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1 – 10 of over 5000Tao (Tony) Gao and Talin E. Sarraf
This paper explores the major factors influencing multinational companies’ (MNCs) propensity to change the level of resource commitments during financial crises in emerging…
Abstract
This paper explores the major factors influencing multinational companies’ (MNCs) propensity to change the level of resource commitments during financial crises in emerging markets. Favorable changes in the host government policies, market demand, firm strategy, and infrastructural conditions are hypothesized to influence the MNCs’ decision to increase resource commitments during a crisis. The hypotheses are tested with data collected in a survey of 82 MNCs during the recent Argentine financial crisis (late 2002). While all the above variables are considered by the respondents as generally important reasons for increasing resource commitments during a crisis, only favorable changes in government policies significantly influence MNCs’ decisions to change the level of resource commitments during the Argentine financial crisis. The research, managerial implications, and policy‐making implications are discussed.
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The purpose of this paper is to investigate the performance implications of internationalization strategies for Chinese multinational corporations (MNCs). Specifically, the…
Abstract
Purpose
The purpose of this paper is to investigate the performance implications of internationalization strategies for Chinese multinational corporations (MNCs). Specifically, the authors examine the individual and joint effects of speed of internationalization in developed and developing countries and age on Chinese MNCs’ performance.
Design/methodology/approach
The authors constructed a unique and comprehensive database on the internationalization strategies of 206 Chinese firms over 14 years and deployed random-effect regressions to assess the effects of age, speed of expansion in terms of number of subsidiaries and countries, and the types of destination (developed vs developing country) on firm performance.
Findings
The analyses show that age is negatively related to performance but rapid expansion of subsidiaries in developing countries and geographic scope in developed countries are positively related to performance. In addition, the impacts of young age and two types of expansion, fast expansion of subsidiaries in developing countries and fast expansion of geographic scope in developed countries, are cumulative.
Originality/value
The authors combine the arguments of the learning advantages of newness and fast movers and model the simultaneous effects of age and speed of two types of international expansion (in terms of number of subsidiaries and countries) in both developed and developing countries on performance. The strong empirical support for the hypotheses based on analyses of a unique data set of Chinese MNCs’ internationalization patterns lends credence to the proposed model.
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Zaheer Khan, Yong Kyu Lew and Byung Il Park
The purpose of this corporate social responsibility (CSR) paper is to investigate specific social roles of multinational corporations (MNCs) in a developing economy, and how these…
Abstract
Purpose
The purpose of this corporate social responsibility (CSR) paper is to investigate specific social roles of multinational corporations (MNCs) in a developing economy, and how these MNCs’ CSR marketing activities are legitimized, from the institutional perspective.
Design/methodology/approach
Anchoring this study in institutional theory, the authors explore how formal and informal institutions affect the legitimacy of MNCs’ CSR marketing practices in the host country of Pakistan. The authors conducted interviews with top managers from 15 local MNCs undertaking CSR programs in various sectors, such as automotive, banking, consumer products, oil and gas, pharmaceuticals, and telecommunications.
Findings
The authors find that MNCs show commitment to CSR programs despite underdeveloped and very weak formal institutions, and that lots of these initiatives such as education, health, environmental protection, and civil society/religious organizations are oriented toward norms-based social CSR marketing, i.e. charitable and philanthropic work, civil society-led social media and religious groups also force MNCs to spend more on CSR marketing initiatives. MNCs follow headquarters’ global CSR marketing strategies and adapt their CSR programs to the host country’s norms, focussing on their product brand value related CSR marketing. However, the MNCs have not taken an integrated approach to CSR marketing, considering the overall institutional environment of the host country.
Research limitations/implications
On the basis of very weak regulatory constraints on CSR marketing activities, MNCs have the propensity to develop normatively acceptable CSR marketing under very weak formal institutional pressures. The findings suggest the need for developing an integrative approach to the CSR strategies of MNCs, comprehensively incorporating regulatory, economic, and socio-cultural as well as various stakeholders’ perspectives.
