Chinese Private Firms’ Outward Foreign Direct Investment: Does Firm Ownership and Size Matter?

This article investigates and explains the behaviors, motives, and characteristics of Chinese privately owned enterprises’ (POEs’) outward foreign direct investment (OFDI), and compares this with the behaviors, motives, and characteristics of Chinese state‐owned enterprises (SOEs), using the institutional perspective and resources‐based view. Through in‐depth interviews with senior managers and an extensive secondary data analysis of Chinese POEs’ OFDI, we found that Chinese POEs are increasingly active in committing both market‐ and strategic asset–seeking OFDI due to the unfavorable institutional environment they face in China and the different types of resources possessed. POEs cluster with their business partners or domestic peers for international market expansion and adopt several approaches to acquire strategic assets. © 2014 Wiley Periodicals, Inc.     

FDI expansion speed of state-owned enterprises and the moderating role of market capitalism: Evidence from China

Drawing on an institutional logics perspective and isomorphism viewpoint, we posit that the negative impact of state ownership on the speed of foreign direct investment (FDI) expansion is attributed to the state socialism logic, which is inconsistent with market-oriented mechanisms that underpin rapid international expansion. We further argue that firms associated with the market capitalism logic shape an institutional context in which state-owned enterprises (SOEs) may adjust their behaviors by adopting market-oriented practices to expand quickly in the global market. Using outward FDI project information from Chinese listed firms over a fourteen-year period, we find evidence that confirms our theoretical predictions. Our analysis shows that, despite the negative relationship between state ownership and the speed of an SOE’s FDI expansion, both the non-state economy in the firm’s subnational region and privately owned enterprises in its industry sector positively moderate this relationship. This study enriches our understanding of institutional complexity in emerging markets and internationalization of emerging-market firms.     

The Compatibility of the Marketing Concept Within the “Classified” Customer Service Culture of Department of Defense National Testing Laboratories

ABSTRACT

The role of national defense research laboratories has dramatically changed since the collapse of the Soviet Union and the relaxation of “Cold War” imperatives. As these organizations are seeking new “market oriented” opportunities, the fundamental philosophy and culture of these organizations must be examined in order to determine if such firms, historically dependent on government awards and contracts, can effectively compete in the highly competitive global economy. The purpose of this study is to examine the relative compatibility of the marketing concept with the attitudes and customer service practices of one such highly confidential organization. By initiating such inquiry, it is hoped that other research and inquiry will be undertaken with the goal being to help transition the power of these basic and applied research facilities into the private sector more efficiently.     

Food capacity in alternative food markets: visceral encounters,bodily interactions and contagious magic

ABSTRACT

Taking inspiration from assemblage thinking and the vitality of matter, this study examines the negotiated, contested and nonlinear formation of highly marginalised and stigmatised alternative food market. The analysis of an ethnographic case study shows that tensions of disorder, abjection and dangerisation spark when components of an alternative food market assemblage misaligns with prevailing social norms, values and institutional arrangements. Although these tensions threaten the alternative food market assemblage, further analysis reveals the capacity of food to assuage these tensions and this occurred, in part; because food catalyses human engagement through visceral encounters, bodily interactions and contagious magic. To that end, the study sets a new agenda for alternative market research to consider the sensory, corporeal and magical capacity of matter to provoke in humans a new sensitivity to our wasteful practices, endangered planet, social inequalities and prejudices.     

“Going global” and FDI inflows in China: “One Belt & One Road” initiative as a quasi‐natural experiment

This paper investigates the impact of “One Belt & One Road” as an exogenous policy shock on the utilisation of foreign capital in China in the short term. Based on provincial panel data for the years 2003–15, the empirical study is conducted with difference‐in‐differences design. The first difference is whether a province is an OBOR province, and the second is whether “One Belt & One Road” initiative has been proposed. The empirical results suggest the utilisation of foreign capital in OBOR provinces has decreased significantly compared to non‐OBOR provinces after the initiative has been proposed. The study has further shown that the OBOR construction not only means factor movements and projects but also stands for policy shock. Its impact on utilisation of foreign capital cannot be simply captured by the commonly quantifiable “going global” indicators, namely outward direct investment, overseas contracted projects or overseas labour services. The negative impact of the initiative on foreign capital utilisation is strongly reflected in the OBOR provinces with low levels of economic development, heavy fiscal burdens and high proportions of state‐owned economy. In the short term, the negative impact of the initiative on foreign capital utilisation may be due to its role in resource competition and signal delivering. The former means that the OBOR initiative may induce resource competition between “going global” and “bringing in,” and the latter suggests that this initiative is likely to be regarded as a “signal” by foreign investors that “going global,” not “bringing in,” has become the priority of the government.     

