Ownership structure and new product development in transnational corporations in China

Abstract

This paper examines the relationship between the ownership structure and new product development (NPD) at the affiliates of transnational corporations in China. Seven research hypotheses are tested on a panel data set covering 10,000 manufacturing firms with foreign involvement for the period 1998-2001. The results from probit and tobit models show that contractual joint ventures, equity joint ventures and joint stock enterprises are better organizational forms than wholly owned enterprises for increasing both the probability and intensity of NPD. We also find that ventures with OECD participation are more likely to be involved in NPD than those with participation by “overseas” Chinese TNCs.