Predatory FDI during economic crises: insights from outbound FDI from China and host country responses

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Arindam Das
Keyword(s):  
Developing Economies ◽  
Secondary Data ◽  
Political Agenda ◽  
Economic Downturn ◽  
Host Countries ◽  
Investment Policies ◽  
Content Type ◽  
Policy Responses ◽  
Cross Border ◽  
And Control

Purpose This paper aims to analyze outbound investments from China at the time of economic crisis caused due to the coronavirus (COVID-19) pandemic and how target valuation and the host country’s inbound investment policies influence the acquisition intents. As firms witness low valuations during an economic downturn, they become attractive targets for opportunistic buyers, who may be driven by motives beyond business and influenced by the home country’s political agenda. Such attempts are countered with the adoption of restrictive investment policies in host countries. Design/methodology/approach The study uses secondary data on cross-border acquisitions from China over the past year and compares the characteristics of these acquisitions with cross-border acquisitions of acquirers from other large developed and developing economies. Findings Statistical analyzes show that there are significant differences in the way acquirers from China pursue strategic asset seeking, creeping and control seeking acquisitions during the pandemic and the pre-pandemic period. This paper also observes that reduced valuation of the target, due to economic downturn or otherwise, result in greater propensity in strategic asset seeking acquisitions by Chinese acquirers. At the same time, adverse policies at host nations negatively influence the strategic asset seeking propensity of these acquirers. In addition, the premium in the valuation of target assets during the pandemic does not drop significantly when compared with that of the pre-pandemic period. Originality/value With the outbreak of COVID-19 and its concomitant economic impact across the globe, the study brings forwards insights on predatory foreign direct investment (FDI) and explores how policy responses in host countries can be comprehensive rather than disembedded and unilateral.

scholarly journals A strategic managerial approach to corporate sports hospitality: the case of Belgian football

2020 ◽  
Vol 35 (1) ◽  
pp. 61-75
Author(s):  
Matteo Balliauw ◽  
Thomas Verlinden ◽  
Lisa De Croocq ◽  
Aline Fobe ◽  
Tomas Van Den Spiegel
Keyword(s):  
Ad Hoc ◽  
Academic Research ◽  
Secondary Data ◽  
Holistic Approach ◽  
Primary Data ◽  
Economic Downturn ◽  
Management Process ◽  
Content Type ◽  
Marketing Tool ◽  
High Level

Purpose Corporate sports hospitality (CSH) is a relationship marketing tool whereby customers and other stakeholders are invited by a company buying CSH from a club to attend a sports event. The CSH product involves premium seating and optional services such as catering. This industry has been perceived to be in decline, especially in times of economic downturn. The purposes of this paper are a quantification of the CSH industry’s value and the development of a formal CSH management process for both companies and clubs. Design/methodology/approach A case study from the highest division in Belgian football (soccer) is conducted, involving interviews and quantitative data collection as the primary data source, in addition to secondary data and insights from the literature. As opposed to literature, this paper uses a holistic approach, combining the perspective of the club and the CSH buying company with attention for customers. Findings CSH returns account for an important share of club revenues (>10%), despite the smaller market compared to the American major sports leagues. Since a club experiences the strongest competitive impact from substitutes and other clubs in the league, and CSH is often managed on an ad hoc base, disposing of a formal management process is crucial for both clubs and companies. For companies buying CSH, not only return on investment but also return on other objectives matters. Moreover, CSH is at least as effective to deepen existing business relationships as to create new ones. Research limitations/implications The paper provides clubs and companies with a theoretic background and practical key performance indicators (KPIs) to base their managerial decisions on. Although external validity to other Belgian venue-based sports can reasonably be assumed, translating the findings to other countries or non-venue based sports requires caution. Originality/value Little academic research about the CSH industry is available. Specific KPIs to define objectives and measure output, as well as feedback loops for clubs and companies, are developed. The proposed CSH management process follows the same high-level steps, but with different specific actions per actor, leading to a better understanding of similarities and differences of both processes, and a better co-creation of the CSH event.

