Rewarding the introduction of multiparty elections

Do aid donors reward the adoption of multiparty elections? Are multiparty elections rewarded in both democracies and electoral authoritarian regimes? How do the rewards for institutional reforms compare to the rewards for substantive improvements in governance and political rights? These questions are of particular interest given both the spread of democracy and the emergence of autocracies with multiparty elections for the executive and legislature as the modal form of authoritarianism. To answer these questions, we examine temporal dynamics in aid flows before and after transitions to multiparty elections and the strategic allocation of aid rewards to specific sectors depending upon electoral competition and substantive improvements in governance and political rights. We find that, in the post-Cold War era, bilateral and multilateral donors reward the adoption of multiparty elections in both democracies and electoral authoritarian regimes while also rewarding substantive improvements in governance and political rights. Sector specific analyses reveal that multiparty elections are rewarded with greater democracy aid and economic aid in both democratic and electoral authoritarian regimes. Nevertheless, the quality of elections matters: the adoption of democratic elections receives greater aid gains than the adoption of authoritarian elections.     

The evolution of inter-organisational social capital with foreign customers: Its direct and interactive effects on SMEs’ foreign performance

Taking a longitudinal approach, we analyze how the evolution of different dimensions of social capital between an SME (Small and Medium enterprise) and its key foreign customers directly influences the firm’s foreign performance growth. Moreover, we utilize a contingency approach by introducing two dyad-specific characteristics into the analysis: psychic and geographic interorganizational distances. Our findings contribute to the international business literature on social capital and suggest that while an investment in social capital with distant foreign customers always reinforces SMEs’ foreign performance development, relational and cognitive social capital have the same positive effects only for low levels of interorganizational psychic distance.     

“Money can’t buy me land”: Foreign land ownership regime and public opinion in a transition society

In recent years, as part of the broader policies of economic liberalization, the sale of agricultural land to foreign citizens has attracted considerable political, social and media attention in transition societies. The regime of land ownership in Georgia has evolved from the complete restriction of foreign acquisition in the beginning of the 1990s, to the unrestricted sale of land to foreign citizens from 2010 onwards. An analysis of newly-available data from International Social Survey Programme’s (ISSP) National Identity module suggests that respondents in Georgia, along with Russia, hold the most negative attitudes toward selling land to foreigners compared to other countries. I hypothesize that this is the result of a confluence of factors such as the communist legacy, historical memory, rural nationalism, agricultural underdevelopment and inequality. The quantitative part of this article tests socio-demographic, geographic, ideological, and identity-based explanations of within-country variation in attitudes toward the purchase of land by foreigners. The results suggest that socio-demographic and geographic variables such as respondents’ age and regional belonging explain some variance in the dependent variable, but that the major effects stem from individuals’ perceptions of economic protectionism, xenophobia, and ethnic national identity.     

FDI spillovers in the Chinese hotel industry: The role of geographic regions,star-rating classifications,ownership types,and foreign capital origins

Although productivity spillovers have long been recognized to be a major benefit of foreign direct investment (FDI), such spillovers have not yet been systematically studied in the context of the hotel industry. This paper investigates hotel-related FDI spillover effects as well as moderating factors (geographic region, star rating classification, ownership type and foreign capital origin) in China. Evidence from province-level panel data reveals the existence and significance of intra-industry spillovers from foreign to domestic hotels in China, although the nature and magnitude vary based on different moderating factors. Domestic hotels in eastern and western China and those with alliance and limited liability ownership structures benefit significantly from productivity spillovers. Foreign-invested three-star hotels transfer a significant amount of positive productivity, whereas domestic three- and five-star hotels benefit the most from productivity spillovers. Moreover, foreign-invested hotels from Hong Kong, Macau, and Taiwan (HMT) and non-HMT countries generate positive spillovers of similar magnitudes.     

