Greater China Region Research Articles

The Impacts of Markets and Tax on a Multinational Firm's Procurement Strategy in China

Motivated by observations in the greater China region, this paper studies a multinational firm (MNF)'s preferences between two procurement strategies in a global business environment. The MNF relies on a contract manufacturer (CM) to produce its products, which serve both markets within (domestic market) and outside (overseas market) China. The MNF is assumed to be monopolistic in the overseas market but faces competition from a local original equipment manufacturer (OEM) who outsources both manufacturing and component procurement to the CM. The MNF will decide whether to control its component procurement (consignment strategy) or delegate that function to the CM (turnkey strategy). Our study indicates that a number of factors unique to the global supply chain environment, such as a multi‐market structure with different sizes and natures of competition, and a set of tax rules that gives differential treatment to products serving different markets, have the potential of impacting the MNF's choice of consignment vs. turnkey strategies, sometimes in interesting ways. In particular, we find that when attempting to balance the pros and cons of cooperating with the local OEM under turnkey while competing against it in the domestic market, the MNF's preference could switch twice from turnkey to consignment and back to turnkey, and its global profits could first decrease and then increase, as the domestic market grows. Our study also highlights the importance of making a company's global supply chain management decisions while considering international tax rules.

The emergence and performance of the Chinese merger market and the impact of partner location

Chinese acquirers spent $38 million on mergers and acquisitions in 1990, and $666.1 billion on mergers and acquisitions in 2016. As the Chinese merger market has grown, so too has the literature on its performance. Little is known, however, about with whom Chinese firms can best do business. We aim to fill this gap. We suggest that because the liabilities of distance, foreignness, and outsideness complicate acquisition performance, targets in countries and regions which add fewer of these liabilities will outperform those that add more. We plot the overseas expansion of Chinese acquirers, and compare the performance of Chinese acquisitions, within the Greater China region, within the Confucian cultural sphere, and between Asian and the West. In each case, we predict that increasing cultural distance decreases performance. Then, because the Continental European governance system is institutionally more familiar to the Chinese system than it is to the Anglo-Saxon system, we consider the Chinese experience in each of these two systems. Our results largely support our hypotheses built on the partner location performance hierarchy argument, but we also point to the limits of the generalizability of existing literature in understanding the Chinese market.

Comparing Chinese state-sponsored media’s agenda-building influence on Taiwan and Singapore media during the 2014 Hong Kong Protest

This empirical study is in the field of mediated public diplomacy. It examines the role of state-sponsored media in international agenda-building during the 2014 Hong Kong Protest. In this study, state-sponsored media are conceptualized as tools used in international political public relations to influence international media coverage. A quantitative content analysis was performed to determine the association of state-sponsored media and agenda-building with news coverage in Taiwan and Singapore. The results showed that state-sponsored media were strongly associated with international news coverage with regard to object salience, attribute salience, and association salience, which indicated potential influence. In addition, the association of Chinese state-sponsored media with news coverage in Singapore was stronger than the association with news coverage in Taiwan, indicating that the influence of agenda-building was moderated by differences between countries and regions. In addition, we presented a message platform matrix and discussed its theoretical and practical significance. This study contributes to the scholarship on governmental strategic communication in the Greater China region by advancing the knowledge about the effectiveness of the Chinese government’s external strategic communication efforts in Chinese-speaking regions.

Tinted revolutions in prismatic news: Ideological influences in Greater China’s reporting on the role of social media in the Arab Uprisings

Social media is widely seen as playing a crucial role in the Arab Uprisings. This study compares news coverage in mainland China, Hong Kong, and Taiwan regarding social media in the Arab Uprisings. Content analysis of 162 news stories revealed that media in the three regions constructed their coverage within different frames, despite the events being geographically remote to the three Greater China regions and occurring in countries with which Greater China has little cultural, religious, ethnical, or economic connections. Overall, a clear pro-social-media pattern was found in Hong Kong and Taiwan media coverage, whereas in mainland China social media and the users involved in the Arab Uprisings were treated in the news in an obscured or unfavorable manner. Mainland China’s coverage was less likely to mention censorship of social media in the revolutions, whereas Hong Kong and Taiwan media frequently reported censorship and took a stance against it. Hong Kong and Taiwan media were also inclined to relate situations in the Arab Uprisings to mainland China. Such variations in the media coverage arguably are mainly due to ideological differences.

