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1 – 10 of over 3000Shifang Zhao and Shu Yu
In recent decades, emerging market multinational enterprises (EMNEs) have predominantly adopted a big step internationalization strategy to expand their business overseas. This…
Abstract
Purpose
In recent decades, emerging market multinational enterprises (EMNEs) have predominantly adopted a big step internationalization strategy to expand their business overseas. This study aims to examine the effect of big step internationalization on the speed of subsequent foreign direct investment (FDI) expansion for EMNEs. The authors also investigate the potential boundary conditions.
Design/methodology/approach
The authors use the random effects generalized least squares (GLS) regression following a hierarchical approach to analyze the panel data set conducted by a sample of publicly listed Chinese firms from 2001 to 2012.
Findings
The findings indicate that implementing big step internationalization in the initial stages accelerates the speed of subsequent FDI expansion. Notably, the authors find that this effect is more pronounced for firms that opt for acquisitions as the entry mode in their first big step internationalization and possess a board of directors with strong political connections to their home country’s government. In contrast, the board of director’s international experience negatively moderates this effect.
Practical implications
This study provides insights into our scholarly and practical understanding of EMNEs’ big step internationalization and subsequent FDI expansion speed, which offers important implications for firms’ decision-makers and policymakers.
Originality/value
This study extends the internationalization theory, broadens the international business literature on the consequences of big step internationalization and deepens the theoretical and practical understanding of foreign expansion strategies in EMNEs.
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Samuel Amponsah Odei and Michael Karikari Appiah
This paper aims to empirically examine the factors driving the acquisition of patents and foreign technologies in 2,198 firms spanning multiple industries in Visegrád countries.
Abstract
Purpose
This paper aims to empirically examine the factors driving the acquisition of patents and foreign technologies in 2,198 firms spanning multiple industries in Visegrád countries.
Design/methodology/approach
To fulfil the research objectives, the authors used the binary logistic regression models for the empirical specifications to analyse the various hypotheses to ascertain the factors contributing to patents, foreign technologies and international quality certificate acquisitions in Visegrád countries.
Findings
The results show that technological innovations, in-house and external research and development, intense competition from the informal sector and external knowledge search positively influence firms to acquire patents, foreign technologies and international quality certificates. The study further showed that certain firm characteristics, such as size, having a board of directors, female top managers and top managers’ experience, positively influenced firms’ ability to obtain patents, foreign technologies and international quality certificates.
Originality/value
The authors provide new insights into understanding the factors contributing to international technological linkages in the context of transitional countries such as the Visegrád four group. The authors have shown that international technology linkages through foreign technology licences and international quality certifications are vital for innovations in transition economies.
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Yuxiao Ye, Yiting Han and Baofeng Huo
In this research, we explore the adverse impact of foreign ownership on operational security, a critical operational implication of the liability of foreignness (LOF).
Abstract
Purpose
In this research, we explore the adverse impact of foreign ownership on operational security, a critical operational implication of the liability of foreignness (LOF).
Design/methodology/approach
The empirical analysis is based on a multi-country dataset from the World Bank Enterprises Survey, which contains detailed firm-level information from over 8,902 firms in 82 emerging market countries. We perform a series of robustness checks to further confirm our findings.
Findings
We find that a high ratio of foreign ownership is associated with an increased likelihood of security breaches and higher security costs. Our results also indicate that high levels of host countries’ institutional quality and firms’ local embeddedness can mitigate such vulnerability in operational security.
Originality/value
This study is one of the first to uncover the critical operational implication of the LOF, indicating that a high ratio of foreign ownership exposes firms to operational security challenges.
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Muhammad Jameel Hussain, Dongfang Nie and Adnan Ashraf
Foreign directors from developed nations are significant brain gains for Chinese firms because they improve board competency and board diversity. Therefore, the purpose of this…
Abstract
Purpose
Foreign directors from developed nations are significant brain gains for Chinese firms because they improve board competency and board diversity. Therefore, the purpose of this study is to explore the relationship between foreign directors from developed countries on Chinese listed firms and firms’ green commitment.
Design/methodology/approach
For the empirical analysis, first, this study applies ordinary least square regression and firm fixed model to explore the relationship between foreign directors and green commitment. For the endogeneity concerns, this study first added more control variable in the main model, then applied instrumental variable approach and propensity score matching technique.
Findings
This study predicts and finds that percentage of foreign directors from developed countries on Chinese listed firms’ board positively enhances the firms’ green commitment. Furthermore, this study also finds that the positive relationship between foreign directors and firms’ green commitment is more significant when firms are in a low competitive industry, have no financial constraints and are overseas-listed. This study’s findings are robust after controlling for endogeneity concerns.
Originality/value
This is new research on the impact of foreign directors on corporate green commitment.
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Lian Zhang, Qingtao Wang, Qiyuan Zhang and Kevin Zheng Zhou
Although the prior literature has identified the relevance of dealer participation for multinational enterprises (MNEs), it is unclear whether such participation could also be an…
Abstract
Purpose
Although the prior literature has identified the relevance of dealer participation for multinational enterprises (MNEs), it is unclear whether such participation could also be an important means for local dealers to learn from MNEs. By adopting local firms’ viewpoint, our study draws on organizational learning theory to examine how local dealers benefit from their participation with foreign suppliers in Africa.
Design/methodology/approach
The empirical setting is a combinative dataset of secondary data and primary survey of 164 small- and medium-sized local dealers with nine subsidiaries of a Chinese motorcycle company in six countries of Sub-Saharan Africa.
