scholarly journals Location choice, ownership structure and multinational performance

2018 ◽  
Vol 26 (3) ◽  
pp. 250-276 ◽  
Author(s):  
Jinlong Gu ◽  
Yong Yang ◽  
Roger Strange
Keyword(s):  
Ownership Structure ◽  
Multinational Enterprises ◽  
Location Choice ◽  
Developed Countries ◽  
Institutional Perspective ◽  
Data Set ◽  
Content Type ◽  
Foreign Operation ◽  
Investment Location ◽  
Positive Effect

Purpose This paper aims to link location choice and ownership structure to the debate on the multinationality–performance relationship. Design/methodology/approach This paper draws on a panel data set that covers 1,321 emerging economy multinational enterprises (EMNEs) and includes 4,227 observations from 44 emerging economies between 2004 and, 2013. Findings The empirical results find that multinationality has a positive effect on EMNEs’ performance, and that this positive effect is larger for their investments in developed countries than in developing countries. The study also finds that this positive effect of foreign operation in developed countries switch to negative at higher levels of multinationality for privately owned EMNEs than for state-owned EMNEs. Originality/value This paper provides new empirical evidence to support an institutional perspective of the internationalisation of EMNEs that are investing in developed countries, contributing to the multinationality-performance literature, highlighting the importance of foreign direct investment location decision and ownership structure.

The influence of motivations on international location choice in least developed, emerging and developed countries: evidence from Chinese MNEs

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fernando Angulo-Ruiz ◽  
Albena Pergelova ◽  
William X. Wei
Keyword(s):  
Emerging Markets ◽  
Multinational Enterprises ◽  
Location Choice ◽  
Emerging Market ◽  
Developed Countries ◽  
Asia Pacific ◽  
Institutional Constraints ◽  
Least Developed Countries ◽  
Content Type ◽  
Developed Economies

Purpose This research aims to assess variations of motivations when studying international location decisions. In particular, this study aims to assess the influence of diverse motivations – seeking technology, seeking brand assets, seeking markets, seeking resources and escaping institutional constraints – as determinants of the international location choice of emerging market multinational enterprises (EM MNEs) entering least developed, emerging, and developed countries. Design/methodology/approach The authors develop a set of hypotheses based on the ownership–location–internalization framework and complement it with an institutional perspective. The conceptual model posits that the different internationalization motivations (seeking technology, seeking brand assets, seeking markets, seeking resources and escaping institutional constraints) will impact the location choice of EM MNEs in developed economies, emerging markets or least developed countries. This study uses the 2013 survey data collected by the China Council for the Promotion of International Trade and the Asia Pacific Foundation of Canada. The final sample of analysis of this research includes 693 observations. Findings After controlling for several variables, two-stage Heckman regressions show there is a variation of motivations when EM MNEs enter least developed countries, emerging markets and developed economies. EM MNEs are motivated to enter least developed countries to seek markets and resources. Conversely, those firms enter developed countries in their search for technological assets and to escape institutional constraints at home. While the present study findings show a clear difference in the motivations that lead to location choice in least developed vs developed countries, the results are not as clear for location in other emerging countries. Research limitations/implications The paper offers empirical support for the importance of motivations as crucial determinants of location choice. Originality/value This paper provides a detailed quantitative study on the internationalization location choice of EM MNEs based on their motivations. Though theoretical models underscore the importance of motivations, we know very little about how, in practice, motivations drive location choice. This study contributes to the international location choice literature a deeper understanding of how diverse motivations drive choices of expansion into developed economies, emerging markets or least developed countries.

Does state capitalism matter in firm internationalization? Pace, rhythm, location choice, and product diversity

2016 ◽  
Vol 54 (6) ◽  
pp. 1320-1342 ◽  
Author(s):  
Hongquan Chen ◽  
Xiaodong Li ◽  
Saixing Zeng ◽  
Hanyang Ma ◽  
Han Lin
Keyword(s):  
Developing Countries ◽  
Location Choice ◽  
Developed Countries ◽  
Least Square ◽  
Product Lines ◽  
State Capitalism ◽  
Content Type ◽  
Government Organizations ◽  
Positive Effect ◽  
Internationalization Behavior

