IDEAS home Printed from https://ideas.repec.org/p/wdi/papers/1999-264.html
   My bibliography  Save this paper

The Institutional Foundation of Foreign-Invested Enterprises (FIEs) in China

Author

Listed:
  • Yasheng Huang

Abstract

Foreign-invested enterprises (FIEs) are now an important component of the Chinese economy. Since 1992, the growth of FIEs has been exponential. However our understanding of the institutional factors driving the FIE growth remains limited. This paper uses data from 39 industries in China for a period of three years (1995-1997) to explore the institutional foundation of the FIE growth. Our findings suggest that the debt obligations on the part of the SOEs and the local control of the SOEs promote the growth of FIEs and that some of the foreign direct investment (FDI) inflows result in acquisition of existing assets and shift asset controls from SOEs to FIEs.

Suggested Citation

  • Yasheng Huang, 1999. "The Institutional Foundation of Foreign-Invested Enterprises (FIEs) in China," William Davidson Institute Working Papers Series 264, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:1999-264
    as

    Download full text from publisher

    File URL: http://deepblue.lib.umich.edu/bitstream/2027.42/39649/3/wp264.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Stephen Young & Ping Lan, 1997. "Technology Transfer to China through Foreign Direct Investment," Regional Studies, Taylor & Francis Journals, vol. 31(7), pages 669-679.
    2. Caves, Richard E, 1974. "Causes of Direct Investment: Foreign Firms' Shares in Canadian and United Kingdom Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 56(3), pages 279-293, August.
    3. Luiz R. de Mello Jr., 1997. "Foreign Direct Investment in Developing Countries: A Selective Survey," Studies in Economics 9701, School of Economics, University of Kent.
    4. Chow, Clement Kong Wing & Fung, Michael Ka Yiu, 1998. "Ownership Structure, Lending Bias, and Liquidity Constraints: Evidence from Shanghai's Manufacturing Sector," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 301-316, June.
    5. Takatoshi Ito & Anne O. Krueger, 1996. "Financial Deregulation and Integration in East Asia," NBER Books, National Bureau of Economic Research, Inc, number ito_96-1.
    6. David K Tse & Yigang Pan & Kevin Y Au, 1997. "How MNCs Choose Entry Modes and Form Alliances: The China Experience," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 28(4), pages 779-805, December.
    7. H H Aswicahyono & Hal Hill, 1995. "Determinants of Foreign Ownership in LDC Manufacturing: An Indonesian Case Study," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 26(1), pages 139-158, March.
    8. Wei, Shang-Jin, 1995. "Attracting foreign direct investment: Has China reached its potential?," China Economic Review, Elsevier, vol. 6(2), pages 187-199.
    9. Robert Z. Lawrence, 1993. "Japan's Low Levels of Inward Investment: The Role of Inhibitions on Acquisitions," NBER Chapters, in: Foreign Direct Investment, pages 85-112, National Bureau of Economic Research, Inc.
    10. Blomstrom, Magnus, 1986. "Foreign Investment and Productive Efficiency: The Case of Mexico," Journal of Industrial Economics, Wiley Blackwell, vol. 35(1), pages 97-110, September.
    11. Sanjaya Lall, 1980. "Transnationals, Domestic Enterprises and Industrial Structure in Host LDCs: A Survey," Palgrave Macmillan Books, in: The Multinational Corporation, chapter 2, pages 29-64, Palgrave Macmillan.
    12. Ito, Takatoshi & Krueger, Anne O. (ed.), 1996. "Financial Deregulation and Integration in East Asia," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226386713, September.
    13. Shang-Jin Wei, 1996. "Foreign Direct Investment in China: Sources and Consequences," NBER Chapters, in: Financial Deregulation and Integration in East Asia, pages 77-105, National Bureau of Economic Research, Inc.
    14. Luiz de Mello, 1997. "Foreign direct investment in developing countries and growth: A selective survey," Journal of Development Studies, Taylor & Francis Journals, vol. 34(1), pages 1-34.
    15. Theodore Groves & Yongmiao Hong & John McMillan & Barry Naughton, 1994. "Autonomy and Incentives in Chinese State Enterprises," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(1), pages 183-209.
    16. Yingyi Qian, 1999. "The Institutional Foundations of China's Market Transition," Working Papers 99011, Stanford University, Department of Economics.
    17. Blomstrom, Magnus & Persson, Hakan, 1983. "Foreign investment and spillover efficiency in an underdeveloped economy: Evidence from the Mexican manufacturing industry," World Development, Elsevier, vol. 11(6), pages 493-501, June.
    18. Yigang Pan, 1996. "Influences on Foreign Equity Ownership Level in Joint Ventures in China," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 27(1), pages 1-26, March.
    19. Kenneth A. Froot, 1993. "Foreign Direct Investment," NBER Books, National Bureau of Economic Research, Inc, number froo93-1.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. WHALLEY, John & XIN, Xian, 2010. "China's FDI and non-FDI economies and the sustainability of future high Chinese growth," China Economic Review, Elsevier, vol. 21(1), pages 123-135, March.
    2. World Bank, 2006. "Foreign Capital Utilization in China : Prospects and Future Strategy," World Bank Publications - Reports 19623, The World Bank Group.
