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This study aims to verify the respective and interactive effects of subnational formal and informal institutions (i.e. legal effectiveness and social trust) on foreign firm performance, and further identify the contingent factor (i.e. institutional experience) that moderates these relationships.

Drawing on the institutional-based view, this study develops several hypotheses that are tested using a comprehensive dataset from four main data sources. The authors’ unit of analysis is foreign firms operating in China. The authors ran ordinary least squares (OLS) regression model to investigate the effects. A series of robustness tests and endogeneity tests were performed.

The results show that both legal effectiveness and social trust at subnational level positively affect foreign firm performance respectively. Legal effectiveness and social trust at subnational level have complementary effect in promoting the performance of foreign firms. Foreign firm's institutional experience in target region of emerging economies host country strengthens the positive impact of subnational legal effectiveness on performance, but weakens the positive impact of subnational social trust on performance.

It is important to fully understand the impact of heterogeneous institutional environments of subnational regions in emerging economies on foreign firm performance, which would help foreign firm make a more suitable secondary choice decision of investment destinations at the subnational regional level.

First, drawing on institutional-based view, the authors incorporate the subnational formal and informal institutional factors to investigate their impacts on foreign firm performance by switching the attention from national level to subnational level in emerging economy host countries. Second, this research furthers existing studies by bridging a missing link between both subnational formal and informal institutional environments and foreign firms' outcomes. Third, the authors prove that the model of subnational formal and informal institutions in influencing foreign firms' performance is contingent on their institutional experience in target subnational region of emerging economy host country.

It is well documented in the extant literature that knowledge plays a crucial role in small and medium enterprise (SME) internationalization. Exporting SMEs from developing economies faces many challenges, including lack of knowledge about institutions in foreign markets, inadequate knowledge about foreign institutions and limited internationalization knowledge (IK). However, research on the export performance of SMEs has thus far focused on the internationalization strategies of multinational corporations. This study aims to explore the effect of foreign market knowledge on SME export performance. The authors also assessed the moderating effect of employee absorptive capacity in the knowledge-performance nexus.

The authors adopted a survey design to collect data from owners/managers of SMEs exporters in the Greater Accra region of Ghana. A total of 350 questionnaires were distributed based on convenience. Of this number, 257 usable responses were used in the final analysis. The authors tested the proposed model using partial least squares-structural equation modeling.

The findings show that the three types of foreign market knowledge tested in this study, namely, foreign institutional knowledge (FIK), foreign business knowledge and IK have positive and significant effects on SME exporters’ performance. It also shows that employees’ absorptive capacity affects the relationship between FIK and SME exporters’ performance.

The study demonstrates the types of knowledge relevant to SME export performance. The study further demonstrates the moderating effect of employee absorptive capacity on the relationship between knowledge and export performance. The study advances existing knowledge on SME performance, especially from an emerging economy context.

The international market entry strategy by acquisition is one of the critical options for success in international business. The decision to acquire a local firm is expected to impact the post-entry financial performance of the local firm as the acquirers come with proprietary advantages to improve the overall performance of the acquired company. The purpose of this paper is to empirically examine the post-acquisition financial performance of acquired foreign subsidiaries and comparable unacquired local firms in Ghana to determine the effect of foreign acquisition on the financial performance of the local subsidiaries.

A quantitative approach was adopted in this study. A sample of 100 locally acquired and non-acquired firms were studied using purposive and convenience sampling method. The research adopted the propensity score matching and the differences in difference methodologies to determine the returns on assets (ROA) of non-acquired local firms and acquired foreign subsidiaries are compared one year pre-acquisition t₁ to two years post-acquisition t₂.

