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Why Has China Grown So Fast? The Role of International Technology Transfer

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  • John Van Reenen
  • Linda Yueh

Abstract

Chinese economic growth has been spectacular in the last 30 years. We investigate the role of International Joint Ventures with Technology Transfer agreements, an understudied area. Technology transfer is the traditional mechanism for developing countries to "catch up" and has been a key component of Chinese economic policy. We collect original survey data on Chinese firms and their joint ventures and match this to administrative data on firm performance. To identify the causal effect of joint ventures we use time-varying and province-specific policies at the time when a firm was born. International joint ventures have large effects on productivity especially when combined with a technology transfer component. We estimate that without International joint ventures China's growth would have been about one percentage point lower per annum over the last three decades.

Suggested Citation

  • John Van Reenen & Linda Yueh, 2012. "Why Has China Grown So Fast? The Role of International Technology Transfer," CEP Discussion Papers dp1121, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp1121
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    1. Prud'homme, Dan & von Zedtwitz, Max & Thraen, Joachim Jan & Bader, Martin, 2018. "“Forced technology transfer” policies: Workings in China and strategic implications," Technological Forecasting and Social Change, Elsevier, vol. 134(C), pages 150-168.
    2. K. Buysse & D. Essers, 2019. "Cheating tiger, tech-savvy dragon : Are Western concerns about “unfair trade” and “Made in China 2025” justified ?," Economic Review, National Bank of Belgium, issue ii, pages 47-70, September.
    3. Bofinger, Peter & Geißendörfer, Lisa & Haas, Thomas & Mayer, Fabian, 2023. "Credit as an instrument for growth: A monetary explanation of the Chinese growth story," W.E.P. - Würzburg Economic Papers 107, University of Würzburg, Department of Economics.
    4. Neil Foster-McGregor & Johannes Pöschl & Ana Rincon-Aznar & Robert Stehrer & Michaela Vecchi & Francesco Venturini, 2014. "Reducing Productivity and Efficiency Gaps: the Role of Knowledge Assets, Absorptive Capacity and Institutions," wiiw Research Reports 396, The Vienna Institute for International Economic Studies, wiiw.
    5. Le Bas, Christian & Latham, William & Volodin, Dmitry, 2014. "Productivité et mobilité des inventeurs prolifiques : une approche comparative des systèmes d’innovation de quatre grands pays asiatiques (Chine, Corée, Japon, Taiwan)," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 15.
    6. Thomas J. Holmes & Ellen R. McGrattan & Edward C. Prescott, 2015. "Quid Pro Quo: Technology Capital Transfers for Market Access in China," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(3), pages 1154-1193.
    7. Qing-Ping Ma, 2017. "Contribution of interest rate control to China’s economic development," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 15(4), pages 325-352, October.
    8. Suma Athreye & Sandeep Kapur, 2015. "Capital and Technology Flows: changing technology-acquisition strategies in developing countries," Birkbeck Working Papers in Economics and Finance 1511, Birkbeck, Department of Economics, Mathematics & Statistics.
    9. Beerli, Andreas & Weiss, Franziska J. & Zilibotti, Fabrizio & Zweimüller, Josef, 2020. "Demand forces of technical change evidence from the Chinese manufacturing industry," China Economic Review, Elsevier, vol. 60(C).
    10. Anh Ngoc Nguyen & Nguyen Thi Tuong Anh & Nguyen Ngoc Minh & Nguyen Thi Phuong Mai, 2018. "SOUTH KOREAN MULTINATIONAL ENTERPRISES AND VIETNAM SMEs’ PARTICIPATION IN GLOBAL PRODUCTION NETWORKS IN THE CONTEXT OF INCREASED ASEAN AND EAST ASIAN REGIONAL ECONOMIC INTEGRATION," Working Papers 03, Development and Policies Research Center (DEPOCEN), Vietnam.
    11. Kun Jiang & Wolfgang Keller & Larry D. Qiu & William Ridley, 2018. "International Joint Ventures and Internal vs. External Technology Transfer: Evidence from China," CESifo Working Paper Series 7065, CESifo.

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    More about this item

    Keywords

    China; technology transfer; joint ventures; productivity;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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