Pro-market institutions and outward FDI of emerging market firms: An institutional arbitrage logic

We offer new theory and evidence regarding the effects of pro-market institutions on outward foreign direct investment (FDI) of emerging market firms (EMFs). Drawing on the logic of institutional arbitrage, we integrate the escapism and exploitation mechanisms of EMF internationalization into a unified theoretical context. We propose an inverted U-shaped relationship between host market-supporting institutions (MSI) and the investment scale of an EMF’s FDI project in the country, showing an escape-driven upward slope for low-to-medium MSI levels and an exploitation-driven downward slope for medium-to-high MSI levels. We supplement this main argument with two boundary conditions: the alleviating effect of home market liberalization (HML) and the strengthening effect of home government subsidies (HGS), demonstrating the coexistence and variation of pro- and anti- market institutions in an emerging market. Using information on 1,450 FDI projects conducted by 288 Chinese listed firms in 116 host countries, we obtain supportive evidence for the predicted relationships between the three institutional forces. This study enriches the literatures on institutional arbitrage and pro-market institutions with evidence from EMFs.     

Neither developed nor emerging: Dual paths for outward FDI and home country innovation in emerged market MNCs

Emerged market multinational corporations (EDMNCs) ? those based in emerged markets that have transitioned out of emerging economic status ? have received little research interest from the international business scholarship, despite their growing presence in the global market. EDMNCs face significant competitive pressure to leverage cross-border knowledge to innovate and leapfrog their middle-zone status between emerging and developed market multinational corporations. Analyzing 174 publicly listed South Korean MNCs and their outward foreign direct investment (OFDI), we find that an EDMNC’s OFDI into developed and emerging markets contributes unequally to its home-country innovation. We also elaborate on the moderating effect of industry peers’ OFDI into developed countries through crowding out and spillover effects. These findings have implications for the OFDI and innovation literature in general, and particularly for international business scholarship focusing on an under-investigated category of MNCs that are increasingly becoming successful in international competition.     

Factors influencing perceptions of performance: The case of western FDI in an emerging market

This paper adopts an integrative approach to incorporate institutional, host country and firm variables as determinants of the factors influencing perceptions of foreign affiliate performance. Based on primary data from 145 affiliates of Western MNEs in Turkey, the findings show that the factors of input quality, comparative cost advantages and government regulations demonstrate a statistically significant impact on the perception of performance of affiliates. In contrast, political risk, financial incentives and cultural distance do not have any significant impact on the perception of performance of affiliates. The findings indicate that firm specific factors are less important than either institutional or perceived environment-specific factors within the host country in influencing perceptions of foreign affiliate performance.     

Stock market correlations between China and its emerging market neighbors

We examine interlinkages of stock return behavior for China and three emerging market neighbors from the Asia Pacific region from November 1993 to July 2008. Results are based on a VAR model. Impulse responses and vector decomposition of VAR are also utilized. Evidence suggests that the aggregate markets are mostly not interrelated. However, we observe relations between China and the other markets when foreign investor returns are specifically accounted for. In addition, a shock originating in China is significantly felt in the other equity markets. Stock market characteristics and macroeconomic conditions of these countries may help explain the observed relations.     

利用搜索引擎进行海外营销

如今外贸企业开拓海外市场,最常用的几种网络推广渠道有许可电子邮件、外贸B2B平台以及搜索引擎,对于外贸企业来说,这几种推广渠道任何一个都不可或缺,每一个都在海外营销这个     

FDI modes and parent firms' productivity in emerging economies:Evidence from Taiwan

This article investigates the effect of foreign direct investment (FDI) on the productivity of parent firms for multinational enterprises in Taiwan. The current research specifically examines the potential differences in productivity effect between FDI toward developing (vertical FDI) and developed countries (horizontal FDI) and between electronics and non-electronics firms. Using panel data on Taiwan firms from 2000 to 2005, results obtained using propensity score matching (PSM) show thatmultinational firms experience a higher productivity following their FDI in developing countries. A time lag exists in productivity gain of investment to developed countries, and is relevant only to electronics firms. Employing the generalized method of moment of the panel fixed model to control for problems of endogeneity and unobservable heterogeneity, the empirical finding suggests that productivity effect caused by investing in developing countries remains significantly positive. A lagged productivity-enhancing effect is also found after FDI in developed countries for both electronics and non electronics firms.     

Investing for strategic resources and its rationale: The case of outward FDI from Chinese companies

As more Chinese companies become engaged in foreign direct investment (FDI), particularly in industrial countries, a crucially important issue must be addressed: what is the motivation of Chinese outward FDI, and what is its rationale? Based on a detailed analysis of both primary and secondary data sources, this article argues that when investing in advanced economies, Chinese multinational corporations (MNCs) are motivated primarily by the quest for strategic resources and capabilities, and that the underlying rationale for such asset-seeking FDI is strategic needs. The examination of this premise will hopefully prompt business practitioners to think about this important issue in new and innovative ways, thereby identifying an appropriate policy and strategic response.     

