Employee motivation, external orientation and technical efficiency of foreign-financed firms in China: a stochastic frontier analysis
journal contributionposted on 2023-06-07, 04:46 authored by Vincent Mok, Godfrey Yeung
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.
JournalManagerial and Decision Economics
Department affiliated with
- Sociology and Criminology Publications
Full text available