scholarly journals Imitation in foreign location choice: The role of upper echelons' diversity

2021 ◽  
Author(s):  
◽  
Umar Ahmed
Keyword(s):  
Institutional Theory ◽  
Functional Diversity ◽  
Host Country ◽  
Home Country ◽  
Location Choice ◽  
International Experience ◽  
Upper Echelons ◽  
Upper Echelon ◽  
Upper Echelon Theory

<p>This research investigates how the Top Management Team (TMT) characteristics impact the imitation of home country firms’ Foreign Direct Investment (FDI) location choice. A review of the FDI location choice research was performed, and various viewpoints for the selecting locations were identified. Amongst these viewpoints, the institutional perspective suggests that lack of cognition coupled with uncertainty about host markets compels firms to follow the FDI decisions of other home country firms. The review identified that the current literature in the cognitive domain had overlooked the role of TMTs. Upper echelon theory suggests that TMTs are not only a unique source of cognitive resources but also help to overcome challenges associated with internationalisation. This research applies institutional theory and the upper echelon theory to advance the argument of how and why TMT characteristics may impact the imitation of location choice decisions. Various TMT attributes like TMT international experience, TMT international experience diversity, TMT tenure diversity, TMT education diversity and TMT functional diversity were hypothesised to moderate the imitation in FDI location choice.  This research applied quantitative methods to assess the proposed hypotheses. First, a sample of 202 US-based firms (which invested in 11 Asia-Pacific countries from 2009 to 2014) was collected from FDI Markets database. This sample generated a panel dataset of 12,771 observations. Nearly 11,000 unique top manager profiles were created to compute the TMT data for the firms in the given period. Through logistic regression, this study assessed whether TMT attributes moderate the extent of imitation in FDI location choice.  The findings from this research contribute to institutional theory by highlighting the role of upper echelons. In particular, the findings show that while TMT tenure diversity weakens the effect of imitation, TMT functional diversity further exacerbates the effect of imitation in location choice. It was also found that when firms do not have a prior presence in the host country, then TMT international experience also strengthens the effect of prior FDI by other home country firms. The research also supports that the effect of various TMT attributes could be subject to environmental conditions. In particular, it shows that deep-level characteristics cause a more profound impact when host country uncertainty is high, while surface-level characteristics are impactful when host country uncertainty is low.</p>

scholarly journals Imitation in foreign location choice: The role of upper echelons' diversity

2021 ◽  
Author(s):  
◽  
Umar Ahmed
Keyword(s):  
Institutional Theory ◽  
Functional Diversity ◽  
Host Country ◽  
Home Country ◽  
Location Choice ◽  
International Experience ◽  
Upper Echelons ◽  
Upper Echelon ◽  
Upper Echelon Theory

<p>This research investigates how the Top Management Team (TMT) characteristics impact the imitation of home country firms’ Foreign Direct Investment (FDI) location choice. A review of the FDI location choice research was performed, and various viewpoints for the selecting locations were identified. Amongst these viewpoints, the institutional perspective suggests that lack of cognition coupled with uncertainty about host markets compels firms to follow the FDI decisions of other home country firms. The review identified that the current literature in the cognitive domain had overlooked the role of TMTs. Upper echelon theory suggests that TMTs are not only a unique source of cognitive resources but also help to overcome challenges associated with internationalisation. This research applies institutional theory and the upper echelon theory to advance the argument of how and why TMT characteristics may impact the imitation of location choice decisions. Various TMT attributes like TMT international experience, TMT international experience diversity, TMT tenure diversity, TMT education diversity and TMT functional diversity were hypothesised to moderate the imitation in FDI location choice.  This research applied quantitative methods to assess the proposed hypotheses. First, a sample of 202 US-based firms (which invested in 11 Asia-Pacific countries from 2009 to 2014) was collected from FDI Markets database. This sample generated a panel dataset of 12,771 observations. Nearly 11,000 unique top manager profiles were created to compute the TMT data for the firms in the given period. Through logistic regression, this study assessed whether TMT attributes moderate the extent of imitation in FDI location choice.  The findings from this research contribute to institutional theory by highlighting the role of upper echelons. In particular, the findings show that while TMT tenure diversity weakens the effect of imitation, TMT functional diversity further exacerbates the effect of imitation in location choice. It was also found that when firms do not have a prior presence in the host country, then TMT international experience also strengthens the effect of prior FDI by other home country firms. The research also supports that the effect of various TMT attributes could be subject to environmental conditions. In particular, it shows that deep-level characteristics cause a more profound impact when host country uncertainty is high, while surface-level characteristics are impactful when host country uncertainty is low.</p>

Mitigating Negative Spillovers from Categorization of Foreign-Listed Firms: The Role of Host-Country Independent Directors

2019 ◽  
Vol 15 (4) ◽  
pp. 773-807
Author(s):  
Eugene Kang ◽  
Asda Chintakananda
Keyword(s):  
Financial Reporting ◽  
Host Country ◽  
Home Country ◽  
Stock Exchange ◽  
Spillover Effects ◽  
Independent Directors ◽  
Fiduciary Duties ◽  
Listed Firms ◽  
Or Task

