Strategic behavior of mineral-abundant countries impacts trade, production, productivity and technological change in critical minerals markets. This study examines the effects of trade restrictions on critical minerals for French firms, focusing on China's export quotas on rare earth elements used in sectors like permanent magnets, wind turbines. China's tightening of export quotas in the 2000s led to a global price spike in 2010, affecting major importers like France. By constructing a rich dataset showing firm-level import and export information, production, and innovation, we analyze econometrically the consequences for French firms exposed to this trade shock. We expect to understand whether firms facing significant exposure to the trade shock reduced output and innovation or accelerated their efforts to innovate and substitute alternative inputs.
The impact of export restrictions to critical minerals on firm innovation, productivity and output
Data provided through CASD (10)