Impact from Productivity and State-ownership of Chinese Agricultural Firms on ODI Decisions

Naixi Liu

doi:doi:10.11648/j.ijae.20200501.13

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Impact from Productivity and State-ownership of Chinese Agricultural Firms on ODI Decisions

Naixi Liu

Published in International Journal of Agricultural Economics (Volume 5, Issue 1)

Received: 8 January 2020 Accepted: 31 January 2020 Published: 11 February 2020

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Abstract

Chinese agricultural outward direct investment has grown rapidly over the last decades. Neo-classical foreign direct investment theories can explain the reasons in motivation perspective reasons for the rapid growth, but cannot explain what types of agricultural firms would be most likely to undertake outward direct investment to together make the rapid growth. We use a Chinese agricultural firm level dataset matched from Chinese industrial enterprises database and Chinese outward direct investment enterprises database to empirically examine the relationship between firm heterogeneity and outward direct investment decisions. We find the estimation results support the Helpman-Melitz-Yeaple hypothesis that as the first firm heterogeneity the total factor productivity has a positive influence on the probability that a firm will undertake outward direct investment, which is in accordance with the past related research especially the recent theoretical research progress of international direct investment. In contrast, we find that as the second firm heterogeneity the state ownership has a negative influence on the probability that a firm will undertake outward direct investment, which is not in accordance with the past research on Chinese overall outward direct investment and could be explained by the domestic support obligations of the state-owned agricultural firms in China. Furthermore, we implement robust estimation and the results shows a significant robustness. Our research shows that firm heterogeneity dose matter and it is important to take this into account in analyzing Chinese agricultural firms' outward direct investment decisions.

Published in	International Journal of Agricultural Economics (Volume 5, Issue 1)
DOI	10.11648/j.ijae.20200501.13
Page(s)	18-29
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2020. Published by Science Publishing Group

Keywords

China, Productivity, Outward Direct Investment, State Ownership

References

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Naixi Liu. (2020). Impact from Productivity and State-ownership of Chinese Agricultural Firms on ODI Decisions. International Journal of Agricultural Economics, 5(1), 18-29. https://doi.org/10.11648/j.ijae.20200501.13

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ACS Style

Naixi Liu. Impact from Productivity and State-ownership of Chinese Agricultural Firms on ODI Decisions. Int. J. Agric. Econ. 2020, 5(1), 18-29. doi: 10.11648/j.ijae.20200501.13

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AMA Style

Naixi Liu. Impact from Productivity and State-ownership of Chinese Agricultural Firms on ODI Decisions. Int J Agric Econ. 2020;5(1):18-29. doi: 10.11648/j.ijae.20200501.13

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@article{10.11648/j.ijae.20200501.13,
  author = {Naixi Liu},
  title = {Impact from Productivity and State-ownership of Chinese Agricultural Firms on ODI Decisions},
  journal = {International Journal of Agricultural Economics},
  volume = {5},
  number = {1},
  pages = {18-29},
  doi = {10.11648/j.ijae.20200501.13},
  url = {https://doi.org/10.11648/j.ijae.20200501.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijae.20200501.13},
  abstract = {Chinese agricultural outward direct investment has grown rapidly over the last decades. Neo-classical foreign direct investment theories can explain the reasons in motivation perspective reasons for the rapid growth, but cannot explain what types of agricultural firms would be most likely to undertake outward direct investment to together make the rapid growth. We use a Chinese agricultural firm level dataset matched from Chinese industrial enterprises database and Chinese outward direct investment enterprises database to empirically examine the relationship between firm heterogeneity and outward direct investment decisions. We find the estimation results support the Helpman-Melitz-Yeaple hypothesis that as the first firm heterogeneity the total factor productivity has a positive influence on the probability that a firm will undertake outward direct investment, which is in accordance with the past related research especially the recent theoretical research progress of international direct investment. In contrast, we find that as the second firm heterogeneity the state ownership has a negative influence on the probability that a firm will undertake outward direct investment, which is not in accordance with the past research on Chinese overall outward direct investment and could be explained by the domestic support obligations of the state-owned agricultural firms in China. Furthermore, we implement robust estimation and the results shows a significant robustness. Our research shows that firm heterogeneity dose matter and it is important to take this into account in analyzing Chinese agricultural firms' outward direct investment decisions.},
 year = {2020}
}

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TY  - JOUR
T1  - Impact from Productivity and State-ownership of Chinese Agricultural Firms on ODI Decisions
AU  - Naixi Liu
Y1  - 2020/02/11
PY  - 2020
N1  - https://doi.org/10.11648/j.ijae.20200501.13
DO  - 10.11648/j.ijae.20200501.13
T2  - International Journal of Agricultural Economics
JF  - International Journal of Agricultural Economics
JO  - International Journal of Agricultural Economics
SP  - 18
EP  - 29
PB  - Science Publishing Group
SN  - 2575-3843
UR  - https://doi.org/10.11648/j.ijae.20200501.13
AB  - Chinese agricultural outward direct investment has grown rapidly over the last decades. Neo-classical foreign direct investment theories can explain the reasons in motivation perspective reasons for the rapid growth, but cannot explain what types of agricultural firms would be most likely to undertake outward direct investment to together make the rapid growth. We use a Chinese agricultural firm level dataset matched from Chinese industrial enterprises database and Chinese outward direct investment enterprises database to empirically examine the relationship between firm heterogeneity and outward direct investment decisions. We find the estimation results support the Helpman-Melitz-Yeaple hypothesis that as the first firm heterogeneity the total factor productivity has a positive influence on the probability that a firm will undertake outward direct investment, which is in accordance with the past related research especially the recent theoretical research progress of international direct investment. In contrast, we find that as the second firm heterogeneity the state ownership has a negative influence on the probability that a firm will undertake outward direct investment, which is not in accordance with the past research on Chinese overall outward direct investment and could be explained by the domestic support obligations of the state-owned agricultural firms in China. Furthermore, we implement robust estimation and the results shows a significant robustness. Our research shows that firm heterogeneity dose matter and it is important to take this into account in analyzing Chinese agricultural firms' outward direct investment decisions.
VL  - 5
IS  - 1
ER  -

