Towards a behavioral theory of MNC response to political risk and uncertainty: The role of CEO wealth at risk

Drawing on behavioral agency research, we examine how CEO equity wealth at risk of loss in the form of restricted stock influences the response of multinational corporations (MNCs) to political risk and political uncertainty. In a sample of 14,765 cross-border greenfield investments and full acquisitions announced by U.S. firms from 2004 to 2016, we find that while greater CEO equity wealth at risk of loss in the form of restricted stock strengthens the (positive) relationship between political risk and MNCs’ choice of greenfield investments over full acquisition, CEO equity wealth at risk of loss does not influence the relationship between political uncertainty and MNCs’ choice of greenfield investments. We contribute to international business theory by introducing a behavioral theory of MNC responses to adverse host country political environments. As such, unlike previous studies that have treated political risk and political uncertainty interchangeably, our study highlights the need to differentiate between political risk and political uncertainty as related yet distinct concepts.     

Sovereign Wealth Funds: Investment and Governance Practices

Sovereign wealth funds (SWFs) are large, growing, and concentrated investment vehicles, with a current estimated value of U.S. $3 trillion. The combination of low transparency and government ownership has raised questions about political agendas, national security, and transfers of technology. In this article the authors report on the current status of SWFs in terms of investments, regulation, governance, and transparency of activities. They also review some recent studies on SWF investments and their impact on financial markets.     

Solon of Athens and the Ethics of Good Business

The ancient lawgiver Solon of Athens left norms of proper conduct that carry important ethical implications for all manner of human affairs, including commercial activities and the pursuit of wealth. In his extant poetry, he emphasizes the strong connections between individual virtue and its consequences in the social and political sphere. In considering the proper means of obtaining material wealth, he describes multiple ways to earn a living and connects them to proper intellectual and ethical dispositions through a concept of justice. This focus on virtue establishes a long-range ethics that is based on a principle of justice, demands rational intellectual activity, and carries implications for everyone’s self-interest. Solon’s concern for matters of virtue, the proper means of attaining wealth, and the need for long-range awareness of consequences offers a valuable point of historical focus for our own examinations of business ethics today.     

Antecedents to international student inflows to UK higher education: A comparative analysis

This study explores the antecedents of international student flows into UK higher education and the variations in the antecedents between home countries of origin. The results suggest that home country economic wealth and demographics, historic/linguistic link and UK government preferential policies are the important antecedents for international students from worldwide flows into the UK. However, a comparative analysis shows that a wide variety of economic, social and political factors are all important to the UK international students originally from developing economies, while home country economic wealth and population, and bilateral trade are more important than other factors in determining the students from developed countries studying in the UK. The UK government should formulate effective and flexible policies and UK HEIs should develop specific marketing strategies to attract a growing number of international students in general and from key target countries and regions in particular.     

The role of sovereign wealth funds in global financial intermediation

Sovereign wealth funds (SWFs) have experienced tremendous growth lately. Their combined wealth is currently estimated at $3 trillion, and the International Monetary Fund estimates that they will continue to grow to $10 trillion by 2012. SWFs' recent investments in the United States and Europe have been the focus of media and government scrutiny, given that a number of SWFs are not transparent, and emanate from authoritarian regimes, which are not political allies of the West. In this article, we provide a comprehensive overview, along with detailed summary statistics on various aspects of SWFs. We also provide recommendations to facilitate SWFs' role in global financial intermediation. © 2010 Wiley Periodicals, Inc.     

Entering the last frontier: expansion by US multinationals to Africa

Literature on multinationalism, even that which focuses on economic development and incentives for foreign direct investment (FDI), largely ignores the African continent despite its market of over 700 million inhabitants and its unique challenges for foreign firms. However, the African continent provides an important arena for examining the effects of infrastructure, wealth, and political differentials across countries and the effects of these variables on the expansion decisions of US multinational corporations (MNCs). In this paper we examine the US stock market reaction to announcements of US firms entering African markets through both FDI and Non-FDI modes. Finally, we investigate the accounting performance implications of these expansions. Our results show that, on average, firms experience negative wealth effects when expanding to Africa. Further analysis shows that expansions to South Africa produce losses, while expansion to the rest of Africa produce positive gains. We also show that firms with higher return on equity perform better than firms with lower return on equity when they expand to Africa in countries other than South Africa.     

