Executive migration and international mergers and acquisitions

This study applies the microfoundations approach to examine the impact of migrating executives on firms’ selection of host country in their international acquisition decisions. Viewing executive migration as a conduit for inter-organizational learning, this study offers the first empirical findings that a migrating executive’s inter-organizational learning associated with two specific types of international acquisition experience, i.e., general and country-specific, accumulated at a prior affiliated firm positively impacts host country selection in the executive’s current affiliated firm’s acquisition decisions. The findings further suggest that the migrating executive’s prior country-specific international acquisition experience has a greater influence compared with the migrating executive’s prior general international acquisition experience. Last, the findings show that industry similarity between a migrating executive’s prior and current affiliated firms enhances the effect of the migrating executive’s specific host country acquisition experience. In sum, this study contributes by introducing migrating executives as a new learning conduit in international acquisitions.     

Firm-level export duration: The importance of market-specific ownership linkages

This paper explores the impact of a firm's market-specific ownership linkages and trade complementarities on different dimensions of its exporting longevity. Unlike previous studies that were mostly based on country-product-level data, this paper uses transaction-level trade data on the population of firms in Slovenia in the 2002–11 period, matched with detailed origin/direction of inward/outward FDI information to determine a firm's integration in international production networks. Our results indicate that firm's bilateral inward and outward FDI flows with an export-destination country have a strong positive effect on a firm's export survival in that market. Importance of market-specific ownership linkages for export duration is exclusively driven by intermediate goods which suggests prolonged export duration through production network involvement. However, the perseverance effect of bilateral FDI ties on export spells has been weakened during the crisis period. We find pronounced market- and product-related trade complementarities as either exporting or importing experience with the relevant market/product substantially improves the chances of a product–market export spell continuing. Finally, the risk of exports termination is lower for a firm's core export products.     

Cross-border mergers and acquisitions vs. greenfield foreign direct investment: The role of firm heterogeneity

We develop a general equilibrium model with heterogeneous firms to address two sets of questions: (1) what are the characteristics of firms that choose the various modes of foreign market access (exporting, greenfield FDI, and cross-border M&A), and (2) how does the international organization of production vary across industries and country-pairs? We show that the answers to these questions depend on the nature of firm heterogeneity. Depending on whether firms differ in their mobile or immobile capabilities, cross-border mergers involve the most or the least efficient active firms. The comparative statics on industry and country characteristics display a similar dichotomy.     

Early international entrepreneurship in China: Extent and determinants

We use data on 3,948 Chinese firms obtained from the World Bank’s Investment Climate Private Enterprise Survey to investigate early international entrepreneurship (international new ventures) in China. The extent of early international entrepreneurship in China is significant: 62% of the exporting firms start export operations within 3 years. Foreign shareholders within the firm and an entrepreneur with previous exporting experience are noted to significantly increase the probability that a firm internationalizes early. We find marked differences in the behaviour of indigenous and foreign-invested firms, and between direct and indirect exporters. For example, for an indigenous firm the more foreign experience its entrepreneur has, the less likely it is to start exporting early. As far as indirect exporting is concerned, business networks are significant determinants of the extent of such exporting, but delays the internationalization process of indigenous firms. The more firms in China export, the more time their managers need to spend on government regulations, although perhaps counter-intuitively, this was not found to discourage exporting. Overall, the findings suggest that exporting by indigenous Chinese firms is often due to challenging or adverse domestic conditions.     

Foreign sourcing and exporting

The aim of this paper was analysing the role of sourcing intermediate inputs internationally on export decisions and distinguishing whether intermediates are sourced from firms belonging to the same business group or from independent suppliers. To analyse firms' export decisions, we use a specification that also accounts for sunk costs and accumulated experience in export markets (i.e., export market learning). We consider that importing intermediates might have direct and indirect effects (operating through enhanced productivity) on the export participation decision. The direct effects on exporting are isolated once we control for productivity and the effects of belonging to an international group. We use a manufacturing panel data set drawn from the Spanish Survey on Business Strategies (ESEE) for the period 2006–14. Both productivity and inward or outward FDI increase the probability of exporting. Moreover, our results uncover the existence of sunk costs and export market learning, and also the relevant role played by intermediate imports in firms' export choices. Their effects act both through the (indirect) channel of enhancing firms' productivity and through a direct effect related to product upgrading, more competitive selling prices or learning from the firm's import experience.     

