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Article
Publication date: 28 May 2021

Hamid Kordbacheh and Seyedeh Zahra Sadati

The natural resources curse theory argues the higher dependency on natural resources leads to many socio-economic problems. The purpose of this study is to examine the…

Abstract

Purpose

The natural resources curse theory argues the higher dependency on natural resources leads to many socio-economic problems. The purpose of this study is to examine the relationship between corruption and banking soundness and also to compare the extent of this effect between the two groups of rich and poor in natural resources countries.

Design/methodology/approach

To this aim, the authors apply a panel data set comprised of 98 countries from 2012 to 2015.

Findings

The results show that nations with a higher level of corruption have poorer banking soundness. The authors also find that by considering the resource curse theory and the effect of natural resource rents in the model, the adverse impact of corruption on banking soundness is more substantial in countries with a higher natural dependency level (rich in natural resources).

Originality/value

Though studies have been conducted on corruption and banking soundness, this paper, by using resources curse theory, articulates that corruption is one of the most critical factors affecting banking soundness and has a destructive effect on the health of the banking system and the economy of almost all countries, especially in natural resource-based economies. This study will appeal to banks authorities, governments, policymakers, oversight financial institutions and those who have a vested interest in regulating financial crimes globally. They can prevent financial and banking crises by cooperating in the fight against corruption worldwide.

Details

Journal of Financial Crime, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1359-0790

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Article
Publication date: 7 January 2019

Dehui Li, Libo Fan and Zhenning Yang

Although the importance of network embeddedness attracted much attention in recent years, the interpretations of the underlying mechanism almost focus on the positive…

Abstract

Purpose

Although the importance of network embeddedness attracted much attention in recent years, the interpretations of the underlying mechanism almost focus on the positive effects and neglect the potential negative aspects. This paper aims to use Chinese listed manufacturing enterprises, in the perspective of network embeddedness, to analyze whether resource curse effects exist in strategic networks of enterprises.

Design/methodology/approach

This paper examines the resource curse effect that exists in enterprise networks through analysis of enterprise’s total factors productivity compared with those of its industry peers with different degrees of embeddedness. This paper then uses several different methods, such as clustered fixed and random effect model, core and peripheral model, and generalized method of moments estimation in endogenous checks, to detect network curse effects and reveal three potential mechanisms, including overinvestment, extra maintaining cost and innovation extrusion.

Findings

This paper finds that excessive network embeddedness hinders continuous improvement of productivity, which is derived from three mechanisms: excessive network embeddedness makes information redundancy among enterprises, and the imitate-follow effect makes excessive investment seriously; enterprises have to encounter more problems and difficulties, such as information coordination and benefit negotiation, to maintain network relationship, which leads to extra cost; enterprises with abundant network resources may tend to more emphasis on marketable operational abilities, resulting in resource decentralization and less investment on innovation, which is finally not beneficial to productivity improvement in the long run.

Originality/value

Compared with previous literatures, this paper not only enriches the understanding of negative mechanisms in enterprise`s network embeddedness, but also unfolds the inconsistency of network embeddedness effects in practice and finds new evidence that the two types of network embeddedness are consistent in certain circumstances.

Details

Nankai Business Review International, vol. 10 no. 1
Type: Research Article
ISSN: 2040-8749

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Article
Publication date: 10 June 2014

Quan Hoang Vuong and Nancy K. Napier

The purpose of this paper is to explore the “resource curse” problem as a counter-example of creative performance and innovation by examining reliance on capital and…

Abstract

Purpose

The purpose of this paper is to explore the “resource curse” problem as a counter-example of creative performance and innovation by examining reliance on capital and physical resources, showing the gap between expectations and ex-post actual performance that became clearer under conditions of economic turmoil.

Design/methodology/approach

The analysis uses logistic regressions with dichotomous response and predictor variables on structured tables of count data, representing firm performance as an outcome of capital resources, physical resources and innovation where appropriate.

Findings

Key findings relevant to economic and business practice follow. First, a typical characteristic of successful Vietnamese firms in the transition period is their reliance on either capital resources or physical asset endowments. Second, poor performers exhibit evidence of over-reliance on both capital and physical assets. Third, firms that relied on both types of resources tended to downplay creative performance. Some evidence suggests that firms face more acute problem caused by the law of diminishing returns in troubled times. Fourth, the “innovation factor” has not been tapped as a source of economic growth.

