Who bears the burden of international taxation? Evidence from cross-border M&As

Cross-border M&As can trigger additional taxation of the target's income in the form of non-resident dividend withholding taxes and acquirer-country corporate income taxation. This paper finds that this additional international taxation is fully capitalized into lower takeover premiums. In contrast, acquirer excess stock market returns around the bid announcement date do not appear to reflect additional taxation of the target's income. These findings suggest that international taxation is considered to be burdensome and that the incidence of this taxation is primarily on target-firm shareholders.     

How do Chinese employees react to psychological contract violation?

Psychological contract violation (PCV) is employee negative emotions aroused by employers not delivering their promises. Past studies have used Social Exchange Theory to explain the effects of PCV on employee responses specified in the EVLN (i.e., Exit, Voice, Loyalty and Neglect) model. The present study argues that Activation Theory may also be applied to explain employee responses to PCV for Chinese employees due to the specific role of emotions in Chinese culture. Both theories receive some supports in a Chinese employee sample (n = 439). Results and implications are discussed.     

How do entrepreneurial firms establish cross-border relationships? A global value chain perspective

In the past decade, international entrepreneurship has centered largely on the internationalization of small- to medium-sized enterprises through dispersed production networks. Although network relationships are crucial in entrepreneurial internationalization, the dynamics underlying the establishment and coordination of interfirm linkages remain uncertain and unclear. Using a global value chain framework, this article uses a case study to explore how two small enterprises engage in the establishment of a cross-border alliance. Findings suggest that the global value chain approach provides a better understanding of the governance of global relationships. The study also denotes the room for further improvement in this area.     

How to Establish a Wholly Foreign Owned Enterprise in China?

Wholly foreign owned enter prises are permitted to regis ter in cases where at least half of their annual output is exported or if the nature of their operations relies heavily on advanced technology and the application of this high technology is beneficial to China. Approval to establish a wholly foreign owned enterprise is granted much more sparingly when compared to joint ventures.     

How do manufacturing exports react to the real exchange rate and foreign demand? The Chilean case

How do manufacturing exports react to the real exchange rate and to foreign demand? We investigate this question with a Chilean panel data spanning from 2003Q1 to 2016Q4, using publicly available data. In the long term, we find that exports strongly co-integrate with external demand, whereas not with the level of the real exchange rate. The short-run elasticities of manufacturing exports differ in size: (a) the elasticity of foreign demand—approximated by trading partners' activity aggregates—ranges between 0.8 and 1.4; and (b) the elasticity with respect to the bilateral real exchange rate is comprehended in the interval [0.4–0.6]. Core estimated elasticities pass usual robustness checks. The fall in manufacturing exports' growth in 2014–16 is consistent with a persistent slowdown in foreign demand, which has been partially offset by an average depreciation of the bilateral real exchange rate (with respect to destination countries of these exports). The transience of the effect of the real exchange rate is coherent with its exhibited stationarity and also consistent with its role of shock absorber.     

Board of director compensation in China: To pay or not to pay? How much to pay?

Over the period 2005 through 2015, we find that director compensation in Chinese listed firms is influenced by both director characteristics and ownership structure. We measure director compensation by both the propensity to be paid and the level of compensation. For independent directors, we find that director busyness, tenure, and ownership concentration positively influence and state-ownership negatively influences director compensation. For non-independent directors, we find that tenure positively influences and that both state-ownership and related directors negatively influence director compensation. Lastly, our evidence suggests that women directors in China are not underpaid.     

How do strategic groups handle cognitive complexity to sustain competitive advantage? A commentary essay

Cheng and Chang [Cheng SL, Chang HC. Performance Implications of Cognitive Complexity: An Empirical Study of Cognitive Strategic Groups in Semiconductor Industry. Journal Business Research 2009‐this issue] empirically investigate how a strategic group's cognitive complexity affects firm performance in the context of Taiwan's semiconductor industry. This commentary essay explores the authors' contribution to the multidisciplinary strategic group literature. The commentary also considers how Cheng and Chang's results can be integrated with important work in the competitive dynamic studies.     

Ideally human-ish: How anthropomorphized do you have to be in shopper-facing retail technology?

As shopper-facing retail technology (SFRT) increasingly replaces human interactions in retail environments, many businesses are considering how to make their retail technology more human-like. This paper identifies two methods of anthropomorphizing technology—visual and cognitive—and seeks to determine whether using these two types of anthropomorphism with a product/service is a better approach to interacting with consumers or whether a combination of visual and cognitive anthropomorphic features is less effective than one. This paper proposes that including one form of anthropomorphism in an SFRT may increase purchase intentions, while the addition of a second form of anthropomorphism will not lend an additional advantage. Specifically, the theory of social response is used to examine the process through which consumers view anthropomorphized SFRT. Three studies assess the proposed model in a mobile shopping application context and include the use of a functional app and 360° video experiments. Theoretical and practical implications are discussed.     

