IMF-评估技术脱钩的影响（英文）-2021.3-正式版-WN4

WP/21/69

SizingUptheEffectsofTechnologicalDecoupling

byDiegoA.Cerdeiro,JohannesEugster,RuiC.Mano,DirkMuir,andShanakaJ.Peiris

IMFWorkingPapersdescriberesearchinprogressbytheauthor(s)andarepublishedtoelicitcommentsandtoencouragedebate.TheviewsexpressedinIMFWorkingPapersarethoseoftheauthor(s)anddonotnecessarilyrepresenttheviewsoftheIMF,itsExecutiveBoard,orIMFmanagement.

©2021InternationalMonetaryFund WP/21/69

IMFWorkingPaper

AsiaandPacificDepartment

Strategy,Policy,andReviewDepartment

SizingUptheEffectsofTechnologicalDecoupling

1

PreparedbyDiegoA.Cerdeiro,JohannesEugster,RuiC.Mano,DirkMuirandShanakaJ.

Peiris

AuthorizedfordistributionbyHelgeBerger

March2021

IMFWorkingPapersdescriberesearchinprogressbytheauthor(s)andarepublishedtoelicit

commentsandtoencouragedebate.TheviewsexpressedinIMFWorkingPapersarethoseoftheauthor(s)anddonotnecessarilyrepresenttheviewsoftheIMF,itsExecutiveBoard,orIMFmanagement.

Abstract

Thispaperproposeschannelsthroughwhichtechnologicaldecouplingcanaffectglobalgrowth,andembedsthesedifferentlayersinaglobaldynamicmacroeconomicmodel.Multiplescenarios

areconsideredthatdifferalongtwodimensions:(i)thecoalitionofcountries(hubs)thatinitiatethedecoupling,and(ii)whethernon-hubcountriesarealsoforcedtodecouplevia‘preferential

attachment’–i.e.byaligningthemselveswiththehubtheytrademostwith.Allglobaltechnologyhubsloseacrossscenarios,andlossesarelargestunderpreferentialattachment.Smallercountrieswithrelationsthatstraddlemultiplehubsgenerallylose,whereasthosewhosetradeisheavilyconcentratedwithonehubmaygainduetoreducedcompetitionundersomescenarios.Technologicalfragmentationcanleadtolossesintheorderof5percentofGDPformanyeconomies.

JELClassificationNumbers:F12,F13,F17,F43,E37,O31.

Keywords:Technologicaldecoupling,trade,non-tariffbarriers.

Author’sE-MailAddresses:

dcerdeiro@

;Johannes.eugster@snb.ch

;rmano@

;

dmuir@

;speiris@

WearegratefultoHelgeBergerforinsightfuldiscussionsthathelpedshapethepaper.WearealsogratefultoChrisErceg,DanielGarcia-Macia,GitaGopinath,RishiGoyal,KennethKang,MartinKaufman,MalharNabar,PapaN’Diaye,JonathanD.Ostry,ChangYongRhee,andIMFseminarparticipantsfortheirhelpfulcomments.Allerrorsareours.

Introduction

Technologicaldecoupling—broadlydefinedastheundoingofcross-bordertradeinhigh-techgoodsandservices—hasbeenassociatedwithconcernsaboutintellectualpropertyprotection,dataprivacy,andnationalsecurityconcernsaswellasarenewedattentiontoindustrialpolicies.However,surprisinglylittleisknownaboutwhatsuchstrategiesmightentailfortheaffectedeconomies.Newsreportshavehighlightedthepoliticaleconomymotivationsfordecouplingandmappedouttheunravellingofties(Webster,2020),withfewattemptstoquantifytheireconomicimpacts.Theacademicliteraturehassofarfocusedpredominantlyontheoreticalaspectsoftechnologicaldecoupling(Garcia-MaciaandGoyal,2020andreferencestherein)andinnovationandresearchanddevelopment(R&D)spillovers(Caiandothers,2019).Thispaperaimstohelpfillthisgapbyprovidingataxonomyofchannelsthroughwhichdecouplingcanaffecteconomicactivityandembeddingthesedifferentlayersinaglobalquantitativemacroeconomicmodeltoassesstheeffectsofvariousscenarios.

