Search results

The purpose of this paper is to provide a nuanced understanding of international marketing agility by connecting organizational capability literature with that of standardization and adaptation. The focus of the research is to clarify whether managing the tension between product standardization and service customization generates an extra premium in international markets.

Two disaggregated Chinese data sets, the Annual Survey of Industrial Enterprises and the China Customs Database, are used for developing an econometric model. Export quality improvement is the outcome variable in reflecting the effect of international marketing agility on performance.

International marketing agility is reached through upstream FDI intensity, particularly in the context of service FDI. Manufacturing sectors with higher service intensity have more agility, being more likely to generate export quality.

This study makes three theoretical contributions by clarifying the concept of international marketing agility as an organizational capability generated by manufacturing standardization and service customization; investigating the influence of upstream FDI intensity for export quality while taking into account the industry contexts; and obtaining an enhanced understanding of the service intensity of manufacturing firms on export quality.

The authors offer a nuanced and contextualized understanding of international marketing agility and explore the complex relationships between FDI, service intensity and export quality.

This paper aims to examine the impact of six possible foreign direct investment (FDI) spillover channels on the total factor productivity (TFP) of Chinese agricultural enterprises and investigate the moderating role of absorptive capacity (technological acumen) on TFP spillover effects.

Based on data from 118 agricultural and related Chinese industries, the authors employ a multithreshold regression model to empirically analyze the impact of FDI on the TFP of agricultural enterprises and the threshold effect of absorptive capacity. To overcome potential endogeneity problems, the authors select the FDI stock of corresponding USA industries and the industrial access policy index as instrumental variables and re-estimate the model.

The results suggest foreign-invested agricultural enterprises are more likely to benefit from FDI, while the “aggregate” FDI spillover effect is negative for domestic agricultural enterprises. However, once threshold effects are introduced, the authors find firms “close to” (“far from”) the technological frontier experience statistically significant positive (negative) spillover effects. Similar results are obtained for virtually all FDI spillover channels for firms in both upstream and downstream industries. FDI spillovers, when they occur, can be a two-edged sword – benefiting some firms at the expense of others.

The authors introduce six FDI spillover channels to examine the impact of FDI on the productivity of foreign-invested and domestic agricultural enterprises. Moreover, the authors analyze the threshold effect of firms' absorptive capacity. These findings can help formulate foreign investment introduction policies based on the characteristics of agricultural enterprises with different ownership structures. These results are also beneficial for agricultural enterprises to better exploit FDI spillover effects and improve their productivity.

In recent years, many firms from developing countries (LDCs) have engaged in foreign direct investment (FDI). Interestingly some of these firms locate their investments in developed countries (DCs) (i.e., upstream FDI), instead of in countries economically similar to or less than their home countries (i.e., downstream FDI). However, only a few researchers have examined the issues related to upstream FDI. Furthermore, when examining FDI, most studies have focused on manufacturing subsidiaries but paid less attention to sales subsidiaries. Due to the differences in nature, management of manufacturing and sales subsidiaries should be different. Using a case study approach and focusing on the behaviors of Taiwanese firms, we address two research questions: (1) what are the channel strategies adopted by the sales subsidiaries of Taiwanese high-tech firms (i.e., multinational corporations (MNCs) from LDCs (LDCMNCs)) in DCs? and (2) how do these subsidiaries manage their channels in DCs? Our findings are: (1) LDCMNCs tend to use multiple sales channels, to work with large national distributors, and to adopt high touch channels to market products in DCs; (2) to reduce channel conflict, less powerful LDCMNCs tend to adopt multiple independent channel system, instead of dual channel system; and (3) due to limited resources, LDCMNCs make more effort on designing channel conflict prevention mechanisms than designing channel conflict resolution mechanisms, emphasize more on building relationships with distributors and tend to use financial incentives/high-power incentives than use other types of incentives to motivate distributors. The findings of this study are helpful for LDC firms to operate their sales subsidiaries more effectively in DCs.

