scholarly journals Formal institutional uncertainty and equity sought on foreign market entry: does industry matter?

2020 ◽  
Vol 30 (3) ◽  
pp. 421-440
Author(s):  
Kashif Ahmed ◽  
Ralf Bebenroth ◽  
Jean-François Hennart
Keyword(s):  
Host Country ◽  
Developed Countries ◽  
Classification Systems ◽  
Foreign Market Entry ◽  
Less Developed Countries ◽  
Content Type ◽  
Cross Border ◽  
Technology Industry ◽  
Industry Classification ◽  
Institutional Uncertainty

Purpose This study aims to examine how the effect of host country formal institutional uncertainty on the percentage of equity sought in cross-border acquisitions (CBAs) is moderated by the host country industry (i.e. targets from the technology versus those from the non-technology industry). Design/methodology/approach This study is based upon the legitimacy perspective of institutional theory and uses Tobit regression analysis on a sample of 1,340 CBAs. Findings Results show that cross-border acquirers prefer a lower equity level for targets in institutionally less developed countries and that this negative effect of the host country institutional risk on the equity percentage sought is more pronounced for technology-based targets. Research limitations/implications Three major limitations of the study are as follows: The data were collected from only Japanese acquirers. The study measured formal institutional uncertainty by applying only secondary data. The study used the Bloomberg Industry Classification Systems, instead of the Standard Industry Classification that has been used widely in prior studies. Practical implications This study shows that the industry selected has a bearing on equity sought in CBAs. Investing in institutionally less developed countries is particularly challenging when the targets of acquisition are in the technology industry. Originality/value To the best of the authors’ knowledge, this is the first study that investigates the moderating effects of an industry on the relationship between host country formal institutional uncertainty and the percentage of equity sought in CBAs.

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.

Examining systematic technological learning of Syrian textile industry

2019 ◽  
Vol 10 (1) ◽  
pp. 116-142
Author(s):  
Sepehr Ghazinoory ◽  
Ammar Ali Ali ◽  
AliReza Hassanzadeh ◽  
Mehdi Majidpour
Keyword(s):  
Technology Transfer ◽  
Textile Industry ◽  
Developed Countries ◽  
Assessment Model ◽  
Incremental Innovation ◽  
Less Developed Countries ◽  
Firm Level ◽  
Content Type ◽  
Technological Infrastructure ◽  
Technological Learning

PurposeBecause of importance of technological learning for less developed countries, the notion has received increasing attention of scholars. The purpose of this paper is to investigate technological learning systematically by assessing the effect of technology transfer actors on technological learning in less developed countries context.Design/methodology/approachThe paper presents assessment model by adopting technological learning concept based on technology absorption and incremental innovation at firm level and identifying key roles of technology transfer actors (State – Scientific and technological infrastructure – Industry) that affect technological learning. The paper follows survey as research methodology. Thus, a questionnaire was addressed to 33 Syrian textile factories to examine the assessment model. Simple linear, multiple linear and ordinal regression analyses are preformed to examine relationships of model components.FindingsThe regression models show notable ability of technology transfer actors to explain technological behavior of firms to accumulate operative capability and consequently to generate passive incremental innovation. The findings indicate passive technical change system of Syrian textile industry. Therefore, goal-oriented evaluation of actual technology policy is preliminary step for achieving improvements, as well as activating scientific and technological infrastructure role by enabling strong relationships with industry and supporting interactions of domestic firms of textile industry and with foreign players.Originality/valueThe paper enriches technological learning literature by proposing systematic approach that sets the nature of technical change process of less developed countries in core of analysis. Moreover, it provides a guide for technological learning practices at firm level and for policymakers based on assessing actual status of Syrian textile industry.

Do consumers support the cross-border charitable activities as the same?

2020 ◽  
Vol 11 (3) ◽  
pp. 441-458
Author(s):  
Zelin Tong ◽  
Tingting Li ◽  
Wenting Feng ◽  
Yuanyuan Zhou ◽  
Ling Zhou
Keyword(s):  
Social Identity ◽  
Host Country ◽  
Home Country ◽  
Identity Transformation ◽  
Extensive Literature ◽  
Content Type ◽  
Cross Border ◽  
National Power ◽  
Charitable Activities ◽  
The Impact

