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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 21, No. 1, pp.229-259
ISSN: 1225-0279 (Print)
Print publication date 29 Feb 2008
Received 16 Oct 2007 Revised 24 Feb 2008

Performance and Growth of Large Firms in China

Young-Sam Kang ; Keun Lee
Postdoctoral Fellow, Department of Economics, Seoul National University, Seoul 151-746, Korea kangys62@snu.ac.kr
Professor, Department of Economics, Seoul National University, Seoul 151-746, Korea, Tel: +82-2-880-6367 kenneth@snu.ac.kr

JEL Classification: O31, O32, G32

Abstract

This study examines the impacts of several factors, such as internal capital markets, technology transfer via FDI, and in-house R&D activities on the performance and growth of firms using data gathered from the top 200 companies in China during the period 1998-2003. A finance company, as an affiliate in the business group, is used as proxy for the internal capital market. The foreign joint venture firms and in-house research center are used as proxies for technology transfer and for the existence of in-house R&D activities, respectively. This paper finds that having foreign joint ventures is positively correlated with the firms’ growth but not with the financial and market performance of firms. In contrast, doing in-house R&D activities is positively correlated with the financial and market performances, as well as the growth of firms.

Keywords:

Finance company, Internal capital market, Joint venture, Technology transfer, R&D activity

Acknowledgments

An earlier version of this paper was presented at the 15th Seoul Journal of Economics International Symposium held in Seoul, October 23, 2007. The authors would like to thank two commentators for their useful inputs.

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