Originality/value
The authors take the institution-based approach to MNCs’ CSR marketing in the context of the developing economy, which extends the extant MNC and international marketing literature. Particularly, MNCs’ CSR marketing legitimacy depends highly on the adaptation to local norms, leading to the importance of the normative pillar of institutionalization in developing economies.
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The main objective of the present chapter is to address empirically the impacts of institutional distance (ID) on the multinationality level of firms from developing countries and…
Abstract
The main objective of the present chapter is to address empirically the impacts of institutional distance (ID) on the multinationality level of firms from developing countries and interpret how the interaction between ID and firm resources affects firms from developing countries. Using data of firms from developing countries, we estimated an empirical cross-section model. The results show that while cultural distance was not found statistically significant, ID, on the other hand, was statistically significant. The higher the distance between home and host country, the higher the multinationality of firms from developing countries. We also found a positive and statistically significant correlation between intangible resource and multinationality, which suggests a tendency toward new pattern in the internationalization of firms from emerging economies.
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In this study, we examine the location strategies (e.g., developing versus developed countries) of Chinese multinational firms (Pantzalis 2001). We argue that domestic…
Abstract
In this study, we examine the location strategies (e.g., developing versus developed countries) of Chinese multinational firms (Pantzalis 2001). We argue that domestic firm‐specific ownership advantages of a firm, in the form of larger size and higher degree of diversification, will induce internationalization into developed countries rather than into developing countries. We also predict that internationalization into developed countries will help performance, but internationalization into developing countries will hurt performance. Based on an analysis of data on 154 Chinese‐listed MNCs from 1992 to 2002, we find support for our predictions.
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Nimet Uray, Nukhet Vardar and Ramazan Nacar
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…
Abstract
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.
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Michael W. Hansen, Henrik Schaumburg‐Müller and Eugene Pottenger
While the implications of outsourcing have been extensively studied from the point of view of the developed country multinational corporation (MNC) and its home economy, far less…
Abstract
Purpose
While the implications of outsourcing have been extensively studied from the point of view of the developed country multinational corporation (MNC) and its home economy, far less attention has been paid to the developing country firm (DCF) participating in the outsourcing collaboration. This article aims at presenting, evaluating, and synthesizing a number of theoretical contributions that may help build an agenda for future research on outsourcing from a DCF perspective.
Design/methodology/approach
Through a review of the extant theoretical literature on outsourcing, the article seeks to explicate a DCF perspective on outsourcing.
Findings
The article argues that although several theoretical domains indirectly shed light on outsourcing from a DCF perspective, they are typically approaching the issue from a macro (country) and meso (industry) level perspective and rarely explicitly apply a micro (firm) level perspective. Moreover, they tend to view DCF strategy in outsourcing collaborations as functions of MNCs' strategies, not as strategies in their own right. In order to fill this apparent lacuna in the outsourcing literature, the article reviews a number of theories that may help building a research agenda on outsourcing from a developing country perspective.
Originality/value
The article contributes to the outsourcing literature by explicating a DCF theoretical perspective on outsourcing.
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Evans S. Osabuohien, Uchenna R. Efobi and Ciliaka M.W. Gitau
Purpose – This study provides insight on how Sub-Sahara African (SSA) countries can ameliorate the impact of environmental pollution in the face of increasing inflow of…
Abstract
Purpose – This study provides insight on how Sub-Sahara African (SSA) countries can ameliorate the impact of environmental pollution in the face of increasing inflow of multinational corporations (MNCs).Design/methodology/approach – An analytical model describing the role of institutions in reducing the environmental impact of MNCs was formulated and analysed for a sample of 43 SSA countries (1996–2010) using descriptive and the System Generalised Method of Moments techniques.Findings – It was found that the ‘tragedy’ of environmental pollution can be ‘managed’ if there are strong institutional framework especially regulatory quality and government effectiveness that will drive environmental policies and make MNCs to comply to the tenets of corporate social responsibility (CSR) in host countries. The study also established that the environmental hazards in the previous year will occur in the current year, but with strong institutions in place, it will be at a decreasing rate. How increase in trade, inflow of MNCs and population growth affect the current extent of environmental pollution was underscored.Research limitation – Aggregated data on the variables were utilised, and thus the results were dependent on the reliability of the data. Examining how MNCs respond to CSR with respect to environmental issues in SSA can be taken up in future studies using micro-data. This will complement this study and further establish the impact of MNCs activities on the environment in SSA.Originality/value of chapter – The relevance of institutions in regulating the behaviours of MNCs with regards to environmental pollution in SSA was emphasised.