Purpose – The purpose of this paper is to investigate the direct effects of state capitalism on the internationalization behavior of state-owned enterprises (SOEs). Specifically, the authors focus on four distinct aspects of internationalization behavior; namely, pace of internationalization, rhythm of internationalization, location choice (developing countries vs developed countries), and diversity of product lines. Design/methodology/approach – The authors empirically test the hypotheses using data from Chinese construction companies during the period 2009-2015. The authors build a unique dataset by combining the data from ENR Top 225 International Contractors reports and the State Administration for Industry and Commerce of China information. Moreover, concerning the panel data structure and the potential for autocorrelation and heteroskedasticity, The authors use the feasible generalized least square panel model to test the hypotheses. Findings – The authors find that the level of state capitalism has a positive effect on SOEs’ rhythm of internationalization, while there is no significant relationship between the level of state capitalism and the pace of internationalization. Furthermore, the authors find that the SOEs affiliated with higher levels of government organizations are more likely to locate business operations in developing countries and engage in more diversity of product lines. Research limitations/implications – The findings show that the different varieties of state capitalism are the source of the different internationalization patterns of SOEs. Instead of supposing SOEs to be uniform players in emerging economies, the authors show that the nature of SOEs varies depending on the level of government with which they are affiliated, and this fact results from the divergent manifestations of state capitalism itself. Originality/value – This study improves the understanding of how state capitalism affects the capabilities and motivations of SOEs in regard to overseas expansion. The authors extend institutional theory by supposing that the level of state capitalism has a positive effect on the rhythm of internationalization. Moreover, the authors find that SOEs embedded with high levels of government affiliation tend to enter into developing countries and diversify their product lines.

Human capital, cultural distance and staffing localization

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Naoki Ando
Keyword(s):  
Human Capital ◽  
Organizational Performance ◽  
Multinational Enterprises ◽  
Cultural Distance ◽  
Data Set ◽  
Subsidiary Performance ◽  
Capital Theory ◽  
Content Type ◽  
Negative Effect ◽  
Positive Effect

Purpose This study aims to explore how a change in the staffing configuration of foreign subsidiaries affects subsidiary performance by focusing on staffing localization. Design/methodology/approach The relationship between localization and subsidiary performance is analyzed from the perspective of human capital. Hypotheses are tested using a panel data set of foreign direct investment by Japanese multinational enterprises. Findings The analysis demonstrates that localization has a positive effect on subsidiary performance when subsidiaries can access a pool of competent local managers in the host country. It also shows that when competent local managers are highly available, localization has a positive effect on subsidiary performance under high cultural distance. In comparison, when the availability of competent local managers is limited and cultural distance is high, localization has a negative effect on subsidiary performance. Originality/value Using human capital theory, this study theorizes how localization, which is a change in the configuration of human capital toward a reliance on local-specific human capital, enhances subsidiary-specific advantages. It introduces the effects of changes in the configuration of human capital over time, into studies on subsidiary staffing. In addition, from a different viewpoint than previous studies, this study proposes one possible path where human capital leads to organizational performance. Specifically, it shows that a change in the configuration of human capital affects subsidiary-specific advantages, which eventually impacts subsidiary performance.

Can’t take the heat? Climate and foreign subsidiary locations

2019 ◽  
Vol 15 (1) ◽  
pp. 42-67
Author(s):  
Amanda Budde-Sung ◽  
Tanya A. Peacock
Keyword(s):  
Economic Theory ◽  
Multinational Enterprises ◽  
Multinational Firms ◽  
Global Financial Crisis ◽  
Location Choice ◽  
Economic Effects ◽  
Foreign Subsidiary ◽  
Global Business ◽  
Data Set ◽  
Content Type

Purpose This paper aims to build upon climato-economic theory to investigate the issue of climate’s effect on foreign expansion and location choice. Design/methodology/approach This empirical paper looks at foreign subsidiary location through the lens of the climato-economic theory. To do this, the study uses a balanced data set, looking at foreign expansion before, during and after the global financial crisis of US multinational firms. A multilevel step-wise regression is used to look at climate, culture and economic effects on foreign location choice. Findings The findings suggest that US multinational enterprises tend to have fewer foreign subsidiaries in countries with extreme climates, and they prefer locations with warmer climates, avoiding locations with colder climates, although they gravitate toward locations with less sunshine. Climate emerges as an important factor in location choice, with greater weighting than other factors, including economic and cultural factors in times of economic calm, but the weightings of the factors change during times of economic crisis. Originality/value This paper contributes to the global business literature by extending the climate-economic theory to macro levels affecting the firm. The paper is the first to look specifically at how climate affects foreign subsidiary location.