Global Value Chains and the Missing Exports of the United States

More and more American multinational corporations (MNCs) are outsourcing the production and assembly of their products to foreign companies. When they do so, they derive the largest share of their revenue from the intellectual property embedded in core technological innovation and brand names. However, conventional trade statistics are compiled based on the value of goods crossing national borders, as declared to customs. Generally, the value added associated with intellectual property rights and embedded in physical goods is not recorded as either export or import of any country. Hence, current trade statistics greatly underestimate US exports and substantially exaggerate its trade deficit. In this paper, we use the case of Apple, the largest American consumer products company, to illustrate the failure of conventional trade statistics to report actual US export capacity in the age of global value chains. According to our analysis of this case, if the value added of Apple intellectual property sold to foreign consumers were counted as part of US exports, total US exports would increase by 3.7%, and its trade deficit would decrease by 7.5%. In terms of bilateral trade, the value added under examination here would lower the US trade deficit with the Greater China region by 6.7% and that with Japan by 9.1%.

Cover Image, Volume 97, Issue 12

The cover image, by Wai Chin Li and Chin Fung Chow, is based on the Review Adverse child health impacts resulting from food adulterations in the Greater China Region, DOI: 10.1002/jsfa.8405. image

Adverse child health impacts resulting from food adulterations in the Greater China Region

Food adulteration has a long history in human society, and it still occurs in modern times. Because children are relatively vulnerable to food adulterants, studying the health impacts of food adulteration on children is important. This article provides an overview of the child health impacts of food adulterants in two recent food adulteration incidents in the Greater China Region: (1) a plasticizer incident in Taiwan and (2) a 2,4,6-triamino-1,3,5-triazine (melamine)-tainted milk incident in China. The involved food adulterants, di-(2-ethylhexyl) phthalate (DEHP), diisononyl phthalate (DiNP) and melamine, are harmful to the hippocampus, kidneys, reproductive organs and immune system of children, and they also increase the risk of cancer. To detect food adulteration and to avoid further harm caused by food adulteration, simple screening methods have been developed, and they have recently emerged as a new focus area for research. This article also summarizes the simple screening methods used to analyse the aforementioned food adulterants and reports how governments reacted to the recent food incidents. © 2017 Society of Chemical Industry.

How copyright shaped the music industry: a comparative and empirical assessment on copyright enforcement in the PRC and the ROC

Since 2000, the revenue of the music industry has plummeted worldwide. Meanwhile, the advancement of technology has created many changes that has transformed the copyright law system, raising doubts about the effectiveness and necessity of copyright law system. This article conducts comparative and qualitative research on the music industry of mainland China and Taiwan, to study the effect of copyright law enforcement to the music industry. In mainland China, the laws, enforcement campaigns, and judicial decisions did not create significant impact on average citizens nor the creative industries. On the contrary, through copyright law legislation and amendments, enforcement, judicial decisions, unspoken rules, and business practices, the notion to respect copyright have been embedded in most people’s minds in Taiwan. It was believed that copyright, manifests in its various of forms, is the keystone to the environment that attracted talent all over the Greater China region to Taiwan.

Yanto Chandra and Linda Wong (eds.): Social Entrepreneurship in the Greater China Region: Policy and Cases

Yanto Chandra and Linda Wong (eds.): Social Entrepreneurship in the Greater China Region: Policy and Cases

Validation of a Measure of Chinese Outpatients' Satisfaction in the Taiwan Setting.

The medical services market is rapidly expanding around the world, following the experience of the industrialized Western economies. Cultural differences make existing assumptions about health care quality risky to export, leading to an increasing interest in understanding patient satisfaction with care within non-Western contexts. Within the Greater China region, both Western and traditional Chinese medicine coexist, yet there is a lack of research instruments that include distinct values of Chinese patients. This article reports the development of a measure of Chinese patient satisfaction with outpatient care. We describe the foundation of the scale in a qualitative report that includes 8 dimensions of Chinese patient satisfaction. A sample of 400 Chinese patients completed the final instrument. A quantitative analytical procedure leads to a 6-dimension and 27-item instrument to measure Chinese patients’ satisfaction with outpatient care. Our proposed instrument has good internal consistency supporting the use of the instrument in contexts where Chinese patients are being treated.

