Multinational enterprises and wage costs: vertical FDI revisited

This study explores how wage costs for high-skilled and less-skilled labor in host countries affect the level of affiliate activities conducted by foreign MNEs. We find support for vertical FDI, in the sense that more FDI is conducted in countries where less-skilled labor is relatively cheap. In addition, we find that skilled-wage cost premia also affect FDI activities previously associated with horizontal FDI, i.e. local affiliate sales. Consequently, the potential effects of relative wage costs on MNE activities are large. Rough calculations suggest that more than 20 percent of US affiliate sales in 1998 can be attributed to skilled-wage cost premia.     

Production transfer within multinational enterprises and American wages

This paper tests whether the transfer of production stages within US-headquartered multinational enterprises (MNEs) from US parents to foreign affiliates has contributed to within-industry shifts in US relative labor demand toward the more-skilled. There are two main empirical results. First, there is evidence of MNE transfer during the past 20 years. Second, regression analysis does not support the MNE hypothesis. MNE transfer tends to have small, imprecisely estimated effects on US relative labor demand. This finding is inconsistent with models of MNEs in which affiliate activities substitute for parent unskilled-labor-intensive activities.     

内部劳动力市场与效率工资在企业中的应用=

内部劳动力市场与效率工资作为两种重要的理论,在企业的管理以及经济发展过程中发挥着重要作用.如何理解并把握住这两种理论的精髓,实现有效的应用,是企业面临与探求的重要课题.本文在深入剖析这两种理论的基础上,寻求出关键点,并结合企业管理与发展中的一系列问题,进行有效性评估与分析,从而提出在企业管理中的具体应用策略,应用技巧,应用途径等建议.     

Multinational mining enterprises and artisanal small-scale miners: From confrontation to cooperation

In many developing countries, multinational enterprises (MNEs) in mining operate alongside fast-growing communities of informal artisanal, small-scale miners. This has led to direct conflict and competition for mineral resources. This paper introduces the Salience and Institutional Analysis and Design framework as a means to analyze the MNE strategies used to address informal miners across different governance levels in the gold mining sector of Ghana and discusses the implications of these strategies for sustainability. We identify the emergence of a cooperative strategy with informal miners as a sustainable alternative to the political strategy of reliance on the state to protect tenure.     

Performance of domestic and foreign-invested enterprises in China

Despite increasing attention paid to China's enterprise reform since the late 1970s, relatively little is known about the performance of reformed state-owned enterprises (SOEs) and newly formed private firms vis-à-vis foreign firms in China. In this study, we examine the performance of domestic Chinese firms in various ownership categories versus foreign-invested enterprises (FIEs) based on two nation-wide surveys conducted by the National Bureau of Statistics in 1998 and 2002. We found that both domestic non-state-owned firms and foreign-invested enterprises performed better than state-owned enterprises. Meanwhile, three categories of Chinese firms—privately owned, collectively owned, and shareholding—had higher performance levels than the foreign-invested enterprises.     

Emigration and wages: The EU enlargement experiment

The enlargement of the European Union provides a unique opportunity to study the impact of the lifting of migration restrictions on the migrant sending countries. With EU enlargement in 2004, 1.2 million workers from Eastern Europe emigrated to the UK and Ireland. I use this emigration wave to show that emigration significantly changed the wage distribution in the sending country, in particular between young and old workers. Using a novel dataset from Lithuania, the UK and Ireland for the calibration of a structural model of labor demand, I find that over the period of five years emigration increased the wages of young workers by 6%, while it had no effect on the wages of old workers. Contrary to the immigration literature, there is no significant effect of emigration on the wage distribution between high-skilled and low-skilled workers.     

Multinational HRM in privatized Jordanian enterprises: An exploration of the influence of political contingencies

Within the international human resource management literature, it is recognized that a range of “host‐country effects” can influence how multinational corporations approach the management of human resources within overseas subsidiaries. This article seeks to further knowledge of these effects by using the findings obtained from two case studies conducted in companies that had come under the control of French multinationals through the Jordanian government's privatization program to explore how subsequent processes of human resource reform were shaped by governmental policies and wider political considerations and the dynamics underlying these shaping processes. In particular, it explores the tensions that arose between government policies and corporate business objectives, the negotiating strategies that the companies adopted in order to resolve them, and the factors that influenced the usage and outcome of these strategies. © 2007 Wiley Periodicals, Inc.     

Multinational enterprises’ risk mitigation strategies in emerging markets: A political coalition perspective

This paper contributes to the IB literature by investigating MNEs’ risk mitigation strategies in emerging markets. Drawing on institutional perspectives and March’s theoretical concept of forming a ‘political coalition’, we propose that risk mitigation cannot be limited to passive compliance and/or demonstrating good corporate behavior, but should extend to collective efforts by building a political coalition and working with key stakeholders to manage potential risk and obtain favorable outcomes in complex institutional environments. In considering MNEs in contemporary China and India, we offer different types of risk mitigation strategies under various institutional contexts and a framework for future research.     