Markups,import competition and exporting

This paper analyses the relationship between markups and international trade at the firm level using a large sample of French manufacturing firms for the period 1995–2007. In particular, the paper investigates the effect of increasing import competition from China on firms' price–cost margins and the way in which exporting interacts with this effect. The results show robust evidence that firms in more direct competition with Chinese imports decrease their markups. However, firms that become exporters experience a smaller reduction in their price–cost margins. Consistent with these findings, the results also show that firms facing tougher competition from China are more likely to start exporting to avoid such competitive pressures.     

Defying Distance? Cross‐Border Acquisitions by Emerging‐Economy Firms

We argue that emerging‐economy firms’ international location choices are driven by the pursuit of dynamic efficiency rather than the immediate minimization of transaction and learning costs, and hence the relationship between country distance and the number of cross‐border acquisitions will be less negative for these firms relative to advanced‐economy firms. We then test the hypothesis with respect to four measures of country distance—geographic, economic, cultural, and institutional—and find support for the hypothesis. Our study provides empirical support for claims in the literature about differences in the international expansion behavior of emerging‐economy firms with respect to location. In addition, our study makes a theoretical contribution by showing that the theoretical perspective of dynamic efficiency can explain the difference in the location choices for cross‐border acquisitions by emerging‐economy firms relative to those by advanced‐economy firms. © 2016 Wiley Periodicals, Inc..     

The Influence of the Provision of Online Channel Functions on Exporting Channel Performance: The Moderating Effect of International Experience

ABSTRACT

The purpose of this research is to investigate the effect of the provision of two online channel functions on exporting channel performance, using international experience as a moderating variable. The study setting is Taiwan. The results confirm that the provision of online communication and transaction functions can increase exporting channel performance. Moreover, international experience can better facilitate the effect of the provision of online transaction functions on exporters’ channel performance for less-experienced firms rather than for experienced firms. However, its facilitation reverses in course of the provision of online communication functions (albeit in a different direction than hypothesized).     

Globalization and technology adoption: evidence from emerging economies

This paper examines the role of globalization in the creation and dissemination of technology across firms operating in 30 emerging and developing economies. Firm-level data from four rounds of Business Environment and Enterprise Performance Surveys from 2002 to 2014 is pooled to assess whether international exposure translates into greater propensity for firms to innovate. The viability of different channels of international technology transmission, i.e. exporting and importing activities, foreign licensing agreements and foreign direct investment are studied to analyze whether they indeed succeed in delivering the push to the firms operating in developing countries to innovate and as a result push them closer to the world's technology frontier. The empirical results endorse the view that exporting and importing activities and foreign licensing agreements are important channels for technology transfer. This study also acknowledges country, sector and firm specific characteristics and their differential capacity to benefit from foreign exposure.     

The impact of transport costs on new venture internationalisation

This paper investigates the importance of transport costs in new venture internationalisation, i.e. of firms that start exporting before they are 3 years of age. It does so by merging two large international datasets, on the firm level (covering 49,584 firms) as well as on the country level (covering 154 countries). It is found that transport costs matter significantly for new venture internationalisation, for older firms’ decision to export, as well as the extent of the latter’s subsequent exports. Export costs, the quality of transport infrastructure and domestic logistics costs affect new venture internationalisation even when controlling for a range of standard determinants. New international ventures behave differently from older firms in two important ways: (1) Transport costs affect the probability that they will export but not the extent of their subsequent exports and (2) their probability of exporting is affected negatively by their networking, domestic success and ISO status, whilst in the case of older firms, these factors have a positive impact. Various recommendations for policy and further research are made.     