During a UN Commission meeting in 1983, Norwegian Prime Minister Brundtland came to state one of the most comprehensive definitions of sustainability: ‘meeting the needs of the present without compromising the ability of future generations to meet their own needs’ (WCED Report, 1987). Since then, themes related to sustainability proliferated and passed beyond the ‘macro’ level by also adopting ‘mezzo’ and ‘micro’ levels as unit of analysis. To state this more specifically, a macro perspective reflects a community level point of view, while a mezzo perspective adopts organisation and institution level focus point, and a micro perspective adopts an individual level research view. Within this framework, the issue turns out to be a debate of providing sustainability to the community, to the institutions (‘business enterprise’ being one of them) and to the individuals. Such fragmentation is especially necessary in literature as it is the aggregation of research on multiple levels that will lead to seminal contributions in many respects. Literature suggests evidence of how devastating the outcomes could be when there is conflict among these different levels regarding the meaning and implications of sustainability (e.g. Baumgartner & Ebner, 2010; Linnenluecke, Russell, & Griffiths, 2009).

This study focuses on the linkages between foreign direct investment and the research and development (R&D) and innovation activity of domestic enterprises in Vietnam.

The Heckman selection model approach is applied to a panel dataset of nearly 7,000 Vietnamese firms for the 2011–2015 study period to investigate the impact of foreign presence on the R&D of local firms through horizontal and vertical linkages. Probit model estimation is employed to examine how foreign investment influences the innovation activity of local companies.

While there are a small number of firms carrying out R&D activities in Vietnam, foreign or joint domestic–foreign venture firms are less inclined than domestic firms to undertake R&D. Domestic factors that include capital, labor quality, location and export status of firm have a significant effect on the decision of domestic firms to participate in R&D activity. Only forward linkages and the gross firm output are found to have an impact on the R&D intensity of domestic enterprises, while other factors appear to have no significant influence on how much firms spend on R&D activities.

In order to promote the R&D activity of domestic firms, policy should focus on (1) the backward linkages between local firms in downstream sectors with their foreign suppliers in upstream sectors, and (2) the internal factors such as labor, capital or location that affect the decisions made by domestic firms.

Given that foreign investment may affect R&D and innovation activity of local firms in host countries, the impact is relatively unexplored for many emerging economies and not so in the case of Vietnam. The availability of a unique survey on Vietnamese firm technology and competitiveness provides the opportunity to address this gap in the literature.

The research proposition of this paper is that multinational enterprises (MNEs) were important in the process of growth and divergence that took place in the world in the nineteenth and twentieth centuries. The rate of growth of GDP per capita was unprecedented, but it was coupled with an increasing gap between the developed and the developing countries. MNEs are even more important in the growth and convergence process that started at the beginning of the twenty-first century where the gap is closing. Global sourcing is the strategy that has led to closing the gap while high growth continues. The paper aims to discuss these issues.

The study is based on macroeconomics general equilibrium model in an imperfect market and on looking at the inventive process as the driving process of the development and the location of MNEs. Using a financial economics model of assets and liabilities, it is shown that MNEs affect the geopolitical distribution of income and wealth through expanding their liabilities. The methodology is a combination of applying economic model and using historical and current data to motivate the use of the model and to validate the models and the conclusions derived from them.

MNEs and major global companies before the name MNE was used were shaped by major macroeconomic processes like the inventive process and the same time they were the prime movers of the two major economic processes of the last 200 years: growth and divergence and growth and convergence. The ideas-led growth model shows why MNEs are becoming larger. As MNEs became bigger they start to import inputs through value maximizing strategy of global sourcing. This led to transfer of value to suppliers in emerging markets that grow over time and eventually it led to new MNEs from emerging markets large countries like China and from smaller countries in Asia and elsewhere. The growth convergence process and the resulting changes in the geopolitical distribution of MNEs is assisted by rapid changes in technology that reduces transactions cost. The continuation of rapid changes in transactions costs is likely to change the current structure, strategy and the location of MNEs and may reverse the growth convergence process once more.

The study begins with aggregate macroeconomic processes and relates them to the development of MNEs and in particular to the development of MNEs from emerging markets. It highlights the importance of global value chains and global sourcing in the process of growth and divergence and the turning of the “Wheel for Fortune” toward China and India as it has been prior to the sixteenth century.

The purpose of this paper is to re-visit and re-invigorate the oligopolistic industry perspective on multinational corporations (MNC) strategy.

Based on insights from the industrial organization tradition and strategic management, the paper brings the original insights of the oligopolistic industry perspective into a modern context by outlining a conceptual framework that may guide future international business (IB) research on MNC strategy in oligopolistic industries.

