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Abstract

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Traffic Safety and Human Behavior
Type: Book
ISBN: 978-1-78635-222-4

Book part
Publication date: 22 September 2009

Witold J. Henisz

This article posits that the effect of political hazards on the choice of market entry mode varies across multinational firms based on the extent to which they face expropriation…

Abstract

This article posits that the effect of political hazards on the choice of market entry mode varies across multinational firms based on the extent to which they face expropriation hazards from their potential joint-venture partners in the host country (the level of contractual hazards). As political hazards increase, the multinational faces an increasing threat of opportunistic expropriation by the government. Partnering with host-country firms that possess a comparative advantage in interactions with the host-country government can safeguard against this hazard. However, as contractual hazards increase, the potential benefit to the joint-venture partner of manipulating the political system for its own benefit at the expense of the multinational increases as well, thereby diminishing the hazard-mitigating benefit of forming a joint venture. A two-stage bivariate probit estimation technique is used to test these hypotheses on a sample of 3,389 overseas manufacturing operations by 461 firms in 112 countries.

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Economic Institutions of Strategy
Type: Book
ISBN: 978-1-84855-487-0

Book part
Publication date: 9 November 2004

Lorraine Eden and Stewart R Miller

The costs of doing business abroad (CDBA) is a well-known concept in the international business literature, measuring the disadvantages or additional costs borne by multinational…

Abstract

The costs of doing business abroad (CDBA) is a well-known concept in the international business literature, measuring the disadvantages or additional costs borne by multinational enterprises (MNEs) that are not borne by local firms in a host country. Recently, international management scholars have introduced a second concept, liability of foreignness (LOF). There is confusion in the two literatures as to the relationship between CBDA and LOF, as evidenced in a recent special issue on liability of foreignness (Journal of International Management, 2002). We argue that LOF stresses the social costs of doing business abroad, whereas CDBA includes both economic and social costs. The social costs arise from the unfamiliarity, relational, and discriminatory hazards that foreign firms face over and above those faced by local firms in the host country. Because the economic costs are well understood and can be anticipated, LOF becomes the core strategic issue for MNE managers. We argue that the key driver behind LOF is the institutional distance (cognitive, normative, and regulatory) between the home and host countries, and explore the ways in which institutional distance can affect LOF. We operationalize our arguments by showing how institutional distance and liability of foreignness can provide an alternative explanation for the MNE’s ownership strategy when going abroad.

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"Theories of the Multinational Enterprise: Diversity, Complexity and Relevance"
Type: Book
ISBN: 978-1-84950-285-6

Book part
Publication date: 18 July 2017

Kala Saravanamuthu

Accounting’s definition of accountability should include attributes of socioenvironmental degradation manufactured by unsustainable technologies. Beck argues that emergent…

Abstract

Accounting’s definition of accountability should include attributes of socioenvironmental degradation manufactured by unsustainable technologies. Beck argues that emergent accounts should reflect the following primary characteristics of technological degradation: complexity, uncertainty, and diffused responsibility. Financial stewardship accounts and probabilistic assessments of risk, which are traditionally employed to allay the public’s fear of uncontrollable technological hazards, cannot reflect these characteristics because they are constructed to perpetuate the status quo by fabricating certainty and security. The process through which safety thresholds are constructed and contested represents the ultimate form of socialized accountability because these thresholds shape how much risk people consent to be exposed to. Beck’s socialized total accountability is suggested as a way forward: It has two dimensions, extended spatiotemporal responsibility and the psychology of decision-making. These dimensions are teased out from the following constructs of Beck’s Risk Society thesis: manufactured risks and hazards, organized irresponsibility, politics of risk, radical individualization and social learning. These dimensions are then used to critically evaluate the capacity of full cost accounting (FCA), and two emergent socialized risk accounts, to integrate the multiple attributes of sustainability. This critique should inform the journey of constructing more representative accounts of technological degradation.

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Parables, Myths and Risks
Type: Book
ISBN: 978-1-78714-534-4

Keywords

Abstract

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Traffic Safety and Human Behavior
Type: Book
ISBN: 978-0-08-045029-2

Book part
Publication date: 20 June 2003

Jennifer VanGilder, John Robst and Solomon Polachek

The purpose of this paper is twofold. First, it assesses motives for intended mobility among academics in institutions of higher education. Second, it investigates gender…

Abstract

The purpose of this paper is twofold. First, it assesses motives for intended mobility among academics in institutions of higher education. Second, it investigates gender differences. Women have twice the intention to leave their institution than men during their first few years, but this difference narrows with seniority. Women report monetary reasons such as salary and promotion opportunities, as well as non-monetary reasons such as spousal employment to motivate their intended mobility. Gender differences across the reasons are minor once one controls for tenure status.

Details

Worker Well-Being and Public Policy
Type: Book
ISBN: 978-1-84950-213-9

Book part
Publication date: 6 September 2010

Shalini P. Vajjhala

Purpose – State and national environmental justice (EJ) programs have expanded in recent years to address new risks and challenges. Several programs including the Environmental…

Abstract

Purpose – State and national environmental justice (EJ) programs have expanded in recent years to address new risks and challenges. Several programs including the Environmental Protection Agency's (EPA) Environmental Justice Small Grants (EJSG) program have helped to facilitate this growth. Since 1994, more than 1,000 small grants have been awarded through the EJSG to support communities in developing solutions to local environmental and public health problems. This chapter evaluates the collective impact of these investments.

Design/methodology/approach – Using Geographic Information Systems (GIS) to map the locations of EJSG funds relative to data from the Toxics Release Inventory (TRI), this chapter addresses two main questions. First, are grants being awarded to the types of communities (low-income, minority areas facing major environmental hazards) intended to be served by the program? Second, have there been any significant environmental changes in EJSG areas since the start of the program?