Purpose This study aims to investigate the impact of cross-border charitable activities on host- and home-country consumers based on the social identity theory. Design/methodology/approach Through an extensive literature review and two experimental designs, this study establishes the research framework and hypothesises the relationships between the constructs. Findings National power moderates the impact of cross-border charitable activities on host- and home-country consumers. In particular, compared to countries with high national power, countries with low national power undertaking cross-border charitable activities will receive more positive reactions from the host-country consumers, and, conversely, more negative reactions from the home-country consumers. Research limitations/implications From the consumer perspective, this study finds that brand cross-border charitable activities have different influences on consumers in different countries because of an identity transformation mechanism that exists between the “insiders” and the “outsiders”, which is different from the assumptions of western theories. Practical implications The findings provide insights for undertaking brand cross-border charitable activities. Originality/value Previous studies, which are based on social identity categorisation, assume that cross-border charitable activities have a more positive impact on home-country consumers than host-country consumers. However, this study adopts the research paradigm of social identity relationisation and draws an opposite conclusion, which not only expands the theory of local intergroup interaction, but also clarifies how brand cross-border charitable activities influence Chinese consumers.

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.

A multicriteria assessment model for countries’ degree of preparedness for successful impact investing

2019 ◽  
Vol 58 (11) ◽  
pp. 2455-2471
Author(s):  
Teresa León ◽  
Vicente Liern ◽  
Blanca Pérez-Gladish
Keyword(s):  
Decision Making ◽  
Political Stability ◽  
Developed Countries ◽  
Multiple Criteria ◽  
Decision Makers ◽  
Less Developed Countries ◽  
Impact Investing ◽  
Content Type ◽  
Financial Decisions ◽  
Decision Making Processes

Purpose In recent years there has been a significant acceleration in the market growth of social impact investing. Policy makers, regulatory bodies and national decision-makers should base their decision-making processes on multiple criteria. These criteria are, by nature, imprecise, ambiguous and uncertain. The purpose of this paper is to provide decision-makers with a mathematical tool which aids them in their decision-making processes identifying the degree of appropriateness of less developed countries in terms of potential success of investment in vaccination campaigns. Design/methodology/approach In this work, the authors have developed a decision-making tool within the framework of multiple criteria decision making and Fuzzy Logic, which aims to aid decision-makers for vaccinations campaigns in less developed countries. In particular, the authors have proposed a Technique for Order Preference by Similarity to Ideal Solution-based method which is able to work in fuzzy environment in order to assess and rank countries based on their fuzzy degree of appropriateness for impact investing in vaccines. Findings The impact investing market provides capital from private sources to address many pressing global challenges such as access to basic services as health. Governments have, therefore, an essential role in supporting the development of this market by improving the risk/return profile of investments through access to credit facilities, tax credits or subsidies or defining the regulation of the supply of investments, provision of technical assistance to investing private companies and co-financing. The proposed framework permits funding decision making taking into account the degree of preparedness and adequacy for impact investing in vaccines of the selected countries. Research limitations/implications Impact investing can play a key role in the reduction of immunization gap offering suitable strategies for both, governments and private investors for the achievement of United Nations Sustainable Development Goals (SDGs). However, in order to make good financial decisions managers should take into account not only health, income, education and other social criteria but also the degree of basic preparedness of the countries in order to ensure the success of the immunization campaigns which means taking into account availability of basic infrastructures, access to electricity, political stability among other criteria. Practical implications However, in order to make good financial decisions managers should take into account not only health, income, education and other social criteria but also the degree of basic preparedness of the countries in order to ensure the success of the immunization campaigns which means taking into account availability of basic infrastructures, access to electricity, political stability among other criteria. Originality/value The proposed model will allow public and private decision makers to make better investment decisions in terms of effectiveness as the provided ranking of countries candidates for the investments is more realistic and takes into account more decision dimensions.

Deadly migrant trafficking trade by sea and restrictive service trade by the WTO

2015 ◽  
Vol 14 (2) ◽  
pp. 86-104
Author(s):  
Rafiqul Islam ◽  
Khorsed Zaman
Keyword(s):  
International Trade ◽  
Social Inclusion ◽  
Developed Countries ◽  
Global Poverty ◽  
Content Type ◽  
Cross Border ◽  
Trade Law ◽  
International Trade Law ◽  
Law And Policy ◽  
Restrictive Trade

