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

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  • Yasheng Huang
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    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.

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    File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp264.pdf
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    Bibliographic Info

    Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 264.

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    Length: pages
    Date of creation: 01 Sep 1999
    Date of revision:
    Handle: RePEc:wdi:papers:1999-264

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    Keywords: foreign direct investment; economic transition; China;

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    Cited by:
    1. World Bank, 2006. "Foreign Capital Utilization in China : Prospects and Future Strategy," World Bank Other Operational Studies 19623, The World Bank.

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