The Strategy and Performance of Hong Kong and Taiwanese Textile and Clothes Firms in China

Market orientation is used to classify Hong Kong and Taiwanese textile and clothes firms in China into two strategic groups: export market-oriented firms and local market-oriented firms. Market orientation reveals significant differences in the strategies of production scale, labor/capital intensity, ownership, location selection, sourcing, and some human resource management, which differentiate these two types of firms. In performance, however, no statistical differences in the growth of sales, sales/investment and profits were found, even though the export market-oriented firms have better control over input-output operations than do the local market-oriented firms. The theoretical and empirical implications of our findings are further discussed.