    3. HE Canfei & ZHU Shengjun, 2007. "Economic Transition and Industrial Restructuring in China: Structural Convergence or Divergence?," Post-Communist Economies, Taylor & Francis Journals, vol. 19(3), pages 317-342.
    4. Elissa Braunstein & Gerald Epstein, 2002. "Bargaining Power and Foreign Direct Investment in China: Can 1.3 Billion Consumers Tame the Multinationals?," SCEPA working paper series. 2002-13, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    5. Canfei He, 2008. "Foreign Manufacturing Investment in China: The Role of Industrial Agglomeration and Industrial Linkages," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 16(1), pages 82-99, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thompson, Edmund R., 2002. "Clustering of Foreign Direct Investment and Enhanced Technology Transfer: Evidence from Hong Kong Garment Firms in China," World Development, Elsevier, vol. 30(5), pages 873-889, May.
    2. Elissa Braunstein & Gerald Epstein, 2002. "Bargaining Power and Foreign Direct Investment in China: Can 1.3 Billion Consumers Tame the Multinationals?," SCEPA working paper series. 2002-13, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    3. Klaus E Meyer & Evis Sinani, 2009. "When and where does foreign direct investment generate positive spillovers? A meta-analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(7), pages 1075-1094, September.
    4. Fetscherin, Marc & Voss, Hinrich & Gugler, Philippe, 2010. "30 Years of foreign direct investment to China: An interdisciplinary literature review," International Business Review, Elsevier, vol. 19(3), pages 235-246, June.
    5. Yasheng Huang, 2001. "Why More is Actually Less: New Interpretations of China's Labor-Intensive FDI," William Davidson Institute Working Papers Series 375, William Davidson Institute at the University of Michigan.
    6. Anis Omri & Amel Sassi-Tmar, 2015. "Linking FDI Inflows to Economic Growth in North African Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 6(1), pages 90-104, March.
    7. repec:ipg:wpaper:2014-558 is not listed on IDEAS
    8. Sun, Qian & Tong, Wilson & Yu, Qiao, 2002. "Determinants of foreign direct investment across China," Journal of International Money and Finance, Elsevier, vol. 21(1), pages 79-113, February.
    9. Rosemary Stanley Taylor, 2020. "Foreign direct investment and economic growth. Analysis of sectoral foreign direct investment in Tanzania," African Development Review, African Development Bank, vol. 32(4), pages 699-717, December.
    10. Argentino Pessoa, 2008. "Multinational Corporations, Foreign Investment, and Royalties and License Fees: Effects on Host-Country Total Factor Productivity," Notas Económicas, Faculty of Economics, University of Coimbra, issue 28, pages 6-31, December.
    11. Takatoshi Ito, 2000. "Capital Flows in Asia," NBER Chapters, in: Capital Flows and the Emerging Economies: Theory, Evidence, and Controversies, pages 255-296, National Bureau of Economic Research, Inc.
    12. Silvio Traverso & Guido Bonatti, 2015. "Education and FDI: An Insight from US Outflows," Journal of Social Economics, Research Academy of Social Sciences, vol. 2(3), pages 101-116.
    13. Angelo Antoci & Paolo Russu & Elisa Ticci, 2011. "Investement inflows and sustainable development in a natural resource-dependent economy," Department of Economic Policy, Finance and Development (DEPFID) University of Siena 0311, Department of Economic Policy, Finance and Development (DEPFID), University of Siena.
    14. Kottaridi, Constantina & Stengos, Thanasis, 2010. "Foreign direct investment, human capital and non-linearities in economic growth," Journal of Macroeconomics, Elsevier, vol. 32(3), pages 858-871, September.
    15. Busse, Matthias & Groizard, José Luis, 2005. "FDI, Regulations and Growth," Conference papers 331335, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    16. Cédric Durand, 2006. "Institutions et impact des IDE dans les pays en développement : le secteur de la grande distribution au Mexique," Post-Print halshs-00135918, HAL.
    17. Tuan, Chyau & Ng, Linda F.Y. & Zhao, Bo, 2009. "China's post-economic reform growth: The role of FDI and productivity progress," Journal of Asian Economics, Elsevier, vol. 20(3), pages 280-293, May.
    18. Angelo Antoci & Paolo Russu & Elisa Ticci, 2014. "Rural Poor Economies and Foreign Investors: An Opportunity or a Risk?," PLOS ONE, Public Library of Science, vol. 9(12), pages 1-24, December.
    19. Akinkugbe, Oluyele, 2003. "Flow of Foreign Direct Investment to Hitherto Neglected Developing Countries," WIDER Working Paper Series 002, World Institute for Development Economic Research (UNU-WIDER).
    20. Narula, Rajneesh & Portelli, Brian, 2004. "Foreign direct investment and economic development: Opportunities and limitations from a developing country perspective," Research Memorandum 009, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    21. Bickenbach, Frank & Liu, Wan-Hsin, 2010. "The role of personal relationships for doing business in the GPRD, China: evidence from Hong Kong electronics SMEs," Kiel Working Papers 1589, Kiel Institute for the World Economy (IfW Kiel).

    More about this item

    Keywords

    foreign direct investment; economic transition; China;
    All these keywords.

    JEL classification:

    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wdi:papers:1999-264. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: WDI (email available below). General contact details of provider: https://edirc.repec.org/data/wdumius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.