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1 – 10 of over 6000The purpose of this paper is to examine and explain the complex interrelationships which influence the performance of politically connected firms to create value for their…
Abstract
Purpose
The purpose of this paper is to examine and explain the complex interrelationships which influence the performance of politically connected firms to create value for their providers of finance and other stakeholders. In doing so, it examines the interrelationships between efficiency and delivering on corporate performance of a firm with political ties.
Design/methodology/approach
The authors gathered the literature from the Scopus website. They reviewed the literature of 58 manuscripts about the efficiency and performance of politically connected firms.
Findings
The research finds that the better quality of efficiency of politically connected firms is positively related to the corporate performance of politically connected firms. The authors’ theoretical findings corroborate the political theory, agency theory, stakeholder theory, resource dependency theory and stewardship theory. These theories prove that political connections have an impact on firm performance as a politician reinforces the efficacy. To better understand the effect of political connections on solid performance due to efficiency, this study classifies various efficiencies and links them with political ties.
Research limitations/implications
Several avenues of research are suggested to examine further the interrelationships identified.
Practical implications
The authors’ conceptual findings are valuable for institutional investors, policymakers and stakeholders. To sum up, all theoretical shreds of evidence prove that politically connected firms can enhance performance via efficiency.
Originality/value
The paper conceptualizes the efficiency and performance interrelationships of politically connected firms. The extant literature comparison allows an assessment of the extent to which different efficiency contexts lead to differences in performance.
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Matthew Davis, Thomas Taro Lennerfors and Daniel Tolstoy
The purpose of the study is to explore, with anchorage in theories about the normalization of corruption, under what conditions blockchain technology can mitigate corruptive…
Abstract
Purpose
The purpose of the study is to explore, with anchorage in theories about the normalization of corruption, under what conditions blockchain technology can mitigate corruptive practices of multinational enterprises (MNEs) in emerging markets (EMs).
Design/methodology/approach
By synthesizing a technological perspective and theory on corruption, the authors examine the feasibility of blockchain for fighting corruption in MNEs’ business operations in EMs.
Findings
Blockchain technology is theorized to have varying mitigating effects on the rationalization, socialization and institutionalization of corruption. The authors provide propositions describing the effects and the limitations of blockchain for mitigating corruption in EMs.
Social implications
This paper offers a perspective for how to tackle acute business problems and social problems pronounced in international business but also prevailing elsewhere.
Originality/value
The study contributes to literature in international management by systematically exploring how and under what conditions blockchain can mitigate the normalization of corruption.
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This paper aims to determine the essential “collective goods” which a foreign multinational enterprise (MNE) must have before production can start in a remote area of an emerging…
Abstract
Purpose
This paper aims to determine the essential “collective goods” which a foreign multinational enterprise (MNE) must have before production can start in a remote area of an emerging economy, and to consider the alternative governance modes available to procure or create these goods.
Design/methodology/approach
This purpose is examined conceptually and theoretically. First, the concept of “collective goods” is presented, followed by a consideration of the traditional “buy, ally or make” contractual approaches available to obtain goods and services. These approaches are repositioned in the context of an “emerging economy” so that alternative “ordering systems” as well as “non-contractual” means of obtaining things have to be considered in the context of internalization and reciprocity theories.
Findings
It is difficult to obtain collective goods in remote areas of emerging economies where private ordering prevails and even succeeds but at high transaction costs and with substantial government intervention. However, the use of non-contractual modes of exchange such as reciprocity is available to facilitate exchanges between market MNEs and nonmarket state offices and civil-society associations such as non-governmental organizations with which collaboration is necessary but which cannot be acquired or controlled by MNEs. However, market firms can use philanthropy and lobbying to obtain the help of these nonmarket actors who know how to operate under private and state-ordering systems.
Research limitations/implications
Theoretical implications: Internalization theory explains why MNEs are able to obtain collective goods by providing them “in-house”, while reciprocity theory exemplifies how non-contractual modes of exchange can substitute for the traditional but contractual “buy, ally and/or make”.
Practical implications
Managerial implications: In terms of the organizational structure of the subsidiary of an MNE operating in an emerging economy, it appears that the line functions of procurement, engineering and production may rely more on contractual exchanges with foreign suppliers, while the staff functions of public affairs, government relations and human resources may be more adept at using reciprocal exchange with local suppliers.
Originality/value
The provisioning of the collective goods when a firm builds its facilities in a remote and underdeveloped part of an emerging economy has hardly received any research attention nor have the non-contractual ways – such as reciprocity – available in the context of private ordering to obtain these goods.
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Zheyao Pan, Guangli Zhang and Huixuan Zhang
The aim of this study is to investigate the impact of local political uncertainty on the asymmetric cost behavior (i.e. cost stickiness) for listed firms in China.
Abstract
Purpose
The aim of this study is to investigate the impact of local political uncertainty on the asymmetric cost behavior (i.e. cost stickiness) for listed firms in China.
Design/methodology/approach
In this study, the authors manually collect the turnover data of prefecture-city officials as a measure of exogenous fluctuations in political uncertainty and obtain firm-level financial information from the China Stock Market Accounting Research (CSMAR) database. To perform the analysis, the authors augment the traditional cost stickiness model by including the interaction terms of the prefecture-city official turnover, and firm-level and prefecture-city level control variables.
