Foreign Investment and Technological Progress. Many economists believe countries that open themselves to foreign investment of plant and equipment will benefit in terms of increased technological...

Foreign Investment and Technological Progress. Many economists believe countries that open themselves to foreign investment of plant and equipment will benefit in terms of increased technological change because local companies will learn from the foreign companies. For the last several decades, China has been more open to foreign investment than India. India, however, has now begun to open up its markets to foreign investment. Explain how this is consistent with the two countries’ patterns of economic growth. What do you think may happen in the future? (Related to Application 3 on page 195.)