Expropriation risk and housing prices: Evidence from an emerging market

This paper examines the microeconomic determinants of residential real estate prices in Caracas, Venezuela, using a private database containing 17,526 transactions from 2008 to 2009. The particular institutional characteristics of many countries in Latin America, and Venezuela in particular, where land invasions and expropriations (with only partial compensation) have been common threats to property owners, provide us with an opportunity to test the effects of these risks on housing prices using a unique database. The effect of these risks on property prices is negative and significant. To our knowledge, this is the first attempt to quantify these impacts in the Hedonic pricing literature applied to real estate. Size, the number of parking spaces, the age of the property, the incidence of crime, and the average income in the neighborhood are significant determinants of prices. Finally, this paper analyzes the microeconomic determinants of housing prices at the municipal level.     

FDI,market signal and financing constraints of firms in China

On the basis of an augmented Euler equation, we use firm survey data provided by the World Bank to investigate the impact of FDI (foreign direct investment) on the financing constraints of firms in China. First we calculate the forward and backward linkages of FDI. Then through empirical estimation, we find that only private firms have financing constraints and that the incoming FDI alleviates this situation. Private firms with more foreign capital shares or having stronger vertical linkage with FDI can get financial resources easily. Furthermore, industries hosting a large amount of FDI are favorite clients of the financial institutions because they are usually much more competitive in the world. As a result, the private firms in these industries also have easier access to financial resources. In the financial market, FDI is a helping hand that reduces the information asymmetry between firms and financial institutions. Financial resources go where FDI goes, which to some extent improves the allocation efficiency.     

Firm competencies on market entry success: Evidence from a high-tech industry in an emerging market

This study explores the effects of three firm competencies, namely, business network, new product development (NPD), and marketing management on market entry success of a high-tech industry in an emerging market. Business network encompasses research and development (R&D) partnership, inter-organizational network, and government relationship (guanxi). NPD consists of R&D capability and product process innovation, while marketing management encompasses distribution channel, promotion, branding, and information management. Using data from 55 biopharmaceutical multinational companies in China, this study applies structural equation modeling technique with confirmatory factor analysis for testing and estimating relationships. We find that only marketing directly influences entry success, whereas the other two yield indirect effects. Our study also suggests the critical role of business network as a prerequisite for entry process. Simultaneously, NPD serves as the driving force of marketing through the creation of product competitiveness.     

The anatomy of financial crises: Evidence from the emerging ADR market

We study the anatomy of recent financial crises in Mexico, East Asia, Russia, Brazil, Turkey, and Argentina by investigating the efficiency and pricing of the emerging American depositary receipt (ADR) market. We use a non-parametric technique to test for persistent regime shifts in two basic structural relationships for ADR returns in 20 emerging countries — identified via arbitrage and capital mobility considerations — that should always hold in efficient and integrated capital markets. We find that those “normal” market conditions were instead often violated in proximity of financial crises: The law of one price often weakened (by 54% on average) and domestic sources of risk became more important (often by more than 100%) for many emerging ADRs. We also find the likelihood of these regime shifts to be related to proxies for uncertainty among investors, exchange rate volatility, trade linkages, and liquidity (but not stock market trends, currency devaluations, capital flight, or capital controls).     

The anatomy of financial crises: Evidence from the emerging ADR market

We study the anatomy of recent financial crises in Mexico, East Asia, Russia, Brazil, Turkey, and Argentina by investigating the efficiency and pricing of the emerging American depositary receipt (ADR) market. We use a non-parametric technique to test for persistent regime shifts in two basic structural relationships for ADR returns in 20 emerging countries — identified via arbitrage and capital mobility considerations — that should always hold in efficient and integrated capital markets. We find that those “normal” market conditions were instead often violated in proximity of financial crises: The law of one price often weakened (by 54% on average) and domestic sources of risk became more important (often by more than 100%) for many emerging ADRs. We also find the likelihood of these regime shifts to be related to proxies for uncertainty among investors, exchange rate volatility, trade linkages, and liquidity (but not stock market trends, currency devaluations, capital flight, or capital controls).     

Assessing consumer logistics functions in grocery shopping: Evidence from an emerging market

Abstract

Consumer logistics (CL), focuses on the role of consumers in the logistical processing of goods for the purpose of consumption from point of acquisition to the point of disposal. The objective of this study is to test and validate the CL scale as introduced by Bahn, Granzin, and Tokman for grocery shopping in a previously unexplored country setting, namely in Turkey. Our findings show in contrast to Bahn et al. only six CL functions: information search, transportation management and materials handling, storage management & inventory needs assessment, contingent inventory operations & product acquisition, intra-household communication, and interdependent transportation operations. These six CL functions are more applicable for an emerging market, such as Turkey. These findings are consistent across the different socio-demographic characteristics in our sample.     

