Did joint ventures help China's automobile business?

#foreigndirectinvestment, via 'quid pro quo', facilitated knowledge spillovers and quality upgrades in the Chinese automobile industry.

In the Chinese automobile industry, in order to be granted market access to #China, foreign automakers are required to set up joint ventures with domestic firms. In this #VoxDevTalk, Jie Bai joins us to discuss whether this quid pro quo policy, where foreign firms trade their technology for market access, enabled knowledge spillovers and quality upgrades amongst Chinese #automobile #manufacturers. By using a new dataset with detailed vehicle quality measures, this #research project, joint with Panle Jia Barwick, Shengmao Cao and Shanjun Li, demonstrates that domestic #automakers do improve quality as a result of this #policy.

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Photo credit: ILO Asia-Pacific.