“Green cannibalism” or an “organic inside job”? Empirical insights into the rivalry of ethical grocery types

Despite having favorable purchase intentions toward organic groceries, the respective purchase behavior falls often short. This so‐called intention–behavior gap is investigated by exploring the impact of competing ethical products fulfilling green consumption motives (“green fit”) as well or lacking credibility of organic groceries on organic purchase behavior. The first two studies (n ₁ = 225; n ₂ = 321) assessing actual and reported purchase behavior are testing the impact of perceived substitutability of local and fair trade alternatives compared with organic groceries. A third study ( n ₃ = 145) examines the impact of food miles and packaging on perceived product quality and credibility as possible reasons for a lacking “green fit” of organic groceries in terms of an experimental design. Local (fair trade) and organic groceries are perceived as substitute (complementary) alternatives. Additionally, local (organic) “green fit” impedes (enhances) the transformation from organic intentions into a respective purchase behavior. Wrapped organic produces with high food miles are linked to lower quality and credibility perceptions, reducing organic sales rates in favor of local groceries.     

Organizational Ambidexterity and the Emerging‐to‐Advanced Economy Nexus: Cases from Private Higher Education Operators in the United Kingdom

The expansion of advanced‐market economy (AME) firms into emerging‐market economies (EME) is well documented. In recent decades, EME companies have moved increasingly into AMEs, especially within the manufacturing sector, as well as other important AME sectors such as higher education (HE). However, the latter have received less attention. This study conducts an in‐depth qualitative analysis of two EME HE organizations operating in the international HE sector in London. The argument applies a theoretical framework of organizational ambidexterity with which to examine the contexts and complexities in collaborations between EME‐HE and AME‐HE firms. These argument surfaces, inter alia: differing dynamics in relation to institutional frameworks and sense making; myopic internationalization; tensions regarding organizational reputation, place, partner, and product legitimization; unfulfilled reverse innovation and “explorative‐pull” phenomena. Overall, the article develops novel conceptual frameworks of practical relevance, which inform EME‐AME firm collaborative operations in AME settings. © 2016 Wiley Periodicals, Inc.     

Income shares,secular stagnation and the long-run distribution of wealth

Four alarming stylized facts have recently emerged in the United States: (a) a decline in the labor share of income; (b) a decline in labor productivity; (c) an increase in the top 1% wealth share and (d) an increase in the capital-income ratio. In Capital in the XXI Century, Thomas Piketty's argument is that the r > g inequality determines an increase in the capital-income ratio; if the elasticity of substitution in production is above one, the profit share rises. We provide a contrasting explanation that draws from the Post Keynesian approach to differential saving propensities between classes and the Classical-Marxian theory of induced technical change. In a simple model of “capitalists” and “workers,” we show that institutional changes that lower the labor share—declining unionization, increasing monopsony power in the labor market, the global ‘race to the bottom' in unit labor costs or the exhaustion of path-breaking scientific discoveries—can reduce labor productivity growth because of the lessened incentives to innovate to save on labor costs. A falling labor share reduces workers' total savings, and wealth concentrates in the capitalists' hands. A higher profit share and wealth share both put pressure on accumulation: but the long-run growth rate, which is anchored to labor productivity growth, has fallen. To restore balanced growth, the capital-income ratio must rise, independent of the elasticity of substitution. These tendencies are not inevitable: taxation can be used to implement any wealth distribution targeted by policymakers, while worker-crushing institutional arrangements can also in principle be reversed through policy. Neither change appears likely given the current institutional and global policy climate.     

Exploring Different Types of Sharing: A Proposed Segmentation of the Market for “Sharing” Businesses

Sharing instead of buying is regaining traction among today's consumers. This study aims at identifying segments of sharing consumers to unearth potentially viable clusters of a consumer behavior that is a market of growing economic relevance. By means of a qualitative study and a survey with a roughly representative sample of 1121 Swiss‐German and German consumers, a set of trait‐related, motivational, and perceived socioeconomic variables is identified that can be used to group individuals into segments that differ with regard to their approach to sharing. A cluster analysis based on these variables suggests four potential clusters of sharing consumers—sharing idealists, sharing opponents, sharing pragmatists, and sharing normatives. Two sets of testable propositions are derived that can guide further research in this domain and pave the way to a more targeted approach to the growing market of “sharing” businesses.     