Research limitations/implications

This study has some limitations. The size of the survey sample is approximately 150 firms, while the potential sample of > 300 should be possible in the future. When the size increases, the research could be expanded to include further variables that will help investigate more deeply into the related issues and business implications. With regard to the implications of the study, the absence of innovations has made the notion of “resource curse” identical to “destructive creation” implemented by ex-ante resource-rich firms, and worsened the problem of resource misallocation in transition turmoil. The Vietnamese corporate sector's addiction to resources may contribute to economic deterioration, through a downward spiral of lower efficiency leading to consumption of more resources.

Practical implications

Insights obtained from this study could save transition economies' resources which have almost always been considered sine qua non before any critical major policymaking, while this is not necessarily true, and in many cases, even counterproductive.

Originality/value

Original data set on Vietnam stock market are collected, processed, prepared and used by the authors. Original design by the authors for regression equations with dichotomous predictor variables: dependence on endowed physical assets, reliance on capital resources and significant signs of creative performance/innovations. Original idea of viewing “resource curse” as absence of innovation and due to uncreative “destructive creation” of poor-performing commercial operations by resource-rich firms is used in the paper. We have searched the literature in business research and found that the empirical results have not been previously reported.

Details

Management Research Review, vol. 37 no. 7
Type: Research Article
ISSN: 2040-8269

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Article
Publication date: 6 November 2017

Tamer K. Darwish, Abdul Fattaah Mohamed, Geoffrey Wood, Satwinder Singh and Jocelyne Fleming

The resource curse literature suggests that firms operating in non-oil and non-gas industries in petrostates face considerable challenges in securing competitiveness and…

Abstract

Purpose

The resource curse literature suggests that firms operating in non-oil and non-gas industries in petrostates face considerable challenges in securing competitiveness and sustaining themselves. Based on a firm-level survey within a micro-petrostate, Brunei, the purpose of this paper is to explore the relationship between specific HR policies and practices and organisational performance; analyse, compare, and contrast oil and gas with non-oil and non-gas sectors; and draw out the comparative lessons for understanding the potential and performance consequences of HR interventions in resource-centred national economies.

Design/methodology/approach

Data for this study were generated from a primary survey administered amongst the HR directors in companies operating in all sectors in Brunei. A statistically representative sample size of 214 was selected.

Findings

The authors confirmed that firms in the oil and gas sector indeed performed better than other sectors. However, the authors found that the negative effects associated with operating outside of oil and gas could be mitigated through strategic choices: the strategic involvement of HR directors in the affairs of the company reduced employee turnover and added positively to financial returns across sectors.

Practical implications

Developing and enhancing the role of people management is still very much easier than bringing about structural institutional reforms: the study confirms that at least part of the solution to contextual difficulties lies within, and that the firm-level consequences of the resource curse can be ameliorated through a strategic choice.

Originality/value

The nature of the present investigation is one of few studies conducted in South East Asia in general and in the context of Brunei, in particular. It also contributes to the authors’ understanding whether HR interventions can ameliorate the challenges of operating in a non-resource sector in a resource-rich country.

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Book part
Publication date: 24 November 2016

Seign-goura Yorbana

The aim of this chapter is to show how new players in an emerging market, through their multinationals, have strategized and operationalised their international interests…

Abstract

Purpose

The aim of this chapter is to show how new players in an emerging market, through their multinationals, have strategized and operationalised their international interests. This international context consists of various stakeholders: states, civil society organisations, multinationals, local communities and institutions which define and regulate the power relations. This study highlights how CNPCIC, a Chinese multinational owned by the state, designs and implements its proclaimed ‘win-win’ cooperation strategy with its host country and the local community for an oil extraction project – called the Rônier Project – in southern Chad.

Methodology/approach

The analysis is based on a case study approach, especially concerning the town of Koudalwa, the oil-producing area in southern Chad. The author conducted qualitative research to collect the data, using ethnographic strategies consisting of field research, interviews with stakeholders.

Findings

Negative externalities as consequences of practices from CNPCIC underlie environmental degradation, socio-economic conflicts and governance problems, despite the existence of an alleged regulatory framework, the role of which is to avert the ‘resource curse’.

Organisations of local and international civil society oscillate between the logic of cooperation, alliance and confrontation with their main stakeholders, CNPCIC and the government.

The ‘win-win’ cooperation advocated by China is implemented in the form of commercial cooperation with full mercantilism where CNPCIC benefits from oil, the Chadian state benefits from oil revenue in the form of royalties and other stakeholders, such as the local communities, only benefit from a fraction of the revenues. The chapter concludes that, within this oil project, CNPCIC developed a corporate diplomacy stance within which, according to the circumstances, predation, philanthropy and strategic alliance are valued at the expense of corporate responsibility despite civil society advocacy for a responsible extraction.

