EAPSI: The Implications of Firm Ownership on Innovation and the Environment in the Chinese Automotive Industry

Helveston John P, Pittsburgh PA

Investigators

Abstract

China has the largest passenger car market in the world. Cars now consume approximately half of all crude oil used in China and also contribute to over half of all harmful pollutants in China. Although the majority of vehicle sales are captured by foreign brands, foreign automakers are not permitted to independently manufacture and sell vehicles in China. Instead they are required to create separate "joint venture" (JV) firms with local Chinese automakers. This requirement has directly affected both the success of different automakers as well as the technologies they sell. In particular, more advanced fuel-saving technologies such as hybrid and electric vehicles have not yet been developed in mass production by any automakers in China, including those with ties to foreign automakers who sell these technologies in other countries. This research will investigate the links between firm ownership, experience in China, and the development of innovative new technologies in China's automotive sector. This work will be conducted with Dr. Xunmin Ou at Tsinghua University in China, and it aims to inform both automakers and policy makers on barriers to the transfer of advanced fuel-saving technologies to China. This research builds on previous work on learning through international joint ventures in China by including information from major Chinese automakers, including those without joint venture partnerships. This research will use a mixture of quantitative and qualitative data, including automotive statistical yearbooks and a series of in-depth interviews with automotive managers and engineers, government officials, and other potential information holders such as researchers, journalists, and consultants. Results of this study will shed insights into the potential effects of informal and formal institutions in China on technology trajectories and the environment not only in China but also globally. This NSF EAPSI award is funded in collaboration with the Chinese Ministry of Science and Technology.