Barrierstotradeinhigh-techsectorsbetweenmajoreconomiescouldhaveprofoundeffectsonworldproductionandconsumptionpatternsbecausetheyaffectsomeofthefastestgrowingsectorsinmosteconomiesandhigh-techproductionisheavilydependentoncross-bordertrade.Forexample,theshareofforeignvalueaddedingrossexportsintheelectronicssectorissignificantlyhigherthanforallothersectors,especiallyinAsia(Figure1).

Figure1.InterdependentHigh-Tech

(shareofforeignvalueaddedingrossexports,2015,inpercent)

45

Allsectors

40

Computers,electronicandelect.Equipment

35

30

25

20

15

10

5

0

G-20

OECD

China

ASEAN

Sources:OECDTiVAandstaffcalculations.

Thissuggeststhatbarrierstotradeinhigh-techsectorsthroughtariffsornon-tariffmeasureshavethepotentialtoreverberatethroughouttheglobaleconomy.Otherformsofrestrictionsuchasthoseonparticipationin5Ginfrastructureoraccesstosoftwareandpatentslimit

technologicaldiffusionandspilloversthroughassociatedresearchanddevelopmentandforeigndirectinvestment.

Tohelpquantifytheeconomiceffectsoftechnologicaldecoupling,thispaperconsidersthreepossiblechannels,focusingontheproductionandtradeofgoodsthatarethemselvesreliantoninnovativeintellectualproperty,particularlyininformationandcommunicationtechnologysectors(“high-tech”goods).

Theshort-andlong-termreductioninglobaltradeflows,wherebyrivalcountriesimposehighernon-tariffbarriers(NTBs)toeliminatetherelativedemandforhigh-techimports,adirecteffectthatiscompoundedbydomesticinvestmentandconsumptionresponsestotheresultingpermanentincomelosses.

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TheseeffectsarequantifiedusingtheIMF’sGlobalIntegratedMonetaryandFiscalmodel(GIMF).

Thelong-termimpactonoutputofsectoralmisallocation,thatis,thelessefficientallocationofresourcesacrosssectorsastradeiscutoffbetweenhubsandblocs.Theseeffectsarequantifiedusingasectoral,computablegeneralequilibriumtrademodelwhichestimatestheseeffects(Caliendo,Feenstra,Romalis,andTaylor,2017;CFRThenceforth).

Theshort-andlong-termdynamicslossesbecauseoftheeffectoflowerforeignknowledgediffusionondomesticlaborproductivity.Theseeffectsarederivedempiricallyfromdataonpatents,R&Dspillovers,andtheirproductivityeffectsamongtechnologicalleaders.Estimates,originallyproducedforIMF(2018a),areextendedheretoalsoincludeChinaandKorea.

ThesethreechannelsarecombinedintoonecoherentpresentationinGIMFtakingintoaccountdynamicglobalgeneralequilibriumeffects,capturingtheshiftsintradecomputedusingGIMF,theshiftsineconomy-widelaborproductivitybecauseofsectoralmisallocationinitially

TheimpositionofNTBstovirtuallyeliminatetradeintechnologicalgoodsisassumedtoproxyanytypeofmeasuretakentorestricttheirtradeonnationalsecuritygroundsorotherprotectionistmotives.TheuseoftariffsisanotheralternativeapproachthathasbeenextensivelymodeledinIMF(2018b)and(2018c).TariffsdifferfromNTBsinthattheygeneraterevenuesforgovernmentsinadditiontogeneratingcostsforconsumers,whichisnotanaccuraterepresentationoftechnologicaldecouplingaspresentedinthispaper.

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computedfromCFRT,andtheshiftsintradablesectorlaborproductivitybecauseoflowerknowledgediffusioncomputedfromtheestimatesbasedonpatentsandR&Ddata.

3

Tobesure,thispaperdoesnotcaptureallpossiblemechanismsthroughwhichpoliciesaimedattechnologicaldecouplingmayaffecteconomicactivity.TheeffectsofdecouplingthroughlowerFDIflowsarenotexplicitlymodeled,norarethosefromtheprovisionofforeignservicesthroughcommercialpresence.

