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Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

Postal Subscription Code 80-978

Front Econ Chin    2012, Vol. 7 Issue (3) : 434-464    https://doi.org/10.3868/s060-001-012-0019-2
research-article |
A Comparison of Technology Firms in Beijing and Shenzhen
Zhaoming Cui1(), Leonard K. Cheng2(), Lian Zhou3()
1. School of Economics, Shanghai University of Finance and Economics, Shanghai 200433, China; 2. Department of Economics, Hong Kong University of Science and Technology, Hong Kong, China; 3. Guanghua School of Management, Peking University, Beijing 100871, China
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Abstract

Beijing and Shenzhen are both well known for their high-tech industries. This paper compares the financial performance of the two cities’ technology firms and explores the effects of the firms’ operating characteristics and strategy choices on their performance. We find that when comparable samples are used, the firms in Beijing performed better than those in Shenzhen. In addition, for firms both in Beijing and Shenzhen, the ratio of current asset to total asset had a significantly positive effect while both short-term and long-term debt-asset ratios had a significantly negative effect on the performance. The strategy variable sales expenses as a fraction of the cost of goods sold had a significantly positive effect on the performance of firms in Beijing, but the positive effect on firms in Shenzhen was not significant. R&D inputs contributed significantly to the pre-tax profitability of Beijing firms, but had no significant effect whatsoever on Shenzhen firms.

Keywords Chinese technology firms      comparison of performance      operating characteristics     
Corresponding Authors: Zhaoming Cui,Email:cuizhm@gmail.com; Leonard K. Cheng,Email:leonard@ust.hk; Lian Zhou,Email:zhoulapku@gmail.com   
Issue Date: 05 September 2012
 Cite this article:   
Zhaoming Cui,Leonard K. Cheng,Lian Zhou. A Comparison of Technology Firms in Beijing and Shenzhen[J]. Front Econ Chin, 2012, 7(3): 434-464.
 URL:  
http://academic.hep.com.cn/fec/EN/10.3868/s060-001-012-0019-2
http://academic.hep.com.cn/fec/EN/Y2012/V7/I3/434
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