Based on a study conducted in situ of Western-owned manufacturing subsidiaries in the People's Republic of China (PRC), this paper contributes to the understanding of the performance of Chinese state-owned enterprises (SOEs) and private Chinese enterprises (PCEs). It does so by considering Western subsidiary managers' perceptions of their merits as suppliers of components and raw materials. The findings suggest that while SOEs have better engineering and technological capabilities, they are less responsive than PCEs to buying firm demands, and less receptive to buyer involvement in developing supplier capabilities.
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