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Alsonotmodeledisthepotentialendogenousnon-macroeconomicpolicyresponsetodecoupling,suchasindustrialpoliciesthataimtomakeupforthelossofaccesstoforeigntechnology.Lastly,technologicaldecouplingcanovertimegiverisetodiverse,incompatiblestandards.Divergingstandardscouldeffectivelylockinthelossesuncoveredinthispaper,asreversingthedecoupling(or“re-coupling”)wouldbecomeincreasinglydifficult(seethepioneeringdiscussionbyDavid,1985).

Table1.HypotheticalTechnologicalDecoupling

Scenarios

Scenario#

Globalhubs

Preferentialattachmentby

non-hubcountries?

1

China|U.S.

No

2

Yes

3

China|OECD

No

4

Yes

5

China|U.S.|Germany

No

6

Yes

Notes:Inallscenarios,non-tariffbarriersareraisedsoastonearlyeliminatetradeinhigh-techsectors.

Source:Authors’calculations

Aswillbecomeclearwhenshowingthesimulationresults,alleconomiestendtoloseoutthroughthesechannelsasaresultofdecoupling.Thisisconsistentwiththeviewthatthemainrationalesbehindtheaimtodecouplehavebeenmostlynon-economic,involvingissuessuchasnationalsecurity,dataprivacy,etc.Thisviewissupportedbymanyindustrygroupsexpressingconcernabouttherestrictionsinhigh-techtrade(fortheU.S.see,e.g.,U.S.-ChinaBusinessCouncil,2021;U.S.ChamberofCommerce,2021;andtheanalysisofBown,2020ontheU.S.semiconductorindustry).SeeGarcia-MaciaandGoyal(2020)foramodelwheredecouplingarisesfromeconomicincentives.

Otherthantourismandtransport,servicesasrecordedininput-outputmatricesarelargelynon-tradable.Servicesprovidedundermode3(commercialpresence;e.g.telecoms)belongtodomesticproduction,inlinewithnationalaccountingpractices.Someservicesrelatedtocertaintechnologygainsarepartlyandindirectlymodeledthroughourknowledge-diffusionchannel,totheextentthattheyarereflectedinpatentandR&Ddata.

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Inadditiontothespecificchannelsthroughwhichtechnologicaldecouplingoperates,thereisthequestionofwhichcountriesitaffects.Threeverystylizedandhypotheticalalternativesoftechnologicaldecouplingareconsideredinthispaper(Table1).Thefirst,andmostprominentinrecentdiscussions,isthepossibilityofaChina-U.S.decoupling.ThesecondisonewhereOECDeconomiesasablocdecouplefromChina.Thethirdisamultipolarworldofthreetechnologyhubsthatdecouplefromoneanother.Forthepurposesofillustrationonly,thetripolarworldconsideredhereisformedaroundtheUnitedStates,China,andGermany.

Whiletheprecedingdiscussiondefinesthetechnologyhubsthatwouldseektodecouplefromoneanother,itstillleavesopenthequestionofhowothernon-hubcountrieswouldinteractwitheachofthehubs.Twopossibilitiesareconsidered–non-hubcountriestradewitheachhubfreelyortheyalignthemselveswiththehubforwhichtheirtotaltradeishighestandonlytradewithothercountriesinthatbloc.Thelatterpossibilityislabeled“preferentialattachment.”

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TheThreeChannelsofDecoupling

Thissectiondiscussesthedetailedanalyticalworkusedtoquantifythereductioninglobaltradevolumes,sectoralmisallocation,andlowerknowledgediffusioninturn.

a.ReductioninGlobalTradeFlows

Thefirstorderimpactfromtechnologicaldecoupling(modeledaseffectivebarrierstotrade)istheassociatedfallinexportsbetweenthedifferenthubsandtheirassociatedtradeblocs.Theshort-andlong-termmacroeconomicimpactsofthecessationofexportsconcentratedinthehigh-techsectorsiscapturedusingGIMF,aglobaloverlapping-generationsdynamicstochasticgeneralequilibrium(DSGE)model.

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Tocontainthescaleofthemodel,whichfeaturesrichdynamicrepresentationsofallincludedeconomies,thereareonlyeightcountriesorregionsin

Foraconcreteexampleofthetensionsfacingbysomeeconomies,see“U.S.,ChinaShouldn’tForceOtherstoChooseSides:Morrison,”BloombergNews,November23,2020.

