How increased foreign competition motivates domestic firms to do good: an examination of foreign entry mode and domestic CSR response

PurposeWe examine whether domestic firms react differently to foreign direct investment (FDI) entry modes –mergers and acquisitions (M&A) versus greenfield. Specifically, we ascertain whether the entry mode of foreign competition motivates different corporate social responsibility (CSR) responses from domestic firms and when such relationships hold.Design/methodology/approachWe employ fixed-effects models using 1,331 US firm-year observations for 2015–2018. Furthermore, we examine the interactive effects of industry concentration to examine a key boundary condition.FindingsForeign entry via greenfield mode has no effect on domestic firm CSR. Entry through M&A has a significantly positive effect. We attribute these findings to the increased threat to domestic firms from foreign M&A whereas foreign entry through greenfield mode is less threatening as entrants face significantly more challenges in host countries. We identify industry concentration as a boundary condition of our findings. The effect of foreign M&A entries on domestic firms' CSR becomes weaker as industries are more concentrated.Originality/valueThis study offers novel insights on FDI by parsing out different reactions to entry mode by domestic firms. We add to our understanding of CSR as a mechanism to stave off foreign competition, offer insights into a key boundary condition of such actions and demonstrate the robustness of our findings.

Global and local corporate social responsibility: a study of foreign entry mode choice in Spanish quoted firms

PurposeThis study examines the relationships between the foreign entry mode (FEM) used by a company, its global corporate social responsibility (CSR) and the host country's local CSR environment in Spanish quoted firms. Additionally, it seeks to explore the moderating role of the host country's CSR in the relationship between firm's global CSR and FEM.Design/methodology/approachTo test the proposed hypotheses, binary logistic regression is used with a sample of 418 foreign direct investment (FDI) operations between 2002 and 2008. This period is chosen with the aim of knowing what happened after the boom in Spanish investments abroad in the 1990s and the uncertainty of the early 2000s.FindingsThe results reveal firm patterns of behaviour regarding the FEM of companies and the two types of CSR according to the proposed hypotheses. Furthermore, it is found that the host country's local CSR may not only have a direct influence on the FEM decision but may also moderate the relationship between the firm's global CSR and firm's entry mode in a host country.Originality/valueThis is one of the first studies to propose as explanatory variables of FEM two types of CSR (firm's global CSR and host country's local CSR). This has been possible by the creation of an ad-hoc database with data from different information sources of FDI (Instituto Español de Comercio Exterior) and CSR [Eikon™ and AccountAbility National Corporate Responsibility Index (NCRI)].

Exploring international markets: unique quality heads to Kenya

Study level/applicability The case is targeted at undergraduate students in international finance, international business, entrepreneurship and strategic marketing classes. Subject area At the broadest level, the case represents an opportunity for students to discuss internationalisation of local firms. It focusses on getting students to analyse the costs and benefits associated with the foreign entry decision as well as the strategies for foreign entry. Case overview The Exploring International Markets: Unique Quality Heads to Kenya case study provides a chronological report of how Unique Quality, a cereal production company, grew locally up until the point when it considers internationalisation. It details the key considerations the firm makes as it considers its foreign entry decision. Unique Quality is a cereal production company in Ghana, which operates within the agriculture industry. The industry operates at almost all the points along the value chain including coordinating the growing of the cereal until it is harvested, packaged and marketed for sale. The company which started operations in 2013 has made great gains in penetrating the Ghanaian market. Salma, who is currently at the helm of affair at the company, together with the board is considering entering into Kenya. This decision is one that must not be taken lightly and has left Salma in a dilemma. Expected learning outcomes The expected learning outcomes of the case are:To enable students:a) identify the reasons why firms go international;b) identify opportunities for cost-cutting benefits or revenue maximisation opportunities for Unique Quality in Kenya;c) understand and identify the various sources of country risk that Unique Quality could face in its attempt to enter the Kenyan market; andd) identify and analyse the various foreign entry strategy options available to Unique Quality. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email [email protected]_to_request_teaching_notes Subject code CSS 1: Accounting and finance.

Modern architecture in Indonesia: A genealogy study

Architectures in Indonesia are often identified as 'unique' compared to European and American constructions. They are referred to as Wastuwidya by Mangunwijaya and Nusantara by Prijotomo. This paper, therefore, aimed to examine the reasons for the perceived similar principles between the Indonesian architectures and those in Europe or America and also reviewed the architecture in the country beyond the identity. This involved the application of a historical approach with synchronous-diachronic methods to determine the significance of a historical timeline and its architectural content. The results showed the country’s modern architecture is associated with the foreign entry, its climate, and socio-cultural conditions, and also perceived as a sign of certain political powers presented during the Daendels and Sukarno era. Indonesian and European/American architectural designs were also observed to have different entry processes. Therefore, modern architecture should be perceived as a process rather than a product. © 2020 Johannes Adiyanto