Internationalization and Performance of Firms in China: Moderating Effects of Governance Structure and the Degree of Centralized Control

Xiao, Shufeng; Jeong, Insik; Moon, Jon Jungbien; Chung, Chris Changwha; Chung, Jaiho

doi:10.1016/j.intman.2012.12.003

Cited by 118 publications

(92 citation statements)

References 94 publications

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“…Luo et al (2011) show empirically that ODI by private Chinese firms had been prompted to exploit firmspecific advantages as well as to tackle market imperfections due to the weak domestic institutions in China. Cui et al (2012), Chen and Young (2010), and Xiao et al (2013) study the implications of Chinese government's involvement in outward investments and reach mixed conclusions regarding the performance of the investment. Other studies on Chinese overseas merger and acquisition 5 Darby, Desbordes, and Wooton (2013) how theoretically that investors from countries with weak domestic institutions are less likely to be deterred from investing in countries with equally poor institutions, compared to advanced economies' investors.…”

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confidence: 99%

Why Is China Investing in Africa? Evidence from the Firm Level

Chen

Dollar

Tang

2016

World Bank Econ Rev

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. China's increased trade with and investment in Africa have boosted the continent's economic growth but have also generated considerable controversy. In this paper we investigate China's outward direct investment ODI in Africa using macro and micro data. The aggregate data on China's ODI in African countries reveal that China's share of the stock of foreign investment is small, though growing rapidly. China's attraction to resource-rich countries is no different from Western investment. China's overall ODI is uncorrelated with a measure of rule of law, whereas Western investment favors the better governance environments. As a result, Chinese investment in strong and weak governance environments is about the same, but its share of foreign investment is higher in the weak governance states. The micro data that we use is MOFCOM's database on all registered Chinese firms investing in Africa between 1998 and 2012. We use key words in project descriptions to code the investments into 25 sectors. This database captures the small and medium private firms investing in Africa. Contrary to common perceptions, there are few projects in natural resource sectors. Most projects are in services, with a significant number in manufacturing as well. In our country-sector-level regressions based on firms' transactionlevel data, we find that Chinese ODI, both horizontal and vertical, is profit-driven, just like investors from other countries. In particular, our regressions show that Chinese ODI is relatively more concentrated in skill-intensive sectors in skill-abundant countries, but in capital-intensive sectors in capital-scarce countries. These patterns are mostly observed in politically unstable countries, suggesting stronger incentives to seek profits in tougher environments. The predominance of Chinese ODI in services appears to be widespread across host countries, independent of host countries' market size and trade costs, but is negatively correlated with their skill abundance. Terms of use: Documents inJEL-Codes: F100, F200, F600.

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confidence: 99%

Why Is China Investing in Africa? Evidence from the Firm Level

Chen

Dollar

Tang

2016

World Bank Econ Rev

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“…Nielsen studied 165 Swiss enterprises data from year 2002 to 2004 and further verified the research conclusion [4]. In addition, the latest research of Chen et al and Xiao has also showed that the relationship between international degree and business performance is S-shaped curve shape [5][6].…”

Section: Usd Hundred Millionmentioning

confidence: 62%

Study on Relationship between Degree of Internationalization and Business Performance of Resources Enterprise - Based on Dynamic Panel Data of Chinese Listing Resources Enterprises

Zhang¹,

Li²

2016

Proceedings of the 2016 International Symposium on Business Cooperation and Development

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Abstract-Resources enterprises have played significant role in the strategy of 'going out' of internationalization of Chinese business. During the fast pace of internationalization of Chinese companies, there are plenty of successful cases. However, there are also some cases are absent of success with regarding to this, which indicate that there is significant disparity on performance of internationalization of Chinese business. This paper selected 40 listing resources enterprises samples which have continuous overseas sales revenue for 9 years and applied dynamic data analysis model for empirical study and analysis. The finding revealed that the relationship between the degree of internationalization of Chinese resources enterprise and business performance is the U-type relationship which is conductivity firstly decreased, and then increased with further internationalization.

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“…At first glance, empirical evidence not always seems to support this theoretical rationale in the Chindia countries. While, for example, Kumar (2009), Huo andHung (2015) as well as Hajela and Akbar (2007) found a positive relationship between internationalization and firm performance, Kumar and Singh (2008) as well as Xiao, Jeong, Moon, Chung, and Chung (2013) found a negative one. It has been argued that contradicting results may be due to a non-linear internationalization-firm performance relationship (U-shaped, inverted U-shaped, or S-shaped) (Geringer, Beamish, & Costa, 1989;Gaur and Kumar, 2009;Wu, Wu & Zhou, 2012;Ficici, Wang, Aybar, & Fan, 2014).…”

Section: Theoretical Backgroundmentioning

confidence: 99%