Purpose – The purpose of this paper is to examine one of the most pressing global challenges, the ongoing migrant trafficking across sea, from international trade law and policy perspective. It identifies global poverty as one of the underlying causes of such trafficking. It argues that restrictive trade in labour-intensive services of the World Trade Organization (WTO) contributes to and sustains poverty in many migrant producing countries. Chronic unemployment in poor countries with surplus manual workforce renders these workers bewildered to survive in a jobless and incomeless home markets. Non-liberalization of movements of natural persons under General Agreement on Trade in Services (GATS) Mode 4 prevents legal cross-border delivery of labours. Restrictive trade in agriculture has but aggravated their marginalized plight. It is this poverty trap that pushes workers, lured by smugglers, to take risky migration routes for better life in countries with labour shortages. Design/methodology/approach – The paper adopts a blend approach of theoretical and applied aspects of international trade law and policy, which is interpreted and applied to a fact situation of contemporary challenge of migrant trafficking by sea. Findings – This paper establishes a nexus between restrictive Mode 4 trade and its implications for poverty-induced migration trafficking trade. It suggests a palatable trade law and policy-based reform response for the WTO to ameliorate poverty and migration trafficking trade concurrently through the creation of legal channels for the cross-border delivery of labours by liberalizing Mode 4 trade in a manner beneficial for developed countries as well. Originality/value – Its value lies in its contribution to maximize multi-lateral trade liberalization for the benefit of all countries, social inclusion and economic emancipation of the disadvantaged, which would minimize global poverty.

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.

scholarly journals Perceptions of justice and organisational commitment in international mergers and acquisitions

2017 ◽  
Vol 34 (5) ◽  
pp. 582-605 ◽  
Author(s):  
Emanuel Gomes ◽  
Kamel Mellahi ◽  
Sunil Sahadev ◽  
Amy Harvey
Keyword(s):  
Mergers And Acquisitions ◽  
Market Entry ◽  
Strong Association ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Organisational Commitment ◽  
Entry Modes ◽  
Content Type ◽  
Cross Border ◽  
And Performance

Purpose Although there is substantial and accumulating evidence on the link between market entry modes and performance, evidence regarding their impact on employee’s perceptions and thereby their commitment is scarce. This is more so in mergers and acquisitions (M&As) where employee’s commitment has a significant impact on post-entry performance. The purpose of this paper is to examine the association between perceptions of justice and organisational commitment in cross-border M&As. Design/methodology/approach The authors draw on market entry and M&As’ literature and studies on the link between perception of justice and commitment to develop the hypotheses. The authors test the hypotheses with survey data from a merger of two culturally different partners – British and Japanese. A total of 128 responses were received, out of a sample of 151 non-managerial employees within the firm. Findings The results show a strong association between employees’ perceptions of justice during the merger and commitment to the new organisation. Surprisingly, the results do not support the widely reported interaction effects between different organisational justices and employees’ commitment. Research limitations/implications Obtaining data from a single M&A is a potential limitation of this study. Practical implications The study underscores the importance of post-market entry. The results suggest that particular attention needs to be paid to the way employees of the acquired firm are treated during their interactions with their counterparts. Originality/value The link between market entry and performance is well documented. However, little progress has been made in understanding the antecedents/factors that influence commitment in foreign market entry and in particular cross-border M&As. This study helps close this gap.

CEO characteristics and SME foreign market entry mode choice

2016 ◽  
Vol 33 (2) ◽  
pp. 246-275 ◽  
Author(s):  
Katharina Laufs ◽  
Michael Bembom ◽  
Christian Schwens
Keyword(s):  
Host Country ◽  
Market Entry ◽  
Mode Choice ◽  
Entry Mode ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Content Type ◽  
Entry Mode Choice ◽  
Foreign Market Entry Mode ◽  
Ceo Characteristics

Purpose – Using arguments from the upper echelons perspective this paper aims to examine the impact of CEO characteristics on small and medium-sized enterprises’ (SMEs’) equity foreign market entry mode choice and how these associations are jointly moderated by geographic experience of the firm and host-country political risk. Design/methodology/approach – The empirical analysis draws on data gathered from German SMEs testing triple-interaction effects between CEO’s age, firm tenure and international experience, geographic experience of the firm (organizational level), and host-country political risk (environmental level). Findings – Empirical findings validate that the influence of CEO’s age and firm tenure on SME foreign market entry mode choice varies by managers’ level of managerial discretion (i.e. latitude of action) as determined by the SME’s geographic experience and the level of political risks prevailing in the foreign market. Practical implications – Empirical findings help SME owners and managers to understand how CEO’s age and firm tenure are related with individual’s risk-taking behavior and information-processing demands and how these contingencies vary by the context in which the individual CEO is nested. Originality/value – This study contributes to the growing body of literature focussing on SME foreign market entry mode choice by emphasizing the important role of CEOs in the decision to internationalize. More specific, this study contributes by an examination of the interactive effect of CEO’s age, firm tenure and international experience, geographic experience of the firm and host-country political risk and, therefore, emphasizes the context and boundary conditions under which the association between CEO characteristics and foreign market entry mode choice is more or less pronounced.

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.

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