Foreign direct investment as a vehicle for deploying cleaner technologies: Technology transfer and the Big Three automakers in China

2003 2003

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Abstract (summary)

The number of cars on the road in China is expected to double every six years at current growth rates. Currently, there are no Chinese fuel-efficiency standards for automobiles, and pollution-control standards are weak. China is already a net importer of oil, and will be an increasingly large source of demand for world oil supplies as the number of automobiles in China increases. Motor vehicles are also now the leading source of urban air pollution in China. The Chinese government has indicated that it wants to avoid a heavy dependence on foreign oil and prevent the worsening of air pollution, but China's domestic technological capacity for clean automobile production is almost entirely dependent on foreign technology transfer. The U.S. Big Three automakers have all formed joint ventures in China and are in the process of transferring technology to their Chinese partners.

The central purpose of this research is to investigate the extent to which international technology transfer through foreign direct investment (FDI) is an effective mechanism for the deployment of cleaner technologies in developing countries. This dissertation provides three empirical case studies of Beijing Jeep, Shanghai GM, and Chang'An Ford based on dozens of interviews in the U.S. and China. The main findings are that: (1) U.S. firms transferred outdated automotive pollution-control technologies to China; (2) U.S. FDI helped to deploy somewhat cleaner automotive technologies, but their potential environmental benefit is being outweighed by having so many more vehicles on the road; (3) automotive technologies that were transferred were not necessarily updated in tandem with updates made to equivalent foreign models; and, (4) U.S. firms did not strongly contribute to improving Chinese automotive technological capabilities because little knowledge was transferred along with the product. Finally, one further implication from this study is that there appear to be limits to leapfrogging to substantially cleaner automotive technologies through technology transfer from foreign firms. These barriers can be overcome through international investment rules, U.S. and Chinese government policy, and the goodwill of foreign firms, but probably most effectively by Chinese regulations.

Indexing (details)

Political science;
Environmental science;
Foreign investment;
Technology transfer;
Automobile industry;
0615: Political science
0501: Economics
0768: Environmental science
0454: Management
Identifier / keyword
Health and environmental sciences; Social sciences; Automobile industry; Big Three automakers; China; Cleaner technologies; Foreign direct investment; Technology transfer
Foreign direct investment as a vehicle for deploying cleaner technologies: Technology transfer and the Big Three automakers in China
Gallagher, Kelly Sims
Number of pages
Publication year
Degree date
School code
DAI-A 64/06, Dissertation Abstracts International
Place of publication
Ann Arbor
Country of publication
United States
Moomaw, William R.
Fletcher School of Law and Diplomacy (Tufts University)
University location
United States -- Massachusetts
Source type
Dissertations & Theses
Document type
Dissertation/thesis number
ProQuest document ID
Database copyright ProQuest LLC; ProQuest does not claim copyright in the individual underlying works.
Document URL
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