Benefits of Foreign Ownership: Evidence from Foreign Direct Investment in China*
| Title: | Benefits of Foreign Ownership: Evidence from Foreign Direct Investment in China* |
|---|---|
| Authors: | Jian Wang; Xiao Wang; Jel Codes F |
| Contributors: | The Pennsylvania State University CiteSeerX Archives |
| Source: | http://www.dallasfed.org/assets/documents/institute/wpapers/2014/0191.pdf. |
| Publication Year: | 2014 |
| Collection: | CiteSeerX |
| Description: | To examine the effect of foreign direct investment, this paper compares the post-acquisition performance changes of foreign- and domestic-acquired firms in China. Unlike previous studies, we investigate the purified effect of foreign ownership by using domestic-acquired firms as the control group. After controlling for the acquisition effect that exists in domestic acquisitions, we find no evidence that foreign ownership can bring productivity gains to target firms. In contrast, a strong and robust finding is that foreign ownership significantly improves target firms ' financial conditions and exports relative to domestic-acquired firms. Foreign acquisition is also found to improve output, employment and wage for target firms. These findings conflict with the conventional view of productivity-driven FDI and highlight the financial channel through which FDI benefits the host countries. |
| Document Type: | text |
| File Description: | application/pdf |
| Language: | English |
| Relation: | http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.656.1758; http://www.dallasfed.org/assets/documents/institute/wpapers/2014/0191.pdf |
| Availability: | http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.656.1758; http://www.dallasfed.org/assets/documents/institute/wpapers/2014/0191.pdf |
| Rights: | Metadata may be used without restrictions as long as the oai identifier remains attached to it. |
| Accession Number: | edsbas.2315204C |
| Database: | BASE |