Export Attitudes of Taiwanese Executives

SUMMARY

Taiwanese-based firms have long been actively involved in exporting and international trade. This article investigates their export attitudes and qualities for effective international conduct. Data from 182 companies in Taiwan provide mixed support for three hypotheses advanced in this study. International experience is found to significantly influence exporting attitude. In addition, two measurements of size (annual sales and number of employees) and international business experience are found to have some influence on export attitudes and on the needed qualities for effective international business conduct.     

The Strategies and Characteristics of Exporting SMEs:

The behaviour of exporting firms is the result of the complex interaction of many factors of the external and internal environment both at the national and international level. This paper presents the main findings from an exploratory study which assessed the characteristics and marketing strategies of small- to medium-sized exporting firms in a developing country, Peru. Statistical analysis using non-parametric methods to measure the behaviour of these firms used criteria taken from studies of firms in mostly developed countries. The observations from the analysis indicate that characteristics such as size and management perceptions and commitment, and strategies related to market concentration in developed countries taking into consideration export sales volume as a measure of performance (dependant variable) were positively associated to the success of these Peruvian firms and added to their competitiveness.     

Does international experience help firms to be green? A knowledge-based view of how international experience and organisational learning influence proactive environmental strategies

Early research on environmental strategy in international firms focused predominantly on direct investment as an expansion strategy for multinationals. However, we know relatively little from a strategic management perspective about exporting, which is the most prevalent form of international expansion. For this reason, we examine whether the knowledge that export firms acquire abroad influences their environmental strategies. Using a sample of export firms from the food industry, we show that the number of years spent in developing export activities does not contribute to developing a proactive environmental strategy; however, a more complex experience of environmental international diversification is positively related to a firm's proactive environmental strategy. Finally, organisational learning capability moderates the positive relationship between environmental international diversification and environmental proactivity.     

R&D Policy Involving Consumer-Friendly Strategy: Cooperative and Non-Cooperative R&D

In a highly globalized economy, foreign exporting firms have initiatives to be consumer friendly for many reasons. The aim of the present paper is to endogenize consumer-friendly actions by the exporting firms, and explore how government’s industrial policy and firm’s R&D investment are affected by the strategy of foreign exporting firms under cooperative and non-cooperative R&D commitments in an international rivalry market. It finds that consumer-friendly action is a dominant strategy equilibrium, and no matter whether under cooperative or non-cooperative R&D, a consumer-friendly firm tends to invest less than does the purely profit-maximizing firm on R&D under symmetrical decisions. In the case of firms cooperating in R&D and involving consumer-friendliness in action, their governments need not intervene. On the other hand, governments always subsidize non-cooperative R&D activities, or cooperative but unfriendly firms. Furthermore, the consumer-friendly action will result in more (less) R&D subsidies by the exporting government when both firms non-cooperate (cooperate) in R&D. Finally, it is robust to indicate that the government of an importing country prefers friendly foreign firms in any circumstances. Above all, the equilibrium outcomes explain the crucial role of consumer-friendly strategy for industrial policies and R&D activities.     

Innovation capacity,international experience and export performance of SMEs in Brazil

Innovation capacity and international experience are factors often related to the internationalisation process of firms, with export activities as the first stage of the process. However, firms from emerging countries seem to show advantages and follow patterns of international expansion that may differ from firms based in developed countries, where the internationalisation models were created. Specifically, exporting firms from emerging countries tend to have limited resources, especially small firms (e.g., for investing in R&D). Despite these facts, the literature on export performance seems biased towards recommending firms to enhance, above all, their innovation capacity in order to achieve better export performance, while little attention is paid to international experience as a factor that is as important as innovation. In this context, the objective of this study is to investigate the impact of innovation capacity and international experience on the export performance of small and medium-sized enterprises (SMEs) located in an emerging country and to identify which factor is more significant. The Resource-Based View and Dynamic Capabilities approach were used as theoretical frameworks. A research model was developed and tested on a significant sample of Brazilian industrial SMEs. The data were analysed through partial least squares structural equation modelling. The results indicate that international experience has a greater impact on export performance than innovation capacity, showing that there is possibility of overemphasising the role of innovation in the export performance of SMEs, at least, in the Brazilian context.     