Multinational enterprises and corporate tax planning: A review of literature and suggestions for a future research agenda

Corporate tax planning by the multinational enterprise (MNE), that is, the MNE’s ability to plan its tax affairs by using a multitude of strategies to reduce its tax bills legally, is a central research question in the literatures of international business, public economics, tax, finance, law and accounting. Underlying theoretical assumptions, approaches to empirical testing, profit shifting estimation strategies and findings are varied. Thus, it is important to conduct a critical literature review. In this paper, we offer new insights by studying the phenomenon from the international business (IB) perspective. We survey the academic literature on the MNE and corporate tax planning to examine the extent of knowledge on this topic and identify areas that we hope will stimulate interest among IB scholars for further research. We find materials across disciplines that are relevant to IB readers. We examine 120 articles in 51 scholarly journals and classic books published during the period 1966-2017. We identify the key mechanisms and the firm characteristics that may influence corporate tax planning. We suggest a research agenda where IB research can make clear contributions.     

The impact of outward FDI on the home country's labour demand and skill composition

The present paper adds to the literature investigating the effects of outward FDI on the home country employment and skill composition. Considering the “industrial region” as the unit of the analysis, we capture both direct and indirect effects of foreign production on the parent company and its environment. The empirical evidence refers to the internationalisation of production by Italian firms throughout the period 1996–2002, and it shows that foreign activities have a negative impact upon the demand for low skilled workers in the parent company's “industrial region”, but also on the demand for high skilled workers when FDI are addressed to high income countries.     

The effect of non-conventional outbound foreign direct investment (FDI) on the domestic employment of multinational enterprises (MNEs)

Using a sample of 787 Japanese MNEs operating in 60 countries from 1996 to 2010, this study examines the impacts of MNEs’ three most commonly observed forms of non-conventional outbound FDI (i.e., as a means to counter trade barriers, to achieve a financial hedge, or to obtain tax breaks) on domestic employment levels of MNEs at home. We build on a conceptual classification of ‘motivation-activity’ of MNEs as a theoretical framework, and evaluate the impacts of MNEs’ non-conventional outbound FDI on their domestic employment levels in relation to the MNEs’ specific combination of ‘motivation’ and ‘activity’ as they conduct outbound FDI in host countries. The 3SLS regression results show strong evidence that non-conventional outbound FDI in core business activities reduces MNEs’ domestic employment levels when the investment is primarily for responding to country-specific conditions, such as circumventing host country restrictions (e.g., FDI to counter trade barriers) or escaping from home country restrictions (e.g., FDI for tax incentive packages), while FDI in non-core business activities (e.g., FDI for financial hedging or FDI in tax havens) has either a positive or insignificant effect on MNEs’ domestic employment levels depending on whether it aims to develop FSAs or not. We conclude the study with public policy implications from these findings.     

The effect of inward FDI on outward FDI over time in China: A contingent and dynamic perspective

Drawing on the investment development path (IDP) framework and foreign direct investment (FDI) spillover literature, this study attempts to identify the contingent and dynamic effect of inward FDI (IFDI) on outward FDI (OFDI) at a provincial level. Using panel data from China, our findings reveal that the positive effect of IFDI on OFDI is stronger in provinces with high economic development, albeit at a diminishing rate over time. However, the level of corruption weakens the effect of IFDI on OFDI over time. Despite that, we find that the effect of IFDI on OFDI is not contingent on trade openness overall. By decomposing trade openness into two dimensions, that is, import intensity and export intensity, our findings indicate that the effect of IFDI on OFDI depends on export intensity, rather than import intensity. Our study provides insights into the complex effect of IFDI on OFDI from a contingent and dynamic perspective.     

Standardized Multinational Advertising: The Influencing Factors

Abstract

Advertising for multinational products uses standardization most often in strategy, less often in executions, and least often in language. This study's international sample of advertising agency executives considers creative impact the most important and pressure (from time, client, etc.) the least important reason to use some form of standardized advertising. Despite this, it is views on client pressure which explain most of the variance in views on future use of standardization. That is, those respondents who believe that client pressure is increasing also believe that overall use of standardization will increase. A separate sample of agency executives reinforced some of these findings, particularly the role of the successful, big idea and client pressure in making the decision to standardize. Copy research also plays a role in standardization recommendations, but it is not used as extensively as might be necessary.     

