Analysis on Firm-level and Country-level Drivers of Multinational Corporations Internationalization in Developing Countries

2011 ◽  
Author(s):  
Pan Jing ◽  
Wang Chen ◽  
Huang Shu
Keyword(s):  
Developing Countries ◽  
Multinational Corporations ◽  
Firm Level ◽  
Country Level

Access to skilled labor, institutions and firm performance in developing countries

2019 ◽  
Vol 40 (2) ◽  
pp. 328-355 ◽  
Author(s):  
Charilaos Mertzanis ◽  
Mona Said
Keyword(s):  
Developing Countries ◽  
Firm Performance ◽  
Technological Progress ◽  
Skilled Labor ◽  
Firm Level ◽  
Content Type ◽  
Country Level ◽  
Wide Range ◽  
Development Institutions

Purpose The purpose of this paper is to examine the role of access to skilled labor in explaining firms’ sales growth subject to the controlling influence of a wide range of firm-specific characteristics and country-level economic and non-economic factors. Design/methodology/approach The analysis uses a consistent and large firm-level data set from the World Bank’s Enterprise Surveys that includes 138 developing countries. An instrumental variables model with a GMM estimator is used for estimating the impact of access to skilled labor on firm performance. In order to obtain more robust estimators, the analysis introduces country-level controls reflecting the influence of economic and institutional factors, such as economic and financial development, institutional governance, education and technological progress. Findings The results document a significant and positive association between access to skilled labor and firm performance in the developing world. The explanatory power of access to skilled labor remains broadly robust after controlling for a wide range of firm-specific characteristics: sectoral and geographical influences matter. The results also show that the association between labor skill constraints and firm performance is mitigated by country-level factors but in diverse ways. Development, institutions, education and technological progress exert various mitigating effects on firm-level behavior regarding access to skilled labor. Originality/value The paper’s novel contribution is threefold: first, it uses joint firm, sector and country-level information to analyze the role of access to skilled labor on firm performance; second, it uses consistently produced information at the firm level from 138 developing countries; and, third, it considers the controlling impact of a wide range of country-level factors that reflect a country’s overall development, institutions and evolution.

Introduction

2009 ◽  
Vol 13 (3) ◽  
pp. 193-198 ◽  
Author(s):  
Christoph Dörrenbächer ◽  
Florian Becker-Ritterspach
Keyword(s):  
Developing Countries ◽  
Multinational Corporations ◽  
Special Issue ◽  
Firm Level ◽  
Economic Implications ◽  
Cross Border ◽  
The Cross ◽  
Political Dimensions ◽  
The Impact

Intrafirm competition, production relocation and outsourcing define crucial ways of organising and reorganising the cross-border operations of multinational corporations. What is more: these organisational activities put severe pressure on established economic coordination and governance both in developed as well as in developing countries. However, despite their organisational, political and economic salience, rather little is known about these processes and in particular about their socio-political dimensions. To this end, the contributions of this special issue aim at exploring, first, who the relevant actors are, what their interests are and how their strategies can be captured in intrafirm competition, production relocation and outsourcing. Second, the contributions discuss the wider socio-economic implications of firm-level processes by discussing, for example, the impact of outsourcing and relocation on employment fragmentation. Finally, the importance of public discourses is highlighted with regard to their role in both legitimating and promoting intrafirm competition, production relocation and outsourcing.

Financialisation, institutions and financing constraints in developing countries

2019 ◽  
Vol 43 (4) ◽  
pp. 825-866 ◽  
Author(s):  
Charilaos Mertzanis
Keyword(s):  
Developing Countries ◽  
Financing Constraints ◽  
External Financing ◽  
Access To Finance ◽  
Firm Level ◽  
Country Level ◽  
Level Data ◽  
Financial Depth ◽  
Level Information ◽  
The Impact

Abstract The paper uses a consistent firm-level data from the World Banks Enterprise Surveys to explore the impact of financialisation in the economy on firms’ access to finance in 138 developing countries. Access to finance reflects survey-based firms’ perceptions of external financing constraints. Financialisation is proxied by consistent cross-country measures of financial depth. These proxies capture separately the role of bank-based versus market-based financing. Firm-, sector- and country-level information is jointly used for the analysis. Firm-specific characteristics and economic and non-economic national factors are included as controls. The results show that the proxies of financialisation are broadly robust predictors of financing constraints of firms in developing countries. However, the magnitude of the financialisation effect varies between bank-based and market-based channels of financing as well as between low- and high-income countries, and it is influenced by social, institutional and religious factors.

