Does Ethnicity Pay? Evidence from Overseas Chinese FDI in China

Yasheng Huang, Li Jin and Yi Qian
Additional contact information
Yasheng Huang: MIT Sloan School of Management
Li Jin: Harvard Business School
Yi Qian: Kellogg School of Management, Northwestern University

The Review of Economics and Statistics, 2013, vol. 95, issue 3, 868-883

Abstract: Most of the economic analyses of the overseas Chinese network focus on trade and investment flows at the country level. In this paper, we analyze the effects of the ethnic Chinese network at the firm level. Contrary to the conventional wisdom, we find that ethnic Chinese FDI firms in China in fact underperform nonethnic Chinese FDI firms. We also find that the performance of ethnic Chinese firms deteriorates over time. We present evidence consistent with the hypothesis that ethnic Chinese firms underinvest in those firm attributes that may contribute to long-term performance, such as human capital and technology. Our findings raise both empirical and normative implications of ethnic ties. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Keywords: ethnicity; relationship; foreign direct investment; performance; intangible assets (search for similar items in EconPapers)
JEL-codes: F23 G30 G32 G34 (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00281 link to full text PDF (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tpr:restat:v:95:y:2013:i:3:p:868-883

Ordering information: This journal article can be ordered from
https://mitpressjour ... rnal/?issn=0034-6535

Access Statistics for this article

The Review of Economics and Statistics is currently edited by Pierre Azoulay, Olivier Coibion, Will Dobbie, Raymond Fisman, Benjamin R. Handel, Brian A. Jacob, Kareen Rozen, Xiaoxia Shi, Tavneet Suri and Yi Xu

More articles in The Review of Economics and Statistics from MIT Press
Bibliographic data for series maintained by The MIT Press ().