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Article
Publication date: 7 January 2019

Indrajit Roy and Narayanan K.

This paper aims to analyse the change in performance of parent Indian firms (home effects) who have invested in overseas locations in recent times.

Abstract

Purpose

This paper aims to analyse the change in performance of parent Indian firms (home effects) who have invested in overseas locations in recent times.

Design/methodology/approach

Difference-in-difference (DiD) estimate of home effects using farm level data.

Findings

Home effects of Indian outward foreign direct investment (OFDI), in general, are insignificant. However, in the case of OFDI directed only to non-offshore financial centre (OFC), some firms did enjoy beneficial home effects with respect to turnover, current ratio and leverage ratio. In the case of OFDI directed purely to OFC locations, some of the parameters exhibited negative home effects. In the subsample of Indian OFDI directed to combination of OFC and non-OFC locations, the results show positive home effects with respect to export, operating profit margin and forex earnings; however, impact on turnover seems to be negative for all the quartiles.

Research limitations/implications

Estimation of home effects using data over longer horizon may yield robust outcome.

Practical implications

These results make a strong case to draw a distinction among OFDIs to OFC, non-OFC and combination of OFC and non-OFC locations in studying the beneficial home effects of OFDI.

Originality/value

To the authors’ knowledge, this is the first paper which estimates home effects of different groups of Indian firms (based on their investment locations and size class) using difference-in-difference estimate.

Details

Journal of Asia Business Studies, vol. 13 no. 1
Type: Research Article
ISSN: 1558-7894

Keywords

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Article
Publication date: 5 October 2020

I-Fan Yen and Hsin-Mei Lin

This paper aims to develop an integrated perspective on the relationship between multinationality and performance in the outward foreign direct investment (OFDI) of…

Abstract

Purpose

This paper aims to develop an integrated perspective on the relationship between multinationality and performance in the outward foreign direct investment (OFDI) of Chinese firms. The study not only represents contrasting OFDI patterns – namely, born global-natured multiple synchronous foreign investments versus conventional internationalization process (IP)-natured steady increasing foreign investments – but also contributes to understanding the extent to which explanations of home political influence need to be rooted within the general theory of multinationality.

Design/methodology/approach

By testing a comprehensive panel observation of 8,635 OFDI projects from 1991-2016 in China, this study found that multinationality with the new pattern of multiple synchronous OFDIs has a superior performance effect compared with the conventional pattern of steady increasing OFDIs.

Findings

This study also finds a positive relationship between multinationality (international diversification and home political influence) and the performance effect with the new pattern of multiple synchronous OFDIs, as well as a partial positive relationship between multinationality and the performance effect with the conventional pattern of steady increasing OFDIs.

Research limitations/implications

The study extends the understanding of the performance effects of Chinese multinational enterprises, which may benefit more from the new pattern of multiple synchronous OFDIs than from the conventional pattern of steady increasing OFDIs when the home-country institution is strongly positioned.

Originality/value

This paper concludes that multinationality needs an integrated framework that accounts for the new pattern of OFDI and the influence of diversification and home politics, particularly for the emerging country, China.

Details

Chinese Management Studies, vol. 15 no. 1
Type: Research Article
ISSN: 1750-614X

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Article
Publication date: 7 November 2016

Selim Aren, Sibel Dinç Aydemir and Yasin Şehitoğlu

The purpose of this paper is to evaluate published institutional investor research focused on home bias, disposition effect, and herding behavior in recognized journals…

Abstract

Purpose

The purpose of this paper is to evaluate published institutional investor research focused on home bias, disposition effect, and herding behavior in recognized journals and to ascertain some substantial gaps with regard to them.

Design/methodology/approach

Recently published studies between 2005 and 2014, which intend to examine behavioral biases on institutional investors, have been reviewed through juxtaposing them under the three fundamental titles and figuring them according to the explanation why these biases occurs.

Findings

The research examining home bias has identified the presence of this effect on institutional investors and explained it with information or culture. Yet, the existence of disposition effect has not been found in the extant research. These studies have estimated disposition effect through overconfidence and experience. Also, extant studies have provided evidence of herding behavior, attributing this behavior to pursuing same published information and protecting their reputation and career.

Originality/value

Currently, no study, which reviews and evaluates the empirical research body on behavioral biases displayed institutional investors, exists. To the authors’ knowledge, this is the first paper which highlights the empirical evidence on these bias and summarizes the explanations in these studies for these biases exhibited by institutional investors. This could contribute to the researchers focusing on behavioral biases on institutional investors by providing them with a meaningful figuralization regarding their evidence and explanation.

Details

Kybernetes, vol. 45 no. 10
Type: Research Article
ISSN: 0368-492X

Keywords

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Article
Publication date: 19 September 2019

Angel Barajas, Elena Shakina and Thadeu Gasparetto

The purpose of this paper is to analyse simultaneously the effect of attendance at the stadium on the size of the TV audience, taking into account the effect of price and…

Abstract

Purpose

The purpose of this paper is to analyse simultaneously the effect of attendance at the stadium on the size of the TV audience, taking into account the effect of price and uncertainty of outcome hypothesis on both the TV audience and stadium attendance. The paper assumes that a home-team effect exists and influences potential spectators’ decision to go to the stadium or to stay at home.

