Subnational institutions,political capital,and the internationalization of entrepreneurial firms in emerging economies

This study advances the institution-based view of strategy by integrating it with firm-specific capability considerations. In particular, we investigate the integrative influence of subnational-level home country institutional environments and firm-level political capital, as an important way to seek resources, on emerging economy entrepreneurial firms’ internationalization. With data from Chinese entrepreneurial firms, we find that the development of subnational institutional environments in the home country is related to firms’ degree of internationalization. Furthermore, while political capital with low-level governments enhances the effect of subnational institutions on internationalization, political capital with high levels of government has no such moderation effect. Theoretical and empirical contributions and implications are discussed.     

Exchange rate regimes, globalisation, and the cost of capital in emerging markets

This paper presents a multifactor asset pricing model for currency, bond, and stock returns for ten emerging markets to investigate the effect of the exchange rate regime on the cost of capital and the integration of emerging financial markets. Our results suggest that a fixed exchange rate regime system can help reduce the cost of capital in emerging markets by reducing the currency risk premia demanded by foreign investors.     

Working capital management,corporate performance,and financial constraints

This paper examines the linkage between working capital management and corporate performance for a sample of non-financial UK companies. In contrast to previous studies, the findings provide strong support for an inverted U-shaped relation between investment in working capital and firm performance, which implies the existence of an optimal level of investment in working capital that balances costs and benefits and maximizes a firm's value. The results suggest that managers should avoid negative effects on firm performance because of lost sales and lost discounts for early payments or additional financing expenses. The paper also analyzes whether the optimal working capital level is sensitive to alternative measures of financial constraints. The findings show that this optimum is lower for firms more likely to be financially constrained.     

Risk-based capital, portfolio risk, and bank capital: A simultaneous equations approach

This paper examines the impact the risk-based capital standards had on bank capital and portfolio risk during the first year the risk-based standards were in effect. To date, insufficient attention has been focused on how the risk-based capital standards have impacted bank capital and risk. Building on previous research, this study used a three-stage least squares (3SLS) model to analyze the relationship between bank capital, portfolio risk, and the risk-based capital standards. The results suggest that the risk-based capital standards were effective in increasing capital ratios and reducing portfolio risk in commercial banks.     

Antecedents and consequences of global responsiveness: An empirical examination of MNCs in the global sourcing context

As global responsiveness (GR) has been recognised as critical for global market advantage, we draw upon social capital theory and develop a theoretical model which clarifies the determinants and consequences of GR. Based upon a cross-national sample of 118 MNCs from the U.S., Europe, and Asia, we found that intra-firm structural and inter-firm relational social capital, as reflected in integrative mechanisms and joint problem solving respectively, are positively associated with GR. In addition, whilst negatively related to global sourcing barriers, GR has a positive effect on MNC performance. Our findings also indicate that GR plays an essential role by fully mediating the associations of information-based mechanisms, people-based mechanisms, and joint problem solving with global sourcing barriers and MNC performance.     

Formal institutions, culture, and venture capital activity: A cross-country analysis

Why does the level of venture capital activity vary across countries? This study suggests that the variation can be attributed to the different levels of formal institutional development. Further, this study proposes that venture capitalists respond differently to the incentives provided by formal institutions depending on different cultural settings. Analysis of VC activity for 68 countries during the 1996-2006 period shows that formal institutions have a positive effect on the level of venture capital activity, but this effect is weaker in more uncertainty-avoiding societies and in more collectivist societies. This study has useful theory and policy implications for venture capital and entrepreneurship development.     

Home country institutions,social value orientation,and the internationalization of ventures

We examined how home country formal institutions and the venture’s value orientation influenced the venture’s likelihood of internationalization based on a data set that was adapted from the Global Entrepreneurship Monitor (GEM) data in the year 2009, covering 7668 individual ventures in 25 countries. Better-developed home country formal institutions are found to have a supportive impact on the venture’s likelihood of internationalization. The supportive impact is also found to be weaker for socially oriented ventures than for profit-oriented ventures. The venture’s social value orientation negatively moderates the home country formal institutions–likelihood of internationalization relationship. The negative moderating effects can be explained as follows: Socially oriented ventures in the better-developed home country institutional environment are less likely to develop coping skills against uncertain and risky institutional environments, which are common in their host countries. Besides the theoretical contributions, this paper also highlights the implications for both business researchers and policy makers.     

