Global Standards and Emerging Markets: The Institutional-Investment Value Chain and the CalPERS Investment Strategy

2005 ◽  
Vol 37 (11) ◽  
pp. 1955-1974 ◽  
Author(s):  
Tessa Hebb ◽  
Dariusz Wójcik
Keyword(s):  
Emerging Markets ◽  
Value Chain ◽  
Institutional Investors ◽  
Capital Investment ◽  
Emerging Market ◽  
Investment Strategy ◽  
Institutional Investment ◽  
Investment Value ◽  
Global Standards ◽  
Anglo American

Institutional investors, particularly pension funds, based in developed Anglo-American capital markets are increasingly investing in international markets, including emerging markets, in an effort to capitalize on the rapid growth rates of these markets. But investment in far-flung jurisdictions carries with it risk and uncertainty, particularly when the corporate standards of firms in emerging markets are below those found in these investors' home countries. In order to mitigate the risks posed by poor corporate standards of behaviour, institutional investors increasingly apply nonfinancial criteria not only to individual firms in emerging markets, but to the corporate practices of whole countries. Though countries and their regulatory regimes are central to external capital-investment decisions, we find convergence to global standards occurs when key actors in the investment value chain demand levels of corporate and social behavior greater than those currently consistent with countries' own regulatory frameworks. We test this hypothesis using the decision of the California Public Employees Retirement System to screen out several emerging-market countries from their investment portfolio on the basis of a variety of nonfinancial criteria.

scholarly journals Moderating Role of Financial Market Development on the Relationship between Stock Liquidity and Dividend

2020 ◽  
Vol 16 (2) ◽  
pp. 77-99
Author(s):  
Mohd Ashari Bakri ◽  
Amin Nordin Bany-Ariffin ◽  
Bolaji Tunde Matemilola ◽  
Wei Theng Lau
Keyword(s):  
Emerging Markets ◽  
Financial Market ◽  
Emerging Market ◽  
Investment Strategy ◽  
Market Development ◽  
Stock Liquidity ◽  
Financial Market Development ◽  
The Relationship ◽  
Moderating Role

This article aims to investigate the relationship between stock liquidity and dividend across emerging market countries as well as examined the moderating role of financial market development on the relationship between stock liquidity and dividend. Data were obtained from the World Bank and DataStream databases. The study examined 3,258 listed firms from 22 emerging markets to be extrapolated in the emerging market context. To analyse the data, this article used the panel data Tobit model and panel logistic regression, both with random effects. The analysis revealed that financial market development has a positive moderating effect on the relationship between stock liquidity and dividend by improving local market liquidity and mitigating information asymmetry. The study findings provide information for managers to devise investment strategy in the emerging markets. This article provides new insights into the financial market development moderating role on the relationship between stock liquidity and dividend.

Examining Granger Causality in the Behavioral Reactions of Institutional Investors— Evidence from India

2019 ◽  
Vol 22 (04) ◽  
pp. 1950027
Author(s):  
Rajesh Mohnot
Keyword(s):  
Granger Causality ◽  
Institutional Investors ◽  
Investment Strategy ◽  
Behavioral Reactions ◽  
Causality Test ◽  
Institutional Investment ◽  
Vector Error Correction ◽  
Vector Error ◽  
Foreign Institutional Investors ◽  
Indian Stock Market

The study examines the behavioral reactions of foreign and domestic institutional investors in the Indian stock market. It poses some critical questions on whether these two types of institutional investors have common investing behavior, and whether foreign institutional investors (FIIs) affect domestic institutional investors’ (DIIs) strategies. Vector error correction model (VECM) is used to examine the trading and investing behavior of these institutional investors. Granger causality test is used to check if foreign institutional investment strategy influences domestic institutional strategy or vice versa. The results indicate that neither foreign institutional investors’ sell (FIISELL) activities affect domestic institutional investors’ sell (DIISELL) activities nor DIISELL affects FIISELL. This may have a crucial policy implication that both institutional investors have independent trading strategies, especially when it comes to selling stocks. But both institutional investors’ sale transactions do affect their own buy transactions implying that any of the institutions’ selling activities should be supported by their buying activities.

scholarly journals Customer Value Creation for the Emerging Market Middle Class: Perspectives from Case Studies in India

2021 ◽  
Vol 14 (10) ◽  
pp. 455
Author(s):  
Rifat Sharmelly ◽  
Anton Klarin
Keyword(s):  
Emerging Markets ◽  
Organizational Performance ◽  
Value Creation ◽  
Value Chain ◽  
Customer Value ◽  
Emerging Market ◽  
Necessary Condition ◽  
Strategic Choices ◽  
Functional Value ◽  
Competitive Prices

