Appropriate Technology in a Model of Multinational Duopoly.

This paper seeks to motivate the observed tendency of multinationals with home bases in LDCs to adopt labor-intensive technology relative to their counterparts in industrial countries. Two multinationals play a spatial duopoly game in which the location, mode of market service (exports or on-site production), and technology choice of the third-world multinational are simultaneously determined. The model is calibrated using observed data on transport costs, factor shares, research intensity, and international income distribution. LDC firms are shown to prefer labor-intensive technological adaptation even when the option of producing on-site in high-income markets is available.

Technology Expenditures, Factor Intensity, and Efficiency in Indian Manufacturing.

The effects of expenditure on R&D and purchase of technology on costs in Indian manufacturing is investigated using firm-level data. Expenditures for R&D, royalties, and technical fees are treated as potentially inducing both Hicks-neutral efficiency shifts and substitution between capital and labor in an indirect cos t function framework. The effects of technology expenditure are found to vary by industry, by type of expenditure, and by domestic or foreign origin of seller. Technology expenditures associated with higher levels of Hicks-neutral efficiency are generally also associated wit h higher capital-labor ratios. Copyright 1992 by MIT Press.

Accounting for discrepancies in bilateral trade: The case of China, Hong Kong, and the United States

China's reported exports to the United States have long been smaller than U.S.-reported imports from China. Earlier explanations for this focused on re-exports through Hong Kong, and appeared to account for most of the difference. Now, even after taking Hong Kong into account properly, there has emerged a new and growing discrepancy which amounted in 2005 to $46 billion, perhaps 20$59 billion.

Avoidance Behaviors of Exporters and Importers: Evidence From the U.S.-China Trade Data Discrepancy*

Since the late 1990s, reported U.S. imports from China and Hong Kong have regularly and increasingly exceeded reported exports of China and Hong Kong to the United States. This discrepancy, which is not caused by re-exporting through Hong Kong, varies by product categories, and in some cases takes the opposite sign. In this paper, we focus on China’s direct exports to the United States. Using a model that allows for simultaneous misreporting to two authorities, we find strong statistical evidence of under-reporting exports at Chinese border to avoid paying value-added tax (VAT). We also provide evidence of tariff evasion at the U.S. border, in particular for related-party transactions, and indirect evidence of evasion of capital controls (money laundering). Key words: trade data discrepancy, tax evasion, export VAT rebates, transfer pricin