Sentence-Level Dialects Identification in the Greater China Region

Identifying the different varieties of the same language is more challenging than unrelated languages identification. In this paper, we propose an approach to discriminate language varieties or dialects of Mandarin Chinese for the Mainland China, Hong Kong, Taiwan, Macao, Malaysia and Singapore, a.k.a., the Greater China Region (GCR). When applied to the dialects identification of the GCR, we find that the commonly used character-level or word-level uni-gram feature is not very efficient since there exist several specific problems such as the ambiguity and context-dependent characteristic of words in the dialects of the GCR. To overcome these challenges, we use not only the general features like character-level n-gram, but also many new word-level features, including PMI-based and word alignment-based features. A series of evaluation results on both the news and open-domain dataset from Wikipedia show the effectiveness of the proposed approach.

Legal Origin and Corporate Governance for Chinese Family Business: Evidence in Hong Kong, Taiwan and Mainland China

This paper aims to examine if the difference of legal traditions make different corporate governance regimes for protecting interest of listed family enterprises’ shareholders through evaluating and comparing corporate governance regimes in the Greater China region, including Hong Kong, Taiwan and Mainland China. The result is consistent with the LLSV paper, i.e. common law tradition constitute better corporate governance regime. We also find that countries with civil law traditions can be enhance the quality of the corporate governance regime through legal and financial reforms, and through adopting some measures which is commonly found in companies govern by common law tradition.

Political entrepreneurship and the Ko-P phenomenon in Taiwan’s democratization

ABSTRACTTaiwan’s economic modernization and political democratization after World War II have been praised as good examples for emerging countries. As of 2014, Taiwan has successfully gone through four direct presidential elections and two rounds of peaceful transfer of power. However, continuing sectarian quarrels between the ruling Kuomintang and the opposition Democratic Progressive Party cast doubt on the suitability of democracy for a Confucian society. This pessimism is challenged by the emergence of a new political star. A political novice, Ko Wen-je (aka Ko-P), won a landslide victory in the 2014 Taipei mayoral election, which is seen as a phenomenon. It has significant political implications and has so far inspired changes in the political landscape. The adoption of entrepreneurial strategies, such as identifying problems, leading by example, and team creation, are unprecedented in Taiwan’s political campaign. The Ko-P phenomenon demonstrates a self-correcting mechanism in Taiwan’s political system and bodes well for the future of new democracies, particularly for the Greater China Region.

Idiosyncratic volatility and excess Return: Evidence from the Greater China region

This study uses monthly data from the Greater China region from 1996 to 2010 to examine the relation between idiosyncratic volatility (IV) and excess returns (ER). We show an insignificant IV-ER relation in the Hong Kong and Taiwan stock markets. A positive relation is found in the Shanghai stock market, but the positive relation disappears after the market liberalization in April 2005. Our finding supports Merton's (1987) theory that excess return and idiosyncratic volatility are positively related when asset diversification is restricted.

Business Ethics in the Greater China Region: Past, Present, and Future Research

While business ethics has generated a great deal of research internationally over the last few decades, academic reviews of the business ethics literature remain limited. Moreover, there has been little attempt to date to analyze this literature specifically in the Greater China region, which has been experiencing rapid socioeconomic growth and dynamic evolution of business ethics in recent decades. This paper addresses this research gap by undertaking a comprehensive and critical appraisal of the business ethics literature on Greater China. In particular, it maps out the existing research findings, identifies limitations in methodology, and suggests future directions for business ethics research in this region. The findings indicate that the scholarly interests cover 24 research themes, including corporate social responsibility and social performance; ethical beliefs, judgment, values, decision-making, and culture; workplace ethics and behavior; marketing ethics and consumer behavior; and sustainability. This review reveals a growing imbalance between empirical and conceptual/theoretical studies on business ethics. In addition, the published works covered in this review heavily rely on survey method and convenience sampling, with a predominant focus on a single individual level of analysis. Importantly, this study identifies four directions for future research: contextualized theoretical development, addressing multilevel research, developing research design tailored to the Chinese context, and ensuring more diversified and rigorous data collection.

