Nature and Extent of International Diversification: Empirical Evidence from India

The paper aims to measure the extent of international diversification achieved by Indian companies in the recent time period. The study also investigates the nature of international diversification of companies during their transition beyond national boundaries. This evaluation of the firm’s nature and extent of internationalization is further extended to cover the period of COVID-19 as well. The Jacquemin and Berry Entropy Approach (1979) is applied to operationalize the firm’s international diversification. It facilitates the measurement of both inter-region and intra-region diversification. World Bank Geographical Region Classification Framework (2018) has been used to facilitate the applicability of the approach applied. Results indicate that Indian companies were inclined to grow beyond their home territories. However, the extent of international diversification is low as ‘Internationally Low Diversification (ILD)’ reveals to be the most popular strategy amongst Indian companies. Nature depicts a preference for relatedness than unrelatedness for overseas expansion as firms prefer intra-region expansion as compared to moving inter-region. Stagnation and halt are witnessed in the global expansion of companies in the period of the pandemic. The present study is novel as it comprehensively evaluates the international growth strategies preferred by Indian companies in the pre-pandemic and the pandemic period.

DIVERSIFIKASI INTERNASIONAL DAN KINERJA PERUSAHAAN MANUFAKTUR DI INDONESIA DENGAN EFISIENSI SEBAGAI VARIABEL MODERASI

Kinerja perusahaan tercermin dari meningkatnya nilai perusahaan karena perusahaan mampu mengelola sumber daya yang dimiliki. Hal ini membutuhkan keahlian, pengetahuan dan keefisiensian manajemen dalam mengelola sumber daya serta mengembangkan strategi yang tepat. Diversifikasi internasional merupakan strategi yang diterapkan perusahaan di era globalisasi ini untuk mengembangkan pangsa pasar internasional yang dapat meningkatkan kinerja perusahaan. Mengingat fakta bahwa sumber daya langka, kebutuhan untuk menjadi efisien merupakan fenomena penting dalam usaha peningkatan kinerja perusahaan. Penelitian ini bertujuan untuk mengetahui pengaruh efisiensi terhadap hubungan antara diversifikasi internasional terhadap kinerja perusahaan manufaktur. Dengan metode purposive sampling dan periode penelitian antara 2013-2017, kami mendapatkan data 69 perusahaan manufaktur dengan jumlah observasi sebanyak 223. Terdapat dua langkah teknik analisis yang digunakan yaitu dengan metode Data Envelopment Analysis (DEA) dan analisis regresi linier berganda. Kami menemukan bahwa diversifikasi internasional mempunyai pengaruh positif yang signifikan terhadap kinerja perusahaan manufaktur di Indonesia. Efisiensi memoderasi pengaruh positif diversifikasi internasional terhadap kinerja perusahaan. The firm's performance is reflected in the increasing value of the company because the company is able to manage its resources. This requires management expertise, knowledge and management efficiency in managing resources and developing appropriate strategies. International diversification is a strategy implemented by companies in this era of globalization to develop international market share that can improve firm’s performance. Given the fact that resources are scarce, the need to be efficient is an important phenomenon in an effort to improve firm performance. The purpose of this study was to determine the effect of efficiency on the relationship between international diversification on the performance of manufacturing firms. Using the purposive sampling method and the research period between 2013-2017, we obtained data from 69 manufacturing firms with a total of 223 observations. There are two steps of the analytical technique used, namely the Data Envelopment Analysis (DEA) and multiple linear regression method. We find that international diversification has a significant positive effect on the performance of manufacturing firms in Indonesia. Efficiency moderates the positive effect of international diversification on a firm's performance.

Analysis of Methodological Approaches Towards Assessing Conditions of International Commodity Markets Convergence