Market responsiveness: antecedents and the moderating role of external supply chain integration

2017 ◽  
Vol 32 (1) ◽  
pp. 30-45 ◽  
Author(s):  
Tuan Luu
Keyword(s):  
Supply Chain ◽  
Supply Chain Integration ◽  
Manufacturing Companies ◽  
Data Set ◽  
Content Type ◽  
Business Context ◽  
Market Responsiveness ◽  
Positive Effect ◽  
Ambidextrous Leadership

Purpose The interaction between opening and closing behaviors of ambidextrous leadership produces “change” force throughout the organization in proactive response to market forces. This research aims to assess the role of ambidextrous leadership in fostering entrepreneurial orientation (EO) and market responsiveness. The research also seeks an insight into how external supply chain integration moderates the positive effect of EO on market responsiveness. Design/methodology/approach Research data were collected from 327 meso-level managers and 517 subordinates from chemical manufacturing companies in the Vietnam business context. Findings Research findings shed light on the positive effect of ambidextrous leadership on EO, which in turn contributes to market responsiveness. The moderation role that external supply chain integration plays on the EO–market responsiveness linkage was also grounded on the data set. Originality/value Through the identification of the predictive roles of ambidextrous leadership and EO for market responsiveness, the current research indicates the convergence between leadership, EO and market responsiveness research streams.

scholarly journals Revenue diversification and financial sustainability of microfinance institutions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Peter Nderitu Githaiga
Keyword(s):  
Generalized Method Of Moments ◽  
Financial Sustainability ◽  
Microfinance Institutions ◽  
Revenue Diversification ◽  
Estimation Model ◽  
Data Set ◽  
Content Type ◽  
Method Of Moments Estimation ◽  
The Impact ◽  
Positive Effect

PurposeThis paper aims to investigate whether revenue diversification affects the financial sustainability of microfinance institutions (MFIs).Design/methodology/approachThe study uses a worldwide panel data set of 443 MFIs in 108 countries for the period 2013–2018 and two-step system Generalized Method of Moments estimation model.FindingsThe study finds that revenue diversification has a significant and positive effect on the financial sustainability of MFIs.Practical implicationsThe findings of this study actually offer important managerial and policy lessons on MFIs’ financial sustainability. Microfinance managers and policymakers should consider revenue diversification as a strategy through which MFIs can attain financial sustainability instead of overreliance on donations and government subsidiesOriginality/valueUnlike previous studies that examined revenue diversification in the context of banking firms, this study contributes to literature by examining the impact of revenue diversification of the financial sustainability of MFIs.

Does the origin matter? The effects of cross-border mergers and acquisitions in France

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Federico Carril-Caccia
Keyword(s):  
Foreign Direct Investment ◽  
Mergers And Acquisitions ◽  
Direct Investment ◽  
Developed Countries ◽  
Emerging Countries ◽  
Intangible Asset ◽  
Data Set ◽  
Content Type ◽  
Cross Border ◽  
The Impact

PurposeThe present article analyses the effects of cross-border mergers and acquisitions (CBM&As) on targets' total factor productivity (TFP), employment, wages and intangible-asset investment. The author investigates whether the impact of CBM&As differs depending on the origin of the investing multinational (MNE). The author distinguishes between CBM&As from European countries, other developed countries and emerging countries.Design/methodology/approachThe author makes use of a unique firm-level data set of foreign direct investment in the French manufacturing sector. The authors applies propensity score matching and difference in differences to estimate the effect of CBM&As.FindingsThe results show that the consequences of CBM&As differ strongly depending on the origin. CBM&As from European MNEs have a positive impact on TFP, wages and intangible-asset investment, and those from emerging countries seem to increase wages and intangible-asset investments. In contrast, CBM&As that originate from MNEs from other developed countries do not have a significant effect.Originality/valueThis article contributes to the growing literature on the effects of foreign direct investment that highlights the relevance of accounting for the MNEs' origin. In particular, it is the first to address the impact of emerging-country MNEs' CBM&As in Europe.

The effect of fiscal transparency on government spending efficiency

2019 ◽  
Vol 46 (7) ◽  
pp. 1365-1379 ◽  
Author(s):  
Elina De Simone ◽  
Mariangela Bonasia ◽  
Giuseppe Lucio Gaeta ◽  
Lorenzo Cicatiello
Keyword(s):  
Government Spending ◽  
Financial Management ◽  
Institutional Environment ◽  
Public Spending ◽  
Time Interval ◽  
Data Set ◽  
Content Type ◽  
Fiscal Transparency ◽  
Positive Effects ◽  
Positive Effect

