scholarly journals FOREIGN INVESTORS AS SIGNPOSTS OF CHANGE?

Ekonomika ◽  
2009 ◽  
Vol 86 ◽  
pp. 89-105
Author(s):  
Camilla Jensen
Keyword(s):  
Regional Policy ◽  
Market Access ◽  
Home Country ◽  
Radical Change ◽  
Agglomeration Economies ◽  
Foreign Firms ◽  
Conditional Logit Model ◽  
Foreign Investors ◽  
Conditional Logit ◽  
Specific Factors

The new market economies in Eastern Europe give a unique opportunity to study how agglomeration occurs due to the shift from a planner- constructed to a firm-driven economy. This paper it is investigated how foreign direct investment affects the existing economic geography. How are these changes taking place within the existing landscape of agglomerations inherited from socialism? Do foreign investors sustain existing patterns of agglomeration or are they signposts of change? A conditional logit model is implemented on a representative dataset combining the firm and regionallevel. Controls are made for region- and firm-specific factors such as market access, pre-existing industrial concentrations, regional policy and firm size. The results suggest that foreign investors are agents of both gradual and radical change in a new market economy such as Poland. With the exception of the capital region of Warsaw, past agglomerations are on the reverse and new ones are emerging; however, industrial inertia is quite strong outside Warsaw. Results also show that agglomeration economies in the make are significantly affected by cognitive distance. Foreign firms are more likely to go where other proximate peers (in terms of home country, industry and both) are going or have already gone.

scholarly journals Chinese Service Multinationals: The Degree of Internationalization and Performance

2021 ◽  
Author(s):  
Ziyi Wei ◽  
Quyen T. K. Nguyen
Keyword(s):  
Financial Performance ◽  
Multinational Enterprises ◽  
Home Country ◽  
Academic Research ◽  
Brand Names ◽  
Theoretical Development ◽  
Superior Performance ◽  
Foreign Firms ◽  
Service Firms ◽  
Degree Of Internationalization

AbstractWe investigate the degree of internationalization of Chinese service multinational enterprises (MNEs) and their performance relative to global peers operating in the same industries, using the benchmarking method with the industry financial data. Our theoretical development is based upon Verbeke and Forootan (2012)’s framework, grounded in “new” internalization theory, arguing that an MNE’s financial performance is fundamentally determined by its firm-specific advantages (FSAs). Here FSAs include not only conventional strengths in R&D and brand names, but also the recombination capabilities, which is a higher-order FSA. We theorize that Chinese service MNEs develop FSAs, which are built upon home country-specific advantages (CSAs) and thus their FSAs are home country-bound in nature. They have not yet been able to develop advanced management capabilities through recombination with host CSAs. We empirically examine the largest 500 Chinese service firms. We find that only 23 Chinese service firms are true MNEs, whereas the majority of them are purely domestic firms. The financial performance of Chinese service MNEs is poor relative to global peers. They internationalize mainly through acquisitions of foreign firms, which help them increase their foreign sales, but they are not able to achieve superior performance in overseas operations. We discuss the strategic implications of our findings for managers, public policy makers, and academic research.

scholarly journals Effect Of Liability Of Foreignness And Family Ownership On Cross-Listing Location Choice

2016 ◽  
Vol 33 (1) ◽  
pp. 207-222
Author(s):  
He Soung Ahn ◽  
Hyejin Cho
Keyword(s):  
Capital Market ◽  
Foreign Capital ◽  
Cultural Distance ◽  
Family Ownership ◽  
Liability Of Foreignness ◽  
Conditional Logit Model ◽  
Institutional Economic ◽  
Conditional Logit ◽  
Cross Listing ◽  
Foreign Countries

Firms incur liability of foreignness (LOF) when they expand their businesses to foreign countries. This study examines the applicability of LOF in the context of financing in a foreign capital market. Using an alternative-specific conditional logit model, we investigate the cross-listing decisions of firms from 28 countries that select among eight target destinations from 1994 to 2008. These firms target capital markets with lower LOF, which is measured by institutional, economic, geographic, and cultural distance. Such preference is particularly stronger for firms with higher levels of family ownership, suggesting family owners’ tendency to be averse to risk is also manifested in financing context.

scholarly journals Motives for foreign direct investment location in Europe and EU enlargement

2020 ◽  
Vol 52 (8) ◽  
pp. 1681-1699
Author(s):  
Jonathan Jones ◽  
Ilona Serwicka ◽  
Colin Wren
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Eu Enlargement ◽  
Conditional Logit Model ◽  
Conditional Logit ◽  
National Market ◽  
Eclectic Paradigm ◽  
Accession Process ◽  
Investment Location ◽  
The Eu

European Union (EU) enlargement of the mid-2000s is likely to have changed the motives for foreign direct investment (FDI) location between the existing Member States (the EU15) and the new entrants of Central and Eastern Europe (CEECs), but it is poorly understood. This paper uses the framework of Dunning’s eclectic paradigm and data for 35,105 foreign investments in Europe not only to examine if the motives differ between these, but also how they are affected by the enlargement. Three asset-exploiting motives of market, resource and efficiency seeking are explored using a conditional logit model for the location choice. This is separately for greenfield and brownfield FDI, involving new facilities or jobs, where the latter is efficiency seeking from an expansion or a co-location of functions. The paper finds greenfield FDI in the CEECs seeks an export platform for the EU market and a low-skilled workforce but a national market and higher skills in the EU15. Brownfield FDI differs from this for expansions only, for which the EU market is important, reflecting scale economies. Surprisingly, EU enlargement has a much stronger effect on the FDI location motives in the EU15 by increasing the importance of the European market, which is possibly because the CEEC liberalisation was ongoing throughout the accession process. The paper finds evidence that the differences in the motives between the CEECs and EU15 are narrowing over time, but they are pronounced, and it is argued that they will persist.

