Efficiency sorting among foreign affiliates: Evidence from china

Yasheng Chen, Ying Ge, Huiwen Lai, Qing Liu

Research output: Journal article publicationJournal articleAcademic researchpeer-review

4 Citations (Scopus)

Abstract

This paper uses a large micro-level data set to investigate the efficiency sorting pattern of foreign affiliates serving different markets. We find systematic differences among the attributes of foreign affiliates serving the local and overseas markets. Affiliates serving only the host country market are the most productive, the most capitalintensive and the most skill-intensive. Affiliates serving only the international market are the most unskilled and labour-intensive, the least efficient, pay the lowest wages and invest least in innovation and advertising. Affiliates serving both markets offer high wages and invest most in innovation and advertising. The results also suggest that the most productive affiliates choose to serve the host country market, whereas the least efficient affiliates target the international market.
Original languageEnglish
Pages (from-to)568-581
Number of pages14
JournalWorld Economy
Volume38
Issue number3
DOIs
Publication statusPublished - 1 Mar 2015

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics
  • Political Science and International Relations

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