A comparison of technology firms in Beijing and Shenzhen

Zhaoming CUI, Kwok Hon, Leonard CHENG, Lian ZHOU

    Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

    Abstract

    Beijing and Shenzhen are both well known for their high-tech industries. This paper compares the financial performance of the two cities’ technology firms and explores the effects of the firms’ operating characteristics and strategy choices on their performance. We find that when comparable samples are used, the firms in Beijing performed better than those in Shenzhen. In addition, for firms both in Beijing and Shenzhen, the ratio of current asset to total asset had a significantly positive effect while both short-term and long-term debt-asset ratios had a significantly negative effect on the performance. The strategy variable sales expenses as a fraction of the cost of goods sold had a significantly positive effect on the performance of firms in Beijing, but the positive effect on firms in Shenzhen was not significant. RandD inputs contributed significantly to the pre-tax profitability of Beijing firms, but had no significant effect whatsoever on Shenzhen firms.
    Original languageEnglish
    Pages (from-to)434-464
    Number of pages31
    JournalFrontiers of Economics in China
    Volume7
    Issue number3
    Publication statusPublished - 1 Jan 2012

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    Beijing
    Shenzhen
    Assets
    Financial performance
    RandD
    Tax
    Long-term debt
    Costs
    High-tech industry
    Profitability
    Expenses

    Cite this

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    title = "A comparison of technology firms in Beijing and Shenzhen",
    abstract = "Beijing and Shenzhen are both well known for their high-tech industries. This paper compares the financial performance of the two cities’ technology firms and explores the effects of the firms’ operating characteristics and strategy choices on their performance. We find that when comparable samples are used, the firms in Beijing performed better than those in Shenzhen. In addition, for firms both in Beijing and Shenzhen, the ratio of current asset to total asset had a significantly positive effect while both short-term and long-term debt-asset ratios had a significantly negative effect on the performance. The strategy variable sales expenses as a fraction of the cost of goods sold had a significantly positive effect on the performance of firms in Beijing, but the positive effect on firms in Shenzhen was not significant. RandD inputs contributed significantly to the pre-tax profitability of Beijing firms, but had no significant effect whatsoever on Shenzhen firms.",
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    A comparison of technology firms in Beijing and Shenzhen. / CUI, Zhaoming; CHENG, Kwok Hon, Leonard; ZHOU, Lian.

    In: Frontiers of Economics in China, Vol. 7, No. 3, 01.01.2012, p. 434-464.

    Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

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