MNC strategy, knowledge transfer context, and knowledge flow in MNEs

2019 ◽  
Vol 23 (9) ◽  
pp. 1885-1900 ◽  
Author(s):  
Ajai S. Gaur ◽  
Hongjia Ma ◽  
Baoshan Ge
Keyword(s):  
Knowledge Transfer ◽  
Multinational Corporations ◽  
Knowledge Flows ◽  
Knowledge Flow ◽  
Transfer Of Knowledge ◽  
Firm Level ◽  
Content Type ◽  
Country Level ◽  
Effective Transfer ◽  
Comprehensive Framework

Purpose Cross-border flow of knowledge is fraught with many challenges. The complexity associated with the organization of multinational corporations (MNCs), and the information asymmetry in foreign locations poses particular challenges to knowledge flow. Yet, effective transfer of knowledge is critical for the survival and performance of MNCs. The purpose of this paper is to present a comprehensive framework to understand the difficulties in the smooth flow of knowledge in MNCs. Design/methodology/approach The study is conceptual in nature and is based on an extensive review of the extant literature. Findings This review of the literature suggests that knowledge flow in MNCs is affected by country-level, firm-level and individual-level factors. The authors discuss these in the backdrop of the MNC strategy and the knowledge transfer context. The authors present their theoretical model and discuss the implications for advancing research in this domain. Originality/value This is one of the first papers to present a comprehensive framework to understand knowledge flows in MNCs.

Stage of development of a country and CSR disclosure – the latent driving forces

2020 ◽  
Vol 62 (5) ◽  
pp. 467-493
Author(s):  
Aparna Bhatia ◽  
Binny Makkar
Keyword(s):  
Developing Countries ◽  
Stock Exchange ◽  
Developed Countries ◽  
Firm Level ◽  
Content Type ◽  
Country Level ◽  
The Usa ◽  
Csr Disclosure ◽  
Developed Nations ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of various determinants at the country level, the industry level, the firm level and the corporate governance (CG) level on the extent of corporate social responsibility (CSR) disclosure in the group of developing and developed nations. Design/methodology/approach The data set comprises 310 companies listed on stock exchanges of developing and developed markets (Brazil – IBrX 100, 42 companies; Russia – Broad Market Index; 48 companies; India – Bombay Stock Exchange (BSE) 100, 50 companies; China – Shanghai Stock Exchange (SSE) 180, 27 companies; South Africa – The Financial Times Stock Exchange (FTSE)/Johannesburg Stock Exchange (JSE) All Share index, 49 companies; the USA – New York Stock Exchange (NYSE) 100, 47 companies; and the UK – London Stock Exchange (LSE) 100, 47 companies). CSR disclosure is measured through CSR disclosure index. Five separate regression models are run to investigate the impact of the factors that affect the extent of CSR disclosure. Findings The findings reveal that CSR disclosure is influenced by factors both at micro and macro levels. Governance environment, globalization and income inequality are found to be significant determinants of CSR disclosure for developing countries. International listing significantly influences CSR disclosure in the developed countries. The results also exhibit that board with large proportion of independent directors, high presence of CSR committee and environmental sensitive industries are more likely to engage in CSR disclosure practices in developing as well as in developed nations. Research limitations/implications This study implicates that varied factors – at country level, industry level, firm level and CG level – need assessment to know their impact differently in countries at different stages of economic development. However, longitudinal study covering longer period would lead to better generalization of results. Practical implications The findings of this present study implicate that managers must evaluate country’s political, social and economic forces and not just rely on company-level indicators affecting disclosure. Policymakers in emerging nations must emphasize on improving country governance features to enhance CSR disclosure of companies. Developing countries must respect and conform to rules and regulations while going global. More endeavors should be made to raise awareness about the benefits of CSR disclosure on reducing income inequality among companies listed on stock exchanges of developing countries. Emerging nations should follow developed nations in assuming responsibility toward stakeholders in foreign markets. This study also recommends regulatory bodies in both developing and developed countries to frame stringent policies regarding CG for improving CSR disclosure by companies. Originality/value This study overcomes the limitations of prior literature by considering both country- and company-specific determinants in prominent group of developing (Brazil, Russia, India, China and South Africa) and developed (the USA and the UK) countries.

Minoritynationals

2015 ◽  
Vol 23 (4) ◽  
pp. 277-305 ◽  
Author(s):  
Cormac Mullen ◽  
Jenny Berrill
Keyword(s):  
Multinational Corporations ◽  
Longitudinal Analysis ◽  
Oil And Gas ◽  
Firm Level ◽  
Data Set ◽  
Content Type ◽  
Country Level ◽  
Global Companies ◽  
Novel Method ◽  
Home Region

