APPROPRIATION OF INVESTMENTS AND INNOVATION BENEFITS IN THE U.S. - CHINA TRADE RELATIONSHIP

Tony Mutsune

Global Journal of Business Research, 2016, vol. 10, issue 2, 1-11

Abstract: It is widely understood that the 1978 market-oriented economic reforms set the stage for China’s phenomenal growth and swift accession to the world’s second-largest economy. A part of the reforms involved relaxing restrictions on foreign investment inflows, privatization and contracting of state-owned industries, and the lifting of protectionist policies. These initiatives are thought to have assisted the flow of knowledge and skills into China. Such flows are known to help deepen human capital which results in productivity increases when combined with improvements in physical capital and other resources. It is reasonable that these advantages are primarily channeled through international commerce linkages. This context provides for investment and innovation choices to influencing productivity outcomes among trading partners. This study presents an empirical framework for testing data from the U.S.-China trade experience for the period 1996-2014, with the aim of identifying how research and development (R&D) expenditures in the U.S. and China combine to influence productivity outcomes in the Chinese economy. The results indicate that R&D stock accumulation in the U.S. plays an important role in prompting productivity increases in China’s economy when combined with China’s own R&D efforts. The implications of the results can be applied in making strategic R&D choices that improve the advantages in the U.S.-China trade relationship

Keywords: Trade; Technology Spillovers; Productivity; Foreign Direct Investment (search for similar items in EconPapers)
JEL-codes: F14 F20 F23 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.theibfr2.com/RePEc/ibf/gjbres/gjbr-v10n2-2016/GJBR-V10N2-2016-1.pdf (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:ibf:gjbres:v:10:y:2016:i:2:p:1-11

Access Statistics for this article

Global Journal of Business Research is currently edited by Terrance Jalbert

More articles in Global Journal of Business Research from The Institute for Business and Finance Research
Bibliographic data for series maintained by Mercedes Jalbert ( this e-mail address is bad, please contact ).