Mainland China Market Research Articles

Does strategic coupling of TNCs affect their exit from host regions: Empirical analysis of the exit of Taiwanese enterprises from mainland China.

This study aims to investigate the temporal and spatial attributes of the exit of Taiwanese enterprises from mainland China between 2001 and 2021, by applying enterprise database data. Furthermore, the influence of strategic coupling on Taiwanese enterprises' exit from mainland China was also investigated. The following are the key findings: The spatial distribution pattern of the exit rate of Taiwanese enterprises in mainland China varied at different phases. In contrast, the inland regions of the country's central and western zones, which are characterized by comparatively less developed economies, maintained consistently high exit rates, whereas the eastern coastal region retained a low exit rate. Particularly, the relationship between Taiwanese enterprises and the invested areas changed from Captive coupling to Cooperative coupling and subsequently to Absorptive Coupling. Similarly, the coupling modes significantly influenced the exit of Taiwanese enterprises from mainland China. Moreover, the COVID-19 pandemic has contributed to the backward connection of Taiwanese corporations, which have become more reliant on the mainland China market and local suppliers than earlier. Taiwan-favoring policies and the regional innovation environment have consequently emerged as the primary locational advantages for retaining Taiwanese enterprises in the aftermath of the global financial crisis. Therefore, the aforementioned factors may help to reduce the Taiwanese enterprises' exit from mainland China and possess valuable policy implications for Taiwan investment zones in mainland China.

Do stock investors in Mainland China care about corporate sustainability?

AbstractCorporate sustainability is an important issue in many parts of the world today. Many studies have pointed out that it will have an impact on share price performance. This article investigates the corporate sustainability aspect of the listed companies in the Mainland China A‐shares market. Our objective is to fill the gap in the previous studies conducted on Western markets and the Mainland China market. The constituent stocks in the Hang Seng (China A) Corporate Sustainability Index (HSCASUS) and the corresponding control stocks in the same industry were taken out and examined. The results of our study indicated that there was no significant relation between the stock return and corporate sustainability for the Mainland China A‐shares market. This research contributes to the promotion of corporate sustainability and provides a reference for the same topic in other emerging countries.

Market size matters? An approach to illustrate the market preference of Hong Kong-mainland China co-production cinema

ABSTRACTInternational co-production deal helps regional filmmakers to enter non-local markets. However, to please cross-border audiences, it may hinder cultural uniqueness. Further, when the participants from an obviously bigger market are engaged in, the minor’s cultural elements may be neglected. This ‘market size matters’ argument is often applied to understand the deterioration of Hong Kong (HK) film industry, which has largely collaborated with mainland China (CN) counterparts. To question this argument, this article proposes five co-production scenarios as ideal types: big-market oriented, lowest-common-denominator, small-market oriented, non market, and hybridity, which are illustrated in a scatter plot. With this comparative approach, HK-CN co-productions are located in the hybridity scenario while they increasingly favour mainland China market.

Viability and Composition Validation of Commercial Probiotic Products by Selective Culturing Combined with Next-Generation Sequencing.

The consumption of dietary supplements to treat health complications or to improve overall health conditions has become a globally increasing trend that leads to the development of a large number of health-related novel products and expands the associated manufacturing industries around the world. In the current study, we applied selective culturing combined with next-generation sequencing to examine the microbial viability in terms of its culturability on culture medium, composition, and possible contamination in the selected 17 commercial probiotic products sold in the mainland China market. Additionally, the relative abundance of each individual bacterial content was also evaluated by using the generated sequencing reads. The tested probiotic product samples were subjected to Illumina HiSeq-2000 sequencing platform and thoroughly analyzed by the in-house developed bioinformatics pipeline. The comprehensive culturing and sequencing analysis revealed both viability and composition inaccuracy among the several tested probiotic products, however, no contaminant was identified during the analysis. Among the total, five probiotic products (29.41%) were found with an inaccurate or lower colony-forming unit (CFU) counts on culture media while four probiotic products (23.52%) have inaccurately labeled classification. This study provides an ideal qualitative and quantitative assessment approach, which can be used as a diagnostic tool for the accurate assessment of commercial probiotic supplements.

