by Yanfeng Zheng and Qinyu (Ryan) Wang

After its public confrontation with China Government and high profile exit from China in 2010, Google became less popular among Internet users in China due to loss of its site and lack of promotion. The fatal blow came on June 1, 2014 when Internet users in China were suddenly blocked from Google and all its affiliation services. Many thought that the blockade was perhaps temporary like before, but it has lasted more than six years and continues today. Some expect that the blockade only affects public opinion in China because researchers can still access scientific and technological information through specific websites or databases. Nevertheless, others suspect that the blockade is consequential because Google was widely used by scientists and researchers in China to seek business information and scientific knowledge.

We tackle this question with a rather rigorous design in a paper titled “Shadow of the Great Firewall: The Impact of Blocking Google on innovation in China” (forthcoming in the Strategic Management Journal, Our paper suggests that the blockade of Google altered the searching behavior of inventors in China and negatively impacted the economic value of their inventions. Why and how did the unexpected blockade of Google in China affect the knowledge seeking behavior of inventors in China and their innovative outcomes?

Inventors nowadays depend heavily on Internet search to access information and knowledge. They, therefore, become vulnerable to barriers imposed on their online search. … From a conceptual perspective, prior studies largely view the Internet and related technologies as tools to reduce information access cost. But, that cannot adequately explain why the loss of Google mattered so much since all the knowledge contents were still available online. We contend that Google and its affiliated services both extend human memory and enhance the ability of inventors to access, digest and assimilate unfamiliar knowledge. It, therefore, helps inventors overcome the local search tendency, extending their search distance in both technological and cognitive spaces.

We tested our predictions by treating the unexpected blockade as an exogenous shock to inventors residing inside China and their patents filed to USPTO as innovation outcomes. Moreover, we regarded inventors in Japan, South Korea, Taiwan, Hong Kong, and Singapore and their inventions with similar characteristics (e.g. similar technologies) as a natural control group, before and after the blockade. This research design is called “difference-in-differences” (DiD) with coarsened exact matching (CEM), a common approach adopted by social scientists to make strong causal inference from their analyses.

Our analyses reveal that inventors in China experienced significant decreases in both technological and cognitive search distances after the blockade. Overall, we show that Google and its affiliated services subtly assist inventors in knowledge seeking beyond a mere cost-reduction effect. Our study contributes to the search-based view of innovation and highlights the importance of Internet technologies in developing high-quality innovation. Another takeaway from our paper is that Internet censorship has profound impact on how we view the world and create knowledge. Its impact therefore goes beyond the politically charged rhetoric. Topics such as how Internet technologies alter human cognition in workplace and how those effects interact with policy changes warrant further research.

About the authors

Yanfeng Zheng is an associate professor with tenure at University of Hong Kong. His research interests revolve around the nexus of innovation and entrepreneurship. One of his current research projects, for example, examines how the golden age of globalization (prior to Trump and Brexit) fosters a surprising anti-globalization trend in terms of accumulative innovation.

Qinyu (Ryan) Wang is a PhD candidate under Professor Zheng’s supervision at University of Hong Kong.