| ID | 101163 |
| Title Proper | Capital or knowhow |
| Other Title Information | the role of foreign multinationals in Sino-foreign joint ventures |
| Language | ENG |
| Author | Bai, Chong-En ; Jiangyong Lu ; Tao, Zhigang |
| Publication | 2010. |
| Summary / Abstract (Note) | China's success in attracting foreign direct investment has been cast in doubt as mainly a transfer of capital, not knowhow, because its financial system is incapable of allocating domestic savings and hard-earned foreign reserves to domestic enterprises. To shed light on this debate, we examine the determinants of equity sharing in Sino-foreign joint ventures with the premise that the roles of foreign direct investment (in transferring capital or knowhow) should be reflected in equity sharing between multinational firms and local firms. Our empirical analysis offers strong evidence for foreign direct investment as a transfer of knowhow, but limited support for foreign direct investment as a transfer of capital, which points to the need for further reform in China's financial system. |
| `In' analytical Note | China Economic Review Vol. 21, No. 4; Dec 2010: p629-638 |
| Journal Source | China Economic Review Vol. 21, No. 4; Dec 2010: p629-638 |
| Key Words | Foreign Direct Investment ; Multinational Firms ; Equity Joint Ventures ; Capital ; Knowhow ; China |