We study the economics of international joint ventures with administrative data for China exploiting the change in foreign direct investment policy as China entered the WTO in the year 2002. Accounting for a quarter of all international joint ventures worldwide, we first show that foreign...

Developing country governments tend to favor joint ventures over other forms of foreign direct investment, believing that local participation facilitates the transfer of technology and marketing skills. However, foreign investors who are technological or marketing leaders in their industries are...