LETTER FROM THE EDITOR

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Firm heterogeneity and location choice of Chinese Multinational Enterprises (MNEs)

Using data on 194 location choices in 32 countries for a decade, we investigated locational determinants of Chinese Multinational Enterprises (MNEs). We found that State-Owned MNEs, compared to their peers without controlling state equity, are less concerned about political risk of the host country, but more responsive to favorable exchange rate between Chinese RMB and the host currency. Strategic intent of Chinese MNEs affects their location choice in a way that manufacturing oriented investment, compared to trading subsidiaries, is more attracted to countries with large market size and more deterred by high cost structure of the host country.     

The impact of regulations on the FDI-growth nexus within the institution-based view: A nonlinear specification with varying coefficients

The impact of Multinational Enterprise (MNE) activities on economic development and poverty reduction constitute a specific field of study within International Business (IB) scholarship during the last decade. Extending the institution-based view that “institutions matter”, we shift the focus of interest on the effect of institutions in the FDI-growth nexus which, surprisingly, have been overlooked by respective literature. A profound understanding of the FDI impact on economic growth cannot neglect institutions that shape the macro environment where MNEs operate. Within this rationale, this paper examines the effect of FDI on growth under different formal institutions placing emphasis to credit and labour market regulatory systems in both advanced and developing countries. Most empirical studies stemming mainly from the economics perspective, assume that the FDI growth effect is linear and incorporate specific functional forms for their regression relationships. We rely on more advanced econometric methods that allow for the regression coefficients to vary as smooth functions of other variables, allowing for more plausible empirical results. Our findings strongly support our suggestion that the host institutional context shape the strategies, structures and competitiveness of MNEs’ activities which they then affect differently economic growth. We thus provide useful insights regarding the long-lasting debate on the FDI-growth nexus.     

A comparative analysis of the internationalization of Chinese and Japanese firms

This paper integrates institution-, industry-, and resource-based views of internationalization and demonstrates that industrial characteristics, firm resources, and institutional factors can significantly explain the differences and similarities of international expansion of Chinese and Japanese multinational enterprises (MNEs). In particular, this paper maps the growth of Chinese MNEs since economic reforms in 1978 and that of Japanese MNEs after World War II. We illustrate the similarities and differences between Chinese and Japanese MNEs with two case studies: foreign direct investment (FDI) of Haier and Matsushita. We suggest that how firms internationalize, in addition to being influenced by industry- and resource-based considerations, is inherently shaped by the domestic and international institutional frameworks governing these endeavors.

东道国腐败对跨国公司进入模式的影响研究

作为东道国投资环境中的重要组成部分,腐败不但会对FDI流入总量产生影响,还会对跨国公司的战略产生影响,而首先受到影响的就是跨国公司的进入模式战略。本研究以19个新兴市场国家的745家跨国公司子公司作为样本,运用MANOVA分析、判别分析、Logistic分析等研究方法得到以下结论:第一,东道国国家层面感知腐败、产业层面感知腐败会使跨国公司采用持股比例较低的合资(控股或非控股)进入模式;第二,东道国腐败程度对跨国公司进入模式战略的影响会受到跨国公司进入东道国战略动机的调节。     

中外资银行对跨国公司的服务现状比较

跨国公司作为市场追捧的高端客户,它既是"最难伺候"的客户,也是"最好伺候"的客户.跨国公司对金融服务的要求是非常高的,有时可能近乎于"苛刻",与此同时,跨国公司又是最好维护的客户,因为只要你能真正关注它们的需求,尽一切可能满足它们的需求,银企之间就可以保持长期的合作关系.目前,世界上共有跨国公司6万多家,这其中最大的500家跨国公司中的400多家已经在中国登陆.而作为中资商业银行,今后和外资银行争夺的主要阵地之一就是跨国公司银行业务.     

A systematic review of the relationship between international diversification and innovation: A firm-level perspective

We conduct a systematic review of the relationship between international diversification (ID) and firm-level innovation (I), considering articles published between 1989 and 2020. The relationship between international diversification and innovation strategies is dynamic and complex, and recent evidence challenges the traditional notion that upgrading firm-specific advantages through technological innovation can be sufficient to guarantee international firm growth and performance. We develop a unified framework that integrates findings from extant ID-I research while also proposing new avenues for further research on topics such as: how firms deal with potentially conflicting ID-I goals, how underlying firm motives shape the interactions between these goals, and how new technologies and institutional dynamism increasingly influence the ID-I relationship. We also discuss how and why the new contexts in which decisions are made, together with the prevalence of relatively newer types of firms (e.g., those associated with global value chains, latest wave of emerging market multinationals, digitalized service MNEs), require a more modern conceptualization of the ID-I relationship.     

Taking two to tango: A comparative nationalism view of cross-border acquisitions

Nationalism is an important yet underexplored issue in the international business strategy literature. As a new reality, the resurgence and augmentation of nationalism in recent decades has brought disruption effects that challenge traditional arguments on the international expansion of multinational enterprises (MNEs). We suggest that nationalism is not merely about one’s own national interest but should be extended to consider the mutual forces from home and host countries in international business (IB) research. This study proposes a comparative nationalism view to investigate the impacts of various types of intercountry nationalism on MNEs’ expansion through cross-border acquisitions. Through scenario analysis, the MNEs’ expansion trajectories are characterized by different degrees of comparative nationalism, including incremental expansion, deceleration, leapfrogging, and divestment strategies. Our findings and propositions create a new vision for cross-border research considering the interacting effect of national sentiments. We also discuss promising future research agendas enabling further exploration of this topic.     

An exploration on policy uncertainty as a driver of R&D activity

We explore the relationship between uncertainty in economic policy and R&D activity for the sample of 576 firms from seven countries in the world. We base our analysis on an index of newspaper-based economic policy uncertainty (EPU) following the approach of Baker et al.’s (2016). We observe a significantly negative link between EPU and R&D intensity. Interestingly, the negative effect of policy uncertainty has less effect on the R&D activities of firms with growth opportunities. Finally, firms in politically sensitive industries respond stronger to EPU as far as R&D intensity is taken into account.     

Do the differences in legal systems hinder international enterprises’ debt financing?

This study examines the impact of the differences in the legal system concerning obligation claim rights between host and multinational enterprises' (MNEs) home countries on bank credit financing by constructing a legal system distance index including four dimensions. Using 57,526 firm-year panel observations of 7,257 firms from 53 countries operating in China, the results find that legal system distance has a negative impact on foreign firms' debt financing. The influential mechanism is due to the increasing transaction costs. Further test finds that the negative effect declines as the cultural differences increase. The heterogeneity analysis finds that the negative impact of the legal system distance on the debt level is more pronounced for those foreign firms with a large scale, short operating age, not enough collateral, and sales in the domestic market, but shows no significant differences between a sole proprietorship and joint ventures. This study not only expands the literature on “Law and Finance” but also provides an implication for foreign firms' debt financing in the emerging host country.