SeeKumhofandothers(2010)foratheoreticalpresentationofthemodel.SeeAndersonandothers(2013)foradiscussionofthemodel’sproperties.AppendixIIdiscussesfeaturesuniquetothisversionofGIMFnotfoundintheaforementionedpapers.

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GIMF–China,theUnitedStates,theeuroarea,India,Japan,andKorea,aswellastwomoreblocsfortheremainderoftheAsia-Pacificregionandtheremainingcountries.

Figure2.ReductionofGlobalTradeFlows:RealGDPforSelectedRegions(PercentdeviationfromtheIMF’sOctober2020WEO)

1

China

1

1

UnitedStates

1

1

EuroArea

1

0

0

0

0

0

0

-1

-1

-1

-1

-1

-1

-2

-2

-2

-2

-2

-2

-3

-3

-3

-3

-3

-3

-4

-4

-4

-4

-4

-4

-5

-5

-5

-5

-5

-5

0

1

2

3

4

5

6

7

8

910

0

1

2

3

4

5

6

7

8

910

0

1

2

3

4

5

6

7

8

910

Years

Years

Years

1

India

1

1

Japan

1

1

Korea

1

0

0

0

0

0

0

-1

-1

-1

-1

-1

-1

-2

-2

-2

-2

-2

-2

-3

-3

-3

-3

-3

-3

-4

-4

-4

-4

-4

-4

-5

-5

-5

-5

-5

-5

0

1

2

3

4

5

6

7

8

910

0

1

2

3

4

5

6

7

8

910

0

1

2

3

4

5

6

7

8

910

Years

Years

Years

Source:Authors'calculations.

ItisassumedforthesixscenariosthatcountriesimposeNTBstoeliminateallbilateralimportsinhigh-techconsumption,investmentandintermediategoodsbasedonthelong-termmagnitudesfromCFRT(discussedbelow),butallowingforlong-termadjustmentsincurrentaccountsandnetforeignassetpositions,whichareonlypossibleinGIMF.When,forexample,theUnitedStatesimposesNTBsagainstChinesegoods,bothcountriesexperiencenegativeimpacts(Figure2).Chinalosesanexportmarket,andlosesincome,whichhasnegativeimpactsonitsfirmswhoinvestlessandhireless.Thefallinemploymenthasanimpactonhouseholds,whothenconsumeless,whichfurthershrinkstheeconomy.ChinamayalsoreducethepriceofitsgoodssubjecttoNTBstoincreasemarketshareelsewhereintheworld.IntheUnitedStates,thefallin

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importsfromChinawillincreasedemandforgoodsfromothercountries(causetradediversion),whichwilllikelybemoreexpensivethantheforegoneChinesegoods,therebyincreasinginflationintheshortterm,butalsoreducinginvestmentandconsumption,asthefewergoodscanbepurchasedforthesamelevelofincomeinitially,whichwillalsodriveafallinU.S.output.Non-hubcountriescaneithergainfromtradediversionorlosefromnegativespilloversastheChineseandU.S.economiescontract.

Tradecancausemyriadspilloversamongcountries,asthesixscenariosrepresentnotjustU.S.NTBsonChina,butdifferentconstellationsofNTBsamongallcountries,withpreferentialattachmentsorotherwise.TheUnitedStateslossesarerelativelysmaller,atleastinpartduetobeingarelativelymoreclosedeconomy.Evenso,itstandstolosearoundhalfapercentofGDPormorepermanentlyacrossscenarios.China’slossesarehigher,mostnotablyinthescenarioswheremostofitshigh-techlinksareaffected(scenario4).WhiletradingmostwithChina,JapanandKoreaalsohavestronglinkswithboththeUnitedStatesandEurope,sotheylosesubstantiallyinthepreferentialattachmentscenarios2and6.

b.SectoralMisallocation

Giventhevaryingdegreesoftechnologicalintensityacrosssectors,technologicaldecouplingisintrinsicallyasectoralshock.Tounderstanditseffects,itisusefultocapturetheproductivitylossesfromalessefficientallocationofresourcesacrosssectorsandcountriesbyemployingCFRT,thecomputablegeneralequilibriummodelbyCaliendoandothers(2017),ascalibratedinCaceresandothers(2019).