A cross-national examination of prejudice toward immigrants: the role of education and political ideology

2016 ◽  
Vol 8 (4) ◽  
pp. 279-289
Author(s):  
Ryan Erhart
Keyword(s):  
Political Ideology ◽  
Secondary Data ◽  
Host Countries ◽  
Content Type ◽  
Attitudes Toward Immigrants ◽  
National Examination ◽  
The World ◽  
Political Conservatism ◽  
Prejudicial Attitudes

Purpose More than ever before, people from around the world are migrating away from their country of birth. Yet citizens of host countries do not always welcome these immigrants – instead, citizens sometimes express prejudice toward them. The purpose of this paper is to examine the factors that influence attitudes toward immigrants cross-nationally. Design/methodology/approach Secondary data from the International Social Survey Programme, which includes data from 30 countries across two time points, were analyzed. Findings Findings indicate that people with higher level of education tend to have more favorable attitudes toward immigrants, while those with more politically conservative leanings and those with a greater sense of national identity tend to hold more prejudicial attitudes toward immigrants. At the country/regional level, education is consistent in its relationship with more favorable attitudes. However, political conservatism is less consistent in predicting prejudice – the relationship is strong in western democracies, but is largely negligible in other parts of the world. Originality/value The present analyses carry implications for improving anti-immigrant prejudice throughout the world.

Organizational slack, experience, and acquisition behavior across varying economic environments

2014 ◽  
Vol 52 (5) ◽  
pp. 967-982 ◽  
Author(s):  
Todd Alessandri ◽  
Daniele Cerrato ◽  
Donatella Depperu
Keyword(s):  
Design Methodology ◽  
Behavioral Theory ◽  
Economic Conditions ◽  
Financial Resources ◽  
Organizational Slack ◽  
Economic Downturn ◽  
Content Type ◽  
Cross Border ◽  
Threat Rigidity ◽  
Using Data

Purpose – The purpose of this paper is to examine the effects of the organizational slack and acquisition experience on acquisition behavior across varying environmental conditions. Drawing from behavioral theory and the threat-rigidity hypothesis, the paper explores firm acquisition behavior, in terms of type of acquisitions, before and during the recent economic downturn. Design/methodology/approach – Using data on 385 acquisitions in Italy in the period 2007-2010, the paper tests hypotheses on how organizational slack and acquisition experience influence the likelihood of cross-border and diversifying acquisitions relative to domestic, non-diversifying acquisitions prior to and during the economic downturn. Findings – Results suggest that the availability of financial resources and acquisition experience both have an important influence on acquisition behavior. Firms with greater slack and acquisition experience were more likely to make diversifying and/or cross-border acquisitions, compared to domestic non-diversifying acquisitions, particularly during an economic downturn, than firms with lower levels of slack and acquisition experience. Originality/value – The paper extends behavioral theory and threat-rigidity hypothesis, highlighting their applicability to acquisition behavior across varying economic conditions. Slack resources and acquisition experience appear to be particularly salient during challenging economic times.

Distance is a Janus: an exploratory study of offshored innovation

2018 ◽  
Vol 35 (3) ◽  
pp. 518-546 ◽  
Author(s):  
Melanie P. Lorenz ◽  
Jack Clampit ◽  
Jase R. Ramsey
Keyword(s):  
Multinational Enterprises ◽  
Secondary Data ◽  
Distance Measures ◽  
Research Network ◽  
Primary Data ◽  
Negative Effects ◽  
Host Countries ◽  
Firm Level ◽  
Content Type ◽  
Innovation Outcomes

Purpose A dilemma exists in that many view offshoring as a tradeoff between cost efficiency and innovation. The purpose of this paper is to reconcile this dilemma by showing how and why offshoring to institutionally distant host countries may result in innovation. The authors introduce an institutional lens in order to understand how offshoring to institutionally distant locales affects innovation outcomes of multinational enterprises. This lens is aimed to provide an analytical tool that is less coarse and less overwhelmingly focused on institutional distance (ID) as a harsh and certain harbinger of reduced innovation performance. Design/methodology/approach The authors use primary data from the Offshoring Research Network as well as secondary data from the Frasier Institute on Economic Freedom, and Hofstede’s cultural value survey to empirically assess the distinct effects of distance on innovation at the firm level. Findings The authors have developed a model of distance and innovation which goes beyond the traditional assumption of distance as overwhelmingly negative. Whereas in some cases, the positive effect of formal and informal distances outweigh the negative effects stimulating innovation; in other cases, the negative effects of distance hamper innovation. Finally, some elements of distance may not have an impact on innovation outcomes at all. Research limitations/implications While previous research stresses the negative effects of distance in general, the authors provide an ID model which, in the context of offshoring, takes into account potential positive, negative, or no effects. Practical implications The study presents global supply chain managers with a reference framework for making strategic offshoring relationships decisions. Originality/value By unbundling the inherently confounding formative construction of distance measures, eschewing the reflexive assumption that distance is always negative, and mapping theories specific to the application of distinct institutional logics to specific value-enhancing business activities (i.e. innovation), this study offers a more accurate and complete institutional picture that helps reconcile institutional theory with an empirical record that often fails to find what it predicts.

