{"title":"Foreign Ownership and International Trade Performance in China","authors":"Zhiyuan Li, Yichun Lin, Mingyao Xu","doi":"10.1111/cwe.12525","DOIUrl":null,"url":null,"abstract":"<p>We investigate the causal relationship between foreign ownership and international trade performance by comparing foreign-acquired firms with similar domestic-acquired firms in China with regard to changes in their post-acquisition international trade performance. Our findings indicate that foreign ownership significantly enhanced the probability of both exporting and importing, and strongly increased trade value. Foreign ownership took effect from the year of the acquisition and persisted for at least 2 years. It stimulated both processing trade and ordinary trade, and expanded products and trading partners. Post-acquisition trade performance also exhibited heterogeneity based on the different pre-acquisition and post-acquisition ownership. As for the underlying mechanisms, we show that firms experienced significant output expansion, increased export dependence, and eased financial constraints after foreign acquisition.</p>","PeriodicalId":51603,"journal":{"name":"China & World Economy","volume":"32 2","pages":"42-72"},"PeriodicalIF":2.9000,"publicationDate":"2024-03-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"China & World Economy","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/cwe.12525","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
We investigate the causal relationship between foreign ownership and international trade performance by comparing foreign-acquired firms with similar domestic-acquired firms in China with regard to changes in their post-acquisition international trade performance. Our findings indicate that foreign ownership significantly enhanced the probability of both exporting and importing, and strongly increased trade value. Foreign ownership took effect from the year of the acquisition and persisted for at least 2 years. It stimulated both processing trade and ordinary trade, and expanded products and trading partners. Post-acquisition trade performance also exhibited heterogeneity based on the different pre-acquisition and post-acquisition ownership. As for the underlying mechanisms, we show that firms experienced significant output expansion, increased export dependence, and eased financial constraints after foreign acquisition.
期刊介绍:
The bi-monthly China & World Economy was launched in 1993 by the Institute of World Economics and Politics, Chinese Academy of Social Sciences (CASS). It is the only English-language journal in China devoted to the topic of the Chinese economy. The journal aims to provide foreign readers with an objective, impartial, analytical and up-to-date account of the problems faced and progress made by China in its interaction with the world economy. Among its contributors are many distinguished Chinese economists from both academic and government circles. As such, it has become a unique window on China and is essential reading for all those concerned with China"s development.