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JOURNAL OF MANAGEMENT POLICY AND PRACTICE
Economic Transition and Foreign Firms’ Ownership Strategy in China:
The Impact of Cultural Distance and Industry R&D Intensity
Author(s): Chuanyin Xie
Citation: Chuanyin Xie, (2013) "Economic Transition and Foreign Firms’ Ownership Strategy in China:
The Impact of Cultural Distance and Industry R&D Intensity," Journal of Management Policy and Practice, Vol. 14, Iss. 1, pp. 19 - 34
Article Type: Research paper
Publisher: North American Business Press
Abstract:
This study investigates foreign firms’ ownership strategy in a dynamic context characterized by economic
transition. Using a sample of 598 international joint ventures in China during a period between 1986 and
1996, I found a positive relationship between foreign firms’ entry time and their ownership position. In
order to examine this relationship in more depth, I regrouped the foreign firms by incorporating two
variables: cultural distance and industry R&D intensity. I found that the strength of the above
relationship was not affected by cultural distance and industry R&D intensity. The empirical results of
this study provide implications for theory application in the context of emerging economies. When
“institutional voids” exist, theories such as mimetic learning and transaction cost economics may not be
relevant.
