The impact of foreign ownership on the Chinese market

This study investigates the impact of foreign ownership on the Chinese consumer electronics industry. The analysis includes a comparison on performance between foreign owned firms and domestic firms within this industry. Additionally, the effect of foreign owner location on foreign owned firms in China is explored. The data includes 1211 Chinese firms with observations ranging from 2005 – 2010. The main findings contradict with existing literature as outcomes show that Chinese domestic firms outperform their foreign owned counterparts on two out of three tested performance measurements. Furthermore, an analysis of foreign owned firms only, finds that; western located foreign owners enhance performance of their owned firms more in terms of ROA as compared to non-western located foreign owners.