scholarly journals Determinants of Staff Localization in Headquarters-Subsidiary-Subsidiary Relationships

2021 ◽  
Vol 14 (1) ◽  
pp. 249
Author(s):  
Chan Bok Kim ◽  
Seong-Jin Choi ◽  
Luyao Zhang
Keyword(s):  
Multinational Corporations ◽  
Host Country ◽  
Cultural Distance ◽  
Foreign Subsidiary ◽  
Host Countries ◽  
Local Competition ◽  
Theoretical Contribution ◽  
Local Experience ◽  
Relationship Structure ◽  
The Impact

This paper investigates how cultural distance, the local experience of a foreign subsidiary, and the intensity of local competition jointly affect the staff localization of MNEs’ subsidiaries. While previous studies on the effects of cultural distance have mainly focused on the gap between home and host countries, we extend the existing “home-host” country perspective to the home-intermediary-host country relationship. This study regards Korea as an intermediary country and utilizes 520 observations from a unique survey conducted by the Export-Import Bank of Korea from 2006 to 2013. The results suggest that the impact of cultural distance on staff localization is a function of local experience and competitive environment in the home-intermediate-host relationship structure. This paper makes a theoretical contribution to our understanding of the behavior of multinational corporations by expanding the cultural distance perspective between the home and host countries explored in previous research to the home-subsidiary-subsidiary structure.

scholarly journals An Analysis of Host Country Characteristics that Determine FDI in Developing Countries: Recent Panel Data Evidence

2009 ◽  
Vol 14 (2) ◽  
pp. 71-96 ◽  
Author(s):  
Muhammad Tariq Majeed ◽  
Eatzaz Ahmad
Keyword(s):  
Developing Countries ◽  
Panel Data ◽  
Multinational Corporations ◽  
Host Country ◽  
Negative Impact ◽  
Positive Impact ◽  
Negative Effects ◽  
Host Countries ◽  
Country Characteristics ◽  
General Method Of Moments

This paper analyzes a range of host country characteristics that determine foreign direct investment (FDI) flows to developing countries, using panel data on 72 countries for the period 1970-2008. Keeping in view the endogeneity problem of the chosen host country’s characteristics, the model is estimated using the General Method of Moments (GMM) technique. The analysis shows that gross domestic product (GDP), economic growth, and per capita income positively affect FDI—a result consistent with the market-seeking behavior of multinational corporations (MNCs). Furthermore, we find that remittances have a significant and positive impact on FDI. On the other hand, inflation and the balance of payments deficit have negative effects on FDI. MNCs are attracted to host countries that are outward looking and follow trade-promoting policies. This is confirmed by the positive effect of openness on FDI flows to developing countries. The study also finds that the effect of military expenditures on FDI is negative and significant. Finally, our analysis finds that the real exchange rate has a significantly negative impact on FDI.

Impact of corruption on Chinese investment in African countries

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shilin Yuan ◽  
Haiyang Chen ◽  
Wei Zhang
Keyword(s):  
Developing Countries ◽  
Developing Country ◽  
Host Country ◽  
Practical Implication ◽  
Host Countries ◽  
African Countries ◽  
Control Variables ◽  
Content Type ◽  
The Impact ◽  
New Evidence

Purpose This paper aims to examine the impact of host country corruption on foreign direct investment (FDI) from China to developing countries in Africa. With the opposing arguments that corruption is detrimental to or instrumental in FDI and mixed empirical evidence, this paper contributes to the literature by providing new evidence on the issue. Additionally, little research has been done on the impact of corruption on FDI made by developing country multinationals to developing countries. This paper fills a void in this area. Design/methodology/approach Based on the published literature, as well as China and Africa contexts, the authors develop hypotheses that host countries with low corruption receive more FDI and resource-seeking investments weaken the relationship. The annual stock of Chinese FDI in 35 African countries, host country corruption data and other control variables from 2007 to 2015 are collected. Feasible generalized least squares models are used to test the hypotheses. Additional robustness tests are also conducted. Findings The findings support the hypotheses. Specifically, Chinese investors make more investments in host countries with low corruption except for resource-seeking investments in resource-rich host counties. The results are statistically significant accounting for various control variables. The results of the robustness tests show that the main findings are robust. Originality/value First, this study provides new evidence on the impact of corruption on FDI. Second, this study also fills a void by examining FDI from a developing country, China to other developing countries in Africa. Finally, this study also has a practical implication for Chinese multinationals investing in Africa.

scholarly journals Career Development Support, Job Adaptation, and Withdrawal Intention of Expatriates: A Multilevel Analysis of Environmental Factors

2019 ◽  
Vol 16 (20) ◽  
pp. 3880
Author(s):  
Hemin Song ◽  
Shuai Zhao ◽  
Wenwen Zhao ◽  
Hua Han
Keyword(s):  
Career Development ◽  
Environmental Factors ◽  
Multilevel Analysis ◽  
Multinational Corporations ◽  
Host Country ◽  
Reference Value ◽  
Analysis Model ◽  
Development Support ◽  
The Impact ◽  
Moderating Role

The present study aims to explore the impact of career development support on job adaptation and withdrawal intention, and the multilevel moderating role of host country environmental factors. Through the questionnaire survey, we collected 242 expatriates’ data of 25 countries from China’s multinational corporations. Based on the constructed multilevel analysis model, we find: (1) career development support has a significant impact on job adaptation and withdrawal intention of expatriates; (2) job adaptation plays a mediating role between career development support and withdrawal intention; and (3) host country environment plays the multilevel moderating role between career development support and job adaptation. Through the multilevel model of host country environment, this study explores the mechanism of how career development support affects job adaptation and withdrawal intention. The conclusions enhance the understanding of the adaptation of expatriates and have important theoretical and practical reference value to achieve successful expatriate in the context of host country environment.

