Trade and Market Liberalisation in Eastern Europe

SUMMARY

The question of why multinational companies (MNCs) choose to locate in one region rather than another has been an important topic in IB research for many years, but has recently received even more attention. This paper presents the results of an econometric investigation of the locational determinants of Italian firms in Central and Eastern Europe. Italian firms have been very active investors in the CEE countries. Our results broadly confirm the findings of previous studies, but we also find that both trade liberalisation and market liberalisation are important influences upon the location decision. If the CEE governments wish to attract further (Italian) foreign investment, then further liberalisation of their domestic economies should be a policy priority.     

International Market Entry Strategies of Emerging Market MNEs: A Case Study of Qatar Telecom

ABSTRACT

Drawing on existing theoretical perspectives and previous research, this study essentially investigated the strategic motives, location choice, and international entry mode strategies of emerging market multinational enterprises based on a case study of a telecom company, Qatar Telecom (Qtel) from the Gulf Cooperation Council. Using empirical findings from the semi-structured interviews, this study has clearly indicated that the main strategic motivation behind Qtel's internationalization was essentially opportunity seeking in terms of enabling market development and generating higher return on investment. Although Qtel used different entry strategies depending on the characteristics of host country markets, the company is more in favor of mergers and acquisitions than greenfield investments.     

Emerging Customers,Market Knowledge Competence,and Investor Transition: The Experience of MNCs in China

ABSTRACT

This research examines the impact of market knowledge competence (MKC) on investor transition with a focus on Chinese emerging customers. Investor transition refers to the role change of multinational corporations that initially select China as a sourcing location and later decide to market products in the host country. Based on the theory of referential information, we hypothesize that each of the three dimensions of MKC influences the level of investor transition. An empirical study among a sample of multinational corporations in China confirms the anticipated relationships. The findings also reveal that two contextual factors, perceived value inclination and cognitive reframing mindset, facilitate the processes of MKC.     

Internationalization of Japanese Multinational Corporations in Central and Eastern Europe

Abstract

The paper focuses on the internationalization activities of Japanese MNCs in Central and Eastern Europe (CEE) analyzing data on national level considering Japan's modes of market entry in the CEE region and some of the countries in it. Major trends and the development of Japanese internationalization in CEE are presented. Individual mini case studies contribute to the analysis using the experience of several major Japanese MNCs that have invested in the region. The goal of the paper is to uncover the specifics of the internationalization process of Japanese corporations in the CEE region. Main characteristics of the penetration of Japanese MNCs in CEE are unveiled and discussed in the concluding part of the paper. The management implications and conclusions from the study are discussed further in the final part of the paper.     

The Impact of Integration and Responsiveness on MNC Subsidiaries’ Market Orientation

ABSTRACT

In this study, the author explored the impact of integration and local responsiveness on the market orientation of multinational corporations’ foreign subsidiaries. An investigation of a sample of 250 foreign subsidiaries in the United Kingdom revealed different effects of integration and local responsiveness on market orientation. In specific, integration directly impacts the development of market orientation of multinational corporations’ subsidiaries, whereas responsiveness effects on market orientation are mainly indirect through first affecting the top management emphasis and then the use of market-based reward systems at subsidiaries. Managerial and research implications are discussed.     

On the choice of in-house production versus outsourcing by multinationals

Abstract

The global economy is becoming more integrated with the increase in international fragmentation. This paper examines two forms of global production networks in a general equilibrium framework by building on the ‘knowledge-capital model.’ The focus is the relationship between country characteristics and the multinational firm's choice either to allocate the labor-intensive processing stage in-house to its foreign affiliates or to outsource the activity to outside contractors at arm's-length. Chinese data on the export processing trade are used to test the theory. The findings show that multinational firms with their headquarters in highly skilled-labor-abundant countries of intermediate size have a preference for outsourcing. By contrast, skilled-labor-abundant countries of small size are homes to multinational firms with subsidiary production in the host country where unskilled labor is cheap.     

