The Impact of China: U.S Trade Frictions on Chinese Enterprise Innovation

The trade frictions between the United States and China has brought great uncertainty and risk to the global economic development environment. Using the panel data of Chinese listed firms from 2009 to 2023, the Difference in Difference (DID) panel model and mediation effect model are employed to study the impact of the US-China trade frictions on firms' innovation. The empirical results show that the US-China trade friction has a negative impact on R&D innovation of Chinese firms. Further research finds that US-China trade friction has a stronger negative effect on R&D innovation of non-state-owned firms and the central and western regions. Finally, this paper finds that US-China trade friction will reduce corporate technology innovation by exacerbating corporate financing constraints.