Does ethnicity pay? Evidence from FDIs in China
Using a comprehensive sample of all FDI firms in China, we explore the question whether ethnicity enhances operating performance. While there has been a sizable theoretical literature studying ethnicity and foreign investments, the prediction of the impact of ethnicity on firm profitability is far from clear. We demonstrate empirically that ethnic firms do not command an operational advantage over non-ethnic firms in the overall sample. Further tests suggest that while ECE firms command an operational advantage over nonethnic firms initially, such advantage declines over time. We then explore what might have caused the decline of the ethnic advantage, and our results suggest that lack of investment in intangible and human capital by ethnic firms is driving the pattern we observe. Overall, our results suggest that while ethnic investment might enjoy an initial operational advantage, such advantage is largely dissipated over time due to the lack of investment in intangible and human capital.
Yasheng Huang Li Jin Yi Qian
MIT Sloan School of Management Harvard Business School Kellogg School of Northwestern University
国际会议
大连
英文
1-51
2008-07-02（万方平台首次上网日期，不代表论文的发表时间）