Technology Spillovers from Sino-Foreign Auto Joint Ventures to Indigenous Brands

This paper employs a structural model to examine the impact of technology spillovers from Sino-Foreign joint ventures (JVs) on indigenous brands, measured by cost reductions for the latter. Technology spillovers can occur by sharing common upstream suppliers (vertical spillover) or production experiences (horizontal spillover). We find that spillovers account for 57.11% of the cost reduction for indigenous brands affiliated with JVs, but JVs do not directly have significant spillovers on independent indigenous brands. Furthermore, affiliated indigenous brands act as conduits for indirect spillovers from JVs to independent indigenous brands, which accounts for 15.68% of the cost reductions for the latter. Welfare analysis reveals that the technology spillovers benefit consumers but reduce JV profits.