Technical appendix for quid pro quo: Technology capital transfers for market access in China

Thomas Holmes (), Ellen McGrattan and Edward Prescott

No 487, Staff Report from Federal Reserve Bank of Minneapolis

Abstract: 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.

Keywords: China (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cwa, nep-dev, nep-dge and nep-tra
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.minneapolisfed.org/research/sr/sr487.pdf
http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=5141 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmsr:487

Access Statistics for this paper

More papers in Staff Report from Federal Reserve Bank of Minneapolis Contact information at EDIRC.
Bibliographic data for series maintained by Kate Hansel ().