scholarly journals Standardization versus adaptation of global marketing strategies in emerging market cross-border acquisitions

2017 ◽  
Vol 34 (1) ◽  
pp. 138-158 ◽  
Author(s):  
Rekha Rao-Nicholson ◽  
Zaheer Khan
Keyword(s):  
Emerging Market ◽  
Developed Countries ◽  
Marketing Strategies ◽  
Host Countries ◽  
Global Marketing ◽  
Content Type ◽  
Local Stakeholder ◽  
Cross Border ◽  
Organizational Identities ◽  
Stakeholder Requirements

Purpose The recent increase in the presence of emerging market firms (EMFs) in global markets requires a closer examination of their international marketing strategies (including branding). The purpose of this paper is to examine the factors behind the standardization or adaptation of global marketing strategies adopted by EMFs for their cross-border acquisitions. Design/methodology/approach This paper examines the determinants of the marketing strategies adopted by Indian and Chinese firms for their cross-border acquisitions. The drivers of the standardization/adaptation of marketing strategies (including branding) are identified using both quantitative data collected in 168 cross-border acquisitions conducted by the EMFs mentioned above and the institutional theory and organizational identity literature. Findings Institutional factors have a stronger effect than organizational identities on global marketing strategies, including branding. The standardization of the EMFs’ marketing strategies is driven by the private statuses of the acquirers, legal distances, target countries’ economic development, and the ethnic ties that exist between the home and host countries. The acquirers’ decisions to retain the targets’ brand identities, thus adapting their global marketing strategies, are related to the cultural distances, economic freedom distances, and sizes of the targets. Research limitations/implications In this study, two large emerging markets – India and China – are used to gather the empirical data; future works can expand upon this line of research and examine other EMFs. Practical implications The acquiring companies have to decide whether to adopt an adaption marketing strategy, with reference to the acquired targets’ local stakeholder requirements, or to incorporate their targets’ brands into their own global marketing strategies. Originality/value Typically, previous work on the adaptation vs standardization of global marketing strategies adopted in the wake of cross-border deals has focussed on acquisitions involving companies from developed countries; this paper extends the field of research to the EMFs of two of the most important developing countries: China and India.

Effects of trade misinvoicing on money laundering in developing economies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bello Umar
Keyword(s):  
Developing Countries ◽  
Money Laundering ◽  
Developing Economies ◽  
Secondary Data ◽  
Developed Countries ◽  
Research Papers ◽  
High Quality Research ◽  
Content Type ◽  
Qualitative Research Methodology ◽  
Developing And Developed Countries

Purpose This study aims to define the concepts and determine the extent to which trade misinvoicing influences money laundering activities in developing countries. Design/methodology/approach A qualitative research methodology was adopted using a descriptive synthesis of secondary data due to the heterogeneous nature of data sources (empirical evidence and content analysis). Findings Analysis revealed that in recent times trade misinvoicing accounts for over 20% of international trade value between developing and developed countries, and trade misinvoicing has been identified as a trade-based money laundering mechanism. Research limitations/implications Unavailability of homogenous data relating to trade misinvoicing among developing countries, different methods for measuring trade misinvoicing and inadequate high-quality research papers that led to the use of reports from reputable organisations. Originality/value To the best of the author’s knowledge, this study is among the few research works to assess the effects of trade misinvoicing and how it influences money laundering activities in developing countries.

Two Accounts of International Tax Justice

2020 ◽  
Vol 33 (2) ◽  
pp. 317-339
Author(s):  
Ivan Ozai
Keyword(s):  
Developing Countries ◽  
Tax Competition ◽  
Income Tax ◽  
Capital Mobility ◽  
Institutional Design ◽  
Developing Economies ◽  
Host Countries ◽  
Cross Border ◽  
Relative Dependence ◽  
International Tax

The contemporary international tax regime has been increasingly criticized over the years from varied perspectives, particularly as to the unfairness it produces for developing countries. Some commentators argue it is unjust due to the lack of participation of developing countries in the policymaking process on an equal footing. Others suggest the international tax regime was designed by affluent countries to respond to self-interested goals. Some note that its current institutional design creates opportunities for tax competition and avoidance, which more seriously affect developing economies due to their relative dependence on corporate income tax and their greater vulnerability to capital mobility. Others specifically criticize how taxing rights, that is, the entitlement of countries to tax cross-border transactions, are currently allocated between home and host countries and how they disfavour capital-importing, developing countries.

