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Do Local Institutions Affect All Foreign Investors in the Same Way? Evidence from the Interwar Chinese Textile Industry
Published online by Cambridge University Press: 13 March 2013
Abstract
This article analyzes the impact of employment institutions on Japanese-, British-, and Chinese-owned textile firms in China during the 1920s and 1930s. Despite Britain's domestic position as a world productivity leader, Japanese firms enjoyed a 70 percent productivity advantage over both British and Chinese competitors. The divergent performance of Japanese and British investments in China is explained by differences in management practice. Japanese firms had domestic experience with employment institutions similar to China's and applied labor management strategies that functioned well under these institutions. British firms lacked the institutional experience necessary to adapt management strategies to Chinese institutions.
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- Copyright © The Economic History Association 2013
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