The Impact of Foreign Direct Investment on the Production Networks between China and East Asia and the Role of the USA and the Rest of the World as Final Markets

Jing Zhou and Mar&xed;a C. Latorre
Authors registered in the RePEc Author Service: María C. Latorre ()

Global Economic Review, 2014, vol. 43, issue 3, 285-314

Abstract: A three factor, four region and 15 sector computable general equilibrium (CGE) model is used to study the impact of foreign direct investment (FDI) accruing to China. We focus on the sectors of Electronics, Machinery and Textiles which account for 55.4% and 40% of Chinese overall exports and imports, respectively. Our data confirm the existence of production networks between China and East Asia and the role that the USA and the rest of the world (ROW) play as final markets. Based on these differentiated geographical roles and on the contrasting production technologies, we offer an in-depth analysis for macro- and micro-variables across the four regions.

Date: 2014
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DOI: 10.1080/1226508X.2014.939212

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