The results demonstrate a higher post-acquisition financial performance of locally acquired foreign subsidiaries in relation to their local counterparts in Ghana. Firms with pre-acquisition modernized ownership structures performed better than state-owned firms and firms with high pre-acquisition absorptive capacity outperformed firms with lower pre-acquisition absorptive capacity. The results also indicate that ROA for acquired local firms in the year of acquisition drops in relation to the year prior to acquisition

A major limitation of this research is that the relative capability of the parent companies and experience in the transfer of knowledge to the acquired local subsidiaries was not considered. The real impact of the various multinationals would have revealed how the capability and competencies of the different parent companies whose subsidiaries this study considered in the paper make a difference in their performance. The study did not also consider the value of parent company participation in the local management of the acquired subsidiaries. Whereas some acquired firms had parent company staff participating in the local management, others did not have same, thus challenging the performance results without any control of this variable. The other limitation of this research is the fact that it did not also consider the experience of the parent company as a factor that can influence the performance of the subsidiary. The more experienced the parent company is in engaging foreign markets, the more likely the support for the subsidiary will result in higher performance as parent company brings previous learnings. Another limitation of this study is that it measures the financials only (ROA) and hence does not provide a 360° assessment of the subsidiary performance, which includes the operational and overall subsidiary effectiveness. This research has not empirically examined all aspects of foreign acquisitions in Ghana and thus has many aspects for future exploration that other researchers may focus on. The paper has not considered the experience and capability of the parent company to transfer technology, innovation and all the advantages of multinationals to the post-acquisition performance of subsidiaries. More experienced multinationals are most likely to transfer knowledge faster to subsidiaries than less experienced ones, thus likely to show better performance post-acquisition than the less experienced ones. The effect of this phenomenon has not been considered in this study. Parent company participation in the local management of the subsidiary can also make a difference in the post-acquisition performance equation but this has not been considered in this research. Some parent companies actively participate in the local subsidiary management as management support for the subsidiary. This might have some effect on the subsidiary post-acquisition performance but this study does consider this. Other researchers may want to look into this factor. Future researchers may also assess the differences in performance of subsidiaries that are wholly owned and partial owned in Ghana. The performance of Greenfield joint ventures and local firm acquisitions can also be studied.

Findings of this research has implications for firms using acquisition as foreign market entry strategy to inform the choice of local partners to select for acquisitions as pre-acquisition ownership structure and absorptive capacity of local Ghanaian firms impact post-acquisitions performance. Ghanaian firms also seeking to attract foreign investments into their businesses will also find the results useful as they organize to meet prospective acquirers’ expectations, for example, building their human capacity and ownership structures, developing export and ensuring debt rations to attract potential acquirers.

Acquisitions as an international market entry strategy continue to gain grounds with lots of research in the area. However, there is scanty research on post-acquisition financial performance, especially in the developing country context, and this paper fills that yawning knowledge gap by comparing acquired and non-acquired local firms in Ghana to determine if foreign acquisitions lead to better ROA.

Although foreign ownership has been widely studied to show its impact on firm performance, the findings are mixed and the underlying rational to explain the impact is not entirely clear. The purpose of this study is to determine if there is a direct relationship between foreign ownership and performance or if this relationship is indirect and affected by mediating and moderating variables such as international diversification and competitive environment.

Financial data, survey data and other financial measures for known indices are used in the research, and SPSS and SEM (Stata 15) analyses are used to test empirically derived hypotheses.

Results from this study indicate that the relationship between foreign ownership and firm performance is mediated by international diversification, such that higher levels of both foreign corporate and foreign institutional ownership lead to higher levels of international diversification, which then lead to higher levels of firm performance. Results from this study also indicate that the competitive environment moderates the relationship between a firm’s level of international diversification and performance, such that the effect of international diversification on performance is greater as the environment becomes more competitive.

This study provides empirical evidence for managers to seriously consider the impact of foreign ownership on decisions involving international diversification, along with competitive environment, when formulating and implementing organizational strategies.

This study extends prior research examining the effects of foreign ownership on firm performance by uniquely showing how international diversification mediates the relationship between foreign ownership and firm performance and how the competitive environment moderates the relationship between international diversification and firm performance.

The purpose of this paper is to examine the relationship between export activity and firm performance for a positive impact of foreign direct investments (FDIs). The authors also analyze two possible causes of the effect: technology transfer and financial support. The theoretical background is rooted in the resource-based approach taking into account multinational companies’ perspective and the specifics of emerging markets.