Design/methodology/approach

The data set consists of all 228 matches broadcast live and on open air from the Brazilian League across the seasons 2013–2015. The econometric approach of the present paper is based on three simultaneous equations through the Three-Stage Least Square estimator. This method is chosen in order to avoid endogeneity between ticket prices and live attendance and, consequently, with the television audience, too.

Findings

This work finds a correlation between TV audience and attendance at the stadium. However, it has been demonstrated that those matches that are more expensive have a larger TV audience. Scheduling and UO appear to be relevant for TVs and clubs. Scheduling is relevant, as weekend matches have a smaller TV audience but higher attendance at the stadium.

Practical implications

The findings indicate that Brazilian football clubs should find optimal prices for matches in order to maximise both TV audience and attendance.

Originality/value

Analysing simultaneously the effect of attendance at the stadium on the size of the TV audience, taking into account the effect of price on all three of these variables, is new. Another novel aspect is the use of data on audience size to observe a possible substitution effect. The authors also distinguish between home and away matches, assuming that a home-team effect exists and influences potential spectators’ decision to go to the stadium or to stay at home.

Details

Sport, Business and Management: An International Journal, vol. 9 no. 5
Type: Research Article
ISSN: 2042-678X

Keywords

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Article
Publication date: 3 February 2012

Yan Chen, Wen‐Chung Hsu and Chengqi Wang

The purpose of this paper is to examine the effects of outward foreign direct investment (O‐FDI) on the competitiveness of home‐country export.

Abstract

Purpose

The purpose of this paper is to examine the effects of outward foreign direct investment (O‐FDI) on the competitiveness of home‐country export.

Design/methodology/approach

This paper employs a six‐year data set from Taiwanese manufacturing data for 15 industries over the period between 1991 and 2007.

Findings

The authors find that exports in Taiwan are positively associated with O‐FDI by Taiwanese firms. This finding supports the view that outward FDI complements home country exports and concurs with the majority of earlier empirical findings which focus on developed home countries. The authors also find that such effect is stronger for Taiwanese FDI in China than in other countries and in traditional sectors than in modern sectors.

Originality/value

These findings suggest that location‐and industry‐specific characteristics moderate the strength of the relationship between O‐FDI and home country exports.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 5 no. 1
Type: Research Article
ISSN: 1754-4408

Keywords

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Article
Publication date: 26 April 2013

Jae C. Jung and Taewon Suh

This study aims to explore how sub‐dimensions of home country influence multinational enterprise (MNE) ownership strategy in international subsidiaries.

Abstract

Purpose

This study aims to explore how sub‐dimensions of home country influence multinational enterprise (MNE) ownership strategy in international subsidiaries.

Design/methodology/approach

Following a grounded theory approach, the authors interviewed 36 managers of US and Japanese MNEs. Among 36 managers, 21 worked for Japanese firms, 12 for US firms, and three for the US‐Japanese IJVs.

Findings

This study proposes a list of cultural and resource‐based explanations for MNEs' divergent ownership patterns by nationality.

Research limitations/implications

This research focused on two home countries, Japan and the USA. Future studies are required to extend and validate the findings in this study.

Practical implications

By considering sub‐dimensions of home country effect, managers can make a more accurate prediction of the potential partner's willingness to form an IJV.

Social implications

This study suggests that host countries' ownership restriction can make divergent effects on foreign investors by their nationality.

Originality/value

The central contribution of this paper is identifying a set of underlying factors of home country effect and explicating their individual effect on MNE ownership strategy.

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Article
Publication date: 17 July 2017

Fangrong Li and Daniel Ding

This study aims to examine the dual effects of home country institutional forces (i.e. institutional support and institutional constraints) on the internationalization of…

Abstract

Purpose

This study aims to examine the dual effects of home country institutional forces (i.e. institutional support and institutional constraints) on the internationalization of private firms in emerging markets. By doing so, this study aims to examine the applicability of the two seemingly paradoxical views (i.e. the governmental promotion view and the institutional escapism view) in explaining private firms’ internationalization. Further, this study investigates how the effect of the home country institutional environment on firms’ internationalization is contingent upon firm characteristics.

Design/methodology/approach

A sample of Chinese private firms is used to examine the effect of home country institutions on internationalization.

Findings

Empirical findings suggest that both institutional support and institutional constraints promote the internationalization of private firms in emerging markets. Moreover, it is found that firm resources strengthen the effect of government support on internationalization. It is also found that firms’ business ties strengthen the effect of institutional constraint on internationalization, whereas firms’ political ties weaken the effect of institutional constraints on internationalization.

Originality/value

By adopting an integrated and comprehensive investigation of the dual effects of home country institutional environment in emerging markets on internationalization, this study provides evidence to the applicability of the two competing views (i.e. the governmental promotion view and the institutional escapism view) in relation to home country institutional effects on internationalization. In addition, this study examines how institutional effects vary across firms with different resources and social ties, thus extends understandings of the boundary conditions of the two institutional effects.

