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1 – 10 of 22Sihan Jiang, Wenbo Teng, Yuanyuan Huang and Xiao Zhang
Given the great upheaval in the international situation and the increasing operating risk in international business, research on corporate diplomacy is thriving. However, it still…
Abstract
Purpose
Given the great upheaval in the international situation and the increasing operating risk in international business, research on corporate diplomacy is thriving. However, it still lacks clear conceptualization and operationalization. Based on social capital theory, our study conceptualizes corporate diplomacy as a three-dimensional construct and quantifies its distinct and combined impacts on multinational enterprises’ (MNE) subsidiary performance.
Design/methodology/approach
This research analyzes 134 responses collected from a questionnaire survey among key informants in Chinese MNEs using the regression method.
Findings
This research finds that corporate diplomacy is positively correlated with MNEs’ subsidiary performance. Specifically, compatriot-oriented diplomacy is the most effective, followed sequentially by host-partner-oriented and host-regulator-oriented diplomacy. In addition, compatriot-oriented diplomacy substitutes for host-partner-oriented diplomacy but complements host-regulator-oriented diplomacy in enhancing subsidiary performance.
Originality/value
Our research enriches the conceptualization and operationalization of corporate diplomacy and provides a nuanced view of its distinct and combined effects on MNEs’ subsidiary performance.
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Nikhil Kumar Kanodia, Dipti Ranjan Mohapatra and Pratap Ranjan Jena
Economic literature highlights both positive and negative impact of FDI on economic growth. The purpose of this study is to confirm the relationship between various economic…
Abstract
Purpose
Economic literature highlights both positive and negative impact of FDI on economic growth. The purpose of this study is to confirm the relationship between various economic factors and FDI equity inflows and find out deviations, if any. This is investigated using standard time-series econometric models. The long and short run relationship is inquired with respect to market size, inflation rate, level of infrastructure, domestic investment and openness to trade. The choice of variables for Indian economy is purely based on empirical observations obtained from scientific literature review.
Design/methodology/approach
The study involves application of autoregressive distributive lag (ARDL) model to investigate the relationship. The long run co-integration between FDI and economic growth is tested by Pesaran ARDL model. The stationarity of data is tested by augmented Dickey Fuller test and Phillip–Perron unit root test. Error correction model is applied to study the short run relationship using Johansen’s vector error correction model method besides other tests.
Findings
The results show that the domestic investment, inflation rate, level of infrastructure and trade openness influence inward FDI flows. These factors have both long and short-term relationship with FDI inflows. However, market size is insignificant in influencing the foreign investments inflows. There lies an inverse relation between FDI and inflation rate.
Originality/value
To the best of the authors’ knowledge, the study is original. The methodology and interpretation of results are distinct and different from other similar studies.
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Why is it that, despite repeated claims that digital-content firms and internet-based businesses can internationalize everywhere almost instantly, many seem unable to profitably…
Abstract
Why is it that, despite repeated claims that digital-content firms and internet-based businesses can internationalize everywhere almost instantly, many seem unable to profitably expand outside their home markets? Why have emerging market firms (EMNEs) caught up with established developed-country multinationals (DMNEs) so much faster than expected? In this chapter, the author argues that the clue to these two puzzles lies in the realization that, contrary to the dominant view in the international business (IB) literature that focuses only on the intangibles exploited by DMNEs and assumes that these firms are free to unilaterally decide on their mode of entry and operation, doing business in a foreign country is only possible if intangibles are bundled with complementary local resources, usually held by local firms. Taking into account these complementary local resources and their owners makes it clear that DMNEs are not always free to choose their entry mode but must enlist the cooperation of local resource owners. The need of digital-content and internet-based firms for local complementary resources also explains why they sometimes experience problems when expanding abroad. Lastly, control of complementary local resources provides EMNEs with a home advantage against DMNEs competing with them in their home market. The author shows how EMNEs can capitalize on this advantage to obtain the intangibles they lack and need. The fact that these advantages are available on efficient global markets, while complementary local resources are not, explains the surprising speed of EMNE catch-up.