Re-understanding the antecedents of functional foods purchase: Mediating effect of purchase attitude and moderating effect of food neophobia

The world market for functional foods has grown dynamically and China is expected to be one of the most promising markets. But little is understood the formation mechanisms of consumers’ purchase attitude and intention toward functional foods in Mainland China. The current study investigates the roles of trust, health consciousness and price in shaping consumers’ purchase intention toward functional foods by focusing on purchase attitude as a mediator and food neophobia as a moderator. Results from the sample of 1144 Chinese suggest that Chinese consumers had moderate purchase intention toward functional foods. Trust in the food system and health consciousness positively affects purchase intention via purchase attitude. Price negatively affects purchase intention; meanwhile, the negative effect could be counteracted by health consciousness. Food neophobia does not directly affect individuals’ purchase attitude or intention, but moderates the relationships between antecedents and them. Consumers with a low level of food neophobia treat higher price as a monetary sacrifice, while their counterparts may regard a higher price as a greater quality signal. The study offers the food industry insights into the development and marketing of functional foods targeted to the Mainland China market.

Mainland China and Hong Kong Closer Economic Partnership Arrangement Effect Analysis

Based on gravity model, this paper analyzes the impact of Mainland China and Hong Kong Closer Economic Partnership Arrangement by using the data from 2004 to 2013. The result shows that, closer economic partnership arrangement has not promoted the goods export of Hong Kong; the effects on services trade and investment are limited. The main reasons may be the disappearance foundation of the cooperation between the two sides and the limited openness of Mainland China market.

Determinants of Inflow to Mutual Funds: Criterion and Methodology for Their Application to the Mainland China Market

This study is based on the Froot, O’Connell, and Seasholes [2001] and Hsieh, Yang and Yu [2008] as foundations to study which reasons and control factors cause herding behavior of mutual fund inflows. The study uses the most popular Asian emerging market, China, as the sample to determine the real attractive reason behind the mutual fund inflows to China. The significant determinant of the mutual fund inflows to China is stock returns for both Shanghai and Shenzhen A stock markets.

Disposition Effect in an Agent-based Financial Market Model

Disposition effect, which refers to investors’ being reluctant to realize losses, is very common in financial markets, especially in mainland China. This paper introduces the disposition effect into a multi-agent model, to research investor behavior and its impact on financial markets. As the result of computer simulation, disposition effect reveals asymmetric volatility which reflects the actual situation in mainland China market, i.e. the impact of bad news on volatility is greater than the impact of good news of the same magnitude. Sensitivity analysis shows that investors’ disposition behaviour slows the release rate of news, makes market more stable around the fundamental price. Meanwhile, proper level of disposition effect can avoid some loss in investment, and make chartist get relative higher return than usual. These conclusions could hopefully offer insights and effective support for investment decision-making and policy regulation.

Modelling Dependence in Mainland China and Hong Kong stock market Based on The Copula Approach

Modelling Dependence in Mainland China and Hong Kong stock market Based on The Copula Approach

Cheap laughs: The mass-production of low-budget Chinese comedies from Feng kuang de shi tou/Crazy Stone (Ning Hao, 2006) to Gao Xing (Agan, 2009)

This article will focus on the burgeoning production of low-budget feature film comedies in Mainland China. A number of these productions have achieved considerable success at the local box office since 2006. The popularity of these swiftly-produced features is the result of rapid industrialization and the increasing emphasis on genre in the Mainland China market. It also suggests a worrying trend in terms of the mass-production of films for local audiences; these films are manufactured in a rough manner with little regard for aesthetic quality or tonal consistency, leading to concerns about malformed genre product. This article outlines the definition, origins and variations of the low-budget comedies produced in China. Based on data gathered through several large-scale industry studies of the local audience, it will show that a relationship exists between the cultural mind-set of young cinemagoers and the styles of low-budget comedy films. To chart the success of this genre, and its evolution from low-budget production to mid-budget production due to consistent box office returns, the article will examine two industrially significant examples: Crazy Stone and Gao Xing. The former arguably started the genre, leading to a host of imitators, of which the latter has been particularly well-attended, despite evidencing a decline in quality as satirical humour is replaced by vulgarity. In this respect, it will be argued that the Mainland China production cycle of the low-budget comedy is an example of 'ShanZhai' culture as this is a form of commercial film-making that is largely based on imitation.