先秦儒家的经济思想及其现代启示

先秦儒家学说作为中国传统文化的主体,内容极为丰富,除政治、哲学、教育、伦理等思想外,还包含经济思想,如＂惠民富民＂的致富观、＂不患寡而患不均＂的分配观、＂鳏寡孤独皆有所养＂的社会保障观念、＂宁俭勿奢＂的消费观、＂见利思义＂的取财观等,这对我国当前的收入分配制度改革、社会保障制度改革等有所启示。     

The Duality of Crony Corruption in Economic Transition: Toward an Integrated Framework

In order to shed light on the issue of crony corruption in the context of economic transition, I focus on the puzzle of China’s unique experience of economic transition characterized by the duality forms and effects of crony corruption underlying local corporatism in a dual-track (i.e., market and political tracks) transition. I argue that the duality of local corporatism derives from the duality of crony corruption. First, the early form of local corporatism as state-business public alliance is embedded in informal crony corruption as positive for the purpose of wealth growth in the initial phase of economic transition with public and private interests aligned as compatible. Second, the later form of local corporatism as official-manager private collusion is embedded in quasi-formal crony corruption as negative for the purpose of wealth transfer in the later phase with public and private interests in conflict as incompatible. The duality of crony corruption in the two phases of economic transition is caused by the interplay between formal and informal factors and between economic and political factors. My contribution is twofold. First, I explain China’s transition in terms of crony corruption underlying local corporatism. Second, I develop an integrated framework of crony corruption concerning its content, process, antecedent and consequence.     

Megamarketing

Abstract

Recent political, economic, and social changes occurring in Eastern Europe are providing opportunities for Western firms to expand to this region. This study presents evidence on the wealth effects associated with expansion by U.S. firms to Eastern European countries. The results of this study show that differential wealth effects are associated with announcements of different modes of expansion, and with country of expansion. The results suggest that Hungary and Poland are important for expansion to Eastern Europe, and that joint ventures should be the preferred mode of expansion for U.S. firms seeking to expand to Eastern Europe. The results also suggest that investors are able to discern between different levels of country risk.     

中国房地产财富效应测度的实证研究

中国居民的财富特征与发达国家居民的财富特征明显不同。利用中国1996—2007年房地产价格和居民消费的季度数据,建立房地产财富效应模型,对中国房地产财富效应进行测度,计算结果表明:随着中国经济增长和居民收入的增加,房地产财富对居民消费的影响不断增强。房地产价格变化是居民消费增加的Granger原因,居民消费的增加是城镇居民可支配收入上升的Granger原因。无论从长期还是短期分析,中国房屋价格变动都会给居民消费带来财富效应。通过脉冲响应函数分析可知,房地产价格的正向冲击将对居民消费产生正效应,导致居民消费增加,从而验证了中国房地产财富效应的存在。     

家族企业财富创造模式转型研究

中国的家族企业要想降低伤亡率,实现可持续发展,需要进行财富创造模式的转型。中国经济的崛起和所处的转型阶段使“创新致富”成为一种极具竞争力的家族企业新型财富创造模式。家族企业无论采取哪种创新形式,基于整体观的“创新致富”模式价值边际分析都是必不可少的。其中企业创新价值增量分析和“创新致富”方案的优化,有利于实现家族企业财富创造模式的转型。     

The Engines of Inequality

In Europe and in the United States, one of the legacies of the economic and financial crisis will no doubt be a high and particularly worrying level of economic inequality. Inequality has roots that go well beyond the 2008 collapse, but the stagnation that has followed it has made disparities in income and wealth more serious and more difficult to eradicate. The challenge now is to turn the injustice of current inequality into a theme of public mobilisation and political action.     

Corporate Social Responsibility Theories: Mapping the Territory

The Corporate Social Responsibility (CSR) field presents not only a landscape of theories but also a proliferation of approaches, which are controversial, complex and unclear. This article tries to clarify the situation, “mapping the territory” by classifying the main CSR theories and related approaches in four groups: (1) instrumental theories, in which the corporation is seen as only an instrument for wealth creation, and its social activities are only a means to achieve economic results; (2) political theories, which concern themselves with the power of corporations in society and a responsible use of this power in the political arena; (3) integrative theories, in which the corporation is focused on the satisfaction of social demands; and (4) ethical theories, based on ethical responsibilities of corporations to society. In practice, each CSR theory presents four dimensions related to profits, political performance, social demands and ethical values. The findings suggest the necessity to develop a new theory on the business and society relationship, which should integrate these four dimensions.     

