Such arguments, however, do not ascertain whether efficiency of foreign firms is due to any ownership-specific advantage or to other factors such as industrial distribution (product mix), size of the firm, capital intensity, skill intensity, market concentration, and export orientation.
The authors conclude that they find that foreign firms are more productive than their local counterparts and this suggests that foreign firms enjoy some ownership-specific advantage.
In particular, we examine the question whether capital intensity, skill intensity, and economies of scale explain all of the labour productivity differences between foreign and local firms, or whether foreign firms enjoy some ownership-specific advantages, such as proprietary technology and management expertise, etc.
In order to ascertain whether the labour productivity differences are due to capital intensity, skill intensity, and economies of scale or to other ownership-specific advantages, we next estimate the regression models (1) to (3).
Even after taking into account the differences in capital intensity, skill intensity and economies of scale we find that foreign firms are more productive than their local counterparts, this suggest that foreign firms enjoy some ownership-specific advantages.
This suggests that foreign firms enjoy some ownership-specific advantages which helps them to perform in a more productive way than their local counterparts.
Our analysis of 1,355 Chinese private enterprises shows that their ownership-specific advantages in areas such as corporate governance, inherited advantage from mergers and acquisitions of state-owned companies, and inward internationalization increase the level of outward internationalization.
Their moderating effect on the link between some ownership-specific advantages and venturing is negative, suggesting a substitutive role of experience in interacting with ownership-specific advantages with the process of internationalization.
While both groups seek ownership-specific advantages in internationalization, developing country private firms are motivated in parallel to avoid environmental hardships at home, such as institutional obstacles and market imperfection residuals.
Specifically, governance advantage is viewed as the key element of a firm's ownership-specific advantages that nurture international venturing (Dunning 1981; Filatotchev et al.