Performance and Growth of Large Firms in China

Abstract

This study examines the impacts of several factors, such as\n\ninternal capital markets, technology transfer via FDI, and\n\nin-house R&D activities on the performance and growth of firms\n\nusing data gathered from the top 200 companies in China\n\nduring the period 1998-2003. A finance company, as an affiliate\n\nin the business group, is used as proxy for the internal capital\n\nmarket. The foreign joint venture firms and in-house research\n\ncenter are used as proxies for technology transfer and for the\n\nexistence of in-house R&D activities, respectively. This paper\n\nfinds that having foreign joint ventures is positively correlated\n\nwith the firms growth but not with the financial and market\n\nperformance of firms. In contrast, doing in-house R&D activities\n\nis positively correlated with the financial and market performances,\n\nas well as the growth of firms.