Purpose Making citizens able to monitor and evaluate public spending activities is a fundamental issue in public financial management literature. The purpose of this paper is to analyze whether fiscal transparency, measured by the Open Budget Index, has an effect on public spending performance, measured by the World Economic Forum’s Global Competitiveness Report data. Design/methodology/approach Research methods rely on random-effects panel regression models on a country-level panel data set of 82 world countries observed in the 2008–2015 time interval. Findings Results show that the potential positive effects of fiscal transparency are mediated by the level of democracy of the country. In detail, in democratic countries, a higher degree of disclosure of fiscal information is correlated with a higher efficiency of government spending while, in non-democratic countries, fiscal transparency does not seem to provide any effect. Social implications The results suggest that fiscal transparency can be a powerful device where politicians can be held accountable for their actions, while it could fail to provide positive results where a strong and effective vertical accountability is missing. Originality/value The novelty of the paper is twofold. First, it provides new additional evidence about the positive effect that fiscal transparency has on public spending efficiency by advancing previous research on this topic (Porumbescu, 2017; Montes et al., 2019). Second, the paper investigates conceptually and empirically how the positive effect on public spending efficiency determined by fiscal transparency depends on the degree of democracy present in the institutional environment in which fiscal information disclosure is implemented.

Institutional diversity, internal search behaviour, and joint-innovations

2015 ◽  
Vol 53 (9) ◽  
pp. 2088-2106 ◽  
Author(s):  
Antonio Messeni Petruzzelli ◽  
Daniele Rotolo
Keyword(s):  
Institutional Diversity ◽  
Institutional Perspective ◽  
University Partnerships ◽  
Content Type ◽  
Internal Resources ◽  
Biotechnology Firms ◽  
Institutional Differences ◽  
The Impact ◽  
University Industry ◽  
Positive Effect

Purpose – The purpose of this paper is to investigate the innovation performance of R & D collaborations from an institutional perspective. Design/methodology/approach – The authors conduct an empirical analysis based on 487 joint-inventions developed by 50 US biotechnology firms from 1985 to 2002. Findings – The authors find that institutional diversity between the partners, as reflected by firm-university partnerships, positively affects the value of their joint-innovation. This effect is reinforced by the firm’s behaviour in searching for knowledge broadly (scope) and in the non-commercial realm (science-based nature). Conversely, as the firm searches for knowledge in few domains areas (depth), the positive effect of institutional diversity is reduced. Research limitations/implications – The study contributes to literature on partner selection, university-industry collaborations, balance between exploration and exploitation, as well as to research on the interdependence between firm’s external and internal resources. Practical implications – The study reveals that when firms innovate together with universities, this promotes the development of high valuable innovations. In addition, it emerges that to fully capture the benefits of these collaborations, firms have to develop a wide set of competencies supported by a scientific approach in problem solving. Originality/value – The study sheds new light on the dynamics favouring the joint development of valuable innovations by focusing on the impact exerted by partners’ institutional differences, as revealed by how norms and rules shape innovation’s modes.

Country-of-origin and CSR initiatives: a social dominance perspective

2018 ◽  
Vol 14 (3) ◽  
pp. 501-515
Author(s):  
Leyla Orudzheva ◽  
Nolan Gaffney
Keyword(s):  
Competitive Advantage ◽  
Host Country ◽  
Social Dominance ◽  
Multinational Enterprises ◽  
Home Country ◽  
Country Of Origin ◽  
Developed Countries ◽  
Less Developed Countries ◽  
Content Type ◽  
Business Context

Purpose Research on corporate social responsibility (CSR) continues to proliferate, but why and how multinational enterprises (MNEs) from different parts of the world engage in CSR is still unclear. The purpose of this study was to investigate whether there are differences in behavior based on the status of the MNE’s home country relative to the host country. Design/methodology/approach Applying a social dominance theory (SDT) framework, the authors explain variations in MNE behavior because of perceived hierarchical differences between a MNE’s home country and that of the host country. It is posited that these hierarchical differences trigger a country-of-origin bias that affects stakeholders’ expectations for the MNE, as well as that firm’s response to those expectations. In this integrative conceptual paper, we propose a testable framework derived from a deductive approach that applies the tenets of SDT to predict outcomes of CSR implementation by MNE’s subsidiaries. Findings MNEs from less developed countries are subject to lower expectations and engage in self-debilitating behavior, which may hinder their attempts to implement CSR initiatives in more developed countries. Paradoxically, engaging in CSR initiatives could help reduce liability of foreignness and increase chances for competitive advantage. Practical implications MNEs from developing countries should be aware of a potential country-of-origin bias affecting decisions on CSR implementation and that could also be detrimental to their competitive advantage when operating in more developed countries. Conversely, MNEs from developed countries should be ready for higher expectations of their CSR initiatives in less developed countries. Originality/value This paper strives to contribute to two extant literatures. First, it contributes to the social dominance literature by applying the perspective in the international business context, specifically research on MNE liability of origin. Second, this perspective offers testable propositions on how perceived hierarchies and liability of origin affect firm decision-making, specifically in the context of developing country MNEs. Third, this paper seeks to expand the discussion of MNE subsidiary CSR behavior to account for the relative context of the home and host country.

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