How do countries respond to anti‐dumping filings? Dispute settlement and retaliatory anti‐dumping

Empirical studies have found that countries may respond strategically to the anti‐dumping petition filed against their exporters through their own retaliatory actions. Although most previous studies have focused on retaliatory anti‐dumping filings, in this paper we explore another potential avenue for strategic response—filing a complaint under the World Trade Organization's (WTO ) dispute settlement understanding. Using a panel of global anti‐dumping filings between 1995 and 2011, we analyse under what conditions countries will choose to retaliate through either an anti‐dumping petition or a WTO dispute, and to what degree these two strategies are complementary or act as substitutes. We find statistical evidence that countries are more likely to file a WTO dispute when they have also filed a retaliatory anti‐dumping petition, suggesting that these two strategies may be complementary.     

How do virtual streamers affect purchase intention in the live streaming context? A presence perspective

The rise of live streaming commerce has attracted attention from scholars and practitioners as a new opportunity to reach consumers. However, few studies have focused on the role of virtual streamers in this context. Based on the stimulus organism response framework, we explore the impact of three characteristics of virtual streamers—likeability, animacy, and responsiveness—on social presence, telepresence, and purchase intention. We use partial least squares structural equation modeling analysis with online survey data from 378 consumers concerning their experiences of viewing virtual streamers. The findings indicate that likeability, animacy, and responsiveness enhance social presence and telepresence, which then promote purchase intention. Likeability and responsiveness directly increase purchase intention, but animacy does not. Multi-group analysis reveals differences between the effects of humanoid and zoonotic virtual streamers on social presence and telepresence. These results shed light on the role of virtual streamer characteristics and contribute to the literature on live streaming commerce, presence, and virtual humans.     

How long will the marriage of Sino-Foreign JVs in China last? A theoretical and empirical investigation

This paper studies the factors affecting the longevity of international joint ventures (IJVs) in China and investigates the strategic interactions of the players in an IJV (foreign parent, local parent and IJV management) by adopting game theory and using empirical analysis based on national perceptions of time horizons. The theoretical part shows equilibria for the games played by the parents. The empirical evidence, based on a sample of Chinese-US and EU IJVs, as well as Chinese-Japanese and South Korean IJVs, is consistent with the propositions derived from our theoretical models. Our empirical findings show that the longevity of an IJV is affected by senior management control. Access to local knowledge is also a crucial factor affecting longevity. Furthermore, the degree of long-term orientation (LTO) of the parents influences the longevity of Sino-Foreign IJVs. The contributions made by both foreign and local parent firms are also found to influence the longevity.     

When do AI chatbots lead to higher customer satisfaction than human frontline employees in online shopping assistance? Considering product attribute type

The increasing adoption of AI chatbots in online shopping assistance, as a complement or substitute for human frontline employees (HFLEs), leads to the question whether HFLEs perform better than AI service robots and why. From the perspective of product attribute type (experiential/functional) and focusing on customer satisfaction, this study explores how the impact of service agent on customer satisfaction varies along with product attribute type. A scenario-based experiment was designed and completed by 567 participants. Although HFLEs lead to higher customer satisfaction when the product attribute is experiential, AI chatbots perform better than HFLEs when the product attribute is functional. We make use of perceived information quality, perceived waiting time, and positive emotions, three determinants of customer satisfaction, to explain the variation of the role of different service agent types. The findings offer useful implications for companies when selecting service agent types in online shopping assistance.     

How do we make you look good? A social network study of upstream organizational impression management and the rhetorical construction of IPO firm images

We present an upstream model of impression management, focusing on how institutional actors may influence the rhetorical content of images IPO firms present to potential investors. Focusing on impression management to minimize poor and maximize good perceptions, we examined the risk, strategy, and governance images presented in prospectuses of 167 firms who issued an IPO between 1996 and 2000. Our results show that dependence on professional firms and IPO firm network prominence help shape the rhetorical construction of these images and suggest that impression management can be understood in terms of Goffman's team‐based effort to control a social interaction situation. Copyright © 2011 ASAC. Published by John Wiley & Sons, Ltd.     

How to attract applicants in the Atlantic versus the Asia-Pacific region? A cross-national analysis on China,India, Germany,and Hungary

While previous studies have shown that firms need to build a favourable employer image to prevail in the war for talent we still lack of an international perspective on employer branding. Based on a survey among engineering students from China, India, Germany, and Hungary, we show that the impact of some facets of employer image (e.g. task attractiveness) varies across different countries, while other employer image facets, such as perceived career opportunities and working atmosphere, unfold a stable influence on students’ intention to apply. Thus, we propose that there is an opportunity for a global employer positioning approach.     