Tax competition with asymmetric market structures: The role of policy instruments*

We analyze the location choice of a multinational corporation (MNC) between two host countries with different market structures, i.e. the number of competing domestic firms in them. We consider the effects of import tariffs and lump-sum subsidies on the MNC's locational choice. Our findings include: (1) with lump-sum subsidy, the country with fewer firms always gets the MNC, (2) with tariffs, the country with more domestic firms gets the MNC when the export transportation cost is high and the domestic firms are sufficiently inefficient, while the country with fewer domestic firms wins the MNC when export transportation cost is low, and (3) the MNC location decision may crucially depend on which instrument is used to attract the MNC.     

Where Do Firms Export,How Much and Why?

The empirical finding that exporting firms are more productive on average than non‐exporters has provoked a large theoretical literature based on models such as Melitz ( 2003 ), where more productive firms are more likely to overcome costs associated with trade. This paper investigates how closely the productivity heterogeneity framework fits the data from a firm‐level survey that includes information on export destinations and firm characteristics such as productivity. We find a high degree of unpredictable idiosyncratic participation in export markets by firms and a relatively weak positive correlation between the extent of a firm's export market participation and its export sales. We find that a small number of standard gravity variables provide a close fit to the country‐level determinants of trade but that greater variation results in more difficulty in explaining firm‐specific factors driving exporting behaviour. We also illustrate some elements of the dynamics over time in firm exporting patterns by destination. We show that lagged exporting activity has a significant effect on a firm's current exporting profile.     

Strategic Trade Policies Under Monopsony and Uncertainty: The Exporter’s Non-Linear Responses Based on the Organization of Its Industry

Players’ access to information, their market power, and the timing and rationale of their decisions are important but often neglected in the making of strategic trade policies. I examine optimal decisions in a monopsonistic market with asymmetric information to determine an exporting country’s policy strategies. The large importing country first sets a producer subsidy and later imposes an import tariff after learning about the welfare-maximizing exporter’s reactions to the subsidy. I assume that at the time of their decisions, the n exporting firms have incomplete information and rely only on noisy signals from their own domestic market to account for the uncertainty in the international market. I find that import tariff and producer subsidy can be substitute rather than exclusively independent policies. Results also show that the exporting country’s optimal reaction is non-linear and is based on the structure of its export industry; the exporting country’s government facing a large importer subsidizes (or taxes) its export when the number of exporting firms is low (or high) relative to a threshold number of firms. More important, before giving out subsidies, the exporting country’s government requires more collusion of its firms especially when the large importer targets a fixed domestic price.     

International competitive strategy choices: comparing firms in China and India

This study investigates the types of international competitive strategies (ICS) followed by Chinese and Indian firms. Using firm-level primary data, the contribution analyses the factors that affect ICS choices and whether these factors differ between the two countries. It argues that firms' resources and capabilities influence firms' propensity to choose a specific ICS and that the strategies differ in relation to firms' location, sector and destination market as well.     

Determinants of Sales Destinations of U.S. Multinational Firms' Affiliates in Developing Countries

This study examines the determinants of the sales of .U.S. multinational firms' affiliates to alternative destinations, including sales to other affiliate firms in a host country and a source country markets as well as sales to other non-affiliate persons in each market. Sample host countries are drawn from developing economies where U.S. multinational firms had affiliate firms during the period 1983–1998. The results of the study reveal that affiliates of multinational firms manipulate sales to minimize international taxation. This is supported by the finding that foreign corporate income taxes: affect sales between affiliate firms favorably, unlike its impacts on sales of affiliates to non-affiliate persons in both a host country and source country markets. Considering all markets together, economic volatility and political instability have minimal impacts on sales of affiliates to other affiliate firms compared to their impacts on sales to non-affiliate persons. The results also confirm that host countries' economic policy reforms and membership in multinational investment guarantee agencies facilitate sales of affiliates to other affiliate firms.