Nature of the relationship between international expansion and performance: The case of emerging market firms

2007 ◽  
Vol 42 (4) ◽  
pp. 401-417 ◽  
Author(s):  
Farok J. Contractor ◽  
Vikas Kumar ◽  
Sumit K. Kundu
Keyword(s):  
Emerging Market ◽  
International Expansion ◽  
Emerging Market Firms ◽  
And Performance ◽  
The Relationship

scholarly journals EXPRESS: Unbundling the Effects of Internationalization on Firm Performance in Emerging Economies: The Moderating Effects of Strategic Resource Decisions

2021 ◽  
pp. 1069031X2110306
Author(s):  
Nilay Bicakcioglu-Peynirci ◽  
Robert E. Morgan
Keyword(s):  
Firm Performance ◽  
Emerging Economies ◽  
Emerging Market ◽  
Strategic Marketing ◽  
Slack Resources ◽  
Moderation Effect ◽  
Strategic Resource ◽  
And Performance ◽  
Resource Decisions ◽  
The Relationship

We investigate how strategic resource decisions—concerning slack resources and strategic marketing ambidexterity—influence the relationship between internationalization and firm performance of emerging market firms. Based upon the resource-based view, we synthesize two dominant, yet divergent, perspectives that explain the respective resource slack advantages and liabilities in the internationalization literature: the flexible capacity and the efficient capacity perspectives. We also explore the moderating role of strategic marketing ambidexterity which comprises a bundle of marketing activities covering both exploitation-dominant actions and exploration-dominant actions. We empirically examine our hypothesized relationships with data from a sample of 1,683 firm-year observations for the period between 2005 and 2018 and find that distinct forms of resource slacks have contrasting effects on the relationship between internationalization and performance. Our results provide strong evidence for positive moderation effect of unabsorbed slack resources and a negative moderation effect of absorbed slack resources on the internationalization-performance relationship. We also indicate nonsignificant moderating effect of strategic marketing ambidexterity, demonstrating that internationalization attains higher firm performance regardless of its exploration-dominant or exploitation-dominant strategic emphasis in emerging economies.

scholarly journals Internationalization and Performance of Vietnamese Manufacturing Firms: Does Organizational Slack Matter?

2018 ◽  
Vol 8 (4) ◽  
pp. 64 ◽  
Author(s):  
Hien Thi Ngoc Huynh ◽  
Phuong V. Nguyen ◽  
Khoa T. Tran
Keyword(s):  
Emerging Market ◽  
Developed Countries ◽  
Organizational Slack ◽  
Optimum Level ◽  
International Expansion ◽  
Manufacturing Enterprises ◽  
Long Run ◽  
Third Stage ◽  
And Performance ◽  
Using Data

This paper aims to investigate the three-stage theory of international expansion in the long run from the perspective of firm behavior. Although this topic has been mostly explored using data from developed countries, this paper aims to fill the research gap in an emerging market by using an extensive unbalanced panel data of 12,704 unlisted Vietnam manufacturing enterprises from the General Statistics Office during 2007 to 2012. The findings illustrated a significant S-shaped relationship between internationalization and performance. Notably, the results depict significantly moderating effects of both high-discretion slacks and low-discretion slacks on the internationalization–performance relationship across three stages of global expansion as an enterprise enhances this relationship in the first and third stage although this worsens it in the middle stage. The empirical results suggest that firms should determine the optimum level of internationalization and slacks in addition to balancing their costs with their real gains.

scholarly journals Debt financing and firm performance: The moderating role of board independence

2020 ◽  
Vol 45 (3) ◽  
pp. 141-151
Author(s):  
Hanh Song Thi Pham ◽  
Duy Thanh Nguyen
Keyword(s):  
Emerging Market ◽  
Debt Financing ◽  
Board Independence ◽  
Data Set ◽  
Listed Firms ◽  
Negative Effect ◽  
And Performance ◽  
The Relationship ◽  
Moderating Role

This article investigates the moderating role of board independence in the relationship between debt financing and performance of emerging market firms. We have used an empirical model in which the firm’s accounting profitability is a dependent variable and the independent variables are debt financing, board independence, the interaction variable made of debt financing and board independence as well as various control variables. Our analysis is based on a panel data set of 300 listed firms in Vietnam between 2013 and 2017. Our study finds that debt financing has a significantly negative effect and that board independence reduces the adverse impact of debt financing on accounting profitability. Our results are consistent across different estimation models and methods.

