Promoting organizational diversity and preserving socioemotional wealth: can family businesses balance the two?

PurposeA key characteristic for a family firm, preservation of socioemotional wealth, may appear to be at conflict with the concept of organizational diversity. The authors investigate how organizational diversity, captured through heterogeneity in ownership structure, diversity in the senior management team, interfaces with the concept of the socioemotional wealth of family businesses in an emerging economy, when these firms pursue inorganic growth strategies.Design/methodology/approachDrawing on the concepts of socioemotional wealth, behavioral agency theory and bifurcation bias, the authors develop perspectives on how ownership structure, family influence in executive management and institutional shareholding influence a family firm's internationalization strategies captured through propensity to pursue cross-border M&A – an activity that may threaten the preservation of socioemotional wealth. The authors also explore the role of business group affiliation, another organizational diversity construct, and contingent parameters like past financial performance and export intensity in this study. The authors take pooled data over 15 years, involving 346 large firms from India, which are family-controlled, to carry out the study.FindingsThe authors’ empirical analysis shows that family stake in the company and family members' presence in the executive team negatively influence the propensity to pursue cross-border M&A activities. A firm's affiliation to a business group moderates these negative relationships. On the other hand, the presence of institutional shareholders, positive past financial performance and export intensity positively influence cross-border M&A propensity.Originality/valueThe results establish that family businesses' attempts to preserve socioemotional wealth may come at the cost of promoting organizational diversity.

Frontier Technology, Trade, FDI, and TFP in the Electrical and Electronic Industries: Exporting or Processing Trade?

Does “openness” determine “catching-up” of establishments to frontier technology and total factor productivity (TFP) in Malaysia's electrical and electronic (E&E) industries? We contribute to this debate by applying a new measurement of processing trade intensity. Utilizing stochastic frontier analysis and Levinsohn and Pertrin (LP) TFP, we investigate determinants of technical efficiency (TE) and TFP. The results show that processing trade intensity and not export intensity determines TE and TFP for the overall sample and subsample of foreign establishments. In the processing trade subsample, export intensity is negatively related to TE and unrelated to TFP, obtaining an unconventional result that exporters are inefficient and not associated with TFP. The results show that higher foreign ownership shares of establishments are negatively associated with LP TFP.

The Spread of Cross-Border High-Tech Manufacturing Component Goods in International Trade Integration

The objective of this study is to examine the spread of cross-border trading in determining the firm's production in high-technology manufacturing industries in Indonesia. The spread of cross-border trading in the model is measured by export intensity and alternatively is measured by vertical trade integration. The firm-level data of high-tech industries are implemented in this study. A panel data regression procedure is applied to estimate the model. The estimation results elucidate that vertical trade integration is a significant determinant on affecting firm's production while export intensity is not. This evidence proves that the pattern of cross-border international trade of high-technology industries shifted from exporting finished goods to exporting fragmented products. The export intensity variable is no longer representing the international trade when the firms break-down their production process. The usage of export intensity variable in firms undertaking the vertical trade integration would lead to a misleading conclusion.

The Future Potential and Prospects of SAARC Regional Grouping: A Study

The renewed and reinvigorated engagement of India with the South Asian Association for Regional Cooperation (SAARC) over the past few years has been one of the significant factors leading to the gradual and irreversible transition of the regional organisation from a declaratory phase to one of implementation (Bhagwati, 2008). The recent developments in the South Asian region, especially the new growth momentum that is observed and increasing openness that brings a fresh look at the economic integration of the region. In this context the study examines the opportunities and commodity potential of trade between India and the SAARC countries by adopting a variety of trade indices of export intensity index and import intensity index along with Gini coefficient. The authors further study the commodity trade potential between India and the SAARC countries by adopting the revealed comparative advantage index and revealed import dependency index. The study concludes an increasing export intensity and import intensity of trade between India and the other SAARC member countries. Finally, the values of Gravity coefficient and commodity analysis find a high trade potential between them and the untapped trade and investment scenario that could be tapped by strengthening the regional block of SAARC.

