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Facts and Fallacies about U.S. FDI in China

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  • Lee Branstetter
  • C. Fritz Foley

Abstract

Despite the rapid expansion of U.S.-China trade ties, the increase in U.S. FDI in China, and the expanding amount of economic research exploring these developments, a number of misconceptions distort the popular understanding of U.S. multinationals in China. In this paper, we seek to correct four common misunderstandings by providing a statistical portrait of several aspects of U.S. affiliate activity in the country and placing this activity in its appropriate economic context.

Suggested Citation

  • Lee Branstetter & C. Fritz Foley, 2007. "Facts and Fallacies about U.S. FDI in China," NBER Working Papers 13470, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:13470
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    References listed on IDEAS

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    1. 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.
    2. Richard B. Freeman, 2006. "Does Globalization of the Scientific/Engineering Workforce Threaten U.S. Economic Leadership?," NBER Chapters,in: Innovation Policy and the Economy, Volume 6, pages 123-158 National Bureau of Economic Research, Inc.
    3. Pol Antràs & Mihir A. Desai & C. Fritz Foley, 2009. "Multinational Firms, FDI Flows, and Imperfect Capital Markets," The Quarterly Journal of Economics, Oxford University Press, vol. 124(3), pages 1171-1219.
    4. Barry Naughton, 1996. "China's Emergence and Prospects as a Trading Nation," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 27(2), pages 273-344.
    5. Lee Branstetter & Nicholas Lardy, 2006. "China's Embrace of Globalization," NBER Working Papers 12373, National Bureau of Economic Research, Inc.
    6. Loren Brandt & Xiaodong Zhu, 2000. "Redistribution in a Decentralized Economy: Growth and Inflation in China under Reform," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 422-451, April.
    7. Morris Goldstein & Nicholas R. Lardy, 2004. "What Kind of Landing for the Chinese Economy?," Policy Briefs PB04-07, Peterson Institute for International Economics.
    8. Diego Puga & Daniel Trefler, 2005. "Wake up and smell the ginseng: The rise of incremental innovation in low-wage countries," Working Papers tecipa-193, University of Toronto, Department of Economics.
    9. Gordon H. Hanson & Raymond J. Mataloni & Matthew J. Slaughter, 2005. "Vertical Production Networks in Multinational Firms," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 664-678, November.
    10. Peter K. Schott, 2008. "The relative sophistication of Chinese exports," Economic Policy, CEPR;CES;MSH, vol. 23, pages 5-49, January.
    11. repec:rus:hseeco:121605 is not listed on IDEAS
    12. Adam B. Jaffe & Josh Lerner & Scott Stern, 2006. "Innovation Policy and the Economy, Volume 6," NBER Books, National Bureau of Economic Research, Inc, number jaff06-1.
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    Citations

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    Cited by:

    1. Barry Bosworth, 2008. "Trading with Asia’s Giants," Working Papers id:1615, eSocialSciences.
    2. Fergal McCann, 2009. "Outsourcing and Firm Productivity in Irish Manufacturing," FIW Working Paper series 021, FIW.
    3. Ito, Banri & Yashiro, Naomitsu & Xu, Zhaoyuan & Chen, XiaoHong & Wakasugi, Ryuhei, 2012. "How do Chinese industries benefit from FDI spillovers?," China Economic Review, Elsevier, vol. 23(2), pages 342-356.
    4. Greaney, Theresa M. & Li, Yao, 2009. "Assessing foreign direct investment relationships between China, Japan, and the United States," Journal of Asian Economics, Elsevier, vol. 20(6), pages 611-625, November.
    5. Steven Husted & Shuichiro Nishioka, 2013. "China’s fare share? The growth of Chinese exports in world trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(3), pages 565-585, September.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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