Ownership participation of cross-border mergers and acquisitions by emerging market firms

2015 ◽  
Vol 53 (1) ◽  
pp. 221-246 ◽  
Author(s):  
Monica Yang
Keyword(s):  
Mergers And Acquisitions ◽  
Cultural Distance ◽  
Emerging Market ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Firm Level ◽  
Content Type ◽  
Cross Border ◽  
Emerging Market Firms ◽  
The Relationship

Purpose – The purpose of this paper is to adopt a multi-level approach to investigate what factors shape the content of emerging market firms’ foreign market entry decisions, particularly the ownership participation in cross-border mergers and acquisitions (M&As). In addition, the author would like to know if companies from emerging markets that possess higher (or lower) ownership in cross-border M&As receive higher valuation in the market. Design/methodology/approach – Using panel data of cross-border M&As by emerging market firms from 2000 to 2012, the author tests the hypothesized effects of the independent variables on the level of ownership participation; and uses a standard event study methodology to assess the market reaction of a particular cross-border M&A deal. Findings – The author finds that a country-level factor (institutional distance), an industry-level factor (industry unrelatedness) and a firm-level factor (board concentration) have significant impact on ownership participation in cross-border M&As. The author also finds that investors do give high valuation to those emerging market firms that chose high ownership participation in cross-border M&As. However, the author did not finds the support for the relationship between ownership participation and cultural distance. Neither did the author finds the support for the relationship between ownership participation and board independence. Originality/value – This study enhances the understanding of conditions under which the level of ownership participation in cross-border M&As would increase (decrease) and how the market reacts to high (low) ownership participation of cross-border M&As by emerging market firms.

scholarly journals Industrial diversification and performance in an emerging market

2016 ◽  
Vol 63 (4) ◽  
pp. 441-454 ◽  
Author(s):  
Emel Yücel ◽  
Yıldırım Önal
Keyword(s):  
Firm Performance ◽  
Panel Data ◽  
Positive Relationship ◽  
Emerging Market ◽  
Performance Measure ◽  
Significant Positive Relationship ◽  
Industrial Diversification ◽  
And Performance ◽  
Diversified Firms ◽  
The Relationship

In this study, we investigated the relationship between industrial diversification and firm performance using a market-based performance measure and an accounting measure. We used the data of the firms listed on Borsa Istanbul during the period between 2006 and 2012. The results of the panel data indicate that there is a significant positive relationship between diversification and performance. We found that diversified firms outperformed the single firms. As is compatible with a resource-based approach, it was found that diversified firms tended to use their resources more efficiently compared to single firms.

Moderating effects of institutional factors on relationship quality: a comparative analysis of the US, Brazil, and China

2019 ◽  
Vol 34 (6) ◽  
pp. 1339-1359 ◽  
Author(s):  
James M. Barry ◽  
Sandra Simas Graca
Keyword(s):  
Relationship Quality ◽  
Emerging Market ◽  
Institutional Factors ◽  
Equation Modeling ◽  
Rule Based ◽  
Content Type ◽  
Governance Environment ◽  
Emerging Market Firms ◽  
Family Based ◽  
The Relationship

Purpose The purpose of this research is to show how institutional factors affect buyer–supplier relationships. Specifically, the authors examine a model of relationship quality and its antecedents across rule-based, relation-based and family-based governance environments. Design/methodology/approach A conceptual model and accompanying research hypotheses are tested on data from a survey of 169 US (rule-based), 110 Brazilian (family-based) and 100 Chinese (relation-based) managers and buyers. Structural equation modeling is used to test the relationship quality framework and the hypothesized moderation of governance environment. Findings Results suggest that the informal institutions which shape a nation’s governance environment impact the relationship building process between buyers and suppliers. Communication quality was found to influence relationship quality more in developed economies where relationships are protected and managed under rule-based governance. Interaction frequency was found to be more relevant in emerging market firms characterized by relation-based societies. relationship benefits are applied more to relationships in emerging markets operating under family-based governance. No differences were found across governance environments for the influence that conflict resolution has on relationship quality. Practical implications Results provide insight into how the fairness and effectiveness of political and economic institutions surrounding a buyer’s nation of operation impact “rules of the game” differently for developed and emerging market firms. Originality/value This study extends research on cross-cultural relationship marketing to more than just communications context and cultural heritage. Results demonstrate that a buyer’s quest for legitimacy impacts its sensitivity to what supplier behaviors matter the most.

