Employee Motivation, External Orientation and Technical Efficiency of Foreign-Financed Firms in China: A Stochastic Frontier Analysis

Mok, Vincent and Yeung, Godfrey (2005) Employee Motivation, External Orientation and Technical Efficiency of Foreign-Financed Firms in China: A Stochastic Frontier Analysis. Managerial and Decision Economics, 26 (3). pp. 175-190. ISSN 0143-6570

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Abstract

By using a stochastic frontier model, we have identified several firm-specific attributes as determinants of technical efficiency in foreign-financed manufacturing firms in southern China. The empirical results suggest a strong association between efficiency and employee motivation, which includes the use of bonus incentives and flexibility in employment policy. In terms of the external orientation behavior of firms, the findings do not support the export/efficiency relationship. Sample firms with a high degree of export-orientedness were less efficient, possibly due to the high transaction costs in China of exportation. As for the effects of expatriate input on production, our empirical evidence revealed that firms with a relatively high expatriate ratio performed less efficiently than others did. These two findings may have significant implications for the marketing strategies and management (including the localization) of human resources of foreign-financed firms in China.

Item Type: Article
Additional Information: Published by Wiley Blackwell
Schools and Departments: School of Law, Politics and Sociology > Sociology
Subjects: H Social Sciences > HD Industries. Land use. Labour > HD0028 Management. Industrial Management
H Social Sciences > H Social Sciences (General)
H Social Sciences > HB Economic theory. Demography
Depositing User: Godfrey Yeung
Date Deposited: 19 Sep 2006
Last Modified: 07 Mar 2017 06:41
URI: http://sro.sussex.ac.uk/id/eprint/214
Google Scholar:7 Citations

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