Innovation plays a key role in economic growth. In this paper, we investigate the effects of intermediate input tariff reduction on the innovation activities of domestic firms. Input tariff reduction has two opposite effects on the innovation decision of a firm: it may promote innovation because...

This study proposes a novel channel through which trade liberalization may induce innovationthrough the reduction of trade policy uncertainties (TPU) in destination markets. To verify thislinkage, we utilize the significant reduction of TPU engendered by China’s accession to theWorld Trade...