Helen Feng Liang
Office:
Helen Feng Liang |
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PhD 2006 | |||
| Business and Public Policy | ||||
| Haas School of Business | ||||
| UC Berkeley | ||||
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F535, Haas School of Business | |||
| Phone: | 510-612-4651 | |||
| Fax: | 510-643-1412 | |||
| Email: fenliang@haas.berkeley.edu | ||||
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Research Interest: |
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CV |
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Working Papers |
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International Business, Corporate Strategy,
Institutional Environment of
Business, Applied Microeconomics |
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Does Foreign Direct Investment improve the Productivity of Domestic Firms? Technology Spillovers, Industry Linkages, and Firm Capabilities (Job Market Paper)
Abstract
Many developing countries attract foreign investment in an attempt to improve the productivity of domestic industries. However, it is unclear whether local firms learn from FDI, and if so, which local firms benefit, what forms of FDI are most beneficial, and why these effects occur. This paper explores how industrial linkages, firm capabilities, and the geographic location of domestic firms affect the diffusion of technology brought by foreign direct investment. I hypothesize that local firms are more likely to improve efficiency when they receive better product inputs from foreign suppliers and technology support by foreign customers, and such transfer of knowledge is more effective when the recipient has high absorptive capacity and is located near the source of knowledge. I analyze plant-level data in China for over 20,000 plants between 1998 and 2005. I find positive productivity spillovers between foreign suppliers and their domestic customers. However, there are not positive spillovers from foreign-owned customers or competitors. Domestic firms’ in-house R&D capital facilitates learn from foreign firms. Local firms learn from both joint ventures and wholly-owned foreign subsidiaries and the effects are larger from wholly-owned subsidiaries.
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Return to R&D Investment and Spillovers in the Chinese Semiconductor Industry: A Tale of Two Segments with Henry Chesbrough
Abstract This study asks how market orientation influences returns to R&D investment and firms’ capability to benefit from external technology opportunities brought about by the globalization of manufacturing and innovation activities. We use a panel of firm-level data in addition to field interviews to study China’s semiconductor industry, a dynamic industry sector characterized by two segments with very different market orientation: a domestically focused one with lagged technology, and a globally focused one employing advanced technology. We examine the productivity consequence of in-house R&D investment and spillovers from industry R&D investment, using firm level production data and R&D activity data. We hypothesize that firms in the globally oriented sectors are more likely to receive higher returns to in-house R&D investment and positive spillovers from external R&D capital, especially from multinational firms, compared with domestically oriented firms, and that firms with higher in-house R&D capital are more likely to receive positive spillovers from external knowledge. The empirical results support our hypotheses in general: we find that firms in the global-oriented segment have higher returns to R&D investment than those in the domestic-oriented segment and a larger positive spillover from external R&D capital. But a firm’s participation in export is negatively related to the spillover from external R&D resources, indicating that the competition effects dominate the technology spillover effects for the exporters.
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Should Firms Look to an Insider or an Outsider When Hiring a New CEO? Evidence from China
Abstract This study examines the performance consequences of managerial turnover in firms operating in a weak institutional environment and facing pressures to restructure. A CEO promoted from within the firm has better knowledge of the organization than an outsider but may be bound by existing social ties with the workers. An outsider successor not burdened by such ties may grasp problems more quickly and allocate human resources more efficiently. In addition managers from outside the firm may have ties with government agencies and other firms that can safeguard contracts and help navigate through regulatory uncertainty. However, they may be hindered by their relative lack of knowledge of the organization. We examine the performance consequences of managerial turnover using a rich data set on firm operations and managerial turnover in China in the 1990s after a widespread institutional change in corporate governance. We find firms improve productivity more after turnover to an external CEO successor, and the effect is more evident in state-owned firms with large employment, those more likely to suffer from labor redundancy, and those dependent on government financial support. We control for the selection effect of CEO successors by matching firms with similar pre-turnover characteristics, and control for unobserved productivity shocks with investment and intermediate inputs.
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Does Foreign Direct Investment Harm the Host Country's Environment? Evidence from China
Abstract Are trade and openness good or bad for the environment? Policy makers are concerned that relatively lenient environmental policies in developing countries give them a comparative advantage in pollution intensive goods, and opening to trade and foreign direct investment will harm the host country environment. This study examines the relationship between inflow of foreign direct investment and local air pollution in China and suggests that the opposite might be true. Trade and foreign direct investment could have beneficial effect on a developing country’s environment when multinationals crowd out inefficient local firms, and when the superior technology multinational firms bring into the developing country diffuses to local firms and improve productivity and energy efficiency. We exploit China’s half land-locked geographic feature and trade policy as exogenous variations in the cities access to foreign investment. We examine the environmental consequence of foreign direct investment using city level data on air pollution, industry output and composition, foreign direct investment, and other social economic factors.