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Putting people first? Chinese state-owned enterprises' adjustment to globalisation

Listed author(s):
  • Girma, Sourafel
  • Gong, Yundan

This paper analyses the impact of FDI on the employment, productivity, profitability and survival performance of urban SOEs in China, with the aid of a rich panel data set over the period 1999-2005. Our estimation strategy controls for the endogeneity of a number of regressors and accounts for firm-level unobserved heterogeneity. Four key results emerge from the analysis: (i) Firm-level foreign finance enhances the employment and productivity growth of SOEs, as well as their survival prospects; (ii) Competition from sectoral FDI has a deleterious impact on the growth and survival probability of SOEs without access to any foreign capital; (iii) Export-oriented FDI in downstream sectors has negative performance ramifications; and (iv) There are no discernible spillover effects that can be attributed to FDI in upstream sectors, suggesting limited linkages between multinational firms and SOEs.

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File URL: http://www.sciencedirect.com/science/article/pii/S0167-7187(07)00051-3
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Article provided by Elsevier in its journal International Journal of Industrial Organization.

Volume (Year): 26 (2008)
Issue (Month): 2 (March)
Pages: 573-585

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Handle: RePEc:eee:indorg:v:26:y:2008:i:2:p:573-585
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505551

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