How foreign firms achieve competitive advantage in the Chinese emerging economy: Managerial ties and market orientation

As China experience unprecedented changes in its social, legal, and economic institutions, on what should foreign firms focus more to overcome this challenge, managerial ties or market orientation? This study investigates how managerial ties and market orientation affect competitive advantage and, consequently, firm performance in China. On the basis of a survey of 179 foreign firms in China, we find that both managerial ties and market orientation can lead to firm success—but in different ways. Market orientation enhances firm performance by providing differentiation and cost advantages, whereas managerial ties improve performance through an institutional advantage (i.e., superiority in securing scarce resources and institutional support). Institutional advantage, in turn, leads to differentiation and cost advantages and consequently superior performance.     

Development of firm export market oriented behavior: Evidence from an emerging economy

Based on gathered survey data from Chinese apparel exporters, using structural equation modeling technique, a proposed firm's export market oriented (EMO) behavior model was empirically tested. A great set of antecedent factors (i.e., organizational structure, export systems, export coordination, top management factors, and export dependence) and moderating factors (i.e., environmental turbulence, export experience) were examined in the context of China, which extends the EMO literature from mainly Western business setting to non-Western business environment. This study identifies several key antecedents (i.e., export reward and training systems, top management support, and export dependence) facilitating the development of firm's EMO behavior while determining the specific moderating effects of environment and experience, and therein explains a large percentage of variance in EMO behavior (78.3%). Importantly, we uncover some instances where the theory of firm EMO behavior's antecedents does not hold for Chinese apparel exporters.     

High ownership concentration and exporting of emerging market firms: evidence from Peru

Despite the extraordinarily high ownership concentration widely observed in emerging market firms as a result of institutional voids, there is little research on how this high ownership concentration affects the exporting behavior of emerging market firms. From principal–agent and institutional perspectives, we hypothesize that high ownership concentration has a negative relationship with export intensity, because, in emerging markets, highly concentrated ownership bridges the interests of owners (principals) and managers (agents) so that principals must be prudent in exploring risky international markets. Moreover, we hypothesize that export country diversification strengthens the relationship between ownership concentration and export intensity, because broad geographic dispersion increases risk exposure and principal-agent problems. Empirical analysis based on a panel dataset for publicly listed firms in Peru from 2005 to 2014 supports the hypotheses. The study highlights the risk aversion attitude activated by ownership concentration, an attitude that protects emerging market firms from overconfidently exploring international business opportunities. The study extends the conventional literature on the interface between ownership concentration and international business in an emerging market context. We also discuss the generalizability of the findings to other emerging markets, e.g. China.     

FDI、技术差距与本土企业的研发投入——理论及中国的经验研究

针对FDI进入以及内外资企业间的技术差距对内资企业的研发投入行为会有怎样影响,本文分析了不同技术水平内资企业的研发策略,认为外资进入后将促进技术领先的本土企业提高创新投入,但却阻碍落后企业的创新投入。文中以通过DEA模型测算的内外资技术差距、以及技术差距与外资比重和勒纳指数的连乘项作为主要自变量,用中国制造业面板数据检验了技术差距对本土企业创新投入的影响。实证结果验证了预期假说,并且技术差距越大,外资进入对内资企业研发投入的负向作用越强,而市场势力的正向作用会有所降低。     

Managerial ownership,diversification, and firm performance: Evidence from an emerging market

Numerous existing studies have explored the impact of corporate diversification on firm performance, whereas considerably less research has investigated the inter-relationships among managerial ownership, diversification, and firm performance. This paper develops several hypotheses based on the agency theory self-interest perspective and tests the relationships among managerial ownership, corporate diversification, and firm performance using a sample of 98 emerging market firms listed on the Taiwan Stock Exchange. The results show a U-shaped relationship between managerial ownership and corporate diversification, similar to that found in prior studies. However, the inflection point is 33.17%, which is lower than that found in previous studies. Moreover, in contrast to prior results, corporate diversification is found to be positively associated with short-term firm performance and bears no relationship with mid-term firm performance, while firms engaged in unrelated diversification outperform those engaged in related diversification. This paper concludes with theoretical implications and suggestions for future research.     

Post-M&A technological capability-building of emerging market firms in China: the case of Lenovo

Technological acquisitions have become a strong motivation for cross-border merger and acquisition (M&A) activities by firms in emerging countries. However, whether these companies achieve their objectives remains an open question. This article presents a case study of Lenovo’s acquisition of IBM’s PC division with a focus on inventor productivity after acquisition. Our case study suggests that while a ‘light-touch’ integration approach helped avoid the all-too-common post-M&A productivity drop, intra-firm knowledge transfers to veteran inventors of the acquirers remained difficult due to the knowledge gap. However, M&A events create other opportunities to improve the technological capability of the acquiring company by sourcing new talent globally, offering unignorable merit that justifies outbound M&A activities by emerging market firms.