Data and do file for paper titled "Revisit the Role of Trade liberalization in Technological Innovation"

This paper examinesthe causality between trade liberalization and technological innovation using the caseof China’s Free Trade Zones (FTZs). Based on the natural experiment of the staggered establishment of FTZs across China, we apply a DID-based causal inference framework and estimate a significant positive treatment effect on the scale and quality of urban technological innovation This result is supported by various estimators and robustness checks. We show that knowledge flows measured by technology transfer and collaborative innovation and institutional optimizations measured by strengthened IP protection and relaxed market entry barriers significantly drive post-FTZ growth in urban technological innovation performance. Moreover, the depth of reform rather than the number of zones established or the level of government attention to SCI&TECH explains the heterogeneity in innovation performance across FTZ cities. We also reveal FTZs’pivotal role in promoting both leading-edge technological innovations and breakthroughs in new technology domains. This study provides new empirical evidence on the relationship between trade liberalization and technological innovation and highlights the importance of trade liberalization reforms for developing countries.