The more the better?: foreign ownership and corporate performance in ChinaTools Yu, Zhihong, Greenaway, David and Guariglia, Alessandra (2014) The more the better?: foreign ownership and corporate performance in China. European Journal of Finance, 20 (7-9). pp. 681-702. ISSN 1466-4364 Full text not available from this repository.AbstractWe examine the relationship between the degree of foreign ownership and performance of recipient firms, using a panel of 21,582 Chinese firms over the period 2000–2005. We find that joint-ventures perform better than wholly foreign-owned and purely domestic firms. Although productivity and profitability initially rise with foreign ownership, they start declining once it reaches a certain point. This suggests that some domestic ownership is necessary to ensure optimal performance. We referred these findings to a model of a joint-venture, where strategic interactions between a foreign and a domestic owner's inputs may lead to an inverted U-shaped ownership–performance relationship.
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