The Effects of the US-China Trade War on Corporate R&D of Chinese New Energy Vehicle Companies

Chinese new energy vehicle companies have recently had trade frictions with the EU and the US, which can draw inspiration from the US-China trade war that began in 2017. This paper uses a difference-in-difference model to study the impact of the exogenous impact of the trade war on corporate R&D, and uses text mining to identify research samples. Empirical results show that the trade war promotes the R&D of Chinese new energy vehicle companies. The results remained robust after the parallel trend test and robustness test. The research results reveal that the trade war forces companies to innovate, and companies will increase strategic investments in an uncertain environment to gain advantages in future markets. In the face of new trade frictions, Chinese new energy vehicle companies should continue to increase their R&D investment. This paper enriches the industry perspective in the study of the relationship between trade war and corporate innovation and puts forward suggestions for Chinese new energy vehicle companies.