Institutional environment and firms' sources of financial capital in Central and Eastern Europe

The external business environment is a major determinant of which sources firms select to obtain financial capital. We examine how the regulatory, political, and financial dimensions of the institutional environment influence the extent to which firms rely on informal sources of financial capital. The analyses of data from 2869 firms in twenty-six transition economies in Central and Eastern Europe (CEE) indicate that ineffective regulatory system, underdeveloped financial system, and government corruption are strong determinants of firms' reliance on informal channels for financial capital. We also find that smaller firms are more vulnerable when the local financial system is underdeveloped and the regulatory institutions are less effective in these transition economies. A subgroup analysis of firms' forms of establishment shows that private firms are sensitive to the level of development of the local financial system and state-owned enterprises are particularly sensitive to the degree of corruption.     

Real-time price discovery in global stock, bond and foreign exchange markets

Using a unique high-frequency futures dataset, we characterize the response of U.S., German and British stock, bond and foreign exchange markets to real-time U.S. macroeconomic news. We find that news produces conditional mean jumps; hence high-frequency stock, bond and exchange rate dynamics are linked to fundamentals. Equity markets, moreover, react differently to news depending on the stage of the business cycle, which explains the low correlation between stock and bond returns when averaged over the cycle. Hence our results qualify earlier work suggesting that bond markets react most strongly to macroeconomic news; in particular, when conditioning on the state of the economy, the equity and foreign exchange markets appear equally responsive. Finally, we also document important contemporaneous links across all markets and countries, even after controlling for the effects of macroeconomic news.     

Bank capital regulation, asset risk, and subordinated uninsured debt

Whether more stringent capital requirements lead to reduced or to increased bank risk-taking has been discussed intensively in the academic literature. In this paper we drop the common but unrealistic assumptions that banks only issue deposits whose returns are guaranteed by a subsidised deposit insurance and that deposit insurance is free. We prove that with uninsured debt and a flat-rate deposit insurance premium the reaction of a bank to a higher capital requirement may change substantially. In some scenarios banks increase asset risk due to the enforcement of a more stringent capital requirement.     

State ownership,political ideology,and firm performance around the world

It is often taken as a stylized fact that state ownership harms the financial performance of firms. Yet we show that this relationship varies greatly across national contexts. We argue that the political ideology of the government, both independently and in conjunction with political institutions (state capacity and political constraint), affects this relationship. We test our hypotheses using meta-analytical techniques on an international sample spanning 53 years and 131 countries. Our research sheds further light on the state ownership – firm performance relationship by highlighting the role of the political ideology of the government, and its interactions with political institutions.     

Access to finance,working capital management and company value: Evidences from Brazilian companies listed on BM&FBOVESPA

In this research, we have analyzed the impact of financial leverage on the relationship between working capital and company value and how financial constraints on access to financing affect this relationship. In addition, we have analyzed the relationship between working capital and company value. Using a sample of Brazilian public companies listed on BM&FBOVESPA from 1995 through 2009, we found evidence for the following conclusions: an extra Real (R$) of investment in working capital is significantly less worth, on average, than an extra Real (R$) of investment in cash; and, on average, increasing the level of working capital at the beginning of a fiscal year reduces company value.     

State capitalism in international context: Varieties and variations

State interventions in markets assume varieties of forms in different economic systems. To capture this variety, we consider state capitalism as a multidimensional concept, first reviewing its historical evolution from both practical and scholarly vantages. We describe several dimensions of state capitalism and demonstrate how cross-national variations can be captured through positioning countries along these dimensions. We use cross-sectional data for a large sample of countries to derive factors that represent key dimensions of state capitalism. We demonstrate how cross-national and historical variation in state capitalism is captured by this Virtual Special Issue and offer suggestions for future research.     