This paper demonstrates how contemporary IB literature pays little attention to a key insight of the early IB literature, namely, that foreign direct investment (FDI) often is driven by strategic interaction among MNCs in oligopolistic industries. Instead, the contemporary IB literature focuses on the FDI as a way to reduce transaction costs and/or as a way to leverage and build capabilities across borders. The paper argues that progressing global concentration in many industries warrants a rediscovery of the oligopolistic perspective on FDI.

The paper provides a comprehensive and unique literature review of the literature on MNC strategy in oligopolistic industries. Based on this review, the paper develops a novel conceptual framework that may inspire future IB research on MNC strategy in oligopolistic industries.

Using panel data of 11324 firms in China from 1996 to 1999, the study finds that FDI tends to generate positive technology spillovers to domestic firms within the same industry, but adversely affect productivity of domestic firms in other industries. It is also found that both the positive and the adverse effects are more significant at the local than the national level. Evidence from China thus suggests that FDI technology spillovers are in favor of domestic firms within the same industry rather than domestic firms in other industries, and are most likely to affect domestic firms within the same locality. The finding has significant implications for the study of the interaction between MNEs and local firms in emerging markets.

The purpose of the paper is to examine the role of institutional distance as a determinant of outward foreign direct investment (OFDI) from India. The study combines a nuanced view of institutional distance, with traditional location factors to analyze Indian OFDI flows to developed and emerging economies (EEs) during the period 2009 to 2017.

The paper employs fixed effects panel regression model on an unbalanced panel data set.

The findings suggest that India's OFDI is undeterred by the isomorphic pressures caused by regulatory and normative institutional distance, but cognitive institutional distance acts as a deterrent in developed economies. Indian MNEs engage in institutional arbitrage as they simultaneously engage in strategies of institutional escapism and institutional exploitation. The study also finds that emerging economies have emerged as an important destination for strategic asset seeking FDI, in addition to developed economies.

The findings of the study present important implications for policymakers and corporate managers. For policymakers, the study points toward the need for improving the general business environment at home to prevent escapist OFDI and trade enhancement as a tool to overcome cognitive barriers and behavioristic stereotypes. For corporate managers, the study's findings underline the importance of adopting different strategies for dealing with different isomorphic pressures in developed and emerging economies.

The study adds value to the sparse literature using the IBV in the emerging markets context, to supplement and enrich existing theoretical frameworks. It is a pioneering study in its use of institutional distance as an explanatory factor for Indian OFDI and provides evidence of institutional arbitrage.

This paper aims to analyse which firm-level characteristics drive their location decisions when investing in a foreign country. Focusing on origin clusters, the authors will study the potential influence of the home country context and, in particular, the impact of firm-level factors, both investor- and investment-related, underlying heterogeneity in their location choice decisions.

The empirical analysis draws on data gathered from mainland Chinese MNEs that have invested in Germany between 2005 and 2013 (269 firms). The authors chose a single host (Germany) and a single home (China) country for their representativeness and for methodological reasons to control for country effects. The authors used a multinomial logit model to assess the effects of the independent variables on the probability that each of the three location possibilities would be selected.

The results suggest that investors preferring co-location in origin clusters have distinct structural and strategic characteristics. From a more structural point of view, Chinese foreign direct investment (FDI) undertaken by smaller firms and those without prior experience in the EU prefer an area where there are other Chinese investors. From a more strategic perspective, these FDI flows are more likely to tap into industry agglomerations when the investors’ objective is strategic asset seeking, and they have less knowledge-intensive investments.

The findings may be of great practical value to practitioners and policymakers. Knowledge of the advantages and disadvantages of the types of agglomeration networks can help managers to balance the rewards and risks in their decision-making and to select a suitable development path for their FDIs. For policymakers, an understanding of the structure and formation of different groups of firms in one location and the characteristics of investors who may enter the location can help them to improve their regulatory work and to develop policies to attract investments, thereby enhancing local economic development and community stability.

The research shifts the emphasis of the location choice decision beyond just where to locate toward with whom to collocate. It also contributes to the growing research on emerging market multinationals by providing further insight into understanding of FDI location behavior by firms from emerging economies.