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

Yu, Zhihong; Greenaway, David; Guariglia, Alessandra

Authors

ZHIHONG YU ZHIHONG.YU@NOTTINGHAM.AC.UK
Associate Professor

David Greenaway david.greenaway@nottingham.ac.uk

Alessandra Guariglia alessandra.guariglia@durham.ac.uk



Abstract

We examine the relationship between the degree of foreign ownership and performance of recipient firms, using a 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 it reaches a certain point. This suggests that some domestic ownership is necessary to ensure optimal performance. We referred these findings to a model of a joint-venture, where strategic interactions between a foreign and a domestic owner's inputs may lead to an inverted U-shaped ownership–performance relationship.

Citation

Yu, Z., Greenaway, D., & Guariglia, A. (2014). The more the better?: foreign ownership and corporate performance in China. European Journal of Finance, 20(7-9), https://doi.org/10.1080/1351847X.2012.671785

Journal Article Type Article
Acceptance Date Feb 28, 2012
Online Publication Date Jun 22, 2012
Publication Date Jan 1, 2014
Deposit Date Jul 4, 2016
Publicly Available Date Jul 4, 2016
Journal European Journal of Finance
Print ISSN 1351-847X
Electronic ISSN 1466-4364
Publisher Taylor & Francis (Routledge)
Peer Reviewed Peer Reviewed
Volume 20
Issue 7-9
DOI https://doi.org/10.1080/1351847X.2012.671785
Keywords foreign ownership; corporate performance, China; F2; G32; L25; O5
Public URL http://eprints.nottingham.ac.uk/id/eprint/34407
Publisher URL http://www.tandfonline.com/doi/abs/10.1080/1351847X.2012.671785
Copyright Statement Copyright information regarding this work can be found at the following address: http://eprints.nottingham.ac.uk/end_user_agreement.pdf
Additional Information This is an Accepted Manuscript of an article published by Taylor & Francis in European Journal of Finance on 2014, available online: http://www.tandfonline.com/10.1080/1351847X.2012.671785

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Copyright Statement
Copyright information regarding this work can be found at the following address: http://eprints.nottingham.ac.uk/end_user_agreement.pdf





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