CFRTcapturestwokeyfeaturesoftheinternationalproductionofgoodsandtrade:(1)thatfirmswithineachsectorareheterogeneousintheirproductivity,and(2)thatinput-outputrelationshipshaveincreasinglydevelopedacrossborders,withintermediategoodsdominatingworldtradeflows.Tomodelproductivityeffects,CFRTallowsforendogenousfirmentryandexitfromdomesticandexportmarketsinresponsetoshocks,afeaturethatcangreatlyamplifyeconomiceffectsandallowsformoredrasticre-compositionofglobalproduction.Astoglobalsupplylinks,thefactthatproductionofanysectorrequiresintermediateinputsfromallothersectors

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explicitlyinCFRTgeneratesyetanotheramplificationmechanism,asshocksreverberateacrossdomesticandforeignproductionvaluechains.

Withinthisframework,thesectoralmisallocationeffectsoftechnologicaldecouplingaremodeledthroughtheimpositionofhighbilateralnon-tariffbarriersthatrepresentthescenariosinTable1.Foreachscenario,theeffectofchangesinNTBsissimulatedusinginput-outputdatacovering165countriesandatotalof17sectors(seeAppendixIfordetails).High-techsectorsareidentifiedbasedontheclassificationinOECD(2011),whichisbasedonsectoralR&Dintensities.Thissuggeststwohigh-techsectors:electronicsandmachinery(denotedas“electronics”henceforth),andtransportequipment.DecouplingisthensimulatedbyraisingNTBsinhigh-techsectorssoastovirtuallyeliminaterelevantbilateraltradeinthosesectors.

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Table2.Sectors:TechnologicalIntensityandElasticities

Sector#

Simplifiedsectorname

Elasticities1/

Tech-intensity2/

1

Agriculture,Hunting,Forestry,andFishing

9.1

N.A.

2

ExtractiveIndustries

19.0

N.A.

3

Food,Beverages,andTobacco

2.5

Low

4

Textiles,TextileProducts,Leather,andFootwear

3.0

Low

5

Wood,Paper,Printing,andPublishing

5.4

Low

6

Petroleum,Chemical,Non-MetallicMineralProducts

12.1

Medium-Low3/

7

MetalProducts

13.9

Medium-Low

8

ElectricalEquipmentandMachinery

2.6

Medium-High4/

9

TransportEquipment

8.0

Medium-High

10

OtherManufacturing;Recycling

4.0

Low

Sources:Caceresandothers(2019),OECD(2011),andauthors’calculations.

Notes:1/SeeTable2inCaceresandothers(2019),column“Preferred”.2/FromOECD(2011).3/ThissectoraggregatesthreeISICrevision3.1manufacturingsub-sectorslistedasMedium-Low(Divisions23,25-26)andonelistedasMedium-High(Division24).4/ThissectoraggregatesoneISICrevision3.1manufacturingsub-sectorslistedasMedium-High(Division29)andanotherlistedasHigh(Divisions30-33).

ThenecessaryincreaseinNTBstoachievesuchsectoraldecouplingisinverselyproportionaltosectoraltradeelasticities.EstimatedsectoraltradeelasticitiesarepresentedinTable2alongside

Bydesign,CFRTdoesnotallowforcornersolutions(seeCaceresandothers,2019,foradiscussion).Inallsimulations,therefore,theaimistoreducetradeinhigh-techsectorsbyatleast95percent.

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thetechnologicalintensitiesdiscussedabove.Giventhedifferentelasticitiesforhigh-techsectors,achievingdecouplingasdefinedaboveendsupentailingdoublingNTBsfortradeintransportequipment,andquadruplingthemfortradeinelectronics.Forservices,anelasticityof

isassumedfollowingCaceresandothers(2019).ThetechnologicalintensityclassificationinOECD(2011)doesnotincludeservicesandthustheyarenotconsideredinthescenarios.

Table3presentsthesimulatedchangesinoutput(panel(a))andrealexports(panel(b))foreachscenarioforselectedcountries.Sincetheseoutputchangesreflectthechangeinlevelsbetweensteadystates,theyarebestinterpretedastheexpectedlong-termor“potential”outputeffectsofdecoupling.