The authors propose testable hypotheses based on a review of the theory. To test the hypotheses, the authors build a sample of over 500 Russian public manufacturing firms covering the period from 2004 to 2014 and estimate regression models. Given concerns about endogeneity, the instrumental variable approach for panel data, using the GMM-estimator, is implemented.

Consistent with the view that FDIs generate spillover effects, the results support the positive impact of foreign ownership on the link between exports and firms’ performance. The results underline the importance of foreign ownership: shareholders from developed countries can provide benefits to exporting companies through transferring advanced technologies and loosening financial constraints by lowering interest and raising availability of bank loans.

The authors provide new insights on the relationship between exports and firm performance. Given our focus on Russia, a market with high potential to draw foreign investments, the research sheds some light on how emerging country firms can benefit from having foreign shareholders with paying attention to geographical distribution of such investments. Specifically, through the overcoming of technological barriers and loosening of financial constraints, the authors show empirically that foreign capital can make up for weak local institutional infrastructure and enhance the company’s returns from internationalization.

The purpose of this paper is to examine relationship between corporate governance (CG) and firm performance for a set of 255 foreign-funded firms in the form of foreign direct investment (FDI) and private equity (PE). The authors employ a wide range of CG measures including board size, meetings, board gender and foreign ownership which are used as the proxy of globalisation and control variables like firm age, leverage, firm size and capital expenditure to arrive at a conclusion.

Panel data set of 255 (187 companies funded by foreign capital in the form of FDI, and 68 companies having foreign capital in the form PE) companies listed on Bombay Stock Exchange, for the period of eight years (2008–2015) are analysed by using static (fixed and random effects) and dynamic (generalised method of moments (GMM)) panel data specifications to examine the relationship among CG, globalisation and firm performance.

The empirical results of static model indicate the relationship between CG and performance of foreign firms, which are not very strong in India. This is due to the fact that most of the firms are not following the guidelines and regulations strictly in the initial period of sample years. Diversity in board is found as an important variable in accessing firm performance. And the authors also found that foreign firms are very particular about the implementation of CG norms. The results of GMM model highlight the interaction term of foreign ownership with governance indicators. CG is having a positive and significant impact over performance, inferring that higher foreign ownership (in the form of FDI and PE) in firm leading to positive effect on profitability.

The investor’s preference of financing a unit is guided by the performance of a firm. Investors are more inclined towards high-performing firms, and hence higher profitability leads to higher inflow of capital. The result indicates that higher accounting and market performance may be achieved by good governance practices, in turn, leading to reduced agency costs. Countries with high governance scores attract more of foreign capital. Similar to the best governed countries, the companies having good governance practices attract more foreign inflows in the form of capital.

While previous literature considered a single measurement framework in the form of a CG index, the authors tried to incorporate a range of CG indicators to study the effect of globalisation and CG on firm performance. The authors segregated foreign-owned funds into two parts, especially FDI and PE. This paper examined heterogeneity in the form of FDI-funded and PE-funded firms, as no prior literature is available which has evaluated different sets of foreign funds simultaneously on CG.

The purpose of this paper is to examine the role of dynamic marketing capabilities (DMC), foreign ownership modes and sub-national locations on the performance of foreign-owned affiliates (FOAs) in developing economies.

Based on a sample of 254 FOAs in the Indian manufacturing sector (covering the period of 2000-2008 leading to 623 firm-year observations), the empirical paper adopts the panel data regression approach.

The study confirms the significant importance of DMC to assist FOAs to gain better sales performance in an emerging market such as India. The findings indicate that wholly owned foreign affiliates (WOFAs) have better sales performance than international joint ventures (IJVs), and majority-owned international joint ventures (MAIJVs) perform better than minority-owned international joint ventures in the Indian manufacturing sector. The results confirm that effective deployment of DMC leads to better sales performance in WOFAs and to some extent in MAIJVs. Perhaps the most interesting finding is that developing DMC in non-metropolitan areas is associated with higher sales growth than in metropolitan locations.

