Export Requirements and Special Features of Inward Foreign Direct Investment in China

The paper investigates the relationship between the policy of export requirements and special features of China's inward foreign direct investment (FDI), and examines how trade-related investment measures affect the investment decisions of multinational firms. A theoretical model is constructed that allows us to analyse how location advantages affect the equilibrium regime under which multinational firms and government policy toward FDI co-exist endogenously. The model also exam the welfare effects of export requirements policy by comparing with an alternative policy - production tax. The findings from this study accord well with the evidence regarding China's inward FDI. The main results indicate that the policy of export requirements is sub-optimal.

Modelling foreign direct investment in China

This thesis consists of three empirical and one theoretical studies. While China has received an increasing amount of foreign direct investment (FDI) and become the second largest host country for FDI in recent years, the absence of comprehensive studies on FDI inflows into this country drives this research. In the first study, an econometric model is developed to analyse the economic, political, cultural and geographic determinants of both pledged and realised FDI in China. The results of this study suggest that China's relatively cheaper labour force, high degree of international integration with the outside world (represented by its exports and imports) and bilateral exchange rates are the important economic determinants of both pledged FDI and realised FDI in China. The second study analyses the regional distribution of both pledged and realised FDI within China. The econometric properties of the panel data set are examined using a standardised 't-bar' test. The empirical results indicate that provinces with higher level of international trade, lower wage rates, more R&D manpower, more preferential policies and closer ethnic links with overseas Chinese attract relatively more FDI. The third study constructs a dynamic equilibrium model to study the interactions among FDI, knowledge spillovers and long run economic growth in a developing country. The ideas of endogenous product cycles and trade-related international knowledge spillovers are modified and extended to FDI. The major conclusion is that, in the presence of FDI, economic growth is determined by the stock of human capital, the subjective discount rate and knowledge gap, while unskilled labour can not sustain growth. In the fourth study, the role of FDI in the growth process of the Chinese economy is investigated by using a panel of data for 27 provinces across China between 1986 and 1995. In addition to FDI, domestic R&D expenditure, international trade and human capital are added to the standard convergence regressions to control for different structural characteristics in each province. The empirical results support endogenous innovation growth theory in which regional per capita income can converge given technological diffusion, transfer and imitation

Expanding to outward foreign direct investment or not? A multi-dimensional analysis of entry mode transformation of Chinese private exporting firms

This research examines the factors determining whether or not exporting firms expand to outward foreign direct investment (OFDI) as part of their internationalisation strategy, using a recent survey of Chinese private-owned enterprises. We carry out a multi-dimensional analysis to investigate the impact of firm productivity, internal resources and the external environment on OFDI decisions, including both the decision to undertake OFDI and the volume of OFDI flows. It is found that productivity, technology-based capability, export experience, industry entry barriers, subnational institutions and intermediary institutional support affect firms’ OFDI decisions. The findings have important policy and managerial implications

A comparative analysis of China and India’s manufacturing sectors

China’s manufacturing sector led by labour intensive manufactures has grown much faster than that of India both in terms of production and exports. It is often argued that India’s manufacturing sector that is relatively capital intensive must now follow China’s example and promote labour intensive manufactures. This is said to be essential if India were to promote growth and employment that are both essential for reducing the relatively high levels of poverty in the country. This paper argues that it may not be feasible for India to follow China’s growth strategy based on exports of labour intensive manufactures. India may have missed the boat and in any case it has failed to implement a strategy for agriculture of the sort that China put in place to provide its manufacturing sector with low wages and low cost raw materials. India, however, should utilise its services sector, mostly the IT services, to promote its nascent non- farm manufacturing sector in the rural areas. There may be lessons here from China’s town and village enterprises TVEs) programme

Competition, Cooperation and Regulatory Intervention Impacts on Independent School Fees

This paper examines the factors determining fee levels set by independent schools, focusing on the impact of competition, cooperation and regulatory intervention in the sector. Results indicate that, once account is taken of factors such as the extent of local competition between independent schools, the impact of the 2003-2005 Office of Fair Trading investigation into the fee-setting cartel on independent school fees becomes insignificant. Meanwhile, the extent of competition between independent schools has a significant effect on levels of boarding school fees. Results highlight the importance of considering pricing strategies of groups within a cartel

Sub-national locations and FDI spillovers : theory and evidence

The welfare-enhancing role of spillovers from foreign direct investment (FDI) in a host country generates significant interests and debates among policymakers, long after a wide range of regulatory changes in favour of FDI in the late 1980s and the 1990s. The expectation of positive spillovers reinforces the development of government policies to attract multinational enterprises (MNEs) to the host country. However, as is documented in surveys of the literature on FDI spillovers (Görg and Strobl, 2001; Havránek and Irsová, 2012; Meyer and Sinani, 2009; Wooster and Diebel, 2010), the empirical evidence on FDI spillovers is rather mixed. The surveys highlight two important factors that might offer the explanations of mixed findings. First, the degree of foreign ownership is a primary factor in determining the strength of linkages between domestic and foreign firms and thereby affects spillovers (Javorcik and Spatareanu, 2008). As argued by Görg and Greenaway (2004), MNEs may be effective at preventing spillover effects of firm-specific assets. This is connected to the ownership strategies of MNEs that often use wholly owned subsidiaries (WOS) to better control the technologies they transfer to their foreign locations. Second, absorptive capacity of domestic firms and the strength of linkages between domestic and foreign firms are critical for spillovers. However, studies taking these factors into consideration are sparse. According to Havránek and Irsová (2012), among 1205 horizontal spillover estimates from 52 studies, only 5.7 per cent and 7.8 per cent control for absorptive capacity of domestic firms and the strength of linkages between domestic and foreign firms, respectively

Does language matter to foreign subsidiary performance?