How do Firms’ Outward FDI Strategies Relate to their Activity at Home? Empirical Evidence for the UK

This paper provides new empirical evidence on the relationship between the structure of firms’ overseas FDI and the performance and organisation of their home‐country operations in both manufacturing and business services. It addresses two questions. First, does sorting into multinational status on the basis of productivity extend to the scale of overseas activity? Second, is there evidence that off‐shoring to low‐wage countries has asymmetric effects on high and low‐skill activities in the home economy? The paper considers heterogeneity in firms’ outward FDI strategies and in their behaviour at home, distinguishing between low‐skill and high‐skill‐intensive activities. I differentiate between firms that invest in relatively low‐wage economies and hence might be engaged in vertical FDI, and those that only invest in high‐wage economies. I find that firms that invest in low‐wage economies simultaneously invest in a large number of high‐wage economies, employing complex FDI strategies. I add to existing evidence by demonstrating that selection into multinational status on productivity extends beyond the decision of whether or not to engage in FDI, to the geographic scope of overseas operations. This is consistent with the highest productivity firms being best able to overcome large fixed costs of establishing multiple overseas facilities. I find evidence consistent with differential effects of vertical FDI on firms’ high and low‐skill manufacturing activity in the UK. Relocating low‐skill activity to relatively low‐wage economies could enable a firm to expand output, with potential positive effects on investment, employment and output in complementary (high‐skill) activities at home. For firms investing in relatively low‐wage economies, I find that labour in these countries may substitute for relatively low‐skilled labour in the UK. In high‐skill manufacturing industries I find that multinationals that invest in low‐wage economies are larger, more capital intensive and more intensive in their use of intermediate inputs than other UK‐owned firms.     

How Do the Asian Economies Compete With Japan in the US Market? Is China Exceptional? A Triangular Trade Approach

We apply a trilateral trade approach to examine how Japanese exports and investment to China, or seven other Asian economies, affect Chinese, or the seven Asian economies', exports to the US market. The results suggest that while Chinese and Japanese exports are directly competitive in US markets, Chinese exports to the US are supported partly by Japanese exports to China. The positive correlation between Japanese exports to China and Chinese exports to the US is explained by vertical trade between Japanese multinationals and their affiliates in China. Indonesian and Philippine exports are also competing with Japanese exports in US markets, though the extent of the competition is much higher for China than for these countries.     

“One of these days,things are going to change!” How do you make sense of market disruption?

The significance of mindsets is apparent in everyday business life. As today’s managers and companies face uncertainty and disruptive change in the business environment and markets, there is a growing need to understand and strategically address such change. This becomes challenging when disruptive market forces confront the institutional logic or rules of the game based on collectively acquired experience of doing business in the given field. In overcoming such challenges, managers’ hidden reasoning remains an untapped potential while their existing mindset influences what they attend to and what they decide to do. This article elaborates a diagnostic framework, accompanied by a tool to help managers make sense of disruptive markets and reflect individually and collectively on possible courses of action. The framework has two principal dimensions—strategic scope and focus—that are further divided into three business elements of strategic market-oriented management: offering, customer, and market. The tool offers a practical means of profiling individuals’ mindsets. In increasingly dynamic business environments, reflection capabilities represent a new source of competitive advantage.     

How can leaders of multinational organizations be ethical by contributing to corporate social responsibility initiatives? Guidelines and pitfalls for leaders trying to do good

Corporate social responsibility (CSR) is a laudable goal for multinational enterprises (MNEs) because of the significant positive impact they can bring to the society and environment around the world. However, there are significant challenges to the practice of CSR in MNEs. This article discusses two major barriers to CSR that are especially significant for MNEs: leaders’ attitudes and cultural variance. We then apply insights from Rest’s ethical decision-making and cross-cultural research to offer guidance to leaders of MNEs to implement CSR in their organizations. We present a multistep process by which leaders first reflect on and clarify what goals they want to accomplish in the realm of CSR and then how to build consensus for those goals and modify them to incorporate the values and beliefs of local constituents.     

How do cross-country differences in institutional trust and trust in family explain the mixed performance effects of family management? A meta-analysis

Cross-country research finds mixed performance effects of family involvement in management (FIM) but consistently positive performance effects of family involvement in ownership (FIO). We argue that cross-country differences in institutional trust and trust in family can help explain this discrepancy. We reason that trust in family normalizes family managers’ use of firm resources to satisfy family needs. In contrast, institutional trust orientates family managers’ attention toward improving firm performance. A meta-analysis supports our theory: greater trust in family increases and greater institutional trust reduces the gap between FIM and FIO's performance effects across countries.