A Spatial Dynamic Model for Export Intensity of Hazardous Industrial Waste: The Incentive Effect of Regional Environmental Policies

This paper analyses, in the context of the Environmental Kuznet Curve, the determinants of export intensity of hazardous industrial waste among Spanish regions, with particular attention to the influence of waste taxes and of environmental policies. This study is carried out for the first time in the literature with a spatial dynamic model, fixed effects and panel data for the 17 regions (Comunidades Autónomas) of Spain during the period 2007–2017. The results suggest there is a spatial-dynamic component to export intensity, and that both regional taxes on waste disposal and environmental policy stringency appear to encourage, albeit modestly, the rate of exported waste to other regions. The model also shows that the more regions recycle, and the greater the economies of scale arising from industrial agglomeration, the lower is the region’s waste export intensity, although increasing restrictions on the international trade in hazardous waste have intensified trading inside the country. Finally, the results suggest a non-linear relationship between growth and export intensity, although apparently we are still far from the absolute decoupling of the Environmental Kuznet Curve.

The Environmental Efficiency-Export Performance Nexus: Fresh Evidence from the Top Environmental Performance Index (EPI) Countries

The quest for sustainability and greener economies has intensified the call for more stringent environmental regulation, hence environmental efficiency of production processes that produce growth. Since trade activities represent a huge part of economic growth, while countries are becoming increasingly cautious of their imports, environmental efficiency becomes an integral consideration for trade. This study investigates the link between environmental efficiency and export performance among the top 20 countries on the environmental performance scale utilizing annual data between 1980 and 2019. The classic comparative advantage theory of international trade provides the theoretical basis for the study. Environmental efficiency scores were generated using the slack-based data envelopment analysis while the nature of causality between environmental efficiency and export performance is established using the Pairwise Dumitrescu Hurlin Panel Causality Tests and VECM Granger causality approaches. The export models are estimated using the fully modified and dynamic ordinary least squares approaches.Bidirectional causality is found between export per capita (and export intensity) and environmental efficiency for the panel analysis. Causality results is however mixed at country level with significant unidirectional causal links running from either export to environmental efficiency or otherwise. The FMOLS and DOLS analysis provides evidence of significant positive effect of environmental efficiency on export per capita and export intensity for the panel of the top EPI countries, and confirmed in most of the countries. The study therefore provides strong evidence for the role of environmental efficiency in countries’ efforts to improve their global competitiveness in trade-related activities. Thus, the study emphasizes increased global investment in environmental efficiency as the global economies grow. JEL: F18; Q56; Q58; N40

Impact of Supply Chain Performance on Firms’ Export Capability: Development of a Statistical Model

The purposes of this article are to establish the crucial indicators of supply chain performance (SCPI) impacting firms’ export performance, revealing its unique characteristics, and assess the effects of these SCPIs on the export capability of the firms. This article develops a statistical model, involving how critical SCPIs can influence firms’ export performance. The developed model is then empirically validated using top 53 firm-level data, based on market share, from the Indian pharmaceutical industry, taken for 10 years. The randomized complete block design approach is employed to confirm the variation of export intensity across firms and time. A panel data fixed-effects model is developed, associating critical SCPIs with export intensity to understand their impact on export performance. Finally, bootstrap is applied as a cross-validation procedure to carry out model authentication. This article contributes to obtaining crucial SCPIs and their impact on firms’ export competitiveness. It has revealed that firms’ raw material import efficiency, working capital efficiency, asset management efficiency, research and development (R&D) capability, and the total cost to serve have a significant impact on the firms’ export capability. The proposed model can help firms make appropriate decisions about different influencing parameters of supply chain performance to improve their export competitiveness.

Export intensity and competitiveness of Indonesia's crude palm oil to main destination countries

Palm oil is a superior product from Indonesia that is continuously and widely used for daily needs such as cooking, grooming, and manufacturing. However, this potential must be supported by oil palm business actors' performance to maintain its intensity and competitiveness. This study investigates how various factors affect Indonesia's crude palm oil (CPO) export intensity and competitiveness by employing panel regression and the basic gravity model. The panel data used here is a 20-year time series with cross-sections from five major importers from 1999 to 2018. The results show that the importer's gross domestic product (GDP) and quantity of export significantly and positively affect Indonesia's CPO export intensity, while the exporter's GDP and economic distance has a significant and negative effect. The factors that positively and significantly influence competitiveness are soybean's import value and Roundtable on Sustainable Palm Oil (RSPO) certification, while Malaysian CPO's export and population of importing countries negatively affect Indonesian CPO competitiveness.