Details

Multinational Business Review, vol. 25 no. 2
Type: Research Article
ISSN: 1525-383X

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Article
Publication date: 21 June 2011

Wen‐Chung Hsu, Xingbo Gao, Jianhua Zhang and Hsin Mei Lin

The paper aims to examine the effects of outward foreign direct investment (O‐FDI) on home‐country productivity.

Abstract

Purpose

The paper aims to examine the effects of outward foreign direct investment (O‐FDI) on home‐country productivity.

Design/methodology/approach

A panel data set for 15 Taiwanese manufacturing industries over the period between 1991 and 2007 is employed for a model in which productivity is regressed on a measure of O‐FDI.

Findings

The study finds no significant positive or negative effect of O‐FDI on productivity. Breaking down the data by location of the investment, however, we find that O‐FDI in other countries enhances productivity in Taiwan, while O‐FDI in China does not. We interpret the positive role of O‐FDI in other countries as relating to the outcome of strategic asset‐seeking nature of Taiwanese investments in these countries.

Research limitations/implications

In order to analyse the productivity effect of O‐FDI more precisely, one would need to compare the firm outcomes in the presence of multinational production with the outcomes that would have prevailed in the absence of multinational production. Unfortunately, we cannot observe what would have happened to firms that did engage in multinational production had they not done so.

Practical implications

The findings suggest that the Taiwanese Government should distinguish the level of liberalization towards O‐FDI for different locations and in different types of industries. In particular, the government should channel more investment towards export‐oriented industries especially those in “other countries”.

Originality/value

The paper employs a contingency approach, examining the conditions under which O‐FDI impacts upon home productivity.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 4 no. 2
Type: Research Article
ISSN: 1754-4408

Keywords

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Article
Publication date: 25 February 2014

Yoko Moriizumi, Piyush Tiwari and Norifumi Yukutake

– The purpose of this paper is to investigate the housing improvement expenditure as a consumption smoothing strategy for Japanese households.

Abstract

Purpose

The purpose of this paper is to investigate the housing improvement expenditure as a consumption smoothing strategy for Japanese households.

Design/methodology/approach

Tobit estimation method is used to empirically investigate the role of home improvement expenditure in smoothing consumption for households in Japan using data from Japan Housing Demand Survey for 2003.

Findings

Findings suggest that: households in Japan use home improvement expenditure to adjust fluctuation in income. Income-constrained elderly households reduce their housing consumption by not improving their homes ceteris paribus in order to maintain their consumption levels. The mortgage repayment burden also plays an important role in home improvement expenditure decisions.

Research limitations/implications

An implication of the analysis is that households who do not own houses may require policy intervention to maintain their welfare. Policies such as subsidies for renters in Japan need to be devised which will provide renters opportunities to smooth consumption. Further, reduction in home improvement expenditure leads to deterioration of quality of housing stock if economic downturn persists longer. This suggests that policies such as tax reduction, tax allowance or tax credit to bolster home improvement behaviour are needed during economic downturn to sustain quality of housing stock.

Originality/value

The paper contributes to the limited literature on the role of home improvement expenditure as a consumption smoothing instrument for households. Those who do not own houses are constrained in maintaining their welfare during downturn. Findings are important for policy makers and paper makes some suggestions in this regard.

Details

International Journal of Housing Markets and Analysis, vol. 7 no. 1
Type: Research Article
ISSN: 1753-8270

Keywords

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Article
Publication date: 7 September 2018

Jinsil Kim, David H. Weng and Seung-Hyun (Sean) Lee

Drawing on the bribery literature, this paper aims to examine the effect of bribes paid in the home country on firms’ decision to internationalize through exports from…

Abstract

Purpose

Drawing on the bribery literature, this paper aims to examine the effect of bribes paid in the home country on firms’ decision to internationalize through exports from transition economies. It also investigates whether the effect of home country bribery may vary from new ventures to established firms, and from those firms that operate in an environment with high to low informal competition.

Design/methodology/approach

This paper tests several hypotheses using a panel data with fixed effects based on a sample of firms in transition economies from the Business Environment and Enterprise Performance Survey.

Findings

First, home country bribery in transition economies can make domestic markets more lenient and dampen firms’ motivation to seek opportunities abroad. Second, new ventures have a higher motivation to focus on their domestic markets after paying bribes. Finally, despite the benefits accrued in the home country through bribery, firms that face a higher level of informal competition in the home country are more likely to seek opportunities abroad.

Practical implications

Managers in transition economies should consider their home country bribery activities in their evaluation of foreign market opportunities. Firms that use money to influence home country government officials, especially new ventures, are advised to have a more holistic view in evaluating foreign market opportunities so they will not miss out on new opportunities.

Originality/value

This paper advances literature on home country institutions and the research on firm global strategies. Moreover, it also highlights several contingencies that shape the effect of home country bribery on firms’ foreign market focus.

Details

Multinational Business Review, vol. 26 no. 3
Type: Research Article
ISSN: 1525-383X

Keywords

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