New perspectives on not-for-profit financial institutions: Organisational form,performance and governance

This introductory essay discusses the context for the special issue, introduces the contributions, considers a number of key themes which link the articles and suggests areas for future research; in particular it makes a case for the link of organisational diversity and the stability of the financial system.     

The relationship between governance structure and risk management approaches in Japanese venture capital firms

This paper attempts to understand what drives Japanese venture capital (JVC) fund managers to select either active managerial monitoring or portfolio diversification to manage their firms' investment risks [J. Bus. Venturing 4 (1989) 231]. Unlike U.S. venture capitalists that use active managerial monitoring to gain private information in order to maximize returns [J. Finance 50 (1995) 301], JVCs have traditionally used portfolio diversification to attenuate investment risks [Hamada, Y., 2001. Nihon no Bencha Kyapitaru no Genkyo (Current State of Japanese Venture Capital), Nihon Bencha Gakkai VC Seminar, May 7]. We found that performance pay is positively related to active monitoring and that management ownership is positively related to active monitoring and negatively related to portfolio diversification. The managerial implication of our study is that venture capitalists should be as concerned about the structure of their incentive systems for their fund managers as they are for their investee-firm entrepreneurs. Agency theory says that contingent compensation is a self-governing mechanism for individual effort that is difficult to measure and verify. When properly applied, equity ownership and performance-based pay can have powerful influencing effects on the strategic choices of managers.     

Mitigating the dual liability of newness and foreignness in capital markets: The role of returnee independent directors

Foreign firms undergoing an initial public offering in developed economies face a dual liability of newness and foreignness that can negatively impact the firm’s ability to access capital. In this study, we examine the ability of returnee independent directors to overcome such a liability among 232 foreign listings in the U.S. We find that returnee independent directors positively impact the price premium of the foreign IPO. We also find that this relationship is contingent on the level of ownership retained by non-independent directors, the level of ownership retained by venture capitalists, and investor protection in the firm’s country of origin.     

金融全球化时代国家货币的命运:过去、现在与未来

主权意义上的国家货币是近代历史的产物。在19世纪,经济民族主义、国内统一市场、军事财政改革、新工业技术共同建构出现代国家货币。而金融全球化冲击着国家货币与货币主权,呈现出一个市场,一种货币的时代特点。这一特点的根源仍然在于国家货币的历史结构。但是,国家货币仍将在未来相当长的一段时期内是国际货币格局的主导形态。     

Sovereign default, interest rates and political uncertainty in emerging markets

A large body of the empirical literature shows that high turnover rates/length of tenure of policymakers and the degree of conflict within a country affects sovereign spreads, debt and default rates. We help to rationalize such claims by including these political features in a dynamic stochastic small open economy model of sovereign debt and default. In this way we offer a complementary approach to the econometric analyses in the literature. Consistent with the data, the quantitative analysis shows that politically unstable and more polarized economies experience higher default rates and larger level and volatility of sovereign interest rate spreads.     

价值链、产业转移与国家产业安全

在经济全球化背景下,发展中国家出现产业安全问题,是全球价值链升级发展过程中发达国家(地区)主导企业积极进行产业分离与转移的必然结果。通过价值链理论回顾与分析,揭示国际间产业转移与产业承接二者之间的关系,从全球价值链角度重新界定国家产业安全的本质与特点,并提出相应的管控机制,有利于我国产业安全管理与产业结构升级。     

大学的道德资本迷失与重拾

大学肩负着为中国特色社会主义建设培养合格人才的历史使命。随着经济社会的发展进步,大学道德资本的缺失与重拾显得尤为重要。高校应高度重视道德资本在功能认识、主体行为、形成机制、评价制度四个方面的缺失和影响,注重道德资本在理论体系、社会功能、形成机制和评价制度四个方面的构建,把立德树人做为教育的根本任务,整合道德资本资源,增加道德资本投入,实现思想道德素质和科学文化素质的全面提高,培养出更多德智体美全面发展的建设者和接班人。