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

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

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

Before and after its accession to the WTO in 2001, China has undergone a far-reaching investment liberalisation. As part of this, 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. Against this background we identify the causal effects of foreign acquisitions on export market entry and technology take-off and 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 can contribute positively to China's "science and technology take-off".

Original languageEnglish
Pages (from-to)254-269
Number of pages16
JournalJournal of Economic Behavior and Organization
Volume116
Early online date21 Apr 2015
DOIs
Publication statusPublished - Aug 2015

Fingerprint

Investment liberalization
Export markets
Ownership structure
Foreign ownership
Market entry
Foreign acquisitions
China
Joint ventures
Selection bias
Industry
Foreign firms
Bivariate probit
Probit regression
Propensity score
Technology transfer
Causal effect
Accessions
Minorities

Bibliographical note

© 2015, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/

Supplementary data: http://dx.doi.org/10.1016/j.jebo.2015.04.008

Keywords

  • export entry
  • foreign acquisition
  • ownership
  • propensity score reweighting
  • R&D

Cite this

Girma, Sourafel ; Gong, Yundan ; Görg, Holger ; Lancheros, Sandra. / Investment liberalisation, technology take-off and export markets entry : does foreign ownership structure matter?. In: Journal of Economic Behavior and Organization. 2015 ; Vol. 116. pp. 254-269.
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Investment liberalisation, technology take-off and export markets entry : does foreign ownership structure matter? / Girma, Sourafel; Gong, Yundan; Görg, Holger; Lancheros, Sandra.

In: Journal of Economic Behavior and Organization, Vol. 116, 08.2015, p. 254-269.

Research output: Contribution to journalArticle

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