Findings
This research shows that dealer participation is positively associated with dealer performance, and this positive effect is stronger when local dealers operate in regions with low government corruption and high government support. However, the positive relationship is weaker when local dealers use the local tongue extensively but becomes stronger when their foreign suppliers have a high dealer coverage.
Originality/value
By taking a local-participant perspective, our study extends the participation literature to show how firms from a resource-constrained region may benefit from their proactive participation with foreign counterparts. Additionally, we identify the boundary conditions of institutional factors and strategic choices of local dealers and foreign suppliers, providing a nuanced understanding of firm behaviors in complex and uncertain markets.
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Nadia Albis Salas, Isabel Alvarez and John Cantwell
This paper explains the mechanisms underlying the generation of two-way knowledge spillovers through the interaction of subsidiaries with differentiated local responsibilities and…
Abstract
Purpose
This paper explains the mechanisms underlying the generation of two-way knowledge spillovers through the interaction of subsidiaries with differentiated local responsibilities and domestic firms.
Design/methodology/approach
The study is based on firm-level panel data from a census of Colombian manufacturing firms for the period 2003–2012. The estimation procedure involves two stages. In the first one, total factor productivity (TFP) of foreign and domestic firms is estimated. In a second step, we estimate conventional spillovers (from foreign-owned to local firms) and reverse spillovers (from local to foreign-owned firms) separately, using a random effect approach.
Findings
This study’s findings reveal that only locally creative subsidiaries enjoy positive and significant two-way knowledge spillover effects. The connectivity of subsidiaries to local and international networks is reinforced by reciprocal relationships among actors that enhance bidirectional knowledge flows, these being favored by the dynamics of clustering effects.
Originality/value
The paper contributes with new empirical evidence about the mechanism explaining how the technological heterogeneity of subsidiaries plays a determinant role in the generation of both knowledge flows from foreign to domestic firms and to the reverse, all integrated into the same framework.
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Thi Bich Thuy Dao and Vi Dung Ngo
This study focuses on the relationship between foreign direct investment (FDI) and economic growth of the formal sector comprising all foreign and domestic registered enterprises…
Abstract
Purpose
This study focuses on the relationship between foreign direct investment (FDI) and economic growth of the formal sector comprising all foreign and domestic registered enterprises engaged in production of goods and services.
Design/methodology/approach
This study uses a balanced longitudinal data set for the period from 2006 to 2014 from secondary sources in 63 provinces/cities of Vietnam. The generalized method of moments (GMM) estimation for a dynamic panel data model is applied.
Findings
The greater the share of FDI in capital resource, the more favorable the output growth in the whole formal sector. The FDI enterprises are more productive than domestic formal firms, and the output growth of FDI firms creates a positive spillover effect on the output growth of domestic firms.
Originality/value
The effect of FDI on economic growth is investigated at subnational level for the whole formal economic sector as well as the formal domestic firms. The domestic and foreign industrial agglomerations and the business environment are also examined.
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Applying the concept of “entrepreneur managers” from dynamic capabilities theory to the question of how some Japanese managers develop and use their relationships with foreign…
Abstract
Purpose
Applying the concept of “entrepreneur managers” from dynamic capabilities theory to the question of how some Japanese managers develop and use their relationships with foreign investors, this article explores organizational contexts in which Japanese managers use foreign shareholders as resources to enhance firm capabilities in the global marketplace, deploy assets effectively and implement changes to traditional organizational customs. The article asks why and how some top managers implemented institutional changes and adopted customs that are common in the shareholder-based system while others did not.
Design/methodology/approach
We conducted qualitative interviews with 11 inverstor relations (IR) managers of large, listed Japanese firms in Kyoto and Tokyo.
Findings
First, by inviting a hedge fund partner and using their human capital and social capital, a Japanese CEO committed to strengthening his firm’s competencies in the global market and introduced changes that are common in the shareholder-based system. Second, a CEO with an MBA degree and exceptional communication skills in English and Japanese dedicated himself to executing much of the strategic advice suggested to him by foreign shareholders and altered some of his firm’s traditional Japanese management practices. Third, even though many Japanese firms welcomed and used foreign shareholders as advisors to help them streamline and/or acquire firm assets, their top leaders’ implementation of organizational changes was limited. Fourth, the top leaders of family-owned firms were reluctant to initiate dialogue with foreign investors.
Originality/value
This article adds some useful organizational context to existing scholarship on institutional theory by examining Japanese leaders’ strategic management in their relations with foreign investors. Using the concept of dynamic capabilities, it addresses the role of innovative strategic managers in firms’ institutional changes.
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Da Teng, Moustafa Salman Haj Youssef and Chengchun Li
This paper builds upon managerial discretion literature to study the relationship between foreign ownership and bribery intensity.
Abstract
Purpose
This paper builds upon managerial discretion literature to study the relationship between foreign ownership and bribery intensity.
Design/methodology/approach
Building on World Bank’s data of 9,386 firms from 125 countries over the period 2006–2018, this paper uses Tobit regression, ordered probit and logit models to empirically test the hypotheses.
Findings
This paper finds that firms have higher bribery intensity when executives have a higher level of managerial discretion. Smaller firms with slack financial resources tend to bribe more when they face more government intervention, munificent and uncertain industrial environment.
Originality/value
Extant corruption literature has addressed the effects of external institutional settings and internal corporate governance on bribery offering among multinational enterprises (MNEs). How much, and under what condition do top executives matter in bribery activities are yet to be answered. This paper integrates the concept of managerial discretion with corruption and bribery literature and offers a potential answer to the above question. In addition, prior corruption and bribery literature have primarily studied bribery through either micro- or macro-level analysis. This paper adopts multiple-level of analyses and elucidates the foreign ownership and bribery relationship from the organizational and industrial levels.
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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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