政治缓冲与环境规制效应

在环境控制技术与环境政策既定的情况下,环境政策的执行情况决定了环境监管的效果。本文使用弹簧模型研究并证实了政治关联缓冲的存在,研究结论认为政治关联缓冲导致中央政府环境政策具体执行效果不佳。为了阻断地方政府与部分被规制企业之间的政治缓冲作用,本文采用建立地方政府环境业绩评价机制从长远的角度解决环境规制的软约束问题。     

Finanzmärkte und (soziale) Nachhaltigkeit – ein schwieriges Verhältnis

In the catalogue of “Sustainable Development Goals” approved by the UN General Assembly in September 2015, financial market regulation is mainly described as an issue of social sustainability. This classification is appropriate because inadequate regulation leads to imbalances between profits and liability, as private gains are accompanied by social costs. Consequently, the distribution of wealth and income deteriorates inasmuch as people with high fortunes tend to have more opportunities to benefit from investments in capital markets. Financial market regulation, aiming to prevent such a development, should mainly focus on fighting moral hazard, limiting too -big -to- fail problems and banning short -term-oriented remuneration structures in banks.     

The new regulatory politics of electricity in India: embryonic ground for consumer action

Newly created regulatory bodies in India are the site for emergent consumer politics around electricity. Forged as a means of attracting private capital, these bodies have nonetheless become potential spaces for consumer and citizen engagement around electricity. The nature of this emergent space is examined by developing three narratives around emergent regulatory institutions—apolitical and independent regulation, regulation as captured by the state, and regulation as contested political space. Recent examples of consumer and citizen action on electricity, and particularly protests over a tariff hike following privatisation in Delhi, suggest that regulation as an institution is poised between being absorbed into politics as usual and creating a genuinely new space for consumer action and political engagement in India.     

The Limits of Corporate Social Responsibility: Techniques of Neutralization, Stakeholder Management and Political CSR

Since scholarly interest in corporate social responsibility (CSR) has primarily focused on the synergies between social and economic performance, our understanding of how (and the conditions under which) companies use CSR to produce policy outcomes that work against public welfare has remained comparatively underdeveloped. In particular, little is known about how corporate decision-makers privately reconcile the conflicts between public and private interests, even though this is likely to be relevant to understanding the limitations of CSR as a means of aligning business activity with the broader public interest. This study addresses this issue using internal tobacco industry documents to explore British-American Tobacco’s (BAT) thinking on CSR and its effects on the company’s CSR Programme. The article presents a three-stage model of CSR development, based on Sykes and Matza’s theory of techniques of neutralization, which links together: how BAT managers made sense of the company’s declining political authority in the mid-1990s; how they subsequently justified the use of CSR as a tool of stakeholder management aimed at diffusing the political impact of public health advocates by breaking up political constituencies working towards evidence-based tobacco regulation; and how CSR works ideologically to shape stakeholders’ perceptions of the relative merits of competing approaches to tobacco control. Our analysis has three implications for research and practice. First, it underlines the importance of approaching corporate managers’ public comments on CSR critically and situating them in their economic, political and historical contexts. Second, it illustrates the importance of focusing on the political aims and effects of CSR. Third, by showing how CSR practices are used to stymie evidence-based government regulation, the article underlines the importance of highlighting and developing matrices to assess the negative social impacts of CSR.     

Governments, Firms, and National Wealth: A New Pulp and Paper Industry in Postwar New Zealand

The state played an important role as political and economicmanager in postwar New Zealand. By fostering manufacturing,governments aimed to provide paid, productive employment, conserveforeign exchange, and support a welfare state. The history ofpulp and papermaking using state-planted pine forests is a goodexample of a government-business joint venture to create a newexport industry and new national wealth. Governments of bothmajor political parties cooperated in capital formation, landuse, hydroelectricity, roads, railroads, a modern port, andtown construction. This longterm state commitment helped propelthe industry toward largescale vertical integration so thatit could achieve economies of scale and scope and compete inworld markets.     

雾霾污染与地方政府环境规制竞争策略

本文利用中国2001～2010年省级面板数据,基于地方政府的环境规制竞争视角,结合我国财政分权和政治集权的体制,考察地方政府间环境规制竞争的策略选择行为及对雾霾污染的作用.静态博弈分析表明,地方政府通过权衡自身的环境规制收益与成本进行策略选择.空间面板杜宾模型的回归结果显示,随着中央政绩考核体系的不断调整,地方政府在环境规制的竞争中采取"差异化"的策略选择,对雾霾污染具有一定的抑制作用,肯定环境规制政策与财政分权对治理雾霾污染的积极效果.为此,应继续完善并加强多元化的政绩考核体系,厘清中央与地方财政事权及支出责任的划分,明确清晰的责权关系,因地制宜制定治污减排目标和监管考核办法.     

Environmental regulations and innovation for sustainability? Moderating effect of political connections

Companies are subject to both formal regulation pressure from government and informal regulation pressure from other stakeholders to adopt green innovations for sustainability. Using a sample of 4924 private Chinese companies, our empirical study indicates that both formal and informal regulation pressures have a positive effect on green innovation. We also find that political connections positively moderate the effect of formal regulation pressure on green innovation, but negatively moderate the effect of informal regulation pressure on green innovation.