International joint ventures and technology diffusion: Evidence from China |
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Authors: | Qing Liu Ruosi Lu Chao Yang |
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Institution: | 1. Renmin University of China, Beijing, China;2. University of International Business and Economics, Beijing, China |
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Abstract: | This paper investigates international technology diffusion through FDI by explicitly considering the ownership structure of FDI projects with detailed Chinese data. We find that international joint ventures (JVs) generate significantly positive technology diffusion effects, while wholly foreign-owned firms (WFOs) generate significantly negative competition effects. The differentiated impacts of JVs and WFOs are robust, heterogeneous and causal as shown by our instrumental variable estimation. As for the mechanisms, evidence suggests that JVs bring better technology to the host country, invest more in R&D and employee training, and also provide easier technology access to local firms than WFOs. |
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Keywords: | China FDI international joint ventures technology diffusion |
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