Backward Linkages of Foreign Subsidiaries in Guangdong, China: A Country- of –Origin Analysis

Multinational companies exercise their impact on the economic development of the host countries and regions through Foreign Direct Investments (FDI). The host countries tap the benefits from these FDIs through the production linkages between the foreign affiliates and domestic firms. This paper attempts to examine with regards to backward linkages of foreign invested enterprise in the province of Guangdong, China. The study shows that the Triad investors have a tendency to source less than the Chinese investors, Hong Kong being the largest. The study draws that local sourcing doesn’t automatically increase overtime. Sourcing from abroad seems rather stable, with approximately half of the inputs being imported.