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Cultural Proximity and Local Firms’ catch up with Multinational Enterprises

Jue Wang, Xiaming Liu, Yingqi Wei () and Chengang Wang

World Development, 2014, vol. 60, issue C, 1-13

Abstract: Integrating and extending new growth theory and resource-based views, this paper provides a theoretical foundation for the catch-up hypothesis. It examines the role of technology gap, technological capability, and cultural proximity in local firms’ catch-up with MNEs. Hypotheses are developed and tested with a dynamic model on a large firm-level panel dataset from Chinese manufacturing. The results confirm that catch-up is positively related to technology gap and technological capability. Furthermore, in the presence of cultural proximity, the speed of local Chinese firms’ catch-up with MNEs from Hong Kong, Macau, and Taiwan is not significantly lower than that with other MNEs.

Keywords: catch-up; China; culture; new growth theory; resource-based views; technology gap hypothesis (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:60:y:2014:i:c:p:1-13

DOI: 10.1016/j.worlddev.2014.02.010

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