{"id":61950,"date":"2022-10-06T10:22:00","date_gmt":"2022-10-06T09:22:00","guid":{"rendered":"https:\/\/www.lse.ac.uk\/granthaminstitute\/?post_type=publication&p=61950"},"modified":"2024-08-19T14:59:11","modified_gmt":"2024-08-19T13:59:11","slug":"was-the-trade-war-justified-solar-pv-innovation-in-europe-and-the-impact-of-the-china-shock","status":"publish","type":"publication","link":"https:\/\/www.lse.ac.uk\/granthaminstitute\/publication\/was-the-trade-war-justified-solar-pv-innovation-in-europe-and-the-impact-of-the-china-shock\/","title":{"rendered":"Was the trade war justified? Solar PV innovation in Europe and the impact of the \u2018China shock\u2019"},"content":{"rendered":"\n

Low-cost solar energy is key to enabling the transition away from fossil fuels. Despite this, in 2012 the European Union followed the United States’ example in imposing anti-dumping tariffs on solar panel imports from China, arguing that Chinese panels were unfairly subsidised and harmed the EU’s domestic industry.<\/p>\n\n\n\n

This paper examines the effects of Chinese import competition on firm-level innovation in solar photovoltaic (PV) technology by European firms. It shows that firms that were exposed to higher import competition innovated more. It also shows that during the years following the trade war, firms with a higher existing stock of innovation became less innovative. The results imply that competition from China constituted a positive push for more innovation among European solar innovators, calling into question the rationale behind the trade war.<\/p>\n\n\n\n

Key points for decision-makers<\/h2>\n\n\n\n