scholarly journals U.S. Multinationals and Human Rights: A Theoretical and Empirical Assessment of Extractive Versus Nonextractive Sectors

2020 ◽  
pp. 000765032092897
Author(s):  
Krishna Chaitanya Vadlamannati ◽  
Nicole Janz ◽  
Indra de Soysa
Keyword(s):  
Human Rights ◽  
Multinational Corporations ◽  
Status Quo Bias ◽  
Democratic Institutions ◽  
Host Countries ◽  
Human Rights Protection ◽  
Rights Protection ◽  
Human Rights Abuse ◽  
Negative Impacts ◽  
The Impact

The consequences of foreign direct investment (FDI) for human rights protection are poorly understood. We propose that the impact of FDI varies across industries. In particular, extractive firms in the oil and mining industries go where the resources are located and are bound to such investment, which creates a status quo bias among them when it comes to supporting repressive rulers (“ location-bound effect”). The same is not true for nonextractive multinational corporations (MNCs) in manufacturing or services, which can, in comparison, exit problematic countries more easily. We also propose that strong democratic institutions can alleviate negative impacts of extractive FDI on human rights (“ democratic safeguard effect”). Using U.S. FDI broken up into extractive and nonextractive industries in 157 host countries (1999–2015), we find support for these propositions.1 Extractive FDI is associated with more human rights abuse, but nonextractive FDI is associated with less abuse, after controlling for other factors, including concerns about endogeneity. We find also that the negative human rights impact of extractive FDI vanishes in countries where democratic institutions are stronger. Our results are robust to a range of alternative estimation techniques.

scholarly journals The Impact of Greenfield Investment on Domestic Entrepreneurship

2021 ◽  
Author(s):  
Son Tung Ha ◽  
Tuan Vu Chu ◽  
Thi Tuyet Mai Nguyen ◽  
Thi Hoai Dung Nguyen ◽  
Thi Ngoc Anh Nguyen
Keyword(s):  
Panel Data ◽  
Host Country ◽  
Time Span ◽  
Host Countries ◽  
Control Variables ◽  
Entrepreneurial Activities ◽  
The Impact ◽  
Detrimental Impact

Abstract The FDI-entrepreneurship nexus has received growing attention over the last decade. However, the empirical findings on their relationship have been inconsistent at best. This study seeks to examine how the inflows of Greenfield investment influence entrepreneurship of the host country. Using panel data from 110 countries during the period 2001-2018, we find that growing level of Greenfield investment brings detrimental impact on the level of total and opportunity-driven entrepreneurial activities in the host countries while the impact on necessity-driven entrepreneurship have been mixed. The results regarding the impact of Greenfield investment on total entrepreneurial activities and opportunity-based entrepreneurial activities are robust across different econometric settings, different time span and different categories of control variables.

The Impact of the Foreign Corrupt Practices Act on Competitiveness, Bribery, and Investment

2020 ◽  
Vol 22 (1) ◽  
pp. 105-126
Author(s):  
Maria Arbatskaya ◽  
Hugo M Mialon
Keyword(s):  
Host Country ◽  
Foreign Firm ◽  
Foreign Firms ◽  
Host Countries ◽  
Foreign Corrupt Practices Act ◽  
Total Investment ◽  
The Impact ◽  
The U.S

Abstract The Foreign Corrupt Practices Act (FCPA) prohibits U.S.-related firms from making bribes abroad. We analyze the FCPA’s effects in a model of competition between a U.S. and foreign firm for contracts in a host country. If the FCPA only applies to the U.S. firm, it reduces that firm’s competitiveness and either increases bribery by the foreign firm or reduces overall investment. If the FCPA also applies to foreign firms, it reduces total bribery, and in host countries with high corruption levels, it increases total investment. The model suggests that the FCPA will deter bribery and stimulate investment while not disadvantaging U.S. firms if its enforcement is aimed at firms who engaged in bribery in highly corrupt countries and whose main competitors are also subject to the FCPA.

An investigation of Confucius Institute’s effects on China’s OFDI via cultural difference and institutional quality

2020 ◽  
Vol 14 (3) ◽  
pp. 241-263
Author(s):  
Chensheng Xu ◽  
Feng Yao ◽  
Fan Zhang ◽  
Yonghong Wang
Keyword(s):  
Host Country ◽  
Cultural Difference ◽  
Institutional Quality ◽  
Cultural Exchange ◽  
Ordinary Least Squares ◽  
Study Strategies ◽  
Potential Interaction ◽  
Host Countries ◽  
Content Type ◽  
The Impact

Purpose This study aims to investigate the influence of the Confucius Institute (CI) on outward foreign direct investment (OFDI) by China and its potential interaction with cultural difference and institutional quality in host countries. Design/methodology/approach In the empirical study, the gravity model is adopted as the benchmark to investigate the effects of CI on China's OFDI using the ordinary least squares or Poisson Pseudo Maximum Likelihood estimators. Panel data on China's OFDI from 2004 to 2015 are used. Cultural difference and institutional quality are included explicitly as control variables to examine the effects of CI on China's OFDI. Findings CI has a significant positive effect on China’s OFDI, and this effect depends on the cultural difference and institutional quality of the host country. The impact of CI on China’s OFDI is more prominent in host countries with a smaller cultural difference or lower institutional quality. Originality/value CI is a comprehensive platform for foreign cultural exchange and signifies the rebirth of Confucianism in China. The present study shows that CI can stimulate the growth of China’s OFDI, with implications for other Asian countries influenced by Confucianism. Based on the results of the study, strategies for “Going Global” and encouraging economic growth based on cultural exchange and the recognition of host country heterogeneities are proposed.

Sign in / Sign up

Export Citation Format

Share Document