Employee motivation, external orientation and the technical efficiency of foreign-financed firms in china: A stochastic frontier analysis

Wai Kwong Mok, Godfrey Yeung

Research output: Journal article publicationJournal articleAcademic researchpeer-review

4 Citations (Scopus)


By using a stochastic frontier model, we have identified several firm-specific attributes as determinants of technical efficiency in foreign-financed manufacturing firms in southern China. The empirical results suggest a strong association between efficiency and employee motivation, which includes the use of bonus incentives and flexibility in employment policy. In terms of the external orientation behavior of firms, the findings do not support the export/ efficiency relationship. Sample firms with a high degree of export-orientedness were less efficient, possibly due to the high transaction costs in China of exportation. As for the effects of expatriate input on production, our empirical evidence revealed that firms with a relatively high expatriate ratio performed less efficiently than others did. These two findings may have significant implications for the marketing strategies and management (including the localization) of human resources of foreign-financed firms in China.
Original languageEnglish
Pages (from-to)175-190
Number of pages16
JournalManagerial and Decision Economics
Issue number3
Publication statusPublished - 1 Apr 2005

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management
  • Management Science and Operations Research
  • Management of Technology and Innovation

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