IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Technology diffusion under contraction and convergence: A CGE analysis of China

  • Hübler, Michael

This paper introduces a mechanism of international technology diffusion via FDI and imports into recursive-dynamic CGE modeling for climate policy analysis. As a novel feature, the mechanism distinguishes spillovers from foreign do domestic capital within sectors and across sectors within the production chain. The paper applies the mechanism to the analysis of a contraction and convergence type climate policy focusing on China. The mechanism of international technology diffusion leads to an increase in China's energy productivity an a decline in China's economic growth rates in a convergence process. In this case, inter-regional emissions trading could (more than) compensate China's welfare losses due to climate policy. Otherwise, China's welfare losses due to climate policy could be significant.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/B6V7G-511K3VC-1/2/d22e43f1d9248182c801232105a6403a
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 33 (2011)
Issue (Month): 1 (January)
Pages: 131-142

as
in new window

Handle: RePEc:eee:eneeco:v:33:y:2011:i:1:p:131-142
Contact details of provider: Web page: http://www.elsevier.com/locate/eneco

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Daron Acemoglu, 2001. "Directed Technical Change," NBER Working Papers 8287, National Bureau of Economic Research, Inc.
  2. van Meijl, Hans & Frank van Tongeren, 1999. "Endogenous International Technology Spillovers and Biased Technical Change in the GTAP Model," GTAP Technical Papers 318, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  3. Xu, Bin, 2000. "Trade, FDI, and International Technology Diffusion," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 15, pages 585-601.
  4. repec:idb:brikps:9167 is not listed on IDEAS
  5. Michael R. Darby, 1986. "The Internationalization of American Banking and Finance: Structure, Risk, adn World Interest Rates," NBER Working Papers 1989, National Bureau of Economic Research, Inc.
  6. Jean, Sébastien & Guérin, Jean-Louis & Decreux, Yvan & Bchir, Mohamed Hedi, 2002. "MIRAGE, a Computable General Equilibrium Model for Trade Policy Analysis," Economics Papers from University Paris Dauphine 123456789/6497, Paris Dauphine University.
  7. Allan Drazen & Elhanan Helpman, 1986. "Inflationary Consequences of Anticipated Macroeconomic Policies," NBER Working Papers 2006, National Bureau of Economic Research, Inc.
  8. Saggi, Kamal, 2000. "Trade, foreign direct investment, and international technology transfer : a survey," Policy Research Working Paper Series 2349, The World Bank.
  9. Richard F. Garbaccio & Mun S. Ho & Dale W. Jorgenson, 1999. "Why Has the Energy-Output Ratio Fallen in China?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 63-91.
  10. Harm Zebregs & Wanda Tseng, 2002. "Foreign Direct Investment in China; Some Lessons for Other Countries," IMF Policy Discussion Papers 02/3, International Monetary Fund.
  11. Blackman, Allen & Wu, Xun, 1999. "Foreign direct investment in china's power sector: trends, benefits and barriers," Energy Policy, Elsevier, vol. 27(12), pages 695-711, November.
  12. Smarzynska, Beata K., 2002. "Does foreign direct investment increase the productivity of domestic firms : in search of spillovers through backward linkages," Policy Research Working Paper Series 2923, The World Bank.
  13. Zhang, ZhongXiang, 2003. "Why did the energy intensity fall in China's industrial sector in the 1990s? The relative importance of structural change and intensity change," Energy Economics, Elsevier, vol. 25(6), pages 625-638, November.
  14. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 1998. "Is Free Trade Good for the Environment?," NBER Working Papers 6707, National Bureau of Economic Research, Inc.
  15. Lei Zhu & Bang Nam Jeon, 2007. "International R&D Spillovers: Trade, FDI, and Information Technology as Spillover Channels," Review of International Economics, Wiley Blackwell, vol. 15(5), pages 955-976, November.
  16. Stephen R. Yeaple & Wolfgang Keller, 2003. "Multinational Enterprises, International Trade, and Productivity Growth; Firm-Level Evidence From the United States," IMF Working Papers 03/248, International Monetary Fund.
