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

Greenaway, D. and Guariglia, A. and Yu, Z. (2012) 'The more the better ? foreign ownership and corporate performance in China.', European journal of finance. .

Abstract

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:University of Nottingham Research Paper 2009/05 'The more the better ? foreign ownership and corporate performance in China' available from http://ideas.repec.org/p/not/notgep/09-05.html
Keywords:Foreign ownership, Corporate performance, China.
Full text:Full text not available from this repository.
Publisher Web site:http://dx.doi.org/10.1080/1351847X.2012.671785
Record Created:21 Mar 2012 10:50
Last Modified:14 Mar 2014 09:46

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