China Economic Quarterly International (Mar 2024)

International related-party trade, institutional differences and performance of foreign-funded enterprises

  • Jinmeng Wang

Journal volume & issue
Vol. 4, no. 1
pp. 13 – 25

Abstract

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Based on the resource-based view, this paper attempts to analyze the impact of international related-party trade on the performance of foreign-funded enterprises in China from the perspective of value creation. The findings of this paper are as follows. (1) the greater the proportion of parent company to foreign-funded enterprises’ international related-party transactions, the better the performance of foreign-funded enterprises. (2) As the differences in legal systems increase, the role of international related-party trade in promoting performance is weakening. (3) As cultural differences increase, the role of international related-party trade in promoting performance is increasing. After considering the impact of transfer pricing, the conclusions of this paper remain unchanged.

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