Is there “productivity paradox” in Chinese producer-service enterprises' OFDI?

Dai, Y; Zhang, R; Hu, H; Hou, K

Is there “productivity paradox” in Chinese producer-service enterprises' OFDI?

Dai, Y Zhang, R Hu, H Hou, K

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Publisher:: Elsevier
Publication Type:: Journal Article
Citation:: International Review of Financial Analysis, 2022, 84, pp. 102318
Issue Date:: 2022-11-01

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Field	Value	Language
dc.contributor.author	Dai, Y
dc.contributor.author	Zhang, R
dc.contributor.author	Hu, H
dc.contributor.author	Hou, K
dc.date.accessioned	2023-07-06T11:56:09Z
dc.date.available	2023-07-06T11:56:09Z
dc.date.issued	2022-11-01
dc.identifier.citation	International Review of Financial Analysis, 2022, 84, pp. 102318
dc.identifier.issn	1057-5219
dc.identifier.uri	http://hdl.handle.net/10453/171274
dc.description.abstract	As an important decision of enterprise internationalization, is there a similar phenomenon of “productivity paradox” in Chinese enterprises' overseas investment? We study this issue by using a sample of Chinese A-share listed firms in the producer-service industry from 2007 to 2019. According to our empirical results, there is no “productivity paradox” phenomenon in the OFDI of producer-service enterprises in China. In other words, the productivity of enterprises is positively correlated with OFDI. After using the different variable measures and adopting IV estimation, this conclusion is still robust. Our research also finds that cost reduction effect, R&D improvement effect and industrial linkage effect are the three main influencing mechanisms. By analyzing the heterogeneity of dimensions such as the nature of enterprise ownership, technology intensity, cultural distance of investment destinations, and whether they belong to the “OBOR” (One Belt, One Road), we find that productivity has a more significant effect on OFDI in SOEs, technology-intensive enterprises and enterprises whose investment destinations belong to non-OBOR, and with closer cultural proximity. This paper provides implications for Chinese enterprises on how to improve their international competitiveness through OFDI.
dc.language	en
dc.publisher	Elsevier
dc.relation.ispartof	International Review of Financial Analysis
dc.relation.isbasedon	10.1016/j.irfa.2022.102318
dc.rights	info:eu-repo/semantics/closedAccess
dc.subject	1501 Accounting, Auditing and Accountability, 1502 Banking, Finance and Investment, 1801 Law
dc.subject.classification	Finance
dc.subject.classification	3501 Accounting, auditing and accountability
dc.subject.classification	3502 Banking, finance and investment
dc.subject.classification	3801 Applied economics
dc.title	Is there “productivity paradox” in Chinese producer-service enterprises' OFDI?
dc.type	Journal Article
utslib.citation.volume	84
utslib.for	1501 Accounting, Auditing and Accountability
utslib.for	1502 Banking, Finance and Investment
utslib.for	1801 Law
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
utslib.copyright.status	closed_access	*
dc.date.updated	2023-07-06T11:56:08Z
pubs.publication-status	Published
pubs.volume	84

Abstract:

As an important decision of enterprise internationalization, is there a similar phenomenon of “productivity paradox” in Chinese enterprises' overseas investment? We study this issue by using a sample of Chinese A-share listed firms in the producer-service industry from 2007 to 2019. According to our empirical results, there is no “productivity paradox” phenomenon in the OFDI of producer-service enterprises in China. In other words, the productivity of enterprises is positively correlated with OFDI. After using the different variable measures and adopting IV estimation, this conclusion is still robust. Our research also finds that cost reduction effect, R&D improvement effect and industrial linkage effect are the three main influencing mechanisms. By analyzing the heterogeneity of dimensions such as the nature of enterprise ownership, technology intensity, cultural distance of investment destinations, and whether they belong to the “OBOR” (One Belt, One Road), we find that productivity has a more significant effect on OFDI in SOEs, technology-intensive enterprises and enterprises whose investment destinations belong to non-OBOR, and with closer cultural proximity. This paper provides implications for Chinese enterprises on how to improve their international competitiveness through OFDI.

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http://hdl.handle.net/10453/171274