Research limitations

Some stakeholders of the project declined the invitation to participate in the research. This may have influenced its findings.

Originality/value

The value of this chapter resides in the use of various theories (corporate diplomacy, stakeholder theory, resource curse) to explain the practices and interests of stakeholders within an oil project at different scales, both local and international.

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Article
Publication date: 9 August 2008

Kathryn McPhail

This paper aims to identify the factors that have allowed some counties to avoid the so‐called “resource curse”; to determine practical steps that can be taken by

Abstract

Purpose

This paper aims to identify the factors that have allowed some counties to avoid the so‐called “resource curse”; to determine practical steps that can be taken by companies, governments, local communities and aid agencies in collaboration to enhance mining's contribution to poverty reduction.

Design/methodology/approach

Research was conducted collaboratively with the UNCTAD and the World Bank Group, overseen by an independent advisory group, and tested through two multi‐stakeholder workshops. Industry involvement in the initiative took place through an ICMM working group comprising around 20 companies and chambers of mines.

Findings

Success depended on three factors: reformed mineral legislation, improved macroeconomic management and some improvements in governance.

Research limitations/implications

Although the robust nature of the processes employed can be demonstrated, the explicit aim of identifying factors that allow certain “successful” countries to avoid the resource curse has inherent limitations.

Practical implications

Companies, governments, donors and other actors need to work together to help strengthen capacity in mining countries and regions, particularly at the sub‐national level.

Originality/value

Mining and metals companies have been at the forefront of some of the most innovative multi‐stakeholder processes of any industry sector. The paper outlines the causes, such as its poor reputation among stakeholder groups, and explores how the industry has sought to become more accountable to its stakeholders by demonstrably improving its sustainable development performance.

Details

Corporate Governance: The international journal of business in society, vol. 8 no. 4
Type: Research Article
ISSN: 1472-0701

Keywords

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Book part
Publication date: 1 November 2017

This chapter will examine the response of a rural community in Ireland to the imposition of a gas pipeline on their farms, in the western coastal county of Mayo. This…

Abstract

This chapter will examine the response of a rural community in Ireland to the imposition of a gas pipeline on their farms, in the western coastal county of Mayo. This analysis will include a discussion of the concept of ‘rural community sentiment’ (Leonard, 2006, 2008a, 2008b) as a factor in the mobilisation of community campaigns against infrastructural projects which are perceived as a threat to existing ways of life in regional areas. The chapter will also explore key theoretical concepts for this community-based responses to environmental degradation in rural areas, including critical criminology and rural criminology, resource curse theory and ask whether the campaign was ecopopulist, with issues of social and environmental justice at its core. This will be achieved through a case study approach. In so doing, the chapter will highlight the basis for rural community’s campaigns of opposition to development projects imposed by corporate or state bodies in the Irish case.

Details

The Sustainable Nation
Type: Book
ISBN: 978-1-78743-379-3

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Article
Publication date: 7 August 2017

Charles Funk and Len J. Treviño

The purpose of this paper is to describe co-devolutionary processes of multinational enterprise (MNE)/emerging economy institutional relationships utilizing concepts from…

Abstract

Purpose

The purpose of this paper is to describe co-devolutionary processes of multinational enterprise (MNE)/emerging economy institutional relationships utilizing concepts from “old” institutional theory as well as the institutional aspects of socially constructed realities.

Design/methodology/approach

The authors develop a set of propositions that explore the new concept of a co-devolutionary relationship between MNEs and emerging economy institutions. Guided by prior research, the paper investigates MNE/emerging economy institutional co-devolution at the macro-(MNE home and host countries), meso-(MNE industry/host country regulative and normative institutions) and micro-(MNE and host country institutional actors) levels.

Findings

MNE/emerging economy institutional co-devolution occurs at the macro-level via negative public communications in the MNE’s home and host countries, at the meso-level via host country corruption and MNE adaptation, and at the micro-level via pressures for individual actors to cognitively “take for granted” emerging economy corruption, leading to MNE divestment and a reduction in new MNE investment.

Research limitations/implications

By characterizing co-devolutionary processes within MNE/emerging economy institutional relationships, the research augments co-evolutionary theory. It also assists in developing more accurate specification and measurement methods for the organizational co-evolution construct by using institutional theory’s foundational processes to discuss MNE/emerging economy institutional co-devolution.