ABSTRACTThis study examines how cognitive categorization by host-country investors give rise to negative spillovers among host-country foreign-listed firms from the same home country when one of these foreign-listed firms discloses a financial reporting irregularity. This study further examines how attributes of host-country independent directors mitigate such negative spillover effects through signaling fulfilment of their fiduciary duties. Our results based on Chinese foreign-listed firms on the Singapore Stock Exchange from 2007–2014 reveal that host-country independent directors increase spillover effects among foreign-listed Chinese firms from financial reporting irregularities. However, such increase is attenuated when these directors signal fulfilment of their fiduciary duties through home-country, industry, or task-related experiences, and the observed mitigating effect is stronger when they possess a combination of these experiences.

Rethinking the literature on “multiple embeddedness” and subsidiary-specific advantages

2014 ◽  
Vol 22 (1) ◽  
pp. 15-33 ◽  
Author(s):  
Alberto Ferraris
Keyword(s):  
Host Country ◽  
Design Methodology ◽  
Home Country ◽  
Complex Phenomenon ◽  
Content Type ◽  
The Creation ◽  
Entire Network ◽  
Over Time ◽  
Country Specific

Purpose – This paper aims to synthesize the literature on embeddedness of MNE subsidiaries, rethinking the concept of “multiple embeddedness” in order to clarify the importance of the subsidiary-specific advantages. Design/methodology/approach – A new and innovative framework based on four key relationships: home country-specific advantages (CSAs)-Headquarters (HQ); HQ-subsidiary; subsidiary-host CSAs; and subsidiary-HQ. This framework is used to discuss the complex phenomenon of “multiple embeddedness”. Findings – The framework proposed sheds light on the subsidiary's need to develop and sustain over time its subsidiary-specific advantages (SSAs) and, where possible, to “upgrade” these SSAs and to integrate them across the entire network of the MNE. The framework is based on two pillars. The first one is the “creation and development” of firm-specific advantages (FSAs) (in the home country) and SSAs (in the host country); the second one is the “transfer” of these advantages from the parent to the subsidiary and vice versa. In addition, several interesting interrelations are found between the four main relationships, and the central role of the recombination capabilities and the importance of distance are highlighted. Originality/value – This paper is one of the first to develop a framework incorporating all the relevant relationships in multiple embeddedness. The framework is innovative and “embeddedness” is analyzed in a novel way, as many studies only partially analyze this complex phenomenon and neglect one or more of these relationships.

scholarly journals Cultural Generalists and Cultural Specialists: Examining International Experience Portfolios of Subsidiary Executives in Multinational Firms

2018 ◽  
Vol 45 (2) ◽  
pp. 384-416 ◽  
Author(s):  
Marketa Rickley
Keyword(s):  
Host Country ◽  
Multinational Firms ◽  
Home Country ◽  
International Experience ◽  
Institutional Distance ◽  
International Experiences ◽  
Institutional Differences ◽  
And Shifts ◽  
The Relationship

On the basis of the observation that today’s executives increasingly possess significant international experiences, this study of foreign subsidiary executive staffing strategies looks beyond the local/expatriate dichotomy and shifts the theoretical and empirical focus from executive nationality to a more nuanced examination of subsidiary executives’ international experience portfolios. The intended contribution of this study is to explore the relationship between home country–host country institutional differences and the quantity and quality of subsidiary executives’ previous international experience. I draw on executive cognition theory and the literature on international experience to hypothesize that variety and specificity of previous educational and professional international experiences facilitate subsidiary executives’ abilities to manage liabilities of foreignness arising from institutional distance. The findings indicate a positive relationship between home country–host country institutional distance and the presence of subsidiary executives with higher duration, count, and variety of international experiences. However, the findings provide no statistical evidence of higher levels of institutional distance being associated with a higher presence of subsidiary executives with specific international experiences that are relevant to the home country–host country pair.

A Theoretical Examination of the Role of Personality in Research on Strategic Process

1995 ◽  
Vol 76 (2) ◽  
pp. 403-417
Author(s):  
Anisya S. Thomas ◽  
Sherry E. Moss
Keyword(s):  
Organizational Performance ◽  
Business Strategy ◽  
Interdisciplinary Approach ◽  
Upper Echelon ◽  
Career Theory ◽  
Upper Echelon Theory ◽  
Strategic Process ◽  
Top Managers ◽  
The Relationship

This paper incorporates an interdisciplinary approach to the study of the relationship between business strategy and top managers' personalities. The fundamental premise of this paper, derived from upper echelon theory, is that the study of managers within the context of their organizations or situations is more fruitful than the independent investigation of managers or organizations. The arguments are justified by drawing on studies from personality theory, career theory, and strategic management. Specific propositions concerning ideal matches between business-level strategies and managerial personality attributes are also developed, and their implications for organizational performance are discussed.

scholarly journals Moving beyond financial remittances: The evolution of diaspora policy in post-conflict economies

