Search results

Purpose – To analyse the contribution of firm structure (size, clustering and foreign ownership) and strategy (subsector specialization) to the financial performance Return On Assets [ROA] of almost 10,000 European textile-clothing firms.

Methodology/approach – A panel regression analysis is conducted for five European countries that are representative of a Southern European model of clustered Small and Medium Enterprises (SMEs) specialized in low-value-added products (Spain, Italy and Portugal) and of a Northern European model of large vertically integrated firms specialized in high-value-added products (France and Germany) in 2002–2009.

Findings – The Northern European model has generated better financial performance than the Southern European model due to the joint role of its structure (large size) and strategy (specialization). Nevertheless, we find a positive effect of clustering in the Southern European model.

Research limitations – Clusters were defined at the NUTS II level instead of the NUTS III level. The coefficient of specialization was calculated for the pre-liberalization average.

Practical implications – Explaining the different levels of competitiveness shown by the same territorial organizational model in an industry.

Originality/value of the chapter – Work that has studied the behaviour of the firms within this territory-industry relationship is still scarce. Given that the viability of clusters and of European manufacturing have been put into question, our work evidences that the efficacy of the decisions related to the firm's structure and strategy needs to be tested jointly so that the way in which the firm addresses environmental changes can be appraised.

Purpose – The main aim of this chapter is to identify the factors that motivate outward Foreign Direct Investment (FDI) from Turkey to EU countries, looking into the problem at the firm level with a marketing focus, trying to understand whether or not there are any Turkey-specific prevailing marketing-related drivers.

Design/methodology/approach – With a distinction between developed and emerging/developing countries and their MNCs’ role in world trade and FDI, the literature review focuses on micro-view motives, particularly marketing-related ones, rather than macro-view motives which are mostly studied in the literature. Based on the literature review, the importance of Turkish MNCs and their increasing role in the world trade is briefly summarized.

Looking into the problem at the firm level with a marketing focus, a series of in-depth interviews with top executives were conducted as an exploratory study in order to explore and understand the role of marketing-related motives in Outward Foreign Direct Investment (OFDI) decisions of Turkish MNCs. For this purpose, 10 in-depth interviews with 13 top executives were conducted with tailor-made questionnaires.

Findings – The analysis of interviews revealed some different OFDI drivers and motivations for the Turkish MNCs compared to the factors mentioned in the literature, as well as iterating some common motives with the OFDI literature. Parallel to the FDI literature, it is observed that the Turkish MNCs mainly started their internationalization attempts by taking somewhat less risky and smaller steps.

As a result of qualitative research, the support is provided for the theoretical perspective that micro variables are more important than macro variables for Emerging Multinationals (EMNCs), particularly for Turkish MNCs; therefore, some Turkey-specific motives were also identified.

Originality/value of chapter – Although there is a consensus in recent literature on the most persistent group of motives influencing OFDI activities of EMNCs in developed countries, the underlying marketing-related objectives which are crucial to sustain competitive advantage have not been analysed and investigated sufficiently. This study is an attempt to fill this gap by identifying the most persistent marketing-related motives and give important insights about country-specific ones encouraging Turkish EMNCs to carry out OFDI in EU.

Purpose – Researchers rarely touch on the phenomenon of crisis in the relationship itself combined with relationship conflict caused by turbulence in the relationship environment – specifically for emerging markets. The aim of this study is to develop a theoretical view for studying how firms manage business relationships when facing crises caused both by involved parties and by contextual factors.

Design/methodology/approach – Based on a business network perspective, the paper develops a relationship view stressing trust/distrust, commitment/de-commitment and uncertainty/knowledge as central explanatory relationship elements. The paper employs longitudinal case study method and discusses how the relationship between the Swedish firm Ericsson and Telefónica in Argentina for the period of 1998–2004. The process view is composed of three phases: the start-up phase, a phase of crisis and instability and finally a phase of restoration.

Findings/originality – With the assumption of extensiveness in relationship development and high risk in falling from conflict into critical problems in emerging markets, the paper has elaborated new theoretical and empirical thoughts. The study gains further strength from the fact that the number and intensity of crises is increasing because of the escalation in global interdependency. It contributes further knowledge on strategy decisions like exit, wait and see, take the risk and advance affecting the firms’ business relationship.

Purpose – We survey the export propensity of firms during the period of economic recession. Our aim is to complement existing literature, by considering the influence of home-country characteristics (corruption, bureaucracy, current financial situation, competition intensity) as predictors of firms’ export decisions.

Methodology – Combining diverse theoretical perspectives, we argue that firms’ export strategy can be reasonably modelled by integrating elements from the environmental determinism theory and the resource-based view of the firm. Research evidence on the factors impacting on export decisions is based on a sample of 136 (local and foreign) firms operating in Greece. A logistic regression model was run with export propensity being the dependent variable.

Findings – Our results indicate that not only firm-level variables (technological competencies and country of origin) are significant determinants of exporting, but considerable attention should also be placed on specific characteristics of the domestic environment. In particular, bureaucracy and the current financial situation seem to influence the managers’ decision to export.

Originality/value – This paper contributes to the field by highlighting the impact of the domestic factors on export propensity, which have been neglected among the micro-level export studies. Further, we present evidence for export propensity in an ‘intermediate-level’ EU peripheral economy during the current economic era.

Implications – Given that this study is based on a country hard hit by the economic recession, it provides useful implications for managers and policy makers.

Purpose – The main research question of this contribution is whether local market concentration influences R&D and innovation activities of foreign affiliates of transnational companies.

Methodology/approach – We focus on transition economies and use discriminant function analysis to investigate differences in the innovation activity of foreign affiliates operating in concentrated markets, compared to firms operating in nonconcentrated markets. The database consists of the results of a questionnaire administered to a representative sample of foreign affiliates in a selection of five transition economies.

Findings – We find that foreign affiliates in more concentrated markets, when compared to foreign affiliates in less concentrated markets, export more to their own foreign investor's network, do more basic and applied research, use more of the existing technology already incorporated in the products of their own foreign investor's network, do less process innovation, and acquire less knowledge from abroad.

Research limitations/implications – The results may be specific to transition economies only.

Practical implications – The main implications of these results are that host country market concentration stimulates intranetwork knowledge diffusion (with a risk of transfer pricing), while more intense competition stimulates knowledge creation (at least as far as process innovation is concerned) and knowledge absorption from outside the affiliates' own network. Policy makers should focus their support policies on companies in more competitive sectors, as they are more likely to transfer new technologies.

Originality/value – It contributes to the literature on the relationship between market concentration and innovation, based on a unique survey database of foreign affiliates of transnational corporations operating in Eastern Europe.