  17. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
  18. Leimbach, Marian & Baumstark, Lavinia, 2010. "The impact of capital trade and technological spillovers on climate policies," Ecological Economics, Elsevier, vol. 69(12), pages 2341-2355, October.
  19. Diao, Xinshen & Rattso, Jorn & Stokke, Hildegunn Ekroll, 2005. "International spillovers, productivity growth and openness in Thailand: an intertemporal general equilibrium analysis," Journal of Development Economics, Elsevier, vol. 76(2), pages 429-450, April.
  20. van der Werf, Edwin, 2008. "Production functions for climate policy modeling: An empirical analysis," Energy Economics, Elsevier, vol. 30(6), pages 2964-2979, November.
  21. Michael Hübler & Andreas Keller, 2008. "Energy Savings via FDI? Empirical Evidence from Developing Countries," Kiel Working Papers 1393, Kiel Institute for the World Economy.
  22. Fisher-Vanden, Karen & Jefferson, Gary H. & Jingkui, Ma & Jianyi, Xu, 2006. "Technology development and energy productivity in China," Energy Economics, Elsevier, vol. 28(5-6), pages 690-705, November.
  23. Gunnar A. Eskeland & Ann E. Harrison, 2002. "Moving to Greener Pastures? Multinationals and the Pollution Haven Hypothesis," NBER Working Papers 8888, National Bureau of Economic Research, Inc.
  24. Diao, Xinshen & Rattso, Jorn & Stokke, Hildegunn E., 2006. "Learning by exporting and structural change: A Ramsey growth model of Thailand," Journal of Policy Modeling, Elsevier, vol. 28(3), pages 293-306, April.
  25. Stèphane Dees, 1998. "Foreign Direct Investment in China: Determinants and Effects," Economic Change and Restructuring, Springer, vol. 31(2), pages 175-194, May.
  26. Leimbach, Marian, 2003. "Equity and carbon emissions trading: a model analysis," Energy Policy, Elsevier, vol. 31(10), pages 1033-1044, August.
  27. Zhang, ZhongXiang, 2009. "How far can developing country commitments go in an immediate post-2012 climate regime?," Energy Policy, Elsevier, vol. 37(5), pages 1753-1757, May.
  28. Findlay, Ronald, 1978. "Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model," The Quarterly Journal of Economics, MIT Press, vol. 92(1), pages 1-16, February.
  29. Alejandro Ciruelos & Miao Wang, 2005. "International Technology Diffusion: Effects of Trade and FDI," Atlantic Economic Journal, International Atlantic Economic Society, vol. 33(4), pages 437-449, December.
  30. Shang-Jin Wei, 1993. "Open door policy and China's rapid growth: evidence from city-level data," Pacific Basin Working Paper Series 93-09, Federal Reserve Bank of San Francisco.
  31. Leimbach, Marian & Edenhofer, Ottmar, 2007. "Technological spillovers within multi-region models: Intertemporal optimization beyond the Negishi approach," Economic Modelling, Elsevier, vol. 24(2), pages 272-294, March.
  32. Wolfgang Keller, 2001. "International Technology Diffusion," NBER Working Papers 8573, National Bureau of Economic Research, Inc.
  33. Sonja Peterson, 2008. "Greenhouse gas mitigation in developing countries through technology transfer?: a survey of empirical evidence," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 13(3), pages 283-305, March.
  34. Haishun Sun & Ashok Parikh, 2001. "Exports, Inward Foreign Direct Investment (FDI) and Regional Economic Growth in China," Regional Studies, Taylor & Francis Journals, vol. 35(3), pages 187-196.
  35. ZhongXiang Zhang, 2009. "Is It Fair to Treat China as a Christmas Tree to Hang Everybody’s Complaints? Putting its Own Energy Saving into Perspective," Working Papers 2009.45, Fondazione Eni Enrico Mattei.
  36. Zhang, Zhong Xiang, 1998. "Macroeconomic Effects of CO2 Emission Limits: A Computable General Equilibrium Analysis for China," Journal of Policy Modeling, Elsevier, vol. 20(2), pages 213-250, April.
  37. Garbaccio, Richard F. & Ho, Mun S. & Jorgenson, Dale W., 1999. "Controlling carbon emissions in China," Environment and Development Economics, Cambridge University Press, vol. 4(04), pages 493-518, October.
  38. Liu, Zhiqiang, 2002. "Foreign Direct Investment and Technology Spillover: Evidence from China," Journal of Comparative Economics, Elsevier, vol. 30(3), pages 579-602, September.
