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In this paper, the authors undertake a comparative study of the performance of local and foreign competitors' manufacturing firms in a FDI-recipient region - Guangdong Province, China - and analyze the policy implications of the comparison for the advanced, FDI-outflow region - Hong Kong Special Administrative Region (HKSAR). By highlighting changes in productivity that vary with changes in manufacturing firm ownership, they reveal that domestic firms have been catching up with their foreign counterparts, including Hong Kong-based firms, though foreign firms have successfully strengthened their dominating position in Guangdong's manufacturing industry.
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