North–South FDI and directed technical change

Shang-ao Li, Shan Pan and Shawn Chi

Economic Modelling, 2016, vol. 59, issue C, 425-435

Abstract: This paper presents a model to explore how patterns of North–South FDI affect the bias of technology and the host country's economic growth. We develop our growth model in a unified framework of directed technical change and cooperative game. The host country's economic growth is embedded in a duopolistic international joint venture. Our model illustrates that: (i) the relative skill-augmenting technology is decreasing in the North–South relative bargaining power if technical and nontechnical intermediates are substitutes, but increasing if they are complements; (ii) there exists an inverse U-shaped relationship between the North–South relative profit share and the host country's steady-state economic growth rate.

Keywords: FDI; Directed technical change; Bargaining power; Economic growth (search for similar items in EconPapers)
JEL-codes: C78 F23 F43 O31 O41 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:59:y:2016:i:c:p:425-435

DOI: 10.1016/j.econmod.2016.08.008

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