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Foreign Direct Investment, Technological Capabilities and Performance in the Chinese Pharmaceutical Industry

Author

Listed:
  • Steven White

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

  • Hideki Yoshihara

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

  • Xielin Liu

    (National Research Center and Technology for Development State Science and Technology Commission of China, China)

Abstract

Does a firm engage in a joint venture with a technologically advanced foreign partner to complement or substitute investments in its own technological capabilities? We address this question in a comparative study of 222 Chinese pharmaceutical manufacturers and Sino-foreign joint ventures. A combination of ANOVA and OLS regression results provide evidence that firms with joint ventures invest more in organizational resources associated with technological capabilities, are higher performing by a number of absolute and relative measures, and have different correlates of high performance than firms without joint ventures. While the study cannot address the question of direction of causality, it does provide support for the view that joint ventures and investments in organizational resources are complementary, or at least correlated, rather than substitution strategies.

Suggested Citation

  • Steven White & Hideki Yoshihara & Xielin Liu, 1997. "Foreign Direct Investment, Technological Capabilities and Performance in the Chinese Pharmaceutical Industry," Discussion Paper Series 86, Research Institute for Economics & Business Administration, Kobe University.
    • Handle: RePEc:kob:dpaper:86
    as

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    More about this item

    Keywords

    Pharmaceutical industry; Technology; China; Foreign investments;
    All these keywords.

    JEL classification:

    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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