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

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  • Vincent Mok

    (School of Accounting and Finance, Hong Kong Polytechnic University, Hong Kong)

  • Godfrey Yeung

    (School of Social Sciences, University of Sussex, United Kingdom)

Abstract

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. Copyright © 2005 John Wiley & Sons, Ltd.

Suggested Citation

  • Vincent Mok & Godfrey Yeung, 2005. "Employee motivation, external orientation and the technical efficiency of foreign-financed firms in China: a stochastic frontier analysis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 175-190.
    • Handle: RePEc:wly:mgtdec:v:26:y:2005:i:3:p:175-190
    DOI: 10.1002/mde.1203
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    References listed on IDEAS

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    Cited by:

    1. Mehdi Rhaiem, 2017. "Measurement and determinants of academic research efficiency: a systematic review of the evidence," Scientometrics, Springer;Akadémiai Kiadó, vol. 110(2), pages 581-615, February.

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