IDEAS home Printed from https://ideas.repec.org/a/bla/chinae/v15y2007i2p89-103.html
   My bibliography  Save this article

Why did China Benefit from a Joint Venture Policy? A Case Study of Shanghai

Author

Listed:
  • Bernard Bishop

Abstract

Mandatory joint venture requirements have played an important role in many developing countries’ foreign investment policies. However, such policies have been criticized in some of the economic literatures on the grounds that they deter investment and lead to the development of inefficient industries. A significant amount of foreign direct investment in Shanghai has been in the form of joint ventures. Yet, by many measures, Shanghai has benefited enormously. This article argues that there are three reasons to explain Shanghai's successful use of the joint venture for its industrial development. First, local firms and industries have had the capability and willingness to learn from joint ventures and other foreign invested firms. Second, the joint venture policy has been more likely than not to have “crowded in” local investment rather than crowd it out. Third, investment authorities in Shanghai have had sufficient bureaucratic capacity and political insulation to prevent the joint venture policy from being manipulated by rent seekers.

Suggested Citation

  • Bernard Bishop, 2007. "Why did China Benefit from a Joint Venture Policy? A Case Study of Shanghai," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 15(2), pages 89-103, March.
    • Handle: RePEc:bla:chinae:v:15:y:2007:i:2:p:89-103
    DOI: 10.1111/j.1749-124X.2007.00063.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1749-124X.2007.00063.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1749-124X.2007.00063.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Luo, Yadong, 2002. "Partnering with foreign businesses: perspectives from Chinese firms," Journal of Business Research, Elsevier, vol. 55(6), pages 481-493, June.
    2. Theodore H. Moran, 1998. "Foreign Direct Investment and Development: The New Policy Agenda for Developing Countries and Economies in Transition," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 53, October.
    3. Stephen Young & Ping Lan, 1997. "Technology Transfer to China through Foreign Direct Investment," Regional Studies, Taylor & Francis Journals, vol. 31(7), pages 669-679.
    4. Daniel H. Rosen, 1999. "Behind the Open Door: Foreign Enterprises in the Chinese Marketplace," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 23, October.
    5. Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998. "How does foreign direct investment affect economic growth?1," Journal of International Economics, Elsevier, vol. 45(1), pages 115-135, June.
    6. Stephen Thomsen, 1999. "Southeast Asia: The Role of Foreign Direct Investment Policies in Development," OECD Working Papers on International Investment 1999/1, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shulin Lan & Ming-Lang Tseng, 2018. "Coordinated Development of Metropolitan Logistics and Economy Toward Sustainability," Computational Economics, Springer;Society for Computational Economics, vol. 52(4), pages 1113-1138, December.
    2. CUYVERS, Ludo & SOENG, Reth & PLASMANS, Joseph & VAN DEN BULCKE, Daniël, 2008. "Productivity spillovers from foreign direct investment in the Cambodian manufacturing sector: Evidence from establishment-level data," Working Papers 2008004, University of Antwerp, Faculty of Business and Economics.
    3. Adriana Giurgiu, 2012. "Investment Incentives and the Global Competition for Capital – By K.P. Thomas," Journal of Common Market Studies, Wiley Blackwell, vol. 50(1), pages 190-190, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Elissa Braunstein & Gerald Epstein, 2002. "Bargaining Power and Foreign Direct Investment in China: Can 1.3 Billion Consumers Tame the Multinationals?," SCEPA working paper series. 2002-13, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    2. Amy Glass & Kamal Saggi, 1999. "The Dynamic Impact of Internalization Advantage," Working Papers 99-04, Ohio State University, Department of Economics.
    3. Kazeem Bello Ajide & Perekunah Bright Eregha, 2015. "Foreign Direct Investment, Economic Freedom and Economic Performance in Sub-Saharan Africa," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 13(1 (Spring), pages 43-57.
    4. Terutomo Ozawa & Sergio Castello, 2001. "Toward an 'International Business' Paradigm of Endogenous Growth: Multinationals and Governments as Co-Endogenisers," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(2), pages 211-228.
    5. Dalila NICET-CHENAF & Eric ROUGIER, 2009. "FDI and growth: A new look at a still puzzling issue," Cahiers du GREThA (2007-2019) 2009-13, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    6. Bernard M. Hoekman & Keith E. Maskus & Kamal Saggi, 2023. "Transfer of Technology to Developing Countries: Unilateral and Multilateral Policy Options," World Scientific Book Chapters, in: Kamal Saggi (ed.), Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy, chapter 5, pages 127-142, World Scientific Publishing Co. Pte. Ltd..
    7. Ashraf Mishrif & Yousuf Al Balushi, 2017. "Effect Of Foreign Direct Investment On Domestic Enterprises In The Gulf Countries," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 11(3), pages 39-54.
    8. Abdel-Latif, Hany, 2019. "FDI response to political shocks: What can the Arab Spring tell us?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 24(C).
    9. Pack, Howard & Saggi, Kamal, 2006. "The case for industrial policy : a critical survey," Policy Research Working Paper Series 3839, The World Bank.
    10. Chun-Hung Lin & Chia-Ming Lee & Chih-Hai Yang, 2011. "Does foreign direct investment really enhance China's regional productivity?," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 20(6), pages 741-768, August.
    11. Edward M. Graham & Erika Wada, 2001. "Foreign Direct Investment in China: Effects on Growth and Economic Performance," Working Paper Series WP01-3, Peterson Institute for International Economics.
    12. Mr. Ewe-Ghee Lim, 2001. "Determinants of, and the Relation Between, Foreign Direct Investment and Growth: A Summary of the Recent Literature," IMF Working Papers 2001/175, International Monetary Fund.
    13. Burns, Darren K. & Jones, Andrew P. & Goryakin, Yevgeniy & Suhrcke, Marc, 2017. "Is foreign direct investment good for health in low and middle income countries? An instrumental variable approach," Social Science & Medicine, Elsevier, vol. 181(C), pages 74-82.
    14. Barry P. Bosworth & Susan M. Collins, 1999. "Capital Flows to Developing Economies: Implications for Saving and Investment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 30(1), pages 143-180.
    15. Klein, Michael & Aaron, Carl & Hadjimichael, Bita, 2001. "Foreign direct investment and poverty reduction," Policy Research Working Paper Series 2613, The World Bank.
    16. Areendam Chanda & Laura Alfaro & Sebnem Kalemli-Ozcan & Selin Sayek, 2006. "How Does Foreign Direct Investment Promote Economic Growth? Exploring the Effects of Financial Markets on Linkages," Departmental Working Papers 2006-13, Department of Economics, Louisiana State University.
    17. WHALLEY, John & XIN, Xian, 2010. "China's FDI and non-FDI economies and the sustainability of future high Chinese growth," China Economic Review, Elsevier, vol. 21(1), pages 123-135, March.
    18. Matthias Blum & Jörg Stosberg, 2003. "The Globalisation and its Implications for the Economic Development of Latin America," International Trade 0309023, University Library of Munich, Germany.
    19. Ian Goldin & Kenneth Reinert, 2005. "Global capital flows and development: A Survey," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 14(4), pages 453-481.
    20. Pichit Patrawimolpon & Runchana Pongsaparn, 2006. "Thailand in the New Asian Economy: The Current State and Way Forward," Working Papers 2006-02, Monetary Policy Group, Bank of Thailand.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:chinae:v:15:y:2007:i:2:p:89-103. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/iwepacn.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.