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The Geoeconomics of Trade Infrastructure and the Innovation Competition between China and the US

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  • Kai A. Konrad

Abstract

China’s high investment in foreign trade structures and the extraordinary innovation efforts of their Firms are closely related. They can be explained as a subgame perfect equilibrium outcome of an asymmetric strategic-trade model, in which infrastructure investment renders successful innovation by exporting companies in China more profitable, and in which China and the US have to choose different roles in this innovation competition. That China ends up in the role of the more active investor and the more innovative competitor in this process can be explained by China’s larger export sector and by their competition policy, which is more focused on national champions.

Suggested Citation

  • Kai A. Konrad, "undated". "The Geoeconomics of Trade Infrastructure and the Innovation Competition between China and the US," Working Papers tax-mpg-rps-2023-14, Max Planck Institute for Tax Law and Public Finance.
    • Handle: RePEc:mpi:wpaper:tax-mpg-rps-2023-14
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