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Investment liberalisation, technology take-off and export market entry: does foreign ownership structure matter?

Girma, Sourafel; Gong, Yundan; Görg, Holger; Lancheros, Sandra

Authors

SOURAFEL GIRMA sourafel.girma@nottingham.ac.uk
Professor of Industrial Economics

Yundan Gong

Holger Görg

Sandra Lancheros



Abstract

In the run up to its accession to the WTO in 2001, China has undergone far-reaching investment liberalisation. As part of this investment liberalisation process, existing restrictions on foreign ownership structure and mandatory export and technology transfer requirements imposed on foreign firms have been lifted in a number of industries. We exploit these facts to identify the causal effects of foreign acquisitions on export markets entry and technology take-off and to evaluate whether the level of foreign ownership plays a role in stimulating these changes. Using doubly robust propensity score reweighted bivariate probit regressions to control for the selection bias associated with firm level foreign acquisition incidences, we uncover strong but heterogeneous positive effects on export activity for all types of foreign ownership structure. We also find that minority foreign owned acquisition targets experience higher likelihood of R&D, providing evidence that joint ventures between foreign owners and Chinese firms can contribute positively to China’s “science and technology take-off”.

Journal Article Type Article
Publication Date Aug 1, 2015
Journal Journal of Economic Behavior & Organization
Electronic ISSN 0167-2681
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 116
APA6 Citation Girma, S., Gong, Y., Görg, H., & Lancheros, S. (2015). Investment liberalisation, technology take-off and export market entry: does foreign ownership structure matter?. Journal of Economic Behavior and Organization, 116, https://doi.org/10.1016/j.jebo.2015.04.008
DOI https://doi.org/10.1016/j.jebo.2015.04.008
Publisher URL http://www.sciencedirect.com/science/article/pii/S0167268115001122?via%3Dihub
Copyright Statement Copyright information regarding this work can be found at the following address: http://creativecommons.org/licenses/by-nc-nd/4.0

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Copyright Statement
Copyright information regarding this work can be found at the following address: http://creativecommons.org/licenses/by-nc-nd/4.0





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