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http://dx.doi.org/10.13106/jafeb.2022.vol9.no2.0313

Does Bilateral Trade Between China and ASEAN Countries Improve Its Firm's Efficiency?  

HANIFA, Mohamed Hisham (Department of Finance, Faculty of Business and Economics, University of Malaya)
CHAN, Sok Gee (Institute of China Studies, University of Malaya)
SUKOR, Mohd Edil Abd (Department of Finance, Faculty of Business and Economics, University of Malaya)
Publication Information
The Journal of Asian Finance, Economics and Business / v.9, no.2, 2022 , pp. 313-324 More about this Journal
Abstract
The Chinese outward foreign direct investment (OFDI) involves various bilateral trade agreements and regional agreements signed between China and other countries. This study examines the impact of Chinese OFDI in ASEAN-5 countries through ASEAN-China Free Trade Agreement (ACFTA) namely Indonesia, Malaysia, Philippines, Singapore, and Thailand from 2000 to 2016. This study attempts to address three research objectives. The first is to examine the motives for China's investment in ASEAN-5. The second is to explore the different impacts of China's investment across countries. The third is to investigate whether the OFDI conducted by state-owned enterprises (SOEs) will produce different impacts on the firm's efficiency score. Using the DEA approach, this study finds evidence that the overall Chinese OFDI is relatively efficient. We find that the estimated efficiency score of this OFDI has improved in pre- and post ACFTA where a higher overall efficiency score was reported when comparing pre- and post ACFTA signing for both SOEs and NSOEs. Finally, China's parent firms' efficiencies showed higher scores among NSOEs compared to SOEs after the signing of ACFTA for all ASEAN countries except Malaysia. We highlight that the country's institutional infrastructure, earlier investment presence, and diplomatic ties help in shaping an effective trade agreement.
Keywords
China Firms; Foreign Direct Investment; State-Owned Enterprises; ASEAN-5; Data Envelopment Analysis;
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Times Cited By KSCI : 7  (Citation Analysis)
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