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Quid Pro Quo: Technology Capital Transfers for Market Access in China / Thomas J. Holmes, Ellen R. McGrattan, Edward C. Prescott.
- Format:
- Book
- Author/Creator:
- Holmes, Thomas J.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w19249.
- NBER working paper series no. w19249
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2013.
- Summary:
- Despite the recent rapid development and greater openness of China's economy, FDI flows between China and technologically advanced countries are relatively small in both directions. We assess global capital flows in light of China's quid pro quo policy of exchanging market access for transfers of technology capital--accumulated know-how such as research and development (R&D) that can be used in multiple production locations. We first provide empirical evidence of this policy and then incorporate it into a multicountry dynamic general equilibrium model. This extension leads to a significantly better fit of the model to data. We also find large welfare gains for China--and welfare losses for its FDI partners--from quid pro quo.
- Notes:
- Print version record
- July 2013.
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