Table3.SimulatedEffects:SelectedEconomies

(a)Potentialoutput

Hubs

Preferential

Country

Asia

Americas

Europe

attachment?

CHN

JPN

KOR

MYSVNM

USA

CAN

MEX

BRA

ARG

DEU

FRA

GBR

POL

CZE

China|U.S.

No

-0.6

0.1

0.1

0.4

0.0

-0.4

0.3

0.4

0.0

0.0

0.0

0.0

0.1

0.0

0.0

Yes

-1.4

-1.0

-2.0

-1.5

-0.6

-0.7

0.1

0.8

-0.4

-0.5

-3.3

-1.5

-1.3

-1.2

1.8

China|OECD

No

-2.8

-0.7

-2.9

4.4

0.4

-0.3

-0.2

0.3

0.0

0.0

-0.9

-0.2

-0.2

-0.2

0.8

Yes

-3.9

-0.6

-3.0

-0.5

-0.6

-0.3

-0.2

0.3

-0.1

-0.2

-0.5

-0.2

-0.2

-0.2

0.8

China|U.S.|Germany

No

-0.9

0.2

0.5

1.1

0.1

-0.4

0.4

0.6

0.0

0.0

-2.0

0.2

0.3

0.1

1.8

Yes

-2.0

-1.1

-2.3

-2.1

-0.5

-0.9

-0.11.2-0.7

-0.8

-2.7

-1.3

-2.5

-0.5

1.4

(b)Realexports

Hubs

Preferential

Country

Asia

Americas

Europe

attachment?

CHN

JPN

KOR

MYSVNM

USA

CAN

MEX

BRA

ARG

DEU

FRA

GBR

POL

CZE

China|U.S.

No

-3.3

0.8

-0.1

0.8

-0.4

-3.4

1.5

3.4

0.1

0.2

0.0

0.1

0.4

0.2

0.0

Yes

-6.5

-8.5

-5.8

0.3

5.1

-7.2

6.4

13.1

-2.9

-1.1

-9.5

-7.8

-6.6

-7.5

12.7

China|OECD

No

-14.3

-4.7

2.9

9.7

-3.9

-1.7

-0.8

3.5

1.5

0.2

-1.0

-0.8

-1.0

-1.1

1.7

Yes

-21.2

-3.9

1.2

2.5

3.8

-2.0

-0.9

3.6

-1.1

-1.0

-0.8

-1.2

-1.1

-2.0

0.9

China|U.S.|Germany

No

-4.6

2.2

-1.4

1.5

-3.9

-3.5

2.9

6.5

1.7

0.6

-2.5

1.6

1.7

1.4

5.4

Yes

-10.0-10.4

-9.0

-1.2

6.1

-8.4

8.5

20.7

-4.8

-0.5

-5.9

-5.0

-11.5

-0.6

6.5

Source:Authors’calculations.

Itcanbereadilyseenthathubstendtoloseacrossscenarios.ForChina,thelossesrangebetweenlessthanonepercentinthelevelofpotentialoutput,tonearly4percentintheharshChinaversusOECDscenariowithpreferentialattachment.Whetherasmallercountrylosesdependsonitsrelationshipwithhubs:ifitismostlyrelatedtoasinglehubwithwhichitcanenjoylessthird-partycompetitionthenitmightgainthroughtradediversion(e.g.Mexico).Ifitsvaluechainsare

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builtbystraddlingdifferentregionalvaluechainstheniteitherbenefitsmarginallyorismorelikelytolose(e.g.,Korea).

ThestarklossesaccruingtoChinainthepreferential-attachmentscenarioversusOECDcountriesreflectthesheersizeofthecoalitionofcountriesassumedtobeengagingintechnologicaldecouplingfromChina.Toillustratethis,Figure3showstheaggregateGDPofeachblocinthescenarioswithpreferentialattachment.BecausetheOECDissuchalargebloc,Chinaisleftnearlyisolatedinthishypotheticalsituation.Infact,onlyfouroutof164countrieswouldtrademorewithChinathanwiththeOECDasawhole,sothatChina’sblocinthisscenariowouldconsistofonly5(small)countries.Intheothertwoscenarioswithpreferentialattachment,ontheotherhand,thedifferentblocswouldbeoffarmoresimilarsize.Somehubs(China,Germany)losemorethanothers(theUnitedStates)inthesescenariosmainlybecausetheyarerelativelymoreopeneconomies.

