Yundan Gong

FDI, Linkages and the Efficiency of State-Owned Enterprises in China

Abstract As China seeks to consolidate its position as an emerging global economic power, reforming the largely inefficient state-owned enterprises (SOEs) presents a major challenge. Using a comprehensive micro data set, we investigate whether SOEs in China have benefited from the managerial, technical and organisational skills possessed by multinational firms operating in the economy, and conclude that the evidence in favour of positive spillovers is not overwhelming. Limited regional linkages and low level of absorptive capacity are found to be the main reasons for this disappointing performance. Policy makers involved in the reform of SOEs should ensure that managers have the right incentives to make long-term investment in absorptive capacity development.

Can Production Subsidies Explain China's Export Performance? Evidence from Firm-Level Data

This paper analyses the relationship between production subsidies and firms’ export performance using a very comprehensive and recent firm-level database and controlling for the endogeneity of subsidies. It documents robust evidence that production subsidies stimulate export activity at the intensive margin, although this effect is conditional on firm characteristics. In particular, the positive relationship between subsidies and the intensive margin of exports is strongest among profit-making firms, firms in capital-intensive industries, and those located in non-coastal regions. Compared to firm characteristics, the extent of heterogeneity across ownership structure (SOEs, collectives, and privately owned firms) proves to be relatively less important.

Can Production Subsidies Foster Export Activity? Evidence from Chinese Firm Level Data

Using a unique firm level data set from the Chinese manufacturing sector, this paper analyses the impact of production subsidies on firms’ export performance. It documents robust evidence that production subsidies stimulate export activity, although this effect is conditional on firm characteristics. In particular, the beneficial impact of subsidies is found to be more pronounced amongst profit-making firms, firms in capital intensive industries and those with previous exporting experience. Compared to firm characteristics, the extent of heterogeneity across ownership structure (SOEs, collectives and privately-owned firms) proves to be relatively less important.

Employment Effects of Privatisation and Foreign Acquisition of Chinese State‐owned Enterprises

Abstract This paper investigates the effects of domestic privatisation or foreign acquisition of Chinese State‐owned Enterprises (SOEs) on employment growth, using firm level data for China and a combination of propensity score matching and difference‐in‐differences in order to identify the causal effect. Our results suggest that, controlling for output growth there is some evidence that domestic privatisation leads to contemporaneous reductions in employment growth compared to firms that did not undergo an ownership change. By contrast, there is some evidence that foreign acquisitions show higher employment growth in the post acquisition period than non‐acquired SOEs.

Drivers of Technology Upgrading: Do Foreign Acquisitions Matter to Chinese Firms?

Technology upgrading is a key element of industrialization in developing countries while technology transfer through trade and FDI has for a long time been regarded as a major engine of technolog)? upgrading, in recent years there has been a renewed emphasis on indigenous innovations as a means for building technology capabilities in developing countries. Many developing countries joined the competition for attracting FDI in the expectation that advanced technological and managerial knowledge embedded in FDI can buildup technological capabilities in their country and drive technological upgrading in these economies. However the question is whether developing countries can rely on foreign technology to catch up with industrialized countries and whether foreign acquisition is one of the major drivers of technology upgrading in developing countries. China is a good example for investigating this question.

Product Innovation as a Source of FDI Spillovers? The Case of Chinese State-owned Enterprises

A quarter of a century of relentless market reform has witnessed the transformation of China from an almost autarchic economy to one that is deeply embedded within the global production network. For example, China is a leading destination of foreign direct investment (FDI) in the world2 and has been described as the ‘export processing zone of the world’ (Lin, 2002).