How Corporate Decisions Weakened America’s Economy
For decades, American companies made a straightforward calculation: They would share their technology with Chinese partners in exchange for access to the world’s largest consumer market and its low-cost labor. General Motors, Intel, and thousands of other firms formed joint ventures that helped their Chinese partners learn advanced manufacturing techniques, chip design, and management practices.
It boosted profits for many of the biggest firms. But a new National Bureau of Economic Research working paper suggests the calculation was a collective mistake—one that left American workers, smaller companies, and the economy as a whole worse off.
The paper—by Jaedo Choi of the University of Texas at Austin, George Cui and Younghun Shim of the International Monetary Fund, and Yongseok Shin of Washington University in St. Louis—argues that the real mistake wasn’t at the company level but at the national level.
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