Prof. Alex Sili Zhou

Journal of International Economics

Prof. Alex Sili Zhou, Associate Professor in the Department of Finance and Business Economics of the Faculty of Business Administration (FBA) of UM and member of the APAEM Asian Economics Team, published an article entitled “Who leads and who follows? The cross-border peer effect in investment by Chinese and US firms” in collaboration with Prof. Warren B. Bailey, Prof. Xiaping Cao, and Prof. Zhenyi Yang, in Journal of International Economics (ABS4).

Paper abstract:

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.

For details: https://doi.org/10.1016/j.jinteco.2023.103875

Source: Faculty of Business Administration, University of Macau.