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The more the better? Foreign ownership and corporate performance in China.

Greenaway, D. and Guariglia, A. and Yu, Z. (2014) 'The more the better? Foreign ownership and corporate performance in China.', European journal of finance., 20 (7-9). pp. 681-702.


We examine the relationship between the degree of foreign ownership and performance of recipient firms, using of panel of 21,582 Chinese firms over the period 2000-2005. We find that joint-ventures perform better than wholly foreign owned and purely domestic firms. Although productivity and profitability initially rise with foreign ownership, they start declining once foreign ownership reaches beyond 64%. This suggests that some domestic ownership is necessary to ensure optimal performance. We rationalize these findings with a model of a joint-venture, where strategic interactions between a foreign and a domestic owner’s inputs may lead to an inverse U-shaped ownership-performance relationship.

Item Type:Article
Additional Information:Special Issue: First Chinese Capital Markets. Conference University of Nottingham Research Paper 2009/05 'The more the better? Foreign ownership and corporate performance in China' available from
Keywords:Foreign ownership, Corporate performance, China.
Full text:Full text not available from this repository.
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Record Created:21 Mar 2012 10:50
Last Modified:23 Jul 2014 15:15

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