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Michael W. Hansen and Wencke Gwozdz
The purpose of this paper is to examine the evolution in subsidiary performance and the factors influencing this performance based on a unique database of approximately 800…
Abstract
Purpose
The purpose of this paper is to examine the evolution in subsidiary performance and the factors influencing this performance based on a unique database of approximately 800 multi-national company (MNC) subsidiaries in developing countries. Developed-country multi-national companies (MNCs) are increasingly establishing subsidiaries in developing countries. The potential gains are high; however, so are the risks. While the issue of subsidiary performance should be at the heart of any international business (IB) enquiry into MNC activity in developing countries, surprisingly little research has examined this issue.
Design/methodology/approach
Based on a comprehensive literature review of the IB performance literature, it is hypothesized that subsidiary performance essentially is shaped by five clusters of factors: location, industry, MNC capabilities, subsidiary role and entry strategy. These factors’ ability to explain variance in subsidiary performance is tested through a multiple regression analysis.
Findings
MNC subsidiary performance in developing countries has improved enormously in recent decades. Especially, MNC capability and subsidiary role-related factors appear to explain variance in performance, while location factors appear to have less explanatory power. This suggests that strong MNC capabilities and organization can make MNCs succeed regardless of location.
Practical implications
The key preparatory work for MNCs contemplating entry into developing countries is to carefully scrutinize internal capabilities and organization.
Originality/value
The paper presents a model for explaining variation in subsidiary performance in developing countries specifically. The paper offers unique empirical insights into the state and drivers of subsidiary performance in developing countries.
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Wong Lai Cheng and Jamilah Ahmad
The purpose of this research is to gain deeper understanding on how the stakeholders' relationship is incorporated in multinational corporations' (MNCs') corporate social…
Abstract
Purpose
The purpose of this research is to gain deeper understanding on how the stakeholders' relationship is incorporated in multinational corporations' (MNCs') corporate social responsibility (CSR) approach.
Design/methodology/approach
Stakeholder theory by Freeman was used as the theoretical framework of this research. A case study of two established MNCs in Penang, Malaysia, were conducted and analysed through within‐case and cross‐case analysis. Three research questions focusing on aspects of CSR (internal and external), concerns of primary and secondary stakeholders based on Carroll's three‐domain approach and factors that influence CSR practices within each stakeholder group were developed.
Findings
A main theoretical contribution of the study found that MNCs in developing countries are increasingly addressing new ways to incorporate CSR internal and external aspects in their operations which will eventually alter the fundamental process of evaluation among their stakeholders. Given the tendency among developing countries to regard all forms of CSR concerns, economic, ethical and legal concerns are equally important. Another main theoretical contribution of this study highlighted that different locality between home country and foreign country operation does affect the CSR work. Findings of this study show that the view of increasing investor clout on CSR in the country where they do business does not affect the MNCs and the influence of CSR activist as top CSR issues does not directly influence MNCs' actual CSR work.
Research limitations/implications
The study has clearly projected the use of stakeholder theory by Freeman. Internal and external aspects of CSR were supported by these organisations as their standard practices. MNCs need to assume these concerns (economic, ethical and legal) for meeting the obligations towards their stakeholders. Stakeholders are significant drivers of CSR which can affect, or is affected by, the achievement of the organisations' objectives.
Practical implications
The study presents practical implications for policy makers and MNCs in developing countries on new ways of incorporating CSR internal and external aspects in their operations and various concerns (economic, ethical, legal) of stakeholders that have been accepted as necessary for the proper functioning of business.
Originality/value
This research paper provides a strong base for MNCs and academicians to understand the various aspects, concerns and factors that influence CSR practices within each stakeholder group.
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