Initial Job Choice in the Greater China Region

Job application choice is influenced by job/organisational attributes, both traditional ones, such as salary, prospects, location, company type and newer ones, such as corporate social responsibility (CSR). To examine the varying importance of these and the impacts of location and gender for initial job applications, potential job applicants were surveyed who were about to join the jobs market based in China, Hong Kong and Taiwan, often grouped together as the Greater China region. Using conjoint analysis of different job scenarios it is found that the importance of different job characteristics does vary across the region, although with no clear result regarding gender. The theoretical and practical implications of this work is discussed.

Hong Kong Panel Study of Social Dynamics (HKPSSD): Research Designs and Data Overview

The Hong Kong Panel Study of Social Dynamics (HKPSSD) aims to establish a city-wide representative household panel survey to track socioeconomic changes and their impact on people’s livelihood in Hong Kong. Three waves of data collection have been completed in 2011, 2013, and 2015, respectively: 3,214 households, 7,218 adults, and 958 children were successfully interviewed in the first wave, and 2,165 households, 4,270 adults, and 623 children were reinterviewed in the second wave. A refreshment sample of 1,007 households (including 1,960 adults and 145 children) with new question modules were added in 2014, which, together with those in the second wave, were reinterviewed in the third wave in 2015, resulting in 2,404 households, 5,160 adults and 477 children. This article introduces the background, research designs, and content coverage of the three waves of the HKPSSD, and presents an overview of the data. The HKPSSD is expected to serve as an important database for social science research and policy study in Hong Kong, and for comparative analyses in the Greater China region.

Empirical assessment on the liveability of cities in the Greater China Region

Purpose – This paper aims to apply a comprehensive Liveability Cities index to rank the liveability of 100 cities in the Greater China Region. Against the backdrop of the ongoing trend of rapid and extensive urbanisation observed in China, “liveability” is being given an increasingly higher priority by the Chinese government. However, there has been no attempt to empirically measure this concept and to examine its nexus to the narrower concept of competitiveness. Design/methodology/approach – The index is based on 96 indicators across five environments, namely, economic vibrancy and competitiveness; environmental friendliness and sustainability; domestic security and stability; socio-cultural conditions; and political governance. Findings – The empirical results show that Hong Kong, Macau and cities in Taiwan generally perform well in overall liveability rankings, while first-tier cities in mainland China (Beijing, Shanghai, Guangzhou and Shenzhen) do not find a place among the top ranks. Originality/value – The rankings and simulation exercise aim to provide Chinese policy makers with a framework to assess the liveability of China’s cities and suggests indicative policy suggestions that can be taken to improve overall liveability.

Massification of higher education, graduate employment and social mobility in the Greater China region

Globalisation and the evolution of the knowledge-based economy have caused dramatic worldwide changes in the character and functions of education, particularly higher education. In the search for global competitiveness, many emerging economies have begun to expand their higher education systems, which has significantly affected the relationship between higher education and graduate employment. Recently, international comparative studies have suggested that increasing enrolment in higher education does not always promote upward social mobility, and can intensify inequality in education. This article critically examines the impact of the expansion of higher education in East Asia on graduate employment and social mobility in the context of an increasingly globalising economy and changing labour market needs. The article discusses emerging trends in the Greater China region, with a particular focus on Hong Kong, Guangzhou and Taipei, and argues that the massification of higher education has not necessarily led to more occupational opportunities for youth or opportunities for upward social movement, particularly since the significant changes in the global labour market after the 2008 global financial crisis. On the contrary, the intensification of ‘positional competition’ among college graduates seems to reflect growing social inequality.

Inflation Transmission in Greater China

AbstractThis paper examines inflation dynamics in Greater China. Using an asymmetric error correction model, we investigate how inflation in Hong Kong and Macao are related to inflation in Chinese Mainland. Our results based on data from July 1997 to December 2012 reveal that a long‐term equilibrium relation exists between inflation in Chinese Mainland and inflation in both Hong Kong and Macao, the two Special Administrative Regions of China. The degree of inflation pass‐through is higher for Macao than for Hong Kong. Moreover, we find no evidence of asymmetries in either Hong Kong and Macao's adjustment speeds towards long‐run equilibrium or in the short‐run pass‐through of accelerating or decelerating inflation in the Mainland. Collectively, our results show a close relationship among price dynamics of the three economies and call for a reconsideration of the exchange rate anchor in the Greater China Region.