  39. Groenwold, Nicolaas & Lee, Guoping & Chen, Anping, 2008. "Inter-regional spillovers in China: The importance of common shocks and the definition of the regions," China Economic Review, Elsevier, vol. 19(1), pages 32-52, March.
  40. Löschel, Andreas, 2001. "Technological change in economic models of environmental policy: a survey," ZEW Discussion Papers 01-62, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  41. Walid Hejazi & A Edward Safarian, 1999. "Trade, Foreign Direct Investment, and R&D Spillovers," Journal of International Business Studies, Palgrave Macmillan, vol. 30(3), pages 491-511, September.
  42. Bruno Van Pottelsberghe & Frank Lichtenberg, 2001. "Does foreign direct investment transfer technology across borders?," ULB Institutional Repository 2013/6221, ULB -- Universite Libre de Bruxelles.
  43. Zhang, Chi & Shukla, P.R. & Victor, David G. & Heller, Thomas C. & Biswas, Debashish & Nag, Tirthankar, 2006. "Baselines for carbon emissions in the Indian and Chinese power sectors: Implications for international carbon trading," Energy Policy, Elsevier, vol. 34(14), pages 1900-1917, September.
  44. Arjan Lejour & Paul Veenendaal & Gerard Verweij & Nico van Leeuwen, 2006. "Worldscan; a model for international economic policy analysis," CPB Document 111, CPB Netherlands Bureau for Economic Policy Analysis.
  45. Berthelemy, Jean-Claude & Demurger, Sylvie, 2000. "Foreign Direct Investment and Economic Growth: Theory and Application to China," Review of Development Economics, Wiley Blackwell, vol. 4(2), pages 140-55, June.
  46. Kuo, Chun-Chien & Yang, Chih-Hai, 2008. "Knowledge capital and spillover on regional economic growth: Evidence from China," China Economic Review, Elsevier, vol. 19(4), pages 594-604, December.
  47. Buonanno, Paolo & Carraro, Carlo & Galeotti, Marzio, 2003. "Endogenous induced technical change and the costs of Kyoto," Resource and Energy Economics, Elsevier, vol. 25(1), pages 11-34, February.
  48. Stephen Young & Ping Lan, 1997. "Technology Transfer to China through Foreign Direct Investment," Regional Studies, Taylor & Francis Journals, vol. 31(7), pages 669-679.
  49. Enrica De Cian, 2006. "International Technology Spillovers in Climate-Economy Models: Two Possible Approaches," Working Papers 2006.141, Fondazione Eni Enrico Mattei.
  50. Popp, David, 2006. "Innovation in climate policy models: Implementing lessons from the economics of R&D," Energy Economics, Elsevier, vol. 28(5-6), pages 596-609, November.
  51. Lai, Mingyong & Peng, Shuijun & BAO, Qun, 2006. "Technology spillovers, absorptive capacity and economic growth," China Economic Review, Elsevier, vol. 17(3), pages 300-320.
  52. Marian Leimbach & Klaus Eisenack, 2009. "A Trade Algorithm for Multi-Region Models Subject to Spillover Externalities," Computational Economics, Society for Computational Economics, vol. 33(2), pages 107-130, March.
  53. Bohringer, Christoph & Welsch, Heinz, 2004. "Contraction and Convergence of carbon emissions: an intertemporal multi-region CGE analysis," Journal of Policy Modeling, Elsevier, vol. 26(1), pages 21-39, January.
  54. Liu, Zhiqiang, 2008. "Foreign direct investment and technology spillovers: Theory and evidence," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 176-193, February.
  55. Fisher-Vanden, Karen & Jefferson, Gary H. & Liu, Hongmei & Tao, Quan, 2004. "What is driving China's decline in energy intensity?," Resource and Energy Economics, Elsevier, vol. 26(1), pages 77-97, March.
  56. Ann E. Harrison & Brian J. Aitken, 1999. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," American Economic Review, American Economic Association, vol. 89(3), pages 605-618, June.
  57. Cole, Matthew A., 2006. "Does trade liberalization increase national energy use?," Economics Letters, Elsevier, vol. 92(1), pages 108-112, July.
  58. Gernot Klepper & Sonja Peterson & Katrin Springer, 2003. "DART97: A Description of the Multi-regional, Multi-sectoral Trade Model for the Analysis of Climate Policies," Kiel Working Papers 1149, Kiel Institute for the World Economy.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:33:y:2011:i:1:p:131-142. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.