Trade Policy Uncertainty,Industry Competition,and Corporate Performance

Since the 45 th US President Donald trump came into office in November 2016,the rise of trade protectionism and the increase of trade uncertainty have made us pay more attention to the impact on business operation.Meanwhile,the industry competition environment is an important factor in business operation,so it is worth studying how it plays a role in enterprise decision-making.In this context,this paper uses the natural experiment of the United States granted China “permanent normal trade relations(PNTR)”status with 2000-2006 combined data of China industrial enterprise and China customs and the double difference method to evaluate systematically.The study finds that the decline of trade policy uncertainty can significantly improve the corporate performance.From the perspective of heterogeneity,the decline of trade policy uncertainty can significantly promote the performance of enterprises that use processing trade methods,operate in the eastern region,and have a high degree of industry competition.By using channel variables such as export value,innovation ability,productivity and export product quality,this paper studies the mechanism of the impact of trade policy uncertainty on corporate performance,as well as the moderating effect of industry competition.The results show that when the uncertainty of trade policy decrease,enterprises significantly increase export value,improve innovation ability,productivity and export product quality to promote the improvement of corporate performance.Moreover,enterprises with high degree of industry competition are particularly significant,while enterprises with high degree of industry monopoly are not significant.On the basis of the research conclusions,this paper puts forward the relevant suggestions for our country and enterprises.