IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v26y2005i3p175-190.html
   My bibliography  Save this article

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1002/mde.1203
    File Function: Link to full text; subscription required
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.1203?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Laffont, Jean-Jacques & Tirole, Jean, 1986. "Using Cost Observation to Regulate Firms," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 614-641, June.
    2. Alwyn Young, 2000. "Gold into Base Metals: Productivity Growth in the People's Republic of China during the Reform Period," NBER Working Papers 7856, National Bureau of Economic Research, Inc.
    3. Marco Francesconi, 2001. "Determinants and Consequences of Promotions in Britain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(3), pages 279-310, July.
    4. Helleiner, G.K., 1989. "Transnational corporations and direct foreign investment," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 2, chapter 27, pages 1441-1480, Elsevier.
    5. Pitt, Mark M. & Lee, Lung-Fei, 1981. "The measurement and sources of technical inefficiency in the Indonesian weaving industry," Journal of Development Economics, Elsevier, vol. 9(1), pages 43-64, August.
    6. Rawski, Thomas G. & Xiao, Wei, 2001. "Roundtable on Chinese Economic Statistics Introduction," China Economic Review, Elsevier, vol. 12(4), pages 298-302.
    7. Michael Bleaney & Katharine Wakelin, 2002. "Efficiency, innovation and exports," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(1), pages 3-15, February.
    8. Kodde, David A & Palm, Franz C, 1986. "Wald Criteria for Jointly Testing Equality and Inequality Restriction s," Econometrica, Econometric Society, vol. 54(5), pages 1243-1248, September.
    9. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    10. Sims, Christopher A, 1972. "Money, Income, and Causality," American Economic Review, American Economic Association, vol. 62(4), pages 540-552, September.
    11. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    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. 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.

    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. Goyal, S.K. & Suhag, K.S. & Pandey, U.K., 2006. "An Estimation of Technical Efficiency of Paddy Farmers in Haryana State of India," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 61(1), pages 1-15.
    2. Castiglione, Concetta & Infante, Davide & Zieba, Marta, 2023. "Public support for performing arts. Efficiency and productivity gains in eleven European countries," Socio-Economic Planning Sciences, Elsevier, vol. 85(C).
    3. Diana, Tony, 2010. "Can we explain airport performance? A case study of selected New York airports using a stochastic frontier model," Journal of Air Transport Management, Elsevier, vol. 16(6), pages 310-314.
    4. Stefano Mainardi, 2021. "Parametric and Semiparametric Efficiency Frontiers in Fishery Analysis: Overview and Case Study on the Falkland Islands," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 79(2), pages 169-210, June.
    5. Madau, Fabio A., 2005. "Technical Efficiency in Organic Farming: An Application on Italian Cereal Farms Using a Parametric Approach," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24545, European Association of Agricultural Economists.
    6. Jan De Loecker, 2002. "Are EU Candidate Countries Ready for the Single Market? Comparing Performance with an EU Benchmark," LICOS Discussion Papers 12302, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    7. Ronald Shadbegian & Wayne Gray, 2006. "Assessing multi-dimensional performance: environmental and economic outcomes," Journal of Productivity Analysis, Springer, vol. 26(3), pages 213-234, December.
    8. Manlagnit, Maria Chelo V., 2015. "Basel regulations and banks’ efficiency: The case of the Philippines," Journal of Asian Economics, Elsevier, vol. 39(C), pages 72-85.
    9. Madau, Fabio A., 2011. "Parametric Estimation of Technical and Scale Efficiencies in Italian Citrus Farming," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 12(1).
    10. Larson, Donald F. & Plessmann, Frank, 2002. "Do farmers chooseto be inefficient? evidence from Bicol, Philippines," Policy Research Working Paper Series 2787, The World Bank.
    11. Rajesh Raj S.N., 2011. "Technical Efficiency in the Informal Manufacturing Sector," Journal of South Asian Development, , vol. 6(2), pages 213-232, October.
    12. Michael Danquah and Bazoumana Ouattara, 2018. "Comparison of Stochastic Frontier Approaches for Estimating National Efficiency: An Application to Sub-Saharan African Countries," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 43(3), pages 119-142, September.
    13. Wang, Eric C., 2007. "R&D efficiency and economic performance: A cross-country analysis using the stochastic frontier approach," Journal of Policy Modeling, Elsevier, vol. 29(2), pages 345-360.
    14. Paul Bishop & Steven Brand, 2003. "The efficiency of museums: a stochastic frontier production function approach," Applied Economics, Taylor & Francis Journals, vol. 35(17), pages 1853-1858.
    15. Coll Serrano, V. & Blasco Blasco, O.Mª., 2009. "Evolución de la eficiencia técnica de la industria textil española en el periodo 1995-2005. Análisis mediante un modelo frontera estocástica/Technical Efficiency In The Textile Industry Of Spain In Th," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 27, pages 779(32á)-77, Diciembre.
    16. Cristina Bernini & Andrea Guizzardi, 2010. "Internal and Locational Factors Affecting Hotel Industry Efficiency: Evidence from Italian Business Corporations," Tourism Economics, , vol. 16(4), pages 883-913, December.
    17. Rouf, Abdur, 2018. "A Novel Approach to Verifying Evaluation of Agricultural Products with Productive Efficiency: An Empirical Study," 2018 Conference (62nd), February 7-9, 2018, Adelaide, Australia 273523, Australian Agricultural and Resource Economics Society.
    18. Giannis Karagiannis & Vangelis Tzouvelekas, 1999. "Measuring Technical Efficiency with Panel Data: Results from Competing Models," Working Papers 9914, University of Crete, Department of Economics.
    19. Michael D. Rosko, 2001. "Cost efficiency of US hospitals: a stochastic frontier approach," Health Economics, John Wiley & Sons, Ltd., vol. 10(6), pages 539-551, September.
    20. Manlagñit, Maria Chelo V., 2011. "Cost efficiency, determinants, and risk preferences in banking: A case of stochastic frontier analysis in the Philippines," Journal of Asian Economics, Elsevier, vol. 22(1), pages 23-35, February.

    More about this item

    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:wly:mgtdec:v:26:y:2005:i:3:p:175-190. 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: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    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.