Who leads and who follows? The cross-border peer effect in investment by Chinese and US firms

• 成果类型: Article
• 署名作者: Bailey, Warren B.; Cao, Xiaping; Yang, Zhenyi; Zhou, Sili
• 署名单位: Cornell University; Fudan University; Hang Seng University of Hong Kong; Guangxi University; University of Macau; University of Macau
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2023.103875
• 发表日期: 2024
• 关键词: Peer effect; US; CHINA; INVESTMENT; WTO

摘要

We document a cross-border peer effect in corporate investment across two key economies, China and the US. Results show that investment by individual Chinese firms lags US peers without feedback in the other direction. This association is stronger for Chinese firms in manufacturing, with innovative US peers, once China joined WTO, or targeted by anti-dumping investigations or measures as reported to the WTO. These findings are robust to diagnostic tests and alternative specifications. Furthermore, Chinese firms respond to domestic competition by learning from US peers. Our findings illustrate how peer competition induced by foreign trade and international institutions affects corporate decision-making in China's rapidly-growing economy.