Abstract
Technical efficiency is introduced as an objective criterion for measuring the performance of international joint ventures in China. By using the technique of stochastic production frontier, we compute the estimates of time-invariant and time-varying technical efficiency in four major manufacturing industries in Shanghai. We show that international joint ventures are in general more technically efficient than domestic firms. In addition, the efficiency gaps between the international joint ventures and domestic firms in the industries of textile, machinery and equipment, and electronics and telecommunications equipment are widening in our sample period although the industrial reforms and active technology policies have improved the productivity of domestic firms. However, in the clothing industry, the technical efficiency of domestic firms, especially state-owned firms, is comparable to the efficiency leader, international joint ventures. These results are useful to assess the competitive advantages of international joint ventures in the People's Republic of China.
| Original language | English |
|---|---|
| Pages (from-to) | 147-157 |
| Number of pages | 11 |
| Journal | Journal of Business Research |
| Volume | 39 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 1 Jun 1997 |
Bibliographical note
The authors thank an anonymous referee for helpful comments to improve this paper. Any remaining errors are of course ours.Funding
We thank the Research Grants Council, University Grants Committee of Hong Kong for funding (Research Project: Foreign Investment and Economic Development in the People's Republic of China) and the Chinese Management Research Group, Faculty of Business Administration, the Chinese University of Hong Kong for its support.