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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

Peter Zeitz
Peter Zeitz*
Affiliation:
Assistant Professor, National University of Singapore Business School, Mochtar Riady Building #6-43, 15 Kent Ridge Drive, Singapore 119245. E-mail: zeitzp@gmail.com.
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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.

Type
Articles
Information
The Journal of Economic History , Volume 73 , Issue 1 , March 2013 , pp. 117 - 141
Copyright
Copyright © The Economic History Association 2013

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