto the Entity List. Also, the findings imply that the pass-through effects of tariffs on Chinese products exports to US consumers cannot be easily applied to high-tech products.
Ⅰ. Introduction
Ⅱ. Background, Data and Estimation Strategy
Ⅲ. Empirical Findings
Ⅳ. Conclusion
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