Purpose This paper examines the role of language in foreign subsidiary performance. Design/methodology/approach We develop hypotheses relating to the effects of language difference and its interplay with cultural distance and market size. Considering languages that can be directly used and that can be acquired by MNEs, we employ language variables representing major languages and a population of 60 home and 57 host countries to study the performance of a sample of 1,751 subsidiaries between 2002 and 2013. Findings Language difference is found to have a negative impact on subsidiary performance. The positive effects of cultural distance on performance become stronger when the language difference is smaller. The language effects are also more pronounced in small markets. Practical implications This study reveals that subsidiary success depends on language difference, and such effects are more pronounced in small markets. The results also suggest that MNEs need to give more attention to bridging language barriers when they invest in culturally distant countries so that they can benefit from the positive effects of cultural distance. Originality/value Given that there is no systematic research investigating the role of language in the foreign subsidiary performance of MNEs, we make an important contribution by presenting a quantitative investigation of the language–performance relationship. The novelty of the paper also lies in examining the interplay of language difference with cultural distance and market size

Pathologic fracture does not influence prognosis in stage IIB osteosarcoma: a case–control study

OBJECTIVE: This study tested the implication of pathologic fractures on the prognosis in stage IIb osteosarcoma. METHODS: A single center retrospective evaluation of clinical management and oncologic outcome was conducted with 15 pathological fracture patients (M:F = 10:5; age: mean 23.2, range 12–42) and 50 non-fracture patients between April 2002 and December 2010. These stage IIB osteosarcoma patients were matched for age, tumor site (femur, tibia, and humerus), and osteosarcoma subtype (i.e., control patients with osteosarcoma in the same sites as the fracture patients). All osteosarcoma patients with pathological fractures underwent brace or cast immobilization, adjuvant chemotherapy, and limb salvage surgery or amputation. Musculoskeletal Tumor Society (MSTS) functional scores were assessed. The mean follow-up time was 34.7 months (range, 8–47 months). RESULTS: Following limb salvage surgery, no statistical differences were observed in major complications (fracture = 20.0%, control = 12.0%, P = 0.43) or local recurrence complications (fracture = 26.7%, control = 14.0%, P = 0.25). Overall 3-year survival rates of the fracture and control groups (66.7% and 75.3%, respectively) were not statistically different (P = 0.5190). Three-year disease-free survival rates of the fracture and control groups were 53.3% and 66.5%, respectively (P = 0.25). CONCLUSIONS: Pathologic fracture was not a prognostic indicator of recurrence or overall survival in localized osteosarcoma patients. Limb salvage can be achieved by and maintaining adequate surgical margins and applying adjuvant chemotherapy

Dual isomorphic mechanisms and the role of a transnational agent : How foreign MNEs affect environmental innovation in domestic firms

Corporate environmental innovation (CEI) is a proactive type of response to increasing public scrutiny regarding firms’ environmental performance. Whilst past studies have overwhelmingly focused on coercive mechanisms and assumed a closed national institutional field, less attention has been given to non-coercive and transnational inter-firm mimetic mechanisms. This paper investigates the joint effect of coercive isomorphic mechanisms from domestic institutions and mimetic isomorphic mechanisms from foreign multinational enterprises (MNE) on corporate environmental innovation (CEI) adoption in domestic firms. Our empirical analysis is based on data from 1,967 firms from the 2010 Korean Innovation Survey (KIS), as well as other official statistics. This study reports the following results: 1) the direct effects of domestic institutions on CEI adoption in domestic firms vary according to institution type, 2) Foreign MNEs have a positive effect, whether using global or local CEI strategies, and 3) the positive effect of foreign MNEs strengthens when the stringency of domestic environmental regulation increases. This paper shows that CEI diffusion is driven by both coercive institutional pressures and inter-firm mimetic mechanisms, including their joint effects. Foreign MNEs act as boundary-spanners that activate a dual isomorphic mechanism, affecting social as well as economic development in host countries. Finally, evidence of interaction between domestic coercive and transnational mimetic mechanisms supports the authors’ contention that national institutional fields are increasingly interconnected

Chinese migrants and their impact on homeland development

This paper aims to systematically examine the impact of Chinese migrants on the economic activities of indigenous Chinese firms from two dimensions: foreign direct investment (FDI) by ethnic Chinese (ECI) and returnees. Using a unique dataset for firms in Zhongguancun Science Park, Beijing, we carry out an in-depth empirical study on the effects of ECI and returnees on indigenous Chinese firms’ productivity, exports and R&D in comparison with the effects of non-ethnic Chinese FDI. The findings have important policy implication