Scandinavian Working Papers in Economics

EIJS Working Paper Series,
Stockholm School of Economics, The European Institute of Japanese Studies

No 188: International Experience and the Performance of Scandinavian Firms in China

Johan Carlsson , Axel Nordegren and Fredrik Sjöholm
Additional contact information
Johan Carlsson: Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden
Axel Nordegren: Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden
Fredrik Sjöholm: European Institute of Japanese Studies, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden

Abstract: Western firms locating in China face a business environment that differs from their home country environment. The differences increase uncertainties and are negative for economic performance. However, firms may differ in their ability to overcome the difficulties, depending on their previous experience. In particular, firms with experience from regions similar to China might do comparably well. We conduct a survey of Scandinavian firms with subsidiaries in China to examine their economic performance. Our results show that subsidiaries in China perform better if the firms have subsidiaries in Hong Kong, Taiwan, or Singapore. In addition, the length of subsidiaries’ operation in China, and the experience from foreign countries outside of Greater China, are also positively affecting the subsidiaries’ economic performance.

Keywords: FDI; Firms; Experience; China; Scandinavia

JEL-codes: F20; F23; M20

35 pages, February 1, 2004

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