Findings – Results of county-level spatial analysis reveal that EJ grants are only in part being awarded to minority or low-income counties facing higher than the national average TRI releases and that average toxic releases have increased significantly in EJSG counties in some EPA regions relative to non-EJSG counties.

Originality/value – These results and the novel application of mapping methods to tracking small grants allocations highlight the need for systematic EJ program evaluation and coordination.

Details

Environment and Social Justice: An International Perspective
Type: Book
ISBN: 978-0-85724-183-2

Book part
Publication date: 25 June 2016

Rosanna Pittiglio, Filippo Reganati and Claudia Tedeschi

This chapter aims to investigate to what extent differences in legal systems affect cross-border insolvency. Specifically, it aims to answer the following research questions: What…

Abstract

Purpose

This chapter aims to investigate to what extent differences in legal systems affect cross-border insolvency. Specifically, it aims to answer the following research questions: What is the relationship between multinational status and firm death rates? To what extent can the legal system affect the pattern of firms’ death across countries? How can the cross-border insolvency legal rules produce firms’ death or survival through corporate restructuring and bailout?

Methodology/approach

We apply survival methods and estimate a discrete-time hazard model in which we look for the effect of foreign ownership on firm death, controlling for firm- and industry-specific covariates. In doing this we analyse the determinants of firms’ death and crisis distinguishing Italian foreign-owned firms according to the legal system of the country where they have their ‘centre of main interests’ (COMI).

Findings

Our main findings reveal that Italian firms owned by foreign multinationals are more likely to exit and to be in crisis than national firms. In addition, Italian foreign-owned firms which have their COMI in a Common law country, compared with those having their COMI in a Civil law country, exhibit a lower risk of death and a higher likelihood of surviving the crisis.

Research limitations/implications

This analysis was limited to all Italian firms. Therefore, it might be interesting to verify if there is a sort of country/sectoral heterogeneity in the firms’ behaviour. In addition, the analysis could be extended to the Italian firms investing abroad (i.e. Domestic MNEs).

Originality/value

Overall, our study enriches our understanding of the determinants of foreign-owned firms’ survival in Italy and highlights the important role assumed by the countries’ legal environment. Although the vast majority of legal systems establishes that business crisis management is no longer aimed at repressing and sanctioning, but rather at preserving the entrepreneurial complex, and rescuing and maintaining business activity, we provide some insights into how differences between Common law countries and Civil law countries affect cross-border insolvency.

Details

Dead Firms: Causes and Effects of Cross-border Corporate Insolvency
Type: Book
ISBN: 978-1-78635-313-9

Keywords

Book part
Publication date: 12 June 2023

Raju Chauhan, Sudeep Thakuri and Charles Pradhan

Nepal is exposed to multi-hazard risk and is highly prone to disasters such as earthquake, flood, landslide, and drought. The climate, topography, nature-based livelihood, and…

Abstract

Nepal is exposed to multi-hazard risk and is highly prone to disasters such as earthquake, flood, landslide, and drought. The climate, topography, nature-based livelihood, and weak economy and institutional capability to deal with such disasters put the country at frontline of the highly vulnerable countries in the world. Majority of the population of Nepal live in rural areas which are characterized by poorly developed infrastructures. Several disasters in such areas induce temporarily or permanently displacements of the people. Vulnerable communities, households, and individuals lack the capacity to withstand shocks, while more resilient communities are able to reduce the associated risks. Migration during disasters is itself an adaptive response which is both the opportunity and challenge for developing a resilient community. This chapter presents the trends and patterns of disaster-induced displacements in Nepal and explores how disaster-induced displacements could be an opportunity to build back better to enhance the resilience of the vulnerable communities. This chapter also highlights the existing institutions and disaster management framework of the national policies and strategies at the federal, provincial, and local levels in the light of disaster-induced displacement, and recommend actions that need to be taken to manage the risk of disaster-induced displacements and enhance resilient livelihoods in Nepal.

Details

Disaster, Displacement and Resilient Livelihoods: Perspectives from South Asia
Type: Book
ISBN: 978-1-80455-449-4

Keywords

Book part
Publication date: 27 February 2009

Melanie Cao and Jason Wei

Starting from 2003, Microsoft and many other companies have either gradually reduced or completely replaced stock options with restricted stocks in their compensation plans. This…

Abstract

Starting from 2003, Microsoft and many other companies have either gradually reduced or completely replaced stock options with restricted stocks in their compensation plans. This raises an interesting question: which form of compensation is better, stock or options? This chapter makes an economic comparison between the two compensation vehicles and concludes that stock is preferred to options. The backdrop of the study is dynamic asset allocation within a utility maximization framework whereby the company may go bankrupt. The incorporation of bankruptcy risk into the analysis is motivated by the recent downfalls of companies such as Enron and WorldCom.

We demonstrate that vesting requirements and bankruptcy risk can lead to significant value discounts. When the restricted stock and options have a vesting period of 5 years, and account for 50% of the total wealth, the total discount is more than 60%, out of which 20% is due to bankruptcy risk. More importantly, we find that stock is a better compensation tool than options. For a given dollar amount of grant, the higher the stock proportion, the higher the expected utility. In fact, replacing options by stock can lead to a substantial amount of cost savings for the firm, while maintaining the same level of utility for the employee. For example, when options account for 50% of the total wealth and are subsequently replaced by stock, the granting cost is reduced by about 60%. Our findings therefore provide a theoretical support for the move to stock-only style of performance compensations.

Details

Research in Finance
Type: Book
ISBN: 978-1-84855-447-4

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