Search results

The discussion of competitive strategy in recent years has turned to exploring the differences between emerging market (EM) companies and traditional companies from the US, Europe and Japan. In particular the question has been: do we need a new theory of EM companies, or can existing theory be applied, perhaps with adaptations? The authors intent in this paper is to show what features enable EM firms to succeed in domestic competition, where institutional settings are different from those in Triad countries. The authors do not explore the issue of EM companies competing internationally.

The authors argue that competitive advantages (Porter) or resources (Barney; Wernerfelt) offer a solid base on which to build an understanding of successful domestic strategies of firms in EMs, also recognizing that the specific advantages differ somewhat in EMs, due to institutional differences (Peng). The authors explore characteristics of the 250 largest publicly-traded South African firms which enable them to compete successfully (incl: company size, brand value, company age, international sales and family ownership). The authors conclude that existing theories do indeed serve in this context, but that they need to be adjusted for the different institutional environments in EMs.

Factors that contribute to performance include: company size(+),brand value(+), company age (+), international sales(+) and family ownership(−). The literature that has developed on EM companies competing internationally fails to recognize that most of the features identified exist for all companies in a given country – so they do not explain domestic performance. Of course, even in the domestic context some companies will be better able to take advantage of institutional capabilities such as dealing with the government and with volatile economic conditions than other companies.

The study results come from only one EM, so there may be limits on generalizing to others. If China is excepted, the results here are broadly applicable to medium-sized and larger EMs today, with idiosyncrasies remaining for individual countries (such as natural resources, location, etc.)

EM companies to succeed in their domestic markets should look to build size/scale, to develop their brands and to expand internationally. They should also expand ownership to non-family investors. These factors were significantly correlated with superior performance of listed companies in South Africa and have been shown to apply elsewhere as well.

Also, most analyses of EM companies focus on their distinctive institutional capabilities for competing with firms from Triad countries. The study analysis focuses on domestic competition rather than on going abroad.

Globalization is often described as one of the most significant trends of our time, with far‐reaching consequences for mankind. This is an introduction to the topic and includes an essay and a selected, annotated bibliography. In the essay, the author provides a definition of globalization as an economic trend with social, political, environmental and cultural consequences. Many view it as a clear “good or bad” and this introduction explains why it is controversial, so much so that it has inspired both strong supporters and passionate foes. The role of multinational corporations, the World Bank, the International Monetary Fund and the World Trade Organization in globalization is discussed. An annotated bibliography of 30 current books, almost all published in 2000 or more recently, representing different perspectives and issues related to globalization, is provided.

The end of World War II brought about many economic changes, among them the tremendous increase of US manufacturing activities in Western Europe. This astronomical increase of foreign direct investment (FDI) required a new theory ‐ an economic theory of foreign direct investment. International economic theory, which traditionally had ignored the FDI decision, was not able to explain the FDI decision, nor could it explain the phenomena of multinational corporation (MNC). In a world of perfect competition, foreign direct investment would be absent. And when all markets operate efficiently, when there are no external economies of production and marketing, when information is costless and there are no barriers to trade or competition, international trade is the only possible form of international involvement. Logically, it follows that it is the departures from the models of perfect competition that must provide the rationale for foreign direct investment. Since, according to the Heckscher‐ Ohlin‐Samuelson (neoclassical) model, trade of goods will equalize factor prices in a world of factor immobility. In fact, the FDI decision is even ignored by new international economics which, since the late 1970's, has utilized new developments in the field of industrial organization. Proponents of these new theories have developed models that emphasize increasing returns and imperfect competition and see the possibility that government involvements in trade (trade restrictions, export subsidies, etc.) may under some circumstances be useful. All of this is done while foreign direct investment is ignored.

The Mexican foreign exchange market plays an important role in the laundering of narcotics revenues of traffickers from that country and, to some extent, traffickers from Colombia who ship through Mexico. This market is different from many other emerging market foreign exchange structures, because a legal parallel market has existed for more than two decades. The black market, meaning unreported foreign exchange dealings, is relatively smaller (compared to the size of the economy) than in other Latin American countries, since business people have broad access to dollars in the legal, parallel market.

