‘Trade shocks’ force China’s firms to invest more efficiently: researchers

‘Trade shocks’ force China’s firms to invest more efficiently: researchers

New paper argues tariffs curb wasteful investment, but analysts warn findings may not apply to current China–US trade tensions.

Trade Wars May Boost Chinese Firms’ Efficiency

Chinese firms have long been accused of benefiting from a protectionist environment at home, but a new study suggests that facing higher duties or import restrictions abroad can actually make them more efficient investors. This counterintuitive finding, published in the Journal of Corporate Finance, challenges conventional wisdom and offers a fresh perspective on the impact of trade wars and… Source