Purpose – This paper aims to conduct a longitudinal analysis of the patterns of internationalisation of multinational corporations and provide a measure of their degree of globalisation at the firm-level. There is much debate in the literature on the regional nature of the globalisation of multinational corporations (Rugman and Oh, 2013). Design/methodology/approach – The authors use firm-level sales data to analyse the location of sales and patterns of globalisation of 1,276 companies across ten countries and ten industries from 1998-2012. Findings – The results show that while international sales are rising and the proportion of home region-oriented firms is falling, the majority of sales of the companies in our data set continues to be in the Triad, with little growth in non-Triad regions. The authors find one common theme for the majority of countries, an increase in sales to Asia yet concentrated in just four industries, financials, basic materials, oil and gas and technology. Despite an increase in the percentage of host-region, bi-regional and global companies, 62.6 per cent of the firms have not changed multinational classification over the 15-year period, 43.1 per cent have not expanded out of their home region and 16.4 per cent have not expanded out of their home market. The authors find some evidence of liabilities of interregional foreignness at the industry and country level. The authors show regional sales are moving towards matching global economic activity for the 50 most globalised firms in our study but less so for the other firms in our sample. Overall, the results show that the majority of the growth in internationalisation comes from a small minority of firms. Originality/value – The authors make several advances across the literature on internationalisation, including a more in-depth longitudinal analysis of firm-level multinationality than exists to date and a novel method of measuring firm-level globalisation.

R&D in the periphery? Foreign direct investment, innovation, and institutional quality in developing countries

2013 ◽  
Vol 15 (1) ◽  
pp. 1-32 ◽  
Author(s):  
Patrick J.W. Egan
Keyword(s):  
Developing Countries ◽  
Multinational Corporations ◽  
Political Institutions ◽  
Multinational Firms ◽  
Institutional Quality ◽  
Socioeconomic Indicators ◽  
Host Countries ◽  
Firm Level ◽  
Education Levels ◽  
The Impact

This paper considers the relationship between assessments of institutional quality in developing countries and the innovative activities of multinational corporations. Firm entry mode literature has established links between domestic institutions and ownership equity patterns among multinationals, but institutionalist analyses have not adequately addressed the types of activities pursued by multinational firms. I argue that in addition to various socioeconomic indicators, the quality of domestic political institutions in developing countries is an important determinant of local innovative activity. I argue that institutional quality in host countries reinforces consistent patterns of interaction between states and firms, leading to reduced risk of technological expropriation and other undesirable outcomes for firms. I test this argument by examining the impact of institutional assessments, carried out by firms themselves and by outside observers, on R&D effort among multinationals, using firm-level surveys conducted in developing countries between 2002 and 2005. The multilevel empirical analysis suggests that multinational firms are likely to both locate R&D activities and pursue them intensively in developing countries with well-regarded institutions, and that the impact of institutional variables is more significant than other likely predictors, such as education levels in host countries.

scholarly journals Corporate ownership patterns in developing countries

2016 ◽  
Vol 13 (2) ◽  
pp. 101-112 ◽  
Author(s):  
Tesfaye T. Lemma ◽  
Minga Negash
Keyword(s):  
Developing Countries ◽  
Ownership Concentration ◽  
Institutional Pressures ◽  
Agency Conflicts ◽  
Corporate Ownership ◽  
African Countries ◽  
Firm Level ◽  
Country Level ◽  
Real Gdp Per Capita ◽  
Ownership Patterns

This paper examines the effect of firm-, industry-, and country-level factors on corporate ownership pattern within the context of six African countries. Based on theory, we develop multi-dimensional models and examine data pertaining to 377 non-financial firms across a time period of 15 years using a battery of econometric procedures. In the sample countries, ownership concentration and/or block shareholding increases with firm level debt maturity structure, industry regulation, and perceived level of corruption in a country and its real GDP per capita. We also find ownership concentration and/or block shareholding decreases with firm level basic capital structure, firm size, and orientation of the financial system of a country. Our findings signify the role that information asymmetries, agency conflicts, and institutional pressures play in the determination of corporate ownership patterns in developing countries. The findings have practical implications for the investment community in assessing ownership patterns of companies listed in developing countries. Furthermore, the results spark insights that are potentially useful to enhance corporate governance institutions in developing countries.

scholarly journals Financial constraint, trust, and export performances: firm-level evidence from Africa

2021 ◽  
pp. 1-23
Author(s):  
Maty Konte ◽  
Gideon Ndubuisi
Keyword(s):  
Financial Constraints ◽  
Interpersonal Trust ◽  
Negative Relationship ◽  
Financial Constraint ◽  
African Countries ◽  
Firm Level ◽  
Country Level ◽  
The World Bank ◽  
Negative Effect ◽  
Enterprise Surveys

Abstract Several existing studies have documented a negative relationship between firm financial constraint and export activities but do not attempt to examine factors that could attenuate this relationship in Africa. In this paper, we examine the effect of financial constraint on exports in Africa and explore how the level of trust in countries where firms are located shapes this relationship. We combine the World Bank Enterprise Surveys with different measures of country-level personal and interpersonal trust computed from the Afrobarometer surveys of 19 African countries. Our results show that financial constraints negatively affect export activities. However, this negative effect is attenuated for firms that are located in trust-intensive societies. These findings are robust to different specifications. Interestingly, we find that small and medium-sized enterprises in Africa are more likely to be affected by financial constraints but also more likely to benefit from a higher level of both personal and interpersonal trust, while for larger firms only interpersonal trust matters.

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