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

This paper examines both the imports and exports of nonmaquiladora Mexican firms, theorizing that importing is generally motivated by exploration for new resources and exporting by exploitation of existing resources. Our results indicate that firm size is positively related to both imports and exports, while low cost labor advantage is positively associated with exports but not significantly related to imports. Because importing may precede exporting, it should be considered as part of the internationalization process of firms and as a key way to acquire resources before exploiting them through exporting.

An innovative effort by a Peruvian university suggests that entrepreneurship can be stimulated by a mix of training and hands‐on work in creating new businesses. The recent efforts of the Universidad del Pacifico to deal with problems faced by managers in that country are described.

Scholars and managers in international distribution have advocated a global approach to distribution as the best strategy to cope with the globalization of markets. This research provides empirical evidence from US multinational firms that globalized distribution is not happening and is not expected to happen in the next five years. Local government regulation and competition are the major barriers preventing firms from adopting a global approach to the management of International distribution systems. The research also shows that despite this lack of success in Implementing a globalized approach to distribution, US multinationals have been more successful at implementing a globalized approach to the process utilized in making major distribution decisions.

Over time the countries characterized as “emerging” change, and some of the companies from these countries become world leaders even as many of those from traditional economic powers fade. There is nothing guaranteed about success of companies from emerging markets (EMs), other than the fact that some of the firms that do survive will be among the success stories of the future. The purpose of this paper is to explore two questions: what enables companies from EMs to compete with existing firms? Is there a conceptual structure that is best for analyzing these firms and their strategies?

This paper discusses the strengths of EM multinational enterprises (MNEs) from the perspective of Dunning’s eclectic view, and gives four detailed examples of companies from this perspective.

It is suggested that while the eclectic view offers excellent insight into EM MNEs, an analysis of their strategies and policy implications requires further perspective such as through the global value-added chain.

No single model will capture all of the important features of EM MNEs, but Dunning’s view and the global value-added chain are good tools.

Hopefully, both research analysts and company managers will be able to utilize the view presented here to better manage/understand EM MNEs.

This view demonstrates a mechanism for exploring key elements of EM MNEs and by moving to the global value-added chain additional, original perspective is gained.

To explore the relationships among oil import dependence, energy (in)efficiency, and environmental damage for the USA. The goal is to illuminate possibilities for reducing oil import dependence.

The paper uses current information about costs of oil imports and energy alternatives for transportation vehicles, and environmental concerns, along with information about alternatives for energy provision for this purpose, to demonstrate feasible ways to reduce dependence, including government policy steps.

The USA is dependent on imported oil: two‐thirds of US oil used today is imported, and mostly used as gasoline for autos – close to 70 percent of all oil is used in transportation. This greatly affects the US BOP; oil imports cost almost US$300 billion in 2006. Current energy efficiency of auto engines is about 15 percent. Using hydrogen fuel cells would at least double this value, as well as reducing waste and completely eliminating carbon dioxide emissions. An efficient means of producing the hydrogen must be developed. A related problem is damage to the environment caused by greenhouse gas emissions. This problem also can be attacked by increasing engine efficiency, and ultimately by replacing gasoline in auto engines with alternative fuels such as hydrogen in fuel cells, as well as by reducing auto use, via mass transport. Policy alternatives include: encouraging energy efficiency via new technologies for vehicle engines; encouraging mass transportation; and higher production of fuels in the USA. Reducing demand via taxes, as in Europe, could reduce consumption, but at a cost to overall GDP unless alternative fuels become competitively priced.

The two main limitations on our recommendations are technology for making fuel cells more competitive, and willingness of government to take the needed policy steps. The practical implication is that dependence can be reduced with these steps.

The paper links the three corners of the energy triangle: dependence; efficiency, and environment.