Findings
The authors find that political turnover leads to a higher degree of cost stickiness, implying that firms retain slack resources when political uncertainty is high. Moreover, the effect of political turnover on cost stickiness is more pronounced for firms residing in regions with weaker institutional environments, and firms that are privately owned and with smaller size. The authors further provide evidence that policy uncertainty and the threat of losing political connection are two underlying channels. Overall, this study documents that the local political process is an important channel that influences corporate operational decisions.
Originality/value
This study provides the first piece of evidence on the relation between political uncertainty and cost stickiness at the local government level. Moreover, the authors propose and demonstrate two underlying channels through which political uncertainty affects firms' asymmetric cost behavior.
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Jasper Hotho and Verena Girschik
The purpose of this paper is to open up new lines of research into the engagement of corporations during humanitarian crises. The paper provides an introduction to core concepts…
Abstract
Purpose
The purpose of this paper is to open up new lines of research into the engagement of corporations during humanitarian crises. The paper provides an introduction to core concepts in the delivery of humanitarian assistance, as well as a comprehensive overview of when, why, how, and to what effect corporations engage in humanitarian action.
Design/methodology/approach
Building on extant literature and policy reports, the paper synthesizes concepts and insights to map the interdisciplinary field of research on corporate engagement in humanitarian action.
Findings
The paper systematically reviews and describes different dimensions of corporate engagement for delivering humanitarian action and explains key complications that inspire new research questions. In particular, the paper highlights challenges associated with getting corporations to engage in humanitarian action; challenges associated with ensuring effective corporate engagement; and challenges associated with ensuring ethical engagement.
Originality/value
By raising new questions about corporate engagement in humanitarian action, this paper develops an original and positive research agenda for international business, management research, and related fields.
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Sara Melén Hånell, Daniel Tolstoy and Veronika Tarnovskaya
The increasing pressure for social responsibility and sustainability that multinational enterprises (MNEs) are facing in their global operations represents one important emerging…
Abstract
The increasing pressure for social responsibility and sustainability that multinational enterprises (MNEs) are facing in their global operations represents one important emerging phenomenon within the international business field. In this book chapter, we present an in-depth case study on how a global fashion MNE develops and implements sustainability practices in their operations in an emerging market context. The case study focusses on the MNE’s work related to energy efficiency and renewable energy in the production market of Bangladesh. The purpose of this chapter is to advance the understanding about particular practices pertinent to a proactive approach to corporate social responsibility (CSR). The chapter contributes to ongoing discussions within the international business field on the role of MNEs in driving and implementing sustainability practices. We add an in-depth understanding of the proactive CSR practices undertaken by an MNE, in an emerging market context.
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Dicky Hadi Pratama and Sophia Everett
Discussion of security in supply chains has been intensified since the tragedy of 9/11 in the United States. The World Customs Organization's SAFE Framework with its Authorized…
Abstract
Discussion of security in supply chains has been intensified since the tragedy of 9/11 in the United States. The World Customs Organization's SAFE Framework with its Authorized Economic Operators (AEO) program is one of the prominent supply chain security initiatives. At the time of its introduction in 2005, 168 member countries signed their support for its implementation. However, the last AEO Compendium reports only 69 countries currently have AEO program in place. This relatively slow development indicates the complexity of issues that might challenge countries to implement the initiative. Against this background, this paper aims to look at the AEO implementation in an environment where supply chain security initiative is relatively new. It focuses on policy development perspectives where the case study of Indonesia might represent challenges of other countries. Involving methods of desk research, interviews, and field observation, this paper starts with the development of various international supply chain security programs where the AEO finds it prominence. It follows with a discussion on the Indonesian AEO implementation where challenges and its policy development process are explored.
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Andreia Borges and Nelson Ramalho
There are no management decisions deprived of ethical or political consequences. Political corporate social responsibility (CSR) has been highlighting this assertion but research…
Abstract
Purpose
There are no management decisions deprived of ethical or political consequences. Political corporate social responsibility (CSR) has been highlighting this assertion but research at the microlevel on this topic is scarce. This study aims to contribute to the microlevel research by proposing a behavioral framework where leaders’ political skills are determinants of engagement in strategic CSR and perceived CSR leverages their ascribed legitimacy to perform a political role outside the boundaries of the organizations.
Design/methodology/approach
Building upon political CSR and critical realism theories, this study offers a general review on key political CSR microlevel concepts and examines multiple dimensions of CSR to explain the indirect effect between boards' political skills and political legitimacy.
Findings
This research suggests that high politically skilled leaders are associated to more CSR adoption which fosters higher legitimacy to act as political influencers. Among these, CSR activities directed toward community members and employees are seemingly the most successful from a political standpoint.
Originality/value
This study proposes a contemporary form of political influence to business leaders that, in contrast with other strategies such as lobbying or financing political campaigns, does not end up damaging corporate image and reputation. Also, this study proposes that not all CSR activities leverage corporate political legitimacy per se, therefore they do need to be differentiated. This study then offers a comprehensive future research agenda, including detailed suggestions for research designs and measurements.
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