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Debolina Saha and Somaiya Begum
Climate change is a bitter truth for the entire humanity, and it vehemently calls for thoughtful means for environmental protection along with sustainable economic growth…
Abstract
Climate change is a bitter truth for the entire humanity, and it vehemently calls for thoughtful means for environmental protection along with sustainable economic growth. International trade blocs fundamentally represent amalgamation of countries to achieve unified goals like higher living standards, reduced trade barriers, freer labour mobility across member states, social and cultural upliftment, political allegiance to regional association, etc. Throughout the 1990s, these trade blocs have committed to reducing environmental pressures and shifting towards cleaner forms of energy. This chapter examines the relationship between rate of change in carbon dioxide (CO2) emissions per capita and rate of change in per capita gross domestic product (GDP) in linear, quadratic and cubic polynomial forms with the other control variables like inflow of foreign direct investment (FDI), export of goods and services, population density, urban population percentage and location dummies for the 66 countries falling in seven regional trade blocs. Other than the European Union and North American Free Trade Agreement (NAFTA), the remaining five trade blocs in the study – Association of South-East Nations (ASEAN), South Asian Association for Regional Cooperation (SAARC), Common Market for Eastern and South Africa (COMESA), Mercado Común del Sur (MERCOSUR) and Commonwealth of Independent States (CIS) – contain mostly the developing and some of the fastest growing economies of the world. The panel regression result finds an inverse relationship between rate of change in per capita CO2 emissions and rate of change in GDP per capita (in linear and cubic polynomial forms), exports and population density, while the other coefficients of the explanatory variables are positive. The study also establishes an Environmental Kuznets Curve (EKC) which is opposite to N-shape during 2005–2019, and that contradicts with the original EKC of inverted U-shaped. However, this shape admits the collective efforts of region-specific trade blocs towards achieving clean environment which is one of the important global goals.
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Mohammad B. Rana and Matthew M. C. Allen
The changing roles of the United Nations (UN) and national institutions have made addressing climate change a critical concern for many multinational enterprises’ (MNEs) survival…
Abstract
The changing roles of the United Nations (UN) and national institutions have made addressing climate change a critical concern for many multinational enterprises’ (MNEs) survival and growth. This chapter discusses how such institutions, which vary in their nature and characteristics, shape firm strategies for climate change adaptation. Exploring different versions of institutional theory, the chapter demonstrates how and why institutional characteristics affect typical patterns of firm ownership, governance, and capabilities. These, in turn, influence companies’ internationalisation and climate-change strategies. Climate change poses challenges to how we understand firms’ strategic decisions from both an international business (IB) (HQ–subsidiary relations) and global value chains (GVC) (buyer–supplier relations) perspective. However, climate change also provides opportunities for companies to gain competitive advantages – if firms can reconfigure and adapt faster than their competitors. Existing IB and GVC research tends to downplay the importance of climate change strategies and the ways in which coherent or dysfunctional institutions affect firms’ reconfiguration and adaptation strategies in a globally dispersed network of value creation. This chapter presents a perspective on the institutional conditions that affect firms’ climate change strategies regarding ownership, location, and internalisation (OLI), and GVCs, with ‘investment’ and ‘emerging standards’ playing a significant role. The authors illustrate the discussion using several examples from the Global South (i.e. Bangladesh) and the Global North (i.e. Denmark, Sweden, and Germany) with a special emphasis on the garment industry. The aim is to encourage future research to examine how a ‘business systems’, or varieties of capitalism, institutional perspective can complement the analysis of sustainability and climate change strategies in IB and GVC studies.
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This chapter analyzes the efficiency levels of a circular economy (CE) with an emphasis on transaction costs. It examines the governance aspect of CE activities in comparison to…
Abstract
This chapter analyzes the efficiency levels of a circular economy (CE) with an emphasis on transaction costs. It examines the governance aspect of CE activities in comparison to the predominant linear value creation. Extant CE research in business studies tends to be descriptive and lacks a theoretical foundation, particularly in understanding CE management. Transaction cost theory explains efficiency in economic organizing, lending itself to the study of arrangements that maximize resource efficiency at continued economic virtue. The conceptualization proposes that CE transaction costs are greater than those within the linear economy (LE), primarily due to the uncertainties about reciprocal dependencies, looping material complexities, exchanging novel information, and increased contracting efforts. Geographically bounded and institutionally homogeneous CE initiatives may curb these rising costs. By bringing efficiency concerns into CE analysis, the chapter demonstrates the applicability of transaction cost theory and highlights CE relevance to international business by pointing out spatial choice implications.
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Irina Alexandra Georgescu, Simona Vasilica Oprea and Adela Bâra
In this paper, we aim to provide an extensive analysis to understand how various factors influence electricity prices in competitive markets, focusing on the day-ahead electricity…
Abstract
Purpose
In this paper, we aim to provide an extensive analysis to understand how various factors influence electricity prices in competitive markets, focusing on the day-ahead electricity market in Romania.
Design/methodology/approach
Our study period began in January 2019, before the COVID-19 pandemic, and continued for several months after the onset of the war in Ukraine. During this time, we also consider other challenges like reduced market competitiveness, droughts and water scarcity. Our initial dataset comprises diverse variables: prices of essential energy sources (like gas and oil), Danube River water levels (indicating hydrological conditions), economic indicators (such as inflation and interest rates), total energy consumption and production in Romania and a breakdown of energy generation by source (coal, gas, hydro, oil, nuclear and renewable energy sources) from various data sources. Additionally, we included carbon certificate prices and data on electricity import, export and other related variables. This dataset was collected via application programming interface (API) and web scraping, and then synchronized by date and hour.
