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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

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  • Jing Zhou
  • Mar&xed;a C. Latorre

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.

Suggested Citation

  • Jing Zhou & Mar&xed;a C. Latorre, 2014. "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," Global Economic Review, Taylor & Francis Journals, vol. 43(3), pages 285-314, September.
    • Handle: RePEc:taf:glecrv:v:43:y:2014:i:3:p:285-314
    DOI: 10.1080/1226508X.2014.939212
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    Cited by:

    1. Yifei Cai & Angeliki Menegaki, 2021. "FDI, growth and trade partisan conflict in the US: TVP-BVAR approach," Empirical Economics, Springer, vol. 60(3), pages 1335-1362, March.

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