Junjie Hong

Exports, Ownership and Firm Productivity: Evidence from China

This paper examines the linkage between exports, ownership and firm productivity. Based on a panel data set that covers over 70,000 Chinese firms from 2001 to 2005, the estimation results provide strong evidence that exports play an important role in enhancing firm productivity. Foreign ownership improves firm performance, but foreign‐owned exporters benefit less from exporting activities compared with domestic exporters. These results are robust to a variety of methods used and consideration of endogeneity issue. We also find that the productivity gain from exporting is greater for new entrants into the international market, and the benefit declines when firms become more experienced. Firms that involve more in exports are more likely to develop new product, suggesting that export‐market participation promotes innovation.

Logistics service providers in China

Purpose – The article attempts to study the current status and future prospects of logistics providers in the whole country as well as a comparatively developed Chinese city (Tianjin); reveal the disparities between China and Tianjin, as well as local firms and their foreign counterparts; and identify the challenges faced by Chinese logistics providers and offer managerial implications for logistics providers in an increasingly competitive environment.Design/methodology/approach – This research is based on two surveys conducted in China and Tianjin, respectively, under the support from government authorities. Comparative analyses were conducted to ascertain the differences between logistics firms in China and developed countries, as well as regional differences within China.Findings – The results reveal that Chinese logistics providers depend heavily on transportation and warehousing businesses but lack value‐added services and logistics information management. Rate setting ranks highly in provider priori...

Determinants of outward foreign direct investment by Chinese enterprises

Purpose – The paper aims to investigate the determinants of outward foreign direct investment (OFDI) by Chinese enterprises during Chinas institutional and economic transition, specifically from the institutional perspective.Design/methodology/approach – An analytical framework was conceptualized by introducing several institutional‐based advantages peculiar to Chinese firms and a series of hypotheses developed regarding the influences of these advantages on the OFDI strategies of Chinese enterprises.Findings – The findings confirm the specific institutional‐based advantages in terms of home government support, investors financing capacity and host ethnic Chinese resources have salient impacts on OFDI behavior of Chinese firms, as predicted by initial hypotheses. Evidence from sub‐samples tests indicates there are varied determinant mechanisms for trade‐oriented, produce‐oriented, and other types of OFDI, respectively.Originality/value – The paper offers two primary contributions. On one hand, by integr...

WTO accession and foreign direct investment in China

Purpose - The purpose of this paper is to attempt to investigate the location determinants of foreign direct investment (FDI) and examine the impact of WTO accession. Design/methodology/approach - Based on an 11-year panel dataset on FDI and urban characteristics across Chinese cities, the paper employs a random effect panel data model to study the impact of WTO accession on FDI. Findings - The estimation results provide supportive evidence on WTO accession effects on FDI location. The importance of agglomeration economies increases, while the influence of market size and government preferential policies has decreased after WTO accession. Cheap labor plays an increasingly important role, but labor quality and roadway transport conditions lose their significance. Originality/value - This study contributes to the existing literature by identifying the WTO accession effects on FDI location choices in a transitional economy.

Subnational institutions and open innovation: evidence from China

Purpose: The purpose of this paper is to examine how subnational institutions within a country explain the performance consequences of open innovation (OI) in emerging market enterprises (EMEs). Design/methodology/approach: The paper conducts a regression analysis by using a novel panel data set comprising of 438 innovative Chinese firms over the period of 2008-2011. Findings: The authors show that although on average openness to external actors improves innovation performance this effect is pronounced for EMEs that operate in subnational regions with a higher level of intellectual property rights (IPR) enforcement and of factor market development. The findings point to the context-dependent nature of OI strategy and the complementary effect of institutional parameters in emerging markets and help to reconcile the contrasting findings regarding the effect of OI in the prior literature. Originality/value: This paper extends the literature on OI by suggesting that the analysis of the performance consequences of OI strategy should go beyond the nexus between OI and firm performance, and instead, focus on subnational-specific institutions, such as region-specific IPR enforcement, factor market development and intermediation market development, that may facilitate or constrain the effect of OI model.

Testing geographic and economic distance of agglomeration economies

Purpose - The purpose of this paper is to test geographic and economic distance of industrial agglomeration. Design/methodology/approach - Based on a recent census database in China, we estimate the production function of Chinese firms, focusing on the impact of agglomeration economies. Findings - The estimation results provide strong evidence that agglomeration effects decline with increasing geographic and economic distance. Originality/value - Previous studies examine agglomeration effects at certain geographic and industrial level, but largely ignore that agglomeration benefit may be different at different levels of geography and industry. This paper contributes to the literature by examining the geographic and economic distance of agglomeration economies, and shows a clear pattern on geographic and industrial scope of agglomeration economies.

An Empirical Taxonomy for Location Strategy of Third-Party Logistics in China

This paper examines the underlying dimensions and develops taxonomy of location strategies used by third-party logistics (3PL) firms in China based on survey data from 155 3PL firms. Four underlying location strategies are identified: economic infrastructure, economic cost, sit attributes, and market size. Three major groups of 3PL firms are identified based on location selection strategies: cost seeking, market seeking, and all seeking. This study provides valuable guidance and insights for managers in the location strategies in 3PL firms. As the largest emerging economy in the world with rapid economic boost of a nearly 10% annual GDP growth in the last decade, China’s logistics industry is developing rapidly. The total amount of social logistics increased with an average annual growth of more than 20% in 21th century (Wang, et al., 2008). In 2009, China’s logistics contributed about RMB 2.31 trillion of added-values, 16.1% of the added-value of servicing industry (National Development and Reform Commission, National Bureau of Statistics, and China Federation of Logistics and Purchasing 2010). The rapid development of the Chinese logistics industry has attracted some attention of researchers from the field of economics and management. Wang et al. (2006) investigate strategic posture of the third party logistics providers (3PL) in China, while Hong and Liu (2007) examine the current status and future prospects of the Chinese logistics industry. Based on a census database, Hong (2007) examines the transport linkage and location choice of foreign logistics firms using conditional logic model, and concludes that transport proximity plays an important role in attracting foreign logistics providers in China. This paper attempts to investigate location strategies of 3PL providers based on a recent survey on Chinese logistics providers. It enriches the literature in the following ways. First, we will try to identify the location strategies of 3PL based on a survey database. As previous studies (e.g. Hong 2007) focus on some of various determinants of firm location, this study summarizes a large number of frequently cited determinants into a small number of strategic dimensions. Second, this is the first attempt to make taxonomy about location strategies of 3PL providers in the literature. The results could provide valuable information for researchers and policymakers.