Abstract
This paper investigates the impact of various Chinese government policies on the competitive advantages of foreign-financed manufacturing firms in Guangdong province of southern China. The objectives of various government sector-specific policies are to lubricate the factor markets in labour, capital and products and to facilitate the operation of foreign-financed firms. However, the actual effects are often quite different: the ambiguity, complexity and inflexibility of policies impose higher transaction costs on foreign-financed firms. These disadvantages offset some economic benefits gained under the central government's preferential foreign direct investment policy and thus damages the competitive advantages of foreign-financed firms based in Guangdong. Worse still, the lack of co-ordination among various bureaux further hampers arbitration between government bureaux and foreign investors.
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The authors are grateful for financial support from the Suzy Paine Fund, the Cambridge Political Economy Society Trust, Sidney Sussex College Research Fund, the UK–HK Joint Research Scheme 1999–2000 (A/C no.: HZF52), the University of Sussex (Geography Subject Group) and the Hong Kong Polytechnic University (Department of Business Studies) for their fieldwork and research activities conducted in 1996–97 and 2000–01. The helpful assistance of various people (especially the staff at the Guangdong Provincial Research Centre for Economic Development and a number of officials in Guangdong who prefer to remain anonymous) who facilitated the field survey is deeply appreciated. The authors are grateful for the valuable comments from the two anonymous referees of ABM on an earlier version of this paper.
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Yeung, G., Mok, V. Government Policy and the Competitive Advantages of Foreign-financed Firms in Guangdong Province of Southern China. Asian Bus Manage 1, 227–247 (2002). https://doi.org/10.1057/palgrave.abm.9200013
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DOI: https://doi.org/10.1057/palgrave.abm.9200013