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Author Information

Naixi Liu

Department of International Economics, China Foreign Affairs University, Beijing, China

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Plain Text BibTeX RIS

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Naixi Liu. (2020). Impact from Productivity and State-ownership of Chinese Agricultural Firms on ODI Decisions. International Journal of Agricultural Economics, 5(1), 18-29. https://doi.org/10.11648/j.ijae.20200501.13

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ACS Style

Naixi Liu. Impact from Productivity and State-ownership of Chinese Agricultural Firms on ODI Decisions. Int. J. Agric. Econ. 2020, 5(1), 18-29. doi: 10.11648/j.ijae.20200501.13

Copy | Download

AMA Style

Naixi Liu. Impact from Productivity and State-ownership of Chinese Agricultural Firms on ODI Decisions. Int J Agric Econ. 2020;5(1):18-29. doi: 10.11648/j.ijae.20200501.13

Copy | Download

@article{10.11648/j.ijae.20200501.13,
  author = {Naixi Liu},
  title = {Impact from Productivity and State-ownership of Chinese Agricultural Firms on ODI Decisions},
  journal = {International Journal of Agricultural Economics},
  volume = {5},
  number = {1},
  pages = {18-29},
  doi = {10.11648/j.ijae.20200501.13},
  url = {https://doi.org/10.11648/j.ijae.20200501.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijae.20200501.13},
  abstract = {Chinese agricultural outward direct investment has grown rapidly over the last decades. Neo-classical foreign direct investment theories can explain the reasons in motivation perspective reasons for the rapid growth, but cannot explain what types of agricultural firms would be most likely to undertake outward direct investment to together make the rapid growth. We use a Chinese agricultural firm level dataset matched from Chinese industrial enterprises database and Chinese outward direct investment enterprises database to empirically examine the relationship between firm heterogeneity and outward direct investment decisions. We find the estimation results support the Helpman-Melitz-Yeaple hypothesis that as the first firm heterogeneity the total factor productivity has a positive influence on the probability that a firm will undertake outward direct investment, which is in accordance with the past related research especially the recent theoretical research progress of international direct investment. In contrast, we find that as the second firm heterogeneity the state ownership has a negative influence on the probability that a firm will undertake outward direct investment, which is not in accordance with the past research on Chinese overall outward direct investment and could be explained by the domestic support obligations of the state-owned agricultural firms in China. Furthermore, we implement robust estimation and the results shows a significant robustness. Our research shows that firm heterogeneity dose matter and it is important to take this into account in analyzing Chinese agricultural firms' outward direct investment decisions.},
 year = {2020}
}

Copy | Download

TY  - JOUR
T1  - Impact from Productivity and State-ownership of Chinese Agricultural Firms on ODI Decisions
AU  - Naixi Liu
Y1  - 2020/02/11
PY  - 2020
N1  - https://doi.org/10.11648/j.ijae.20200501.13
DO  - 10.11648/j.ijae.20200501.13
T2  - International Journal of Agricultural Economics
JF  - International Journal of Agricultural Economics
JO  - International Journal of Agricultural Economics
SP  - 18
EP  - 29
PB  - Science Publishing Group
SN  - 2575-3843
UR  - https://doi.org/10.11648/j.ijae.20200501.13
AB  - Chinese agricultural outward direct investment has grown rapidly over the last decades. Neo-classical foreign direct investment theories can explain the reasons in motivation perspective reasons for the rapid growth, but cannot explain what types of agricultural firms would be most likely to undertake outward direct investment to together make the rapid growth. We use a Chinese agricultural firm level dataset matched from Chinese industrial enterprises database and Chinese outward direct investment enterprises database to empirically examine the relationship between firm heterogeneity and outward direct investment decisions. We find the estimation results support the Helpman-Melitz-Yeaple hypothesis that as the first firm heterogeneity the total factor productivity has a positive influence on the probability that a firm will undertake outward direct investment, which is in accordance with the past related research especially the recent theoretical research progress of international direct investment. In contrast, we find that as the second firm heterogeneity the state ownership has a negative influence on the probability that a firm will undertake outward direct investment, which is not in accordance with the past research on Chinese overall outward direct investment and could be explained by the domestic support obligations of the state-owned agricultural firms in China. Furthermore, we implement robust estimation and the results shows a significant robustness. Our research shows that firm heterogeneity dose matter and it is important to take this into account in analyzing Chinese agricultural firms' outward direct investment decisions.
VL  - 5
IS  - 1
ER  -

Copy | Download