跨国公司逆向知识转移母公司影响因素的前沿研究

跨国公司对外投资逐渐关注战略性资源寻求,其中知识寻求日益受到重视,并借由子公司向母公司的逆向知识转移获取东道国先进知识资源,因此探讨逆向知识转移影响因素成为备受关注的课题。文章从研究该论题的主要文献入手,探讨了母公司战略组织和能力制度两类因素对逆向知识转移的积极调控作用,前者包括国际化战略导向和母子公司控制程度,后者包含吸收能力和转移支持制度,同时在总结现有研究特点基础上还对未来研究方向进行了展望。     

Foreign Direct Investment Motives and Marketing Strategies in Central and Eastern Europe

Summary

Foreign direct investment (FDI) inflows are of crucial importance for the process of reintegration of Central and Eastern Europe (CEE) in the global marketplace. This paper explores the motives of foreign investors, host governments, and host companies in the FDI process taking place in CEE. The degree to which the motives of the three parties have been achieved is evaluated. The motives of foreign investors, host governments, and host companies are related to the strategic priorities of the FDI companies. The way in which these priorities have been realized is discussed. Recommendations for foreign investors' behavior in the CEE context are presented at the end of the article. The research data come from four countries: Bulgaria, Hungary, Poland, and Slovenia.     

Multinational mining companies,employment and knowledge transfer: Chile and Norway from ca. 1870 to 1940

Abstract

This article compares employment at multinational mining companies in Chile and Norway from ca. 1870 to 1940. I find that multinationals in Chile recruited foreigners to managing and middle-management positions, while Norwegian workers were heavily involved in management of multinationals in Norway. The exclusion of Chileans encouraged enclave tendencies and prevented knowledge transfer, while strong networks were created between multinationals and the local industry in Norway through job switching. Evidence suggests that local workers were employed if they were qualified and that discrepancies in institutions stimulating capacity building in the two countries largely explain the different employment patterns.     

Industry,Organizational Age,and Size as Predictors of Organizational Values in the Context of a Transition Society: The Case of Estonian Organizations

ABSTRACT

Over the past 20 years, China and India have emerged as the fastest growing economies in the world. In this context, the authors review, examine, and list the factors that have contributed to the emergence of China and India (referred to as Chindia). The authors compare the antecedents, characteristics, and consequences of their emergence in the global market. This article provides insights for the researchers and multinational enterprises from rest of the world to carry out studies on country analysis as well as foreign market entry modes. Besides, we posit theoretical and testable propositions for future research.     

On the Marketing of Nations

Abstract

Deciding on how and where to begin a new regional expansion is a highly important and complex task for multinational companies. The importance and complexity stems from the fact that these decisions involve relatively high uncertainty (i.e., risk) and, at the same time, require an intensive multidimensional evaluation process. Many countries, however, particularly in emerging markets, work to encourage multinational companies to establish a base of operations there or to enlarge existing regional headquarters. Consequently, multinationals and countries have a common interest in identifying key elements in this multidimensional decision process and estimating the likelihood that a particular country will be more suitable to fill this task than others. In order to gain a deeper understanding as to the attractiveness of a host country for establishing a base of operation (BOO) of multinational corporations, we explore the perceptions of corporate managers of different Mediterranean countries. Our analysis highlights the different country characteristics that contribute to the difference in perceptions. In addition, we find specific attributes that contribute the most to these differences. We conclude with a discussion of actions that can be taken by a specific country to close, or expand, some perception gaps.     

Traces of foreign retailers – local knowledge-spillovers and strategy adaption within retail internationalization

ABSTRACT

Since the 1990s certain retail companies have evolved into some of the largest and most dispersed transnational corporations worldwide. However, within the ‘new era of retail distribution’ retailers are increasingly divesting from foreign markets. This study addresses these recent and under-explored dynamics by revealing the traces transnational retail corporations leave after divesting from a country. It explores the aspect of learning of host market retailers from entering transnational corporations (TNCs) and examines how foreign knowledge is adjusted in the business strategies of these local actors. It takes a fresh empirical slant using qualitative interviews with host market retail managers including former TNCs’ subsidiaries operating under domestic ownership. The emerging economy of Turkey serves as an empirical example. The paper finds that foreign retailers transfer firm-specific resources to the local retail through (1) demonstration and imitation, (2) vertical linkages with suppliers, (3) joint ventures and acquisitions, and (4) labor turnover of TNC trained staff. Certain successful local companies adjust the foreign knowledge based on their local knowledge and strengths, their high level of flexibility and deep territorial embeddedness, and create ‘hybrid’ business strategies. These findings suggest that dynamic capabilities are crucial to successful retailing in an international competitive environment. TNC managers should work with local staff in partnerships of equals and managers of locally operating companies should incorporate new knowledge by hiring TNC trained staff.     

Distance Education

ABSTRACT

This article examines management of accountancy education in Zambia and Zimbabwe, two countries in Sub-Saharan Africa. Both programs are collaborative efforts to manage the link between the accounting profession, governments of emerging economies and in-country postgraduate training facilities. Both programs are designed to promote the study of accounting at a level recognized by the international accountancy profession.

