Performance and Growth of Large Firms in China

Abstract

This study examines the impacts of several factors, such as

internal capital markets, technology transfer via FDI, and

in-house R&D activities on the performance and growth of firms

using data gathered from the top 200 companies in China

during the period 1998-2003. A finance company, as an affiliate

in the business group, is used as proxy for the internal capital

market. The foreign joint venture firms and in-house research

center are used as proxies for technology transfer and for the

existence of in-house R&D activities, respectively. This paper

finds that having foreign joint ventures is positively correlated

with the firms growth but not with the financial and market

performance of firms. In contrast, doing in-house R&D activities

is positively correlated with the financial and market performances,

as well as the growth of firms.