Two‐Factor Decomposition Analysis for Correlation between Mainland China and Hong Kong Stock Markets

AbstractWe analyzed the correlation between mainland China and Hong Kong stock markets based on cash flow (CF) news and discount rate (DR) news instead of considering market return as a whole. We decomposed stock return into CF news and DR news following Campbell and Vuolteenaho. Then, the VAR‐ BEKK‐GARCH method was used to investigate the time‐varying correlations of CF news and DR news in the two markets. We ensured robustness by using the structural break test from Bai and Perron to estimate the structural break points during the sample period. The results show that CF news and DR news in the mainland China market is more volatile than in the Hong Kong market, and DR news correlation is usually negative when the mainland China market is undergoing some reform. The estimated structural break points were matched to important events in the mainland China market and the two markets become increasingly correlated.

Day and night returns of Chinese ADRs

Are the returns of Chinese American Depositary Receipts (ADR) more affected by the US market or their underlying home market? We separate Chinese ADR daily returns into day and night returns to investigate the different market effects on ADR pricing. We compare “homeless” ADRs to home-based or cross-listed ADRs to see if they are affected differently by market factors. We find the night returns of Chinese ADRs are significantly affected by their home market (either the Hong Kong market or mainland China market) daily returns and the US market night returns. The US day returns appear to be the most significant pricing factor for the day returns of Chinese ADRs. The homeless ADRs are more affected by the US market and less affected by their home market compared to the cross-listed ADRs.

Day and Night Returns of Chinese ADRs

Are the returns of Chinese ADRs more affected by the U.S. stock market or their underlying home market? Since there is non-synchronous trading between U.S. and the Chinese stock markets, we decompose the Chinese ADR daily returns into day and night returns to investigate the different market factors in Chinese ADR pricing. This paper also attempts to separate homeless ADRs from home-based ADRs to see if they are affected differently by market factors. We include a sample of 76 Chinese ADRs with the daily data from January 2000 to July 2010. Through regression and VAR analysis, we find that the U.S. market dominate the day returns of Chinese ADRs, and the Hong Kong market factor dominate the ADR night returns over the mainland China market for the whole sample. These results are particularly strong for “homeless” ADRs.

FDIs by high-tech firms from newly-industrialized economies in emerging markets: The role of resources on entry strategy

International investments by firms from Newly-Industrialized Economies (NIEs) in other less-developed emerging economies were increasingly important due to the rise of labor cost in the home economy. This paper investigated how resources of high-tech Taiwanese firms influenced their entry strategy in Mainland China. The results indicated that the parent firms’ knowledge-based and property-based resources impacted their equity ownership in overseas subsidiaries. Taiwanese firms usually with limited resources and capability were concerned about appropriation hazard of their technological know-how in Mainland China market, therefore took larger equity ownership to assume greater strategic control over their subsidiaries. Firms having more marketing resources assumed larger equity ownership to streamline their marketing programs and practices to achieve marketing efficiency in Mainland China, where price competition was intense. Organizational slacks proved to be necessary to buffer firms from unprecedented adverse circumstances as firms occupying more slack were likely to maintain larger equity ownership in Mainland China market. Slack also acted as a substitute for more restricted externally raised financial resources. Besides, firms possessing greater internally generated financial resources, which imposed fewer restrictions of deployment, tended to commit larger equity ownership in their subsidiaries. This study might be generalizable to other NIEs and emerging markets. Key words: Foreign direct investment, newly-industrialized economies, emerging markets, resources, entry strategy, equity ownership, high technology, Taiwan, Mainland China.