This paper examines the customer value creation framework and discusses the design of the key elements for product development in emerging markets. A scientometric/bibliometric scoping literature review identifies a clear gap in the current research in studying prerequisites for customer value creation in emerging market contexts. Observing experiences of Daikin and Renault in the context of India, the purpose of this paper is to identify value creation strategic choices following which comprehensive customer value offerings in products and services can be successfully created by firms across the four facets of the framework in emerging markets. Value creation strategies include having a nuanced understanding of the latent contextual needs to offer localized high-quality products that embody distinct functional attributes that provide a functional value and being responsive to specific emotional needs and epistemic experiences of the target customers in product and service offerings to deliver a greater experiential value. Furthermore, the products should adopt a localized operational excellence strategy throughout the value chain to reduce costs for competitive price offerings in order to deliver superior cost value and develop brand image and equity strategy, thereby allowing for the provision of a greater symbolic value. Experiences of successful firms demonstrate the need for extensive local research into the emerging market followed by localization of production and development of a distribution network to be able to offer customized products at competitive prices whilst maintaining the brand value. We thus extend the customer value creation framework by introducing localization as a necessary condition for successful organizational performance in emerging markets.

Executive Insights: Managing the Transnational Value Chain—Strategies for Firms from Emerging Markets

1997 ◽  
Vol 5 (3) ◽  
pp. 71-84 ◽  
Author(s):  
C. Samuel Craig ◽  
Susan P. Douglas
Keyword(s):  
Emerging Markets ◽  
Value Chain ◽  
First Generation ◽  
Low Cost ◽  
Emerging Market ◽  
Private Label ◽  
World Markets ◽  
Component Manufacturing ◽  
Generic Strategies ◽  
Generation Technology

To compete successfully in world markets, firms from emerging market and newly industrialized economies need to develop strategies to participate more broadly in the transnational value chain. More specifically, they need to move beyond cost-oriented commodity approaches that rely on low-cost labor and other resources to value-creating strategies that capture a greater share of the transnational value chain. This article presents six generic strategies appropriate for emerging market firms: low cost commodity, component manufacturing, private label manufacturing, low-cost leader, first generation technology, and specialized niche. The advantages and limitations of each of these strategies are discussed, as well as general guidelines for extending the firm's participation in the transnational value chain.

scholarly journals From the Host to the Home Country, the International Upgradation of EMNEs in Sustainability Industries—The Case of a Chinese PV Company

2019 ◽  
Vol 11 (19) ◽  
pp. 5269 ◽  
Author(s):  
Jun Jin ◽  
Zhengyi Zhang ◽  
Liying Wang
Keyword(s):  
Emerging Markets ◽  
Host Country ◽  
Value Chain ◽  
Multinational Enterprises ◽  
Home Country ◽  
Emerging Market ◽  
Internal Market ◽  
Market Mechanism ◽  
Trigger Time ◽  
Depth Analysis

With the internationalization of firms from emerging-markets, the upgradation along the global value chain of emerging-market multinational enterprises (EMNEs) has attracted the attention of academics and industries. However, the role of upgradation of EMNEs in a host country to the transition of EMNEs in the home country is ignored. This study explored how EMNEs from emerging-markets could upgrade their operations in their home countries driven by the transformation of subsidiaries in host countries. An in-depth analysis of Company S was conducted to elaborate on the resources and trigger time a firm needs to transform the function of a subsidiary in the host country, and the upgradation of the firm in the home country during the internationalization process. Research on the internationalization of Company S suggested that with the complementary capabilities and markets as the fundamental basic resources, the industrial crisis triggers the firm’s upgrading in the host country. In addition, the intrafirm (internal) market mechanism makes it possible to sustain the upgrading process without conflicts between subsidiaries. Moreover, synergies will develop through interactions with subsidiaries, owing to complementary capabilities and the internal market. The synergetic development promotes the transition of firms in the home country and emphasizes the complementarity of the manufacturing and engineering service. Finally, this study demonstrates the two-stage international upgrading process, in which the international upgrading of firms in the home country is driven by the development and transition of the subsidiary in the host country, which provides contributions to the internationalization upgrading strategy and process of firms from emerging-markets.

