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Investment Liberalisation, Technology Take-off and Export Market Entry: Does Foreign Ownership Structure Matter?

Sourafel Girma (), Yundan Gong (), Holger Görg () and Sandra Lancheros ()
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Yundan Gong: Aston University
Holger Görg: Kiel Institute for the World Economy
Sandra Lancheros: University of Nottingham

No 8997, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: Before and after its accession to the WTO in 2001, China has undergone a far-reaching investment liberalisation. As part of this, existing restrictions on foreign ownership structure and mandatory export and technology transfer requirements imposed on foreign firms have been lifted in a number of industries. Against this background we identify the causal effects of foreign acquisitions on export market entry and technology take-off and evaluate whether the level of foreign ownership plays a role in stimulating these changes. Using doubly robust propensity score reweighted bivariate probit regressions to control for the selection bias associated with firm level foreign acquisition incidences, we uncover strong but heterogeneous positive effects on export activity for all types of foreign ownership structure. We also find that minority foreign owned acquisition targets experience higher likelihood of R&D, providing evidence that joint ventures can contribute positively to China's "science and technology take-off".

Keywords: propensity score reweighting; China; FDI; investment liberalization; doubly robust estimation (search for similar items in EconPapers)
JEL-codes: F23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cna, nep-int and nep-tra
Date: 2015-04
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Published in: Journal of Economic Behavior and Organization, 2015, 116, 254-269

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