2019 ◽  
Vol 38 (1) ◽  
pp. 41-62
Author(s):  
Nick Williams
Keyword(s):  
Host Country ◽  
Home Country ◽  
Policy Discourse ◽  
Entrepreneurial Activity ◽  
Post Conflict ◽  
Key Stakeholders ◽  
Diaspora Policy ◽  
Outward Migration ◽  
Depth Interviews

This article examines the role of institutional change in engaging the diaspora to invest in their home country. The article draws on in-depth interviews with key stakeholders in Bosnia & Herzegovina, Kosovo and Montenegro, all post-conflict economies which have experienced significant outward migration. This article shows that despite the importance attached to the diaspora in policy discourse, they are an under-utilised resource in economic and social development. While diaspora entrepreneurs have a strong emotional connection to their home country, they have faced numerous barriers upon returning due to unstable institutional environments. Many provide financial remittances but can remain isolated from entrepreneurial activity, and social remittances are limited due to the skills gained while in the host country. Institutional improvements are required if they are to be assimilated into the economy. The article concludes by providing a number of implications for institutional theory and policy.

scholarly journals Host country experience, institutional distance and location choice of Chinese MNEs

2019 ◽  
Vol 26 (1) ◽  
pp. 24-45 ◽  
Author(s):  
Diego Quer ◽  
Laura Rienda ◽  
Rosario Andreu ◽  
Si Miao
Keyword(s):  
Host Country ◽  
Risk Taking ◽  
Home Country ◽  
Location Choice ◽  
Institutional Distance ◽  
Government Official ◽  
Chinese Government ◽  
Content Type ◽  
Chinese Mnes ◽  
Country Specific

PurposeThe conventional wisdom suggests that the lack of prior host country-specific experience and a higher institutional distance deter multinational enterprises (MNEs) from entering a foreign country. However, past studies report that Chinese MNEs show an unconventional risk-taking behavior choosing foreign locations, where they have no prior experience or there is an increased institutional distance. Drawing on the institutional theory, the purpose of this paper is to argue that Chinese Government official visits to the host country may act as a risk-reduction device, thus providing an explanation for such an unconventional behavior.Design/methodology/approachThe authors develop two hypotheses regarding how Chinese Government official visits moderate the impact of host country-specific experience and institutional distance on the location choice of Chinese MNEs. The authors test the hypotheses using a sample of investment location decisions by Chinese MNEs in Latin America.FindingsThe authors find that government official visits mitigate the lack of firm’s prior host country experience. However, only high-level government visits reduce institutional distance.Originality/valueThe authors contribute to the international business literature by analyzing how home country government diplomatic activities may pave the way of host country institutional environment for foreign MNEs from that home country. In addition, the authors provide an additional explanation for the unconventional risk-taking behavior of Chinese MNEs. Finally, the authors also contribute to a better understanding of the decision-making process of emerging-market MNEs entering other emerging economies.

The Role of the Manager in the Middle East: An Empirical Study of Multinational Companies

2019 ◽  
Vol 20 (4) ◽  
pp. 887-900
Author(s):  
Aissa Mosbah ◽  
Jaithen Alharbi ◽  
Abdulla Fetais ◽  
Ibrahim Alkandi
Keyword(s):  
Middle East ◽  
Multinational Corporations ◽  
Host Country ◽  
Home Country ◽  
Multinational Companies ◽  
Resource Dependency ◽  
Primary Data ◽  
Host Country Nationals ◽  
Number Of Factors

This article is an empirical investigation into the role of the CEO manager in the affiliates of multinational corporations operating in the Middle East. Grounded in a literature review of the reasons for employing either parent country nationals (PCNs) or host country nationals (HCNs) in top management position in foreign subsidiaries, a number of factors influencing the choice between these alternatives are identified. Using a data collected from 147 multinational companies (MNCs) operating in the Kingdom of Saudi Arabia (KSA), the influence of each of these factors on this selection is empirically tested with the help of primary data. The study proposed that the relationship between the home and host country managers could be linked to agency theory (with the ‘classical’ principal–agent relationship) and to resource dependency theory (implying relations between the branch and other partners based on interdependence). Our results show that the agency and resource dependency mechanisms are indeed used side by side and complementary to each other to exercise control. Home country managers can strategize to implement control by the informal and social means by positioning a sizeable number of managers from the home country within the subsidiary. Indeed, our results revealed this as true.

scholarly journals Upper Echelon Theory: Role of Community and Strategy

2015 ◽  
Vol 1 (3) ◽  
pp. 35-44
Author(s):  
Majdi Anwar Quttainah
Keyword(s):  
Top Management Teams ◽  
Management Teams ◽  
Community Level ◽  
Top Management ◽  
Strategic Decisions ◽  
Upper Echelon ◽  
Top Executives ◽  
Upper Echelon Theory ◽  
Better Than

In this paper, we argue that community plays an important role in shaping the values and characteristics of top management teams. It builds on upper echelon theory to posit that community level characteristics are instrumental in framing the cognitions of CEOs and top executives. Strategic decisions made by managers in organizations represent the significant impact community has on top management teams. Examining the influence community has on top management teams provides additional implications about why certain firms perform better than others.

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