Impacts of globalization on worker injury in host countries

2019 ◽  
Vol 10 (2) ◽  
pp. 119-133
Author(s):  
Michael D. Stackhouse ◽  
Kaustav Misra ◽  
Micah DelVecchio
Keyword(s):  
Social Responsibility ◽  
Labor Force ◽  
Panel Study ◽  
Secondary Data ◽  
International Expansion ◽  
Host Countries ◽  
Data Set ◽  
Content Type ◽  
Iso 26000 ◽  
The Impact

Purpose International expansion is an inevitable consequence for companies that are seeking revenue growth. Foreign direct investment (FDI) by global enterprises is a common route of such expansion. As companies invest abroad, competing interests cause concerns over the impact (both positive and negative) on the local labor force (necessitating corporate social responsibility) caused by FDI. Therefore, there is a logical link between FDI, a country’s labor force and globalization. The purpose of this study is to explore this untested relationship. Design/methodology/approach This panel study uses cross-country data from the World Bank to understand the pattern of influence of globalization on worker injury. A secondary data set of 36 developed and developing countries from 2003 to 2007 are gathered for this paper to analyze. Findings The results of this paper indicate that, companies are seeking to maintain higher levels of social responsibility should not only consider a framework such as ISO 26000 themselves but also they should encourage compliance from their upstream suppliers as well. Originality/value Goods for these companies are manufactured in Bangladesh, but unfortunately, a serious tragedy occurred when a building collapsed, resulting in the death of 1,127 people, which was not the first of such events in Bangladesh (The Associated Press, 2013). Inspired by this recent tragedy, this study examines possible connections between globalization and the factors that are associated with the incidences of worker injury. Globalization is a well-studied phenomenon, however very little has been done to examine its impact on worker injuries; this paper helps fill that gap.

Foreign direct investment, smart policies and economic growth

2017 ◽  
Vol 17 (3) ◽  
pp. 245-256 ◽  
Author(s):  
Murat Yulek ◽  
Nurullah Gur
Keyword(s):  
Host Country ◽  
Capital Accumulation ◽  
Developing Economies ◽  
Foreign Direct Investments ◽  
Domestic Investment ◽  
Host Countries ◽  
Fdi Inflows ◽  
Investment Policies ◽  
Net Benefits ◽  
Fdi Policies

Developing economies need foreign direct investments to complement domestic investment with a view to increase capital accumulation, productivity and growth rates. But, foreign direct investments (FDIs) may have costs in addition to the well-known benefits to the host country. Generating higher net benefits from FDI necessitates design and implementation of ‘smart’ investment policies by the host countries rather than the current orthodoxy of ‘neutral’ FDI policies, which is based on liberalizing the FDI inflows and aim to attract ‘any’ kind of FDI. In this article, we discuss such polices and how they relate to host country circumstances.

Governance distance and the performance of cross-border private participation infrastructure projects

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yanxi Li ◽  
Heng Zhao ◽  
Shanshan Ouyang
Keyword(s):  
Emerging Market ◽  
Infrastructure Projects ◽  
Host Countries ◽  
Content Type ◽  
Cross Border ◽  
Study Results ◽  
Private Participation ◽  
Negative Effect ◽  
Host Government ◽  
The Impact

PurposeThe privatization of infrastructure promotes efficiency and service standards. While cross-border private participation infrastructure (PPI) projects hosted in emerging markets have become more prevalent in recent years, there have also been more failures. The purpose of this paper is to investigate how governance distance affects the survival of cross-border PPI projects.Design/methodology/approachThe authors provide theoretical justification and empirical evidence to verify our views. The authors test the hypotheses on a sample of 4,678 cross-border PPI project investments made in emerging market countries between 1990 and 2016. Estimation techniques consist of a binary logistic regression model and a rare events logistic model.FindingsThe findings suggest that increased governance distance can lead to project failure. The study results show that governance distance is negatively correlated with the probability of project survival. Greenfield investment intensifies the negative effect of governance distance while competitive contracts mitigate the negative effect of governance distance.Practical implicationsThe results reveal that transnational investment in infrastructure projects is susceptible to institutional differences between home and host countries. Therefore, both private enterprises and host government should pay attention to the impact of inter-country differences on negotiations and project operation. Competitive contracts mitigate this negative effect, but entering in the form of greenfield investment amplifies the negative effect of distance.Originality/valueTransnational industrial engineering projects are easily affected by the differences in governance levels between the two countries. This study introduces governance distance into the field of infrastructure projects, focusing on the impact of differences between home and host countries on transnational projects. The findings on infrastructure projects that are closely related to host government contribute to the literature by broadening the research of institution and distance.

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