Commodities in International and Emerging Markets

2018 ◽  
Author(s):  
Kamal Smimou
Keyword(s):  
Business Cycle ◽  
Emerging Markets ◽  
Emerging Market ◽  
Trading Strategies ◽  
Emerging Nations ◽  
Economic Significance ◽  
Portfolio Strategy ◽  
Bond Portfolio ◽  
The Business Cycle ◽  
Global Investors

This chapter seeks to elucidate the relations of U.S.-listed global commodity futures, the business cycle, and stocks and bonds of emerging markets. It shows that global investors poised to benefit from investing in emerging market securities can concurrently learn from and better understand the dynamic intermarket relations when establishing such trading strategies. Investment in emerging markets can enhance the performance and sturdiness of an equity or bond portfolio strategy. Evidence lends support to the conjecture that a subtle contemporaneous and occasionally trailing effect exerted by the movement of global commodities on the business cycle exists. Global commodities also affect equity and bond market dynamics. The evidence also reveals differences in terms of economic significance and magnitude among selected emerging nations and across various commodities.

Consumer Behavior in Emerging Markets

2018 ◽  
pp. 218-240 ◽  
Author(s):  
Raquel Castaño ◽  
David Flores
Keyword(s):  
Consumer Behavior ◽  
Emerging Markets ◽  
Emerging Market ◽  
High Income ◽  
Future Research ◽  
Psychological Processes ◽  
Developed Markets ◽  
Contextual Characteristics ◽  
Initial Framework

Emerging markets are substantially different from markets in high-income, industrialized societies. While many aspects of consumer behavior are the result of inherent psychological processes and are, thus, generalizable across countries and cultures, the specific contextual characteristics of emerging markets can significantly influence other aspects of consumer behavior. In this chapter, we explore the behavior of emerging market consumers. This chapter reviews the existing literature and proposes an initial framework delineating the main differences between emerging markets and developed markets consumers that describe how consumers in these societies recognize a need for, select, evaluate, buy, and use products. The chapter discusses the issues and contributions of the research on emerging consumers and presents implications of extant research for international managers. Finally, the chapter elaborates on an agenda for future research in this area.

Investments by Emerging-Market Multinationals in Other Emerging Markets

2018 ◽  
pp. 630-656
Author(s):  
Jing Li ◽  
Daniel Shapiro
Keyword(s):  
Sustainable Development ◽  
Corporate Governance ◽  
Emerging Economies ◽  
Multinational Enterprises ◽  
Emerging Market ◽  
Institutional Development ◽  
Spillover Effects ◽  
Investment Strategy ◽  
Future Research ◽  
Foreign Direct Investments

This chapter reviews the literature on foreign direct investments among emerging economies (E-E FDI), focusing on the motivations behind E-E FDI, country-specific advantages and firm-specific advantages associated with emerging-economy multinational enterprises (EMNEs), and spillover effects of E-E FDI on host-country economic and institutional development. We identify the following topics as posing important questions for future research: EMNEs’ ability to leverage home-government resources and diplomatic connections to promote investment in other emerging economies; nonmarket strategies of EMNEs in emerging economies; ownership and corporate governance affecting investment strategy and performance of EMNEs; E-E FDI contributions to sustainable development in host countries. Future studies should also consider potential heterogeneity among EMNEs by integrating insights from institutional theory, network theory, political science, corporate governance, corporate social responsibility, and sustainable-development research.

Earnings management and ownership structure in emerging market

2017 ◽  
Vol 43 (10) ◽  
pp. 1117-1136 ◽  
Author(s):  
Naima Lassoued ◽  
Mouna Ben Rejeb Attia ◽  
Houda Sassi
Keyword(s):  
Emerging Markets ◽  
Earnings Management ◽  
Ownership Structure ◽  
Audit Quality ◽  
Emerging Market ◽  
Middle Eastern ◽  
Convincing Evidence ◽  
Loan Loss ◽  
African Countries ◽  
Content Type

Purpose The purpose of this paper is to investigate whether ownership structure affects earnings management in the banking industry of emerging markets. Design/methodology/approach The empirical study is conducted using a sample of 134 banks from 12 Middle Eastern and North African countries. Econometrically speaking, the study used a panel data regression analysis. Findings The authors found convincing evidence that banks with more concentrated ownership use discretionary loan loss provisions to manage their earnings. The authors also found that state and institutional owners encourage earnings management, while family owners reduce this practice. Practical implications The findings would be valuable for investors since they should take into account ownership structure in order to reach a better investment decision. Moreover, regulatory reforms in emerging markets should push for more transparency about ownership structure, high levels of supervision, and external audit quality. Originality/value This study presents international evidence on the prominent role of owners in earnings management in emerging markets with weak shareholder rights protection.

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