The study contributes to the literature by examining the impact of DMC on performance of FOA by considering the organised manufacturing sector in a large and fast growing developing economy. In addition, the results for the moderating effects provide novel evidence of the conditions under which DMC of FOA interact with different ownership modes and influence firm performance.

This study examines the impact of two different types of foreign ownership—by Arab and non-Arab investors on firms' financial and social performance. It then goes on to investigate how the degree of board independence affects the aforementioned relationship between these two types of foreign investors on firm performance.

The sample for the study is a panel of all listed firms in the Dubai Financial Market (DFM) and the Abu Dhabi Securities exchange (ADX) from 2008 to 2012.

Results indicate that while Arab foreign ownership affects firms' financial and social performance negatively, non-Arab foreign ownership does so, positively. Further tests indicate that board independence weakens the negative relationship between firm financial and social performance with foreign Arab ownership and deteriorate the relationship between firm financial and social performance and non-Arab foreign ownership.

Future studies may extend the coverage of the study by including other countries in the region and other identities of the foreign investors.

This study may help policy makers in the UAE to improve the implementation and enforcement of existing regulations concerning corporate social responsibility (CSR) and board independence. It also highlights the need to look into the monitoring role of independent board members.

This is the first study to examine the role of board independence on the relationship between foreign ownership and firm's financial and social performance. To the best of our knowledge, this is the first paper that attempts to enrich the understanding of foreign ownership by classifying it into Arab versus non-Arab.

The authors investigate how foreign investment in securities market informs about the future firm performance in emerging markets.

The authors define the independent variable, abnormal foreign investment (AFI) as the residuals of the foreign ownership equation. The authors regress foreign ownership on its first lag and factors and define the residuals as the AFI. The AFI is the over- or under-investment reflecting foreign conscious (clear-purpose) investment, thus better indicating how foreign investment affects firm performance. The dependent variable is Tobin’s q (Q), which represents the firm performance. Then, the authors regress the Tobin’s q next quarters (Qt + k) on the AFI current quarter (AFIt). The authors use a two-step generalized method of moments (GMM) and check endogeneity with the D-GMM model for the regression.

The results show that the current AFI is positively correlated with the firm performance in each of the next four quarters (the following one year). This positive relationship is pronounced for large firms, firms with no large foreign investors, liquid firms and firms listed in the active market. The results suggest that foreign investment might choose well-productive firms already. Also, the current AFI is significantly positively correlated with stock returns in each of the next three quarters. These results suggest that the AFI is informative up to one-year period.

The results suggest that foreign investors (most of them are small) in the Vietnamese market might choose well-productive firms already. However, if the large investors have long-term investment in tangible, intangible, human capital and so on, and lead to a significant increase in firms’ performance is still the limitation of this paper.

The results of this paper may guide investors whose portfolios are composed of stocks with foreign investment.

This paper adds to the literature to enrich the conclusion of a positive relationship between foreign ownership and firm performance.

This study aims to provide firm-level evidence on the relationship between the presence of financial services multinationals and indigenous counterparts’ performance, using a comprehensive sample of firms in the emerging financial industry in Vietnam.

This study uses the generalized method of moments with instrumental variables (IV/GMM) to deal with potential endogeneity problem. Of this technique, a pragmatic approach to constructing instruments is adopted, capitalizing on the geographical and industry segmentation of the local market. The empirical analyses also address statistical issues of the overall model significance, heteroskedasticity and multicollinearity.

The regression results reveal that foreign entrants have a positive and statistically significant association with indigenous firms’ labor productivity and the average wage, with a more pronounced impact on the latter. The increased entry of financial multinationals appears to be uncorrelated with indigenous firms’ profitability. The extended estimations also suggest that investor origin matters in determining spillover magnitude. The average estimate of Asian affiliates in the examined relationship is approximately half that of European affiliates, whereas foreign entrants originating from America show an insignificant role.

This study sheds light on the broader impacts of foreign financial affiliates by simultaneously exploring their impacts on three key dimensions of indigenous firm performance, namely, labor productivity, average wage and profitability. This paper also enriches the existing literature by disentangling the effects of foreign entrants from different regions of origin, which was largely neglected in the context of financial services multinationals.