scholarly journals The role of firm characteristics on the relationship between gender diversity and firm performance

2016 ◽  
Vol 54 (6) ◽  
pp. 1407-1419 ◽  
Author(s):  
Mehmet Nihat Solakoglu ◽  
Nazmi Demir
Keyword(s):  
Firm Performance ◽  
Emerging Market ◽  
Gender Diversity ◽  
Firm Level ◽  
Content Type ◽  
Specific Factors ◽  
And Performance ◽  
The Relationship ◽  
Measures Of Performance

Purpose – The purpose of this paper is to understand the effect of gender diversity on firm performance and evaluate how that relationship is influenced by some firm-specific factors for firms in an emerging market. Design/methodology/approach – The authors collected firm level financial data and firm level characteristics for the firms listed in BIST100 index of Borsa Istanbul for the period between 2002 and 2006. Due to endogeneity of gender diversity and firm performance, the authors utilize unbalanced panel data with 2SLS specification. To observe the sensitivity of results across measures of performance, three measures of performance, two accounting-based and one market-based, are utilized. Findings – Overall, the authors find some weak evidence that gender diversity impacts firm performance. In particular, the findings imply significant association between gender diversity and firm performance for firms that are targeting local markets, for firms in the financial sector and for firms that are family or block-owned. Moreover, findings are fragile with respect to the measures of diversity and performance selected. Originality/value – Although the relationship between gender diversity and firm performance are investigated several times in the past, there are not many studies that examines the role of firm-specific factors on that relationship. By revealing the factors that are important, this study provides an explanation why the existing literature leads to mixed results.

scholarly journals AGENCY CONFLICTS AND OPERATING PERFORMANCE IN AN EMERGING MARKET

2016 ◽  
Vol 14 (1) ◽  
pp. 73-83 ◽  
Author(s):  
Manas Mayur
Keyword(s):  
Positive Relationship ◽  
Emerging Market ◽  
Negative Relationship ◽  
Intermediate Level ◽  
Curvilinear Relationship ◽  
Agency Conflicts ◽  
Ipo Performance ◽  
And Performance ◽  
The Relationship ◽  
Very High

The study examines the relationship between post-IPO performance of 306 Indian firms and the changes in insiders’ ownership around their IPOs? The results illustrated a curvilinear relationship between ownership and performance. Whereas the negative relationship was found for low and very high ownership level and positive relationship was found for intermediate level. This is an attention-grabbing outcome as it contrasts with earlier studies on curvilinear relationship between ownership and performance, where the negative relationship was found for intermediate level and positive relationship was found for both very low and very high ownership level.

scholarly journals Independence, size and performance of the board: An emerging market research

2018 ◽  
Vol 15 ◽  
pp. 201-208 ◽  
Author(s):  
Joy Elly Tulung ◽  
Dendi Ramdani
Keyword(s):  
Regional Development ◽  
Emerging Market ◽  
Secondary Data ◽  
Board Independence ◽  
Development Bank ◽  
Board Size ◽  
Top Executives ◽  
And Performance ◽  
The Relationship ◽  
Regional Development Bank

The purpose of this article is to find the link between board independence, board size and BPD (regional development bank) performance for describing the corporate governance in regional development bank. The sample of firms consists all 26’s BPD in Indonesia in the period 2010-2014; we take secondary data from the annual report of each BPD, total 203 top executives who are members of the boards of all BPD in Indonesia. The results are the influence of the board independence and board size on the BPD performance. The sample employed all the members of the boards of BPD in Indonesia giving us a confidence in generalization our findings. The statistical method used to test the hypotheses is OLS regression. This method was applied to measure the relationship between board independence, board size and BPD performance. The results suggested that there is a positive relationship between board independence, board size and BPD performance.

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