Findings
We discover that the competitiveness significantly affected electricity prices in Romania. Furthermore, our study of electricity price trends and their determinants revealed indicators of economic health in 2019 and 2020. However, from 2021 onwards, signs of a potential economic crisis began to emerge, characterized by changes in the normal relationships between prices and quantities, among other factors. Thus, our analysis suggests that electricity prices could serve as a predictive index for economic crises. Overall, the Granger causality findings from 2019 to 2022 offer valuable insights into the factors driving energy market dynamics in Romania, highlighting the importance of economic policies, fuel costs and environmental regulations in shaping these dynamics.
Originality/value
We combine principal component analysis (PCA) to reduce the dataset’s dimensionality. Following this, we use continuous wavelet transform (CWT) to explore frequency-domain relationships between electricity price and quantity in the day-ahead market (DAM) and the components derived from PCA. Our research also delves into the competitiveness level in the DAM from January 2019 to August 2022, analyzing the Herfindahl-Hirschman index (HHI).
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Christopher Richardson and Morris John Foster
The data for this case were obtained primarily through a series of in-person interviews in Penang between the authors and Pete Browning (a pseudonym) from 2017 to early 2019. The…
Abstract
Research methodology
The data for this case were obtained primarily through a series of in-person interviews in Penang between the authors and Pete Browning (a pseudonym) from 2017 to early 2019. The authors also consulted secondary data sources, including publicly available material on BMax and “Company B”.
Case overview/synopsis
This case examines a key decision, or set of decisions, in the life of a small- to medium-sized management consultancy group, namely, whether they might expand their operations in Southeast Asia, and if so, where. These key decisions came in the wake of their having already established a very modest scale presence there, with an operating base on the island of Penang just off the north western coast of Peninsular Malaysia. The initial establishment of a Southeast Asian branch had been somewhat spontaneous in nature – a former colleague of one of the two managing partners in the USA was on the ground in Malaysia and available: he became the local partner in the firm. But the firm had now been eyeing expansion within the region, with three markets under particular consideration (Singapore, Indonesia and Thailand) and a further two (Vietnam and China) also seen as possible targets, though at a more peripheral level. The questions facing the decision makers were “was it time they expand beyond Malaysia?” and “if so, where?”
Complexity academic level
This case could be used effectively in undergraduate courses in international business. The key concepts on which the case focuses are the factors affecting market entry, particularly the choice of market and the assessment of potential attractiveness such markets offer.
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Yongzhi Du, Yi Xiang and Hongfei Ruan
The purpose of this study is to examine how the childhood trauma experiences of CEOs influence firms’ internationalization.
Abstract
Purpose
The purpose of this study is to examine how the childhood trauma experiences of CEOs influence firms’ internationalization.
Design/methodology/approach
The research used a difference-in-difference method with constructing a treatment group whose chief executive officer (CEO) experienced the great famine in China between the ages of 7 and 11, and a control group whose CEO was born within three years after 1961.
Findings
The study reveals a significant inverse correlation between CEOs’ childhood trauma experiences and firm internationalization. However, this correlation is weaker in the case of state-owned enterprises and firms led by CEOs with overseas work experience.
Originality/value
To the best of the authors’ knowledge, this study is the first to extend the theoretical framework to elucidate firms’ internationalization by introducing childhood trauma theory into the field of international business literature. Second, the authors link the literature on the effect of CEO explicit traits and psychological traits on firm internationalization by exploring how CEOs’ childhood trauma experience shapes their risk aversion, which, in turn, influences firm internationalization. Third, the authors address the call for examining the interplay of CEO life experiences by scrutinizing the moderating effect of CEO overseas work experience on the association between CEOs’ childhood trauma exposure and firm internationalization.
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By using a wide range of macro and micro factors, this paper aims to provide a new assessment of the recent literature on inbound tourism demand models.
Abstract
Purpose
By using a wide range of macro and micro factors, this paper aims to provide a new assessment of the recent literature on inbound tourism demand models.
Design/methodology/approach
This study examines the determinants and spatial effects of inbound tourism using Hausman–Taylor and spatial econometric models.
Findings
Several important factors were identified, including local economic growth, openness to the outside world, regional size, geographic distance, foreign direct investment, level of innovation and average annual temperature. In addition, the study found strong cross-city competition effects on tourism resource endowment and hotel infrastructure.
Originality/value
Inbound tourism is a crucial link in achieving high-quality economic development. However, previous studies have mainly focused on the analysis of single influencing factors, ignoring the spatial spillover effects of factors.
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