Foreign banks,financial crises and macroeconomic fluctuations

Understanding the implications of increased foreign bank presence is especially compelling in periods of financial crisis. In this paper, we explore this issue by examining the relationship between the involvement of foreign banks in the banking systems and the volatility of key macroeconomic variables in normal and crisis periods. Using a sample of 20 Emerging European countries from 1998 to 2013, we find that an increase in the assets of foreign banks in the banking system reduces output and consumption growth volatility in general but does not significantly affect the volatility of investments. However, these banks were found to play a significant role in increasing output, consumption and investment volatility in 2009. Our findings suggest that foreign banks’ harmful impact during the global crisis was only temporary and that they seem to help Emerging European countries stabilize macroeconomic volatility in normal times and after the global crisis.     

The Impact of Foreign Banks on Monetary Policy Transmission During the Global Financial Crisis of 2008–2009: Evidence from Korea

This article examines the impact of foreign banks on the monetary policy transmission mechanism in the Korean economy during the period from 2000 to 2012, with a specific focus on the lending behavior of banks with different types of ownership. Using bank-level panel data of the banking system in Korea, we present consistent evidence on the buffering impact that the foreign banks, especially foreign bank branches including US bank branches, on the effectiveness of the monetary policy transmission mechanism in Korea from the bank-lending channel perspective during the global financial crisis of 2008–2009.     

A net stable funding ratio for Islamic banks and its impact on financial stability: An international investigation

The Islamic Financial Services Board (IFSB) is the standard setting body for the Islamic banking industry. The IFSB, while endorsing the Basel III accord, modified the criteria to calculate the Net Stable Funding Ratio (NSFR) to cater for the unique aspects of the Islamic banking industry. In this paper, we calculated the modified NSFR of 136 Islamic banks from 30 jurisdictions between 2000 and 2013 and explored the potential impact the requirements of this ratio has on the financial stability of Islamic banks after controlling for bank, country, and market-specific variables. The empirical findings suggest that the modified NSFR has a positive impact on the financial stability of Islamic banks during the sample period. However, the marginal impact of the NSFR on stability diminishes as the size of the bank increases. The results remained robust after applying an alternative measure of stability and using an alternative estimation model based on an instrumental variable approach. These results validate the use of the IFSB’s modified NSFR for Islamic banks as a regulatory measure.     

Theoretical foundations of equity based foreign market entry decisions: A review of the literature and recommendations for future research

This paper reviews the theoretical foundations of the equity based foreign market entry (FME) decisions literature. We analyse 1055 academic FME papers published over four decades (1970–2013). We identify and analyse the theories that informed and guided FME research over time. Our review indicates that scholars have recently started to challenge some of the core assumptions of established theories, draw on and integrate insights from multiple theoretical perspectives which, in turn, generated a multiplicity of approaches for studying FME decisions and their performance outcomes. The paper discusses the explanatory power of the different theories, assesses the relevance of the different theoretical perspectives to our understanding of current FME phenomena and recommends directions for further research.     

Managing the foreign investment portfolio: How industry and governance diversity influence firm performance

Foreign investment has been seen as an important strategy for learning about new technologies and markets. However, the link between the characteristic of a foreign investment portfolio and firm performance has not been examined in detail. Using panel data from 199 Taiwanese firms, this study examines how the foreign investment portfolio in terms of industry and governance diversity influences firm performance. This study finds that governance diversity has an inverse U-shaped relationship to firm performance, whereas industry diversity does not. In addition, this study also finds that their relationships are affected by R&D capability and industry profitability. The empirical findings of our study are useful for firms that invest in emerging economies.     

Can the Islamic bank be an emerging leader? A panel data causality analysis

This short note investigates the ability of Islamic banks (IBs) to play a leading role in revamping and driving conventional banking. To this end, we used a panel of 10 major conventional banks (CBs) and 10 IBs over the period 2006–2013. We applied panel regression tests and carried out a panel causality analysis. Our findings identified no significant causality effect from IBs to CBs and indicated that IBs are not able to play a role of leader.