CEO Stock-Based Pay, Home-Country Risk, and Foreign Firms' Capital Acquisition in the US Market

2010 ◽  
Vol 18 (6) ◽  
pp. 496-510 ◽  
Author(s):  
Mason A. Carpenter ◽  
Daniel C. Indro ◽  
Stewart R. Miller ◽  
Malika Richards
Keyword(s):  
Home Country ◽  
Country Risk ◽  
Foreign Firms ◽  
The Us ◽  
Capital Acquisition

scholarly journals How International Political Conflict Hurts Country Image and further Influences Consumers’ Purchase Intention

2018 ◽  
Vol 11 (2) ◽  
pp. 95
Author(s):  
Mary Kang ◽  
Sarah Kim ◽  
Gukseong Lee
Keyword(s):  
Purchase Intention ◽  
Home Country ◽  
Underlying Mechanism ◽  
Political Conflict ◽  
Purchase Intentions ◽  
Foreign Firms ◽  
Country Image ◽  
Research Model ◽  
Missile Defense ◽  
The Relationship

Recently, South Korea’s decision to deploy an advanced U.S. missile defense system has drawn neighboring China’s strong protests. Amid this political tension between both countries, the purpose of this study is to explore the relationship between this specific political conflict and consumers’ purchase intention. Based on previous literature, this study suggests a research model that defines the relationship between international political conflict, country image (i.e., affective country image and cognitive country image) and purchase intention. Proposed hypotheses suggest that international political conflict between foreign firms’ host and home countries is negatively associated with consumers’ purchase intention toward foreign firms’ products in the host country by hurting cognitive and affective image of the home country. This study contributes to understanding the underlying mechanism on how international political conflict influences consumers’ purchase intentions.

China will lift barriers to foreign financial firms

2017 ◽  
Keyword(s):  
Financial Market ◽  
Market Access ◽  
Foreign Firms ◽  
Shadow Banking ◽  
Content Type ◽  
Playing Field ◽  
Market Opening ◽  
Financial Firms ◽  
China Trade ◽  
Financial Liberalisation

Subject Potential loosening of restrictions of foreign investment in the financial sector. Significance Senior officials are among the authors of a report released last month that gives policy recommendations for financial market reform, advocating broader financial market access for foreign players and a freer exchange rate. If adopted, the reforms will give foreign financial firms more control over their Chinese subsidiaries and enable them to conduct business in areas that are currently off limits to foreign investors. Impacts Broader financial market access does not guarantee a level playing field; protectionism will persist in more subtle ways. Financial market opening will not cease after the central bank's reformist governor retires; his proteges remain in key positions. Financial tightening to fight corruption, curb debt and reform shadow banking will continue, despite liberalisation vis-a-vis foreign firms. China will use financial liberalisation as a bargaining chip in US-China trade talks.

Go West initiative may increase China’s self-reliance

2020 ◽  
Keyword(s):  
Economic Growth ◽  
Western China ◽  
Foreign Firms ◽  
High Tech ◽  
Foreign Investors ◽  
Content Type ◽  
The Core ◽  
Self Reliance ◽  
Ethnic Tensions ◽  
Self Sufficiency

Significance It is also designed to enable greater reliance on domestic resources and markets in an increasingly hostile international geopolitical environment. Infrastructure is the core of the strategy. Impacts The most visible impact will be the construction of infrastructure, especially in transport, energy and the high-tech sector. Foreign investors are likely to play little if any role in Go West. Some foreign firms may benefit if costs fall and incomes rise in Western China; others will lose out if China’s self-sufficiency increases. Economic growth will not reduce ethnic tensions in Xinjiang and Tibet if ethnic Han benefit disproportionately.

A Heterogeneous Conditional Logit Model of Choice

1988 ◽  
Vol 6 (3) ◽  
pp. 391 ◽  
Author(s):  
Joel H. Steckel ◽  
Wilfried R. Vanhonacker
Keyword(s):  
Logit Model ◽  
Conditional Logit Model ◽  
Conditional Logit

Cournot-Bertrand competition: a revisit of strategic trade policy in the third-market model

2016 ◽  
Vol 43 (3) ◽  
pp. 475-487 ◽  
Author(s):  
Shoou-Rong Tsai ◽  
Pan-Long Tsai ◽  
Yungho Weng
Keyword(s):  
Optimal Policy ◽  
Home Country ◽  
Export Subsidy ◽  
Stackelberg Equilibrium ◽  
Market Model ◽  
Foreign Firms ◽  
Domestic Firm ◽  
Model Framework ◽  
Content Type ◽  
Strategic Variable

Purpose – The purpose of this paper is to discuss the optimal policy settings of the home government for any combination of strategic variables adopted by home and foreign firms under Brander and Spencer’s third-market model framework. Design/methodology/approach – This paper follows all the assumptions of Brander and Spencer with only two modifications: firms produce differentiated products, and firms choose different strategic variables. A two-stage game is set and the subgame-perfect Nash equilibrium is deduced following backward induction. Findings – The authors arrive at a general, simple rule to determine the optimal policy of the home government for any combination of strategic variables: regardless of the strategic variable of the domestic firm, the optimal policy of the home country is an export subsidy (tax) as long as the foreign firm’s strategic variable is output (price). The optimal subsidy or tax of the home country is shown to move the equilibrium to the Stackelberg equilibrium where the domestic firm behaves as the leader while the foreign firm behaves as a follower under free trade. With appropriate interpretations and a suitable caveat, the above results still hold in the case with multiple foreign firms which may choose different strategic variables. Originality/value – This paper fills the gap in the literature, and provides some more general results not easily detected in the original model of Brander and Spencer or Eaton and Grossman.

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