Figure3.AggregateGDPofSegmentedRegions(US$trillion,scenarioswithpreferentialattachment)

Scenario2

(China-U.S.)

Scenario4

(China-OECD)

Scenario6

(China-U.S.-Germany)

China

China-linked

U.S.

U.S.-linked

ChinaChina-linkedOECDOECD-linked

China

China-linked

U.S.

U.S.-linked

Germany

Germany-linked

Source:Authors’calculations.

Thislayerofresultsisavailablefor165countries.Thecolor-codedmapsinFigure4showtheeffectsonpotentialGDPacrossthesixscenarios.Therearesomeinterestingandintuitiveeffectsonnon-hubcountries.Forexample,inscenario5,GermanyiscutofffromtradingwiththeUnitedStatesandChinainthetwohigh-techsectors,whichbenefitsotherEuropeancountries

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whobegintointermediatethistradegiventheirproximityandcloseinput-outputlinkageswithGermany.Whencomparingscenarioswithpreferentialattachment,lossesarerelativelymoreheavilyconcentratedinChinaundertheisolationistChinaversusOECDscenario4,andmorewidespreadwhentheworldissplitinthemoreevenlydistributedblocsofscenarios2and6.

Figure4.EffectonPotentialGDPAroundtheWorld

WithoutPreferentialAttachment

WithPreferentialAttachment

Scenario1:China-U.S.

Scenario2:China-U.S.

Scenario3:China-OECD

Scenario4:China-OECD

Scenario5:China-U.S.-Germany

Scenario6:China-U.S.-Germany

Source:Authors’calculations

c. LowerForeignKnowledgeDiffusion

Inadditiontothereductioninglobaltradeflowsandsectoralmisallocationfromtechnologicaldecoupling,therearepotentialconsequencesforinnovationandproductivitygrowth.Togauge

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whatisatstake,thissectionprovidesanempiricalestimateofthepositiveknowledgespilloversamongtechnologicalleaderssincetheearly2000s.TheseestimateswillthenformthebasisoftheintegratedscenarioanalysisfeaturingallthreechannelsinPartIIIofthepaper.

Theapproach,basedontheworkbyEugsterandothers(2018),reliesonatwo-stepestimationandathree-dimensionalpaneltostudythecontributionof“accessible”foreignR&D–theproxyforknowledgeavailableabroad–todomesticinnovationandproductivity.Thefindingshighlightthatknowledgediffusionhasmadeaquantitativelysignificantcontributiontoinnovationandproductivity,includingintheUnitedStatesandChina.EvenwhenaccountingforthefactthatChina’sR&Dnumberspotentiallyoverstateitscontributiontoglobalknowledge,itremainsamongthemostimportantsourcesoftechnologyspilloversfortheUnitedStates.

Data.Theanalysislinksproductivityandinnovationtotheavailablestocksofknowledgebothathomeandabroadatthecountry-industrylevel.Asaproxyforproductivity,theanalysisreliesontheproductivityoflabor,constructedastheratioofrealvalueaddedandtotalemployment,bothsourcedfromtheKLEMSdatabase.Apriori,itwouldhavebeenpreferabletodisaggregatelaborproductivityfurtherintothepartsthatrespectivelyarisefromcapitaldeepeningandgreaterefficiencyintheuseofthefactorsofproduction(totalfactorproductivity,TFP).However,thesectoraldataoncapitalstocksislackingforChinaandothercountries,whichpreventsanequivalentanalysisofTFP.Whilethisisconceptuallyunfortunate,ithardlyreducestherelevanceoftheresults,asthemoreeasilymeasuredlaborproductivity–whichattheaggregatelevelisequivalenttoGDPpercapita–isastandardmetricfortheproductionandprosperityofacountry.

Asaproxyforinnovation–theseconddependentvariable–thenumberofpatentfamiliesthatcanbeconsidered“international”is