Export restrictions and the rise of basic research: how chip controls influence Chinese firms’ research orientation

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Panel data analysis reveals export controls increase basic research investment in Chinese firms, suggesting stronger innovation capacity.

Export controls significantly increase firms' investment in basic research, fostering long-term innovation capacity.
Basic research engagement is affected by organizational mechanisms like technological realignment and talent restructuring.
Panel data analysis identifies the causal effect of export control exposure across Chinese firms from 2010 to 2024.
Findings highlight the need for policymakers to build domestic support systems to leverage external shocks for innovation.

Cai et al. (2025) studied this question.

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