The programs are being developed in the context of World Bank research, which confirms linkage between economic growth and an appropriately trained accounting profession, and recognizes the need for economic growth in Sub-Saharan Africa.

Six principal program characteristics are examined: the challenge facing the accountancy profession in Sub-Saharan Africa; funding sources; details of the programs; delivery of the programs; program costs, and graduation outcomes. This article reports on the struggle faced by the accounting profession in emerging economies to make the managers of the global accountancy profession, donor agencies, and multinational commercial enterprises aware of this aspect of the developing SSA market.     

Foreign Direct Investment and Training in the Host Country: The Tariff-Jumping Argument Revisited

We analyze the direct investment versus export decision of a multinational firm in competition with a potential entrant in a host country. We consider a workers' skills asymmetry between the host and the multinational home countries. We also give the multinational the possibility to train all (or a part of) the hired workers when investing. We show that an improvement in the workers' skills in the host country does not systematically increase the multinational incentive to invest. We also demonstrate that the tariff-jumping investment can improve the welfare of the host country even if it excludes the local firm from the market.     

跨国公司在华经营策略分析——百安居并购、欧倍德退出案例对比研究

本文以欧倍德从中国市场退出以及百安居的相对成功为例，分析跨国公司在华经营策略，从而说明如果不根据当地市场需求适时地调整战略决策，即使拥有较高的资本优势和优秀的管理经验也不免经营失败。跨国公司在处理母公司管理模式转移与海外子公司经营管理创新的关系时，应注重东道国的市场环境，选择合适的经营方式，及时地转换经营策略，积极进行管理创新。     

Vertical Specialization Across Developed Countries

This article explains why a large part of vertical specialization in production takes place across developed countries. By introducing the concept “the Ideal Intermediate Good” it is shown that there are incentives for vertical collaboration between an intermediate good producer and a final good producer. The purpose of locating the intermediate good production in an identical host country is to come closer to the most suitable intermediate good. Thereby the variable costs in the final good production are reduced. When the final good production takes place in one company, we have a vertical integrated multinational enterprise, which splits its production across identical countries. By inclusion of internal economies of scale and transport costs the problem becomes much more complex, and a reallocation of welfare between the countries can be the result.     

Foreign Direct Investment in Hungary

Abstract

When in 1989 the markets in Central and Eastern Europe opened, western firms were quick to move in. Hungary treated foreign firms equal to domestic ones in the privatization process. It attracted most foreign direct investment in the region. Now, other countries are likely to follow the Hungarian path and allow foreign firms to take over domestic firms. This contribution discusses the experience of six Dutch multinational firms in Hungary and discusses whether these can be useful for expansion into other countries in the region. The results indicate that firms easily underestimate the cost of reconstructing acquired enterprises and that building a market position is more expensive than anticipated.     

The Role of Multinational Enterprises in West African Regional Economic Integration

Abstract

Studies on regional economic integration in West Africa have concentrated on conventional accounts, which focused primarily on the activities of states and their agencies. The role and activities of actors who play a key function in the political economy of the integrating states and in the integration process are largely ignored or given limited attention. This paper contributes to a better understanding of the integration process in West Africa by exploring the role and the activities of multinational enterprises (MNEs) in the development and growth of the Economic Community of West African States (ECO-WAS). Further, this paper contends that MNEs are never passive in market integration. And through their membership in business associations, they participate in the creation, development and growth of the regional scheme. As the winds of economic liberalization and political reforms sweep across the West African subregion, it will become ever more crucial to forge partnerships between multinational enterprises and the host countries with the desire of fostering regional economic     

Internationalization of Chinese and Korean firms

This article compares and contrasts the growth of Chinese and Korean multinational enterprises (MNEs). The article identifies the similarities and differences between Chinese and Korean MNEs in terms of motivations for internationalization, expansion strategies, and paths. The goal of this article is to contribute to the literature by shifting focus on host‐country conditions to home‐country conditions in explaining the drivers for firms' internationalization. We conclude that firms are motivated to expand abroad when faced with domestic competitive disadvantages resulting from absence or deficiency of one or more of Porter's Diamond attributes in their domestic market. Implications for further studies are also explored. © 2009 Wiley Periodicals, Inc.     

Union legislation and export platform FDI

Abstract

This paper examines Foreign Direct Investment in the presence of labour unions. An oligopoly model is developed in which identical firms locate in a host country in order to export to a foreign country. These firms are unionized and compete with foreign firms on the foreign market. We consider the incentives for social dumping via restrictive labour legislation, which we assume can be used by the host country government to affect the bargaining power of unions. We ask whether it is in the interest of the importing foreign country for the host country to relax or to tighten labour laws.