Spillover Effects Among the Greater China Stock Markets

Summary This paper explores the linkages among the different stock markets in the Greater China region (China, Hong Kong, and Taiwan). The empirical findings show no indications of long-run relationships among the markets. There are, however, short-run spillover effects in both returns and volatility in the region. Both China and Hong Kong are affected by mean spillover effects from Taiwan. Volatility in the Hong Kong market spills over into Taiwan, which in turn affects the volatility in the Mainland China market. This means that the Mainland China market is related to other markets, even though the possibilities for outside investments have been limited until recently. Overall, the study shows significant interdependencies among the three markets, a result that has important implications for both policymakers and investors in the region.

The application of project advancement to developing the deployment procedure for transnational investment: the example of fast food industry entry into mainland China

Whenever an enterprise (especially, in the service industry) decides to invest in a specific host country for global market expansion, it has been a common to set up an effective deployment procedure for this host country. Project Advancement (PA) is a method which provides a systematic thinking rule to aid decision-makers. This study applies PA to a fast food industry company's entry into the Mainland China market. The idea of a 'primary business network (PBN)' that consists of three elements: locations for investment, business goals and value-based time limits for these locations, affords a novel view on the fundamental investment objective of multinational enterprises (MNE) to ensure sustainable competitive advantages. Methodologies to find the three elements of PBN are proposed. According to a matrix of 'capital competence' and 'country risk', a proper resource allocation and/or transfer strategy can be recommended to the possibility of creating a PBN.

The Outbound Mainland China Market to the United States: Uncovering Motivations for Future Travel to Hawaii

ABSTRACT It is essential for U.S. travel industry leaders to learn more about the characteristics and needs of the Mainland Chinese visitor as these travelers have high expectations for the quality of the tourist product and services. This empirical study profiles 351 Mainland Chinese tourists traveling to the United States uncovering their travel habits, preferences, satisfaction levels, motivations, and what will retain the traveler for future visits, as well as identifying why the traveler would not return to the destination. Results suggest that industry leaders focus on ways to reduce or eliminate travel barriers as many new competitive travel opportunities become available to the Mainland Chinese traveler. Marketing implications are detailed and analyzed.

Time series analysis for the interest rates relationships among China, Hong Kong, and Taiwan money markets

This paper aims at investigating the regional financial integration of Chinese economic area (CEA), embracing Taiwan, Hong Kong and China after the Asian Financial Crisis. We empirically find that, in the long-run, the money markets of Taiwan, Hong Kong and China have to be mutually linked in order to ensure a long-run equilibrium relationship in the Chinese economic society. In the shot-run, China’s interest rate has a significant impact on the interest rates of Taiwan and Hong Kong, but not conversely. The China money market is more rigid due to the existence of market barriers and the China’s economic boom in 1990s. Since Taiwan and Hong Kong are typical island-style economies with high degree of market liberalization and their business people have invested huge amount in China market in recent years, they tend to be more sensitive to the innovations and the volatilities from Mainland China market.

Relative development in stock markets: empirical evidence from mainland China and Hong Kong

Factors that might explain the relative growth of the stock markets of Hong Kong and Mainland China in recent years and the different responses of these markets to the 1997 Asian financial and economic crisis are empirically analysed. These factors are used to project the growth of total market capitalization of the two markets in the future. Clearly, Hong Kong, with its open economy and financial markets, was strongly affected by the Asian crisis, whereas Mainland China, with many restrictions on capital flows still in place, was less affected. The results indicate that the Mainland Chinese stock market is still developing, and forecast models suggest that Mainland China's market will overtake Hong Kong's market in size, but may become the more volatile of the two markets, especially as China relaxes its restrictions on international capital flows.

Taiwan in 1993: Attempting a Diplomatic Breakthrough

The Republic of China on Taiwan experienced another multiparty election in November 1993, the third in as many years. Political parties competed on bread-and-butter issues in the island-wide election for mayors and county magistrates, and continued economic growth remained the ruling Kuomintang's (KMT) most important asset. However, Taiwan had become more and more dependent on the mainland China market. In order to offset this economic dependence, and to co-opt an issue previously monopolized by the opposition, the ROC government made an attempt to rejoin the United Nations.