Trade shocks and investment efficiency
利用中国企业产品层面数据，研究发现反倾销等贸易救济措施通过减少自由现金流和加剧竞争，抑制了过度投资，从而提升了目标企业的投资效率。
We investigate how international trade shocks affect corporate investment efficiency. Utilizing a novel pairwise firm-product level dataset in China, we find that the investment efficiency of target firms significantly improves following the implementation of trade defense instruments (TDIs), including antidumping, countervailing, and safeguard measures. The reduction in free cash flow and heightened competition triggered by TDIs discourage overinvestment, particularly in firms more prone to overinvestment and those operating in industries with lower ex-ante competition. Moreover, the efficiency-enhancing effect is more pronounced in firms subject to stricter penalties and higher-value targeted products. Taken together, these findings suggest that Chinese target firms respond to international trade shocks by altering their investment strategies and improving efficiency.