Limits to learning from the west: How western management advice may prove limited in Eastern Europe

The West's aid to the emerging Eastern European economies includes consultancy and education. This will have considerable impact on their economic and managerial activity, even though the theories of organization and management on which it is based are much criticized here. As these theories are applied in the extreme economic, social and political circumstances of the Soviet collapse, we are likely to be both surprised and pushed into a period of critical organizational theorizing. Much of the criticism comes from institutionalists who reject a generic approach to economics and management. They argue instead that organizations are embedded within a specific environment of social, legal, economic, and technological institutions which fashion their activities. They are saying “things are different over there and we should recognize that our advice presumes our own institutional arrangements.” The first part of this study reviews the reasoning behind this critique. It has two threads: (a) the institutional context and the way that shapes economic transactions and their costs; and (b) the way institutions develop as collective responses to social uncertainties. We look at organization theory's dependence on the social institutions, such as contract law, professional training, and the market for insurance. We take these and many other Western institutions for granted, and seldom stop to analyze them. In Eastern Europe, managers lack such institutional infrastructures and face uncertainties beyond our experience. This article's second part focuses on the processes by which organizations respond to uncertainties. There are many types of uncertainty and we pick out that of adopting a new technology. Problems arise because of “gaps” between the organization's in-place work practices, knowledge, and attitudes, and those which they must eventually adopt if they are to use the new technology effectively. Recent research into workplace know-how suggests that such gaps are bridged by workers developing a new “tacit” understanding of the technology through learning-by-doing. This knowledge generation (KG) works best when it is also communal, when creative teams form. By definition, this kind of team cannot be managed bureaucratically, in ways that depend on an understanding of the task in hand. We see that bureaucracy is a theory of knowledge application (KA) which breaks down in the absence of the necessary knowledge, rules, measurements, communications, and sanctions. Creative teams can operate under the conditions of bureaucratic failure because they are held together by institutional forces rather than by rational administration. The context of social institutions outside the organization becomes important because it defines the institutional bases for such teams. In the final section we look beyond creative teams as internal uncertainty resolvers. The new institutional economists argue that firms should internalize the uncertain transactions that are difficult to contract, and so precipitate market failure. We suggest that entrepreneurs also look outside the firm at those social institutions which enable them to externalize uncertainties. In general, the institutionalist critique reveals that entrepreneurs have several domains of action. The formal KA part of the firm, the focus of classical organization and management theory, is but one of these domains. Other equally important KG domains lie both within the firm and in the interorganizational networks and social institutions beyond its boundaries. The uncertainties of the Soviet collapse move us on from the simplicities of Western organization theory toward a richer set of ideas more relevant to our Eastern European colleagues—and to ourselves.     

A Linear Multisector Model of “Endogenous” Growth and the Problem of Capital

In this paper a linear multisector model of “endogenous” growth with heterogeneous capital goods is elaborated. The purpose of this exercise is to show that this kind of model is exempt from the capital theory critique put forward against the conventional long-period neoclassical growth model á la Solow. This confirms previous claims that at least some of the “new” growth models are somewhat extraneous to neoclassical analysis and actually exhibit the logical structure of classical theory. In addition it is shown that the use of an intertemporal analysis to establish a correct long-period position is not necessary and that the use of the long-period method may speed up the elaboration of new scientific results.     

Keeping up with the neighbors: The role of cluster identity in internationalization

This paper explores the implications of the collective identity of a regional cluster on firms’ internationalization. Prior research has established the value of cluster “insidership” through access to knowledge and resources. Through a longitudinal study, we find that cluster identity, through distinct identity claims, provides imperatives and shapes the motivation of firms to internationalize. These imperatives, we argue, stem from cluster identity seen as defined features of regional collectives, extending reference theory to encompass the role of social cues from similar firms located geographically close. The imperatives are particularly salient in the early stages of firms’ internationalization, adding the role of cluster identity to explain the differences between inexperienced and experienced firms in internationalization.     

Attribution Effects of Time Pressure in Retail Supply Chain Relationships: Moving From “What” to “Why”

Retail supply chains must be responsive to consumer demand and flexible in adapting to changing consumer preferences. As a result, suppliers are often expected to deal with time pressure demands from retailers. While previous research demonstrates that time pressure can have longer term relational costs that reduce collaborative behaviors and overall relationship quality, this mixed‐methods study goes further by accounting for attribution effects to explain why the time pressure occurs. Specifically, supplier perceptions for the reason of time pressure being within or beyond a retailer's control, rather than time pressure itself, appear to have a stronger effect on relational outcomes. By investigating time pressure through the lens of attribution theory, this research opens a new inquiry of research that moves away from examination of outcomes themselves (the “what”), to examining “why” the outcome occurred.     

Economic growth with demand saturation and “endogenous” demand creation

In this article, we present a model of economic growth through “demand creation” in the face of “demand saturation,” by representing demand saturation by an S‐shaped logistic function and reckoning the firm's R&D as an activity to determine the probability of product innovation, that is, of demand creation. By defining the parameter of birth rate of a new product as the probability that a new product is derived from an existing one and identifying the time path of this parameter with the firm's R&D plan, we derive the optimal R&D plan and examine the growth rate of the firm's expected total revenue along this optimal plan. We then find that the optimal birth rate of a new product is influenced positively by the speed of diffusion of demand and the initial level of demand but negatively by the unit cost of production and the interest rate and that the growth rate of the firm converges to the optimal birth rate of a new product.     