Wages and skills utilization: effect of broad skills and generic skills on wages in Singapore

Many people go for training to upgrade their skills which is hoped to pave the way for better pay. But what are the kinds of skills that really affect wages? Employers have emphasized the value of generic skills such as interpersonal and communication skills, teamwork and problem solving. Does possession of these skills translate to at least the same or better wages as compared with having broad skills represented by educational qualifications and job‐related training? This paper, arising from the research project on the Skills Utilisation in Singapore, aims to answer which skills can have more influence on wages and which job‐related training in terms of training duration can have more impact on wages. Using ordinal logistic regression, our findings show that educational qualification and initial training time can influence wages as well as utilization of leadership, planning and problem‐solving skills.     

Development of a cognitive skill in solving business ethics problems: The effect of instruction

Education in business ethics focuses mainly on the improvement of ethical awareness, on philosophical issues, or on the transfer of moral content. However, serious problems with the effectiveness of these methods have been reported. In line with the psychological theories of Piaget, Vygotsky and Kohlberg, and in order to avoid the above problems, the educational effort in the present study was concentrated on the stimulation of development of the underlying autonomous cognitive ability to solve moral problems. Adults were trained to solve business ethics problems according to the autonomous function. The problems were presented in the form of moral conflicts introduced by hypothetical stories. The results showed that simple instructions were sufficient to promote a significant shift in the subjects' mode of solving the problems towards the autonomous moral function. Both the educational method and the test device are promising. Issues concerning the scoring instrument as well as questions about the transfer and application of the cognitive skill in real situations are discussed.Iordanis Kavathatzopoulos is Assistant Professor of Psychology at the Department of Psychology, Uppsala University, Sweden. His research focuses mainly on education and development of ethics, and on structure and dynamics of work organisation. He has published recently in theJournal of Moral Education.     

Entrepreneurial orientation and firm performance in non-profit service organizations: contingent effect of market orientation

Prior research indicates that an inverted U-shaped relationship exists between entrepreneurial orientation (EO) and firm performance. This study argues that the inverted U-shaped relationship may depend on the level of market orientation (MO). A moderated hierarchical regression based on a sample of 307 non-profit service organizations reveals that an inverted U-shaped relationship exists between each sub-dimension of EO and performance. However, these relationships do not exist for each sub-dimension of MO. When both market intelligence generation and responsiveness are high, the relationship between innovativeness and performance will be in a linear form. Under the condition of high-market intelligence responsiveness, the higher proactiveness will lead to a higher performance level. These findings will better our understanding of the relationship between EO and firm performance.     

Exploration and exploitation in established small and medium-sized enterprises: The effect of CEOs' regulatory focus

Based on theory of regulatory focus and organizational ambidexterity, we hypothesize that the level of engagement in exploration and exploitation in a small or medium-sized enterprise (SME) is affected by the respective CEO's chronic regulatory focus. In our analysis of survey responses from CEOs in Switzerland, we find that the CEO's level of promotion focus positively affects the firm's engagement in both, exploration and exploitation, while the CEO's prevention focus is negatively associated with the firm's exploration but not significantly related to its exploitation. The positive associations between a CEO's promotion focus and the firm's exploration/exploitation activities are enhanced under conditions of intense competition.     

The influence of business groups on board composition in offshore financial multinational enterprises

Based on resource dependence theory we argue for an influence of business groups (BGs) on the board composition of constituent offshore financial multinational enterprises (FMNEs). Using a unique sample of 171 Caribbean FMNEs in an inter-island BG setting, we find BGs’ control in constituent firms to be indicative of the importance of the internal financing and intermediation within the group network. This control leads to a higher proportion of lawyers hired to the boards of directors in BG-constituent firms and supports the argument that lawyers provide skills in complex offshore regulatory frameworks that facilitate BGs’ optimal tax management. Furthermore, we observe that an increased adoption of shareholder rights governance by BG-constituent firms is associated with increased engagement with outside resource providers, increased potential conflicts of interest and hence a need for hiring more lawyers. Our interpretation is that offshore FMNEs have a need for more lawyers, whose legal skill is critical to the competitive advantage of FMNEs.     

Human resource management in multinational and domestic enterprises: A comparative institutional analysis in Southeast Asia

This article looks at the relative impact of context on the role of senior managers. It compares HR directors of domestic enterprises (DEs) with those of multinational enterprises (MNEs), within an emerging market setting, based on a survey of HR directors in Brunei. We found that, with the exception of some aspects of selection and recruitment, HR directors of MNEs accorded a higher priority to strategic tasks but were more reluctant to delegate. This study confirms the importance of MNEs in pioneering more modern and integrated approaches to people management but also demonstrates the limitations to the extent where they might act as evangelists of new practices that are adopted by their local peers. In contrast, local firms were more likely to concentrate their attention on administrative, rather than strategic, issues. We draw out the implications of our findings for theory and practice.