Practical implications

The research suggests the use of enhanced regulation, bilateral investment treaties and MNE/local institution partnerships to stabilize MNE/emerging economy institutional relationships, leading to more robust progress in building emerging economy institutions.

Originality/value

The research posits that using the concepts of institutional theory as a foundation provides useful insights into the “stickiness” of institutional instability and corruption in emerging economies and into the resulting co-devolutionary MNE/emerging economy institutional relationships.

Details

Cross Cultural & Strategic Management, vol. 24 no. 3
Type: Research Article
ISSN: 2059-5794

Keywords

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Book part
Publication date: 17 September 2014

Uwafiokun Idemudia

The purpose of this chapter is to critically examine the extent to which oil multinational corporations (MNCs) can be both money makers and peace makers in the Niger Delta…

Abstract

Purpose

The purpose of this chapter is to critically examine the extent to which oil multinational corporations (MNCs) can be both money makers and peace makers in the Niger Delta area of Nigeria, and to consider its implication for the role of business in conflict mitigation in resource-rich African countries.

Design/methodology/approach

The chapter presents a theoretical analysis based on secondary data and empirical research.

Findings

There is now an emerging consensus that business can be peace makers and money makers in developing countries as part of their social responsibility. However, the tendency to explore business-conflict linkage largely from a business perspective and to see conflict as an “incidence” that business has to respond to, as opposed to a “dynamic process” that is a function of the breakdown of stakeholder relationship, limits our understanding of the relationship between business and conflict. Focusing on the Niger Delta in Nigeria, it is argued that the contradictory tension inherent in the peace making efforts of oil MNCs and the nature of their core business activities (i.e., oil extraction) limits the incentives and undermines the capacity of oil MNCs to be peace makers.

Originality/value

The chapter contributes a critical perspective to the literature on business and conflict informed by nearly two decades of empirical research undertaken by the author in Africa. It analyzes how contextual factors in resource-rich African countries, previously neglected in the literature, influence both the willingness and ability of business to contribute to peace. It concludes by discussing the theoretical and practical implications for the role of business in conflict zones.

Details

Corporate Social Responsibility and Sustainability: Emerging Trends in Developing Economies
Type: Book
ISBN: 978-1-78441-152-7

Keywords

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Article
Publication date: 7 September 2020

Yusniliyana Yusof and Kaliappa Kalirajan

The study contributes to the aim of regional development policy in reducing regional disparities, by examining the spatial balance in socioeconomic development across the…

Abstract

Purpose

The study contributes to the aim of regional development policy in reducing regional disparities, by examining the spatial balance in socioeconomic development across the states of Malaysia based on composite development index (CDI). Besides, the study has attempted to understand the issues in the development gaps across Malaysian states by evaluating the factors that explain the variation in economic growth

Design/methodology/approach

This study uses three-stage least squares (3SLS) and bootstrap sampling and estimation techniques to examine the factors that explain the variations in the growth of development across the states in Malaysia. The analysis involves 13 states in Malaysia (Johor, Melaka, Negeri Sembilan, Pulau Pinang, Perak, Perlis, Selangor, Kedah, Kelantan, Pahang, Terengganu, Sabah and Sarawak) from 2005 to 2015.

Findings

The pattern in the spatial socioeconomic imbalance demonstrates a decreasing trend. However, the development index reveals that the performance of less developed states remained behind that of the developed states. The significant factors in explaining the variation in growth across the Malaysian states are relating to agriculture, manufacturing, human capital, population growth, Chinese ethnicity, institutional factors and natural resources.

Research limitations/implications

The authors focused on Malaysian states over the period between 2005 and 2015. The authors encountered some limitations in obtaining relevant data such as international factors and technological change that might also explain the variation in economic growth as the data on these variables are not reported at the state level. Moreover, the data on GSDP by sector was only available from the year 2005. Second, the study is based on secondary data. Future studies might examine the factors that contribute to the development gap across Malaysian states through interviews or questionnaires and compare the findings with the existing results. Despite its limitations, this study contributes to the existing literature that emphasizes on spatial balance of socioeconomic in a developing country, focusing on Malaysian states.

Practical implications

These findings provide guidance for policymakers by understanding key potential areas to reduce the disparity in economic growth across Malaysian states by understanding their impact on the growth.

Originality/value

This study employs different method of 3SLS and bootstrap sampling and estimation techniques in examining the factors that explain the variations in the growth of development across the states in Malaysia.

Details

Journal of Economic Studies, vol. 48 no. 3
Type: Research Article
ISSN: 0144-3585

Keywords

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