To analyze different methodological approaches to determining the marketing attractiveness of international markets and their convergence assessing. Develop an indicators system for assessing the convergence of international markets to determine their marketing attractiveness for domestic agricultural enterprises. The international markets have been rated on the basis of summing the ranks of indicators of attractiveness method of their business environment for Ukrainian farmers by the product group «1008 Buckwheat, millet and other cereals» in order to identify more favorable conditions for doing business. The application of this approach allowed to develop a target portfolio for further targeting the implementation of the internationalization strategy by domestic producers of the product group «1008 Buckwheat, millet and other cereals». The methodological basis of the study are general and special research methods: epistemological and systems analysis - in the study of «economic convergence» definition; systems theory and systems analysis - to analyze of process determining the marketing attractiveness of international markets and assessing their convergence; statistical analysis, synthesis and comparison ‒ to identify trends in the entry of agricultural enterprises of Ukraine to international markets; comprehensive assessment of the convergence of agricultural enterprises of Ukraine under the conditions of international diversification. It has been proved that in the expert assessment of convergence indicators the markets of foreign countries, the indicators of which are as close as possible to the economy of Ukraine, should be singled out. It has been determined that the markets of Austria and Nigeria are promising for domestic agricultural enterprises, producers of the commodity group «1008 Buckwheat, millet and other cereals», with the possibility of overcoming a significant gap in certain indicators, namely: the market of Austria, Nigeria where there is low quality regulation and also unfavorable investment conditions. The scientific and methodological approach to the complex assessment of the convergence of new international markets for domestic agricultural enterprises under the conditions of international diversification has been substantiated and developed. The result of the evaluation allowed to come up to the conclusions about the marketing opportunities of domestic agricultural enterprises under the conditions of entering the markets of these countries. As a result of the proposed approach, it is possible to identify foreign markets that demonstrate favorable conditions for doing business in them, which indicates the presence of convergent conditions, which is a prerequisite for the entry of goods of domestic agricultural enterprises in the markets of these countries. As a result of the proposed approaches, there were identified new international markets, that demonstrated favorable conditions for doing business in them by domestic agricultural enterprises producing the product group «1008 Buckwheat, millet and other cereals». It has beed developed in the study a target portfolio for further targeting the strategy implementation of internationalization domestic producers of the product group «1008 Buckwheat, millet and other cereals».

Determints of CEO Bonus Compensation

The primary purpose of this study is to explore the determinants of CEO bonus compensation: to examine CEO bonuses and to explore whether or not the independent variables are associated with CEO bonus compensation. For the purposes of this study, a sample of 2,448 CEO bonus compensations across 1,622 firms from 1997 to 2002 was used to test several hypotheses. The dependent variable in this model is the CEO bonus compensation. Bonus is the dollar value of the bonus (cash and non-cash) earned by the named executive officer during the fiscal year. Corporate diversification was divided into two categories; international diversification and industry diversification. Firm performance is measured by both Market-based, Performance (RET) and Accounting-based, Performance (ACE). The results show that the higher the degree of international diversification, and the higher accounting earnings performance, the more CEOs receive in bonuses. In addition, this study found that international diversification is associated with a greater use of bonuses and with a greater reliance on accounting-based, rather than market-based measures of firm performance. The results also demonstrated that CEOs in firms with more investment opportunities will receive higher bonuses than CEOs in firms with fewer investment opportunities and CEOs in larger firms will receive higher bonuses than CEOs in smaller firms.

International portfolio diversification during the Covid-19 onset: A study of correlations among CEE post-transition and developed countries

Purpose: The chapter examines the hypothesis that during the Covid-19 onset, the higher positive correlations between stock exchange indices persist, preventing the use of international diversification to reduce the volatility of global portfolio. Design/methodology/approach: The study focuses on CEE post-transition countries and their main stock exchange indices’ correlations with developed markets stock exchange indices. The data cover the period starting from January 8, 2004, until the end of October, 2020. The bivariate relationship between stock indices and VIX was measured by the Pearson coefficient of correlation. Findings: The findings of correlations estimation in three periods (long-term, Covid-19 on-set, and recovery) indicate that except for a period of large volatility measured by the VIX index lower relationships between developed and emerging stock markets persist. However, the results of the study concerning the shaping of correlation between the stock indices and the global risk shows a significant negative relationship between them, approaching very high levels close to 1 during the Covid-19 onset. All the CEE stock exchanges – even those low correlated in the longer term – behaved very similarly during the stock exchange crunch with its epicenter in March 2020. Practical implications: The answer to the research questions concerning the shaping of correlations on international markets is important for the portfolio theory itself in its international aspect, but also from the viewpoint of its applicability in practice. Huge market synchronization in terms of comovements in stock indices is troubling. It significantly reduces or even eliminates the benefits of international diversification during market crashes.