Defensive Innovation: Technological Rivalry and College Major Choice

07.10.2025 14:15 – 15:30

GENEVA TRADE AND DEVELOPMENT WORKSHOP

Jointly with Xiaohua Bao, Qin Chen, Zibin Huang and Mengyuan Wang

Abstract:


This paper studies the responses of students' college major choices to trade tensions in the context of the U.S.-China trade war. By analysing granular college admissions data, we find that the U.S. tariffs targeting China'shightech industries unexpectedly raised admission scores for STEM majors. A 1percentage point increase in the weighted average tariff correlates with a 2%to 3% rise in standardized admission scores, particularly for engineering disciplines and elite universities. This phenomenon results from the"defensive innovation", where increased government support and private innovation investments in affected industries lead to greater demand for high-skilled workers. As U.S. tariffs rose, Chinese firms received more subsidies, enabling them to offer higher wages and more R&D related job opportunities, which incentivized students to pursue majors critical to the development of key strategic industries.

Biography: Please see https://lei-li-economics.weebly.com/

It will be hybrid via Webex. Please click here: https://iheid.webex.com/iheid/j.php?MTID=mfd3fe58bdd66746ccd5174efa8043684 to participate via Webex. The presenter will be available as of 14:00 for a short exchange with participants.

Lieu

Bâtiment: Maison de la paix

Graduate Institute
2 Chemin Eugène-Rigot,
Petal 1, Room S5
1202 Genève

entrée libre