The logic of being illogical in strategic marketing planning

This article challenges the validity and usefulness of a conventional model of the sequence of stages in strategic marketing planning. Quite simply the conventional model ignores the organisational and human realities facing the planner. This paper proposes an “illogical” but iterative model of strategic marketing planning which is driven by the managerial understanding of the environment and knowledge of what tactical imperatives exist and constrain implementation. The advantages of explicitly recognising this “illogical” aspect of the planning process lie in: coping better with information demands made by executives in planning; allowing for psychological planning constraints and the obstacles created by the real nature of the manager's job; and in gaining the implementation of strategic marketing plans, with all that this implies for organisational and cultural change. The argument leads to an agenda of issues to be considered by the executive responsible for managing the strategic marketing planning process.     

Makeshift markets and grassroots reponsibilization

ABSTRACT

Prior research has yielded insights into how market actors generate permanent, institutionalized structures. Investigate the emergence of a temporary marketplace, characterized by flexible socio-material constellations. We draw on ethnographic data collected within a refugee aid initiative, which assembled during the in 2015–2016, and was a response to the failure of institutional structures. We map out a process through which individuals are collectively moved to respond form social networks, and engage in market-making practices. We identify this process as the emergence of a “makeshift” market, and argue that it is a complementary form of institutional work, constituted by a grassroots process of responsibilization. We contribute to the literature on responsibilization and market dynamics by discussing (1) the emergence and decline of temporary and complementary marketplace structures and (2) mapping out a responsibilization process driven by moral outrage at the experiential level.     

Does it transfer? The effects of pre-internationalization experience on post-entry organizational learning in entrepreneurial Chinese firms

Although organizational learning plays a critical role in the internationalization of firms, researchers have largely focused on learning that occurs after a firm’s international entry (“learning by doing”). Few studies have discussed how a firm’s experiences prior to international entry affect its organizational learning after entry. Using a sample of Chinese internationalizers, we argue that pre-entry characteristics will influence organizational learning after international entry. We argue and show that prior experience with international companies in the domestic market is transferable and does affect an organization’s post-entry learning through a mechanism called analogical reasoning or “learning by analogy.”     

Emerging‐Market Firms Venturing into Advanced Economies: The Role of Context

Sociocultural, economic, political, and institutional differences between countries increase uncertainty and complexity in today's highly competitive international business environment. Moreover, the “West‐Leads‐East” to “West‐Meets‐East” shift in the global economy requires firms in both advanced economies and emerging markets to seek sustainable solutions by collaborating across geographic boundaries. Such novel collaborative partnerships may help build a stable, resilient, and sustainable world economy by leveraging the resources and capabilities of firms from both advanced and emerging economies. This article has three general objectives. First, we seek to show that context has been a long‐standing issue in management, organization, and international business research and provide an overview of the puzzles that informed and motivated this special issue. Second, we highlight the key insights and contributions of the articles included in this special issue by reviewing their theoretical underpinnings, methodological approaches, and empirical findings. Finally, we outline a future research agenda on emerging‐market firms venturing into advanced economies that can help advance international business and management studies. © 2017 Wiley Periodicals, Inc.     

The opportunity not taken: The occupational identity of entrepreneurs in contexts of poverty

Innovative entrepreneurship is an essential but often missing outcome of poverty alleviation efforts. This qualitative study set in rural Ghana explores the occupational identity of entrepreneurs, the institutions that shape it in isolated “island networks”, and how it influences entrepreneurs' practices and decisions. We find that the institutional forces of “collectivism” and “fatalism” feature prominently. Being an entrepreneur in such settings means being a mentor, market link, and community safety net, and the types of opportunities entrepreneurs pursue are largely seen as pre-destined and inherited rather than individually chosen. As a result, the pursuit of innovative opportunities may be significantly limited.     

Does Institutional Blockholder Short‐Termism Lead to Managerial Myopia? Evidence from Income Smoothing

We examine institutional blockholders’ influence on income‐smoothing practices in the Korean market, which provides an interesting setting where family‐oriented chaebols dictate the corporate landscape and impede shareholder activism. The empirical results reveal that institutional shareholders with a short‐term (long‐term) investment horizon facilitate (constrain) managerial myopia. This positive (negative) association is most evident among firms with domestic institutional investors. Therefore, we argue that the presence of domestic institutional investors with transient investment goals incentivizes firms’ management to smooth out earnings.