Robustness of size and value effects in emerging equity markets, 1985–2000

We examine the robustness of size and book-to-market effects in 35 emerging equity markets during 1985–2000. Mean returns for high book-to-market firms significantly exceed mean returns for low book-to-market firms. These findings are robust to tests that control for size effects and that remove extreme returns. Similarly, mean returns for small firms exceed mean returns for large firms. But, the firm size results lack robustness to the removal of extreme returns. Moreover, significant size effects are found in tests that define firm size relative to the local market average, but generally are not found in tests that use absolute firm size. Our findings are confirmed by cross-sectional regressions that control for systematic risk at the global and local levels.     

Opportunities,contradictions and attitudes: The evolution of university–business engagement since 1960

The culture and attitudes of any institution are shaped by history and this may affect absorptive capacity and adjustment to change or responses to challenge or opportunity. The article explores how responses to policy initiatives played out within individual universities and the implications this had for their business engagement. The patterns of business engagement are related to the histories of the individual universities, identifying those forces which helped to shape the ‘rules of the game’ and explaining the similarities and differences in experience.     

East meets west—Corporate governance in Asian emerging markets: A literature review and research agenda

This review examines how corporate governance mechanisms in the Asian emerging markets (AEMs) context affect firm-level outcomes. Literature about characteristics of the main corporate governance actors (boards and owners), their effects on firm-level outcomes, and contingency factors in AEMs offers interesting first insights. I synthetize these results and develop a research agenda that proposes how AEM corporate governance research should extend (but not ignore) agency theory, how AEM research about firm effects of corporate governance could take a stakeholder-oriented perspective, and how research could utilize the AEM institutional context to model contingency factors and extend our theoretical understanding of corporate governance.     

British business and the telephone, 1878–1911

Most research into the early telephone system has focused on telephone providers rather than users, and this article begins to address that imbalance. The telephone was initially used to improve internal communications within firms, by connecting offices with warehouses, or by enabling staff working away from the office to report back. With the expansion of exchange networks, the commercial, intermediary and brokering sectors became heavy users of the technology for routine information transfer within business districts. Business elites continued to favour face-to-face contact for strategic business negotiations, however, and delegated telephone use to their employees.     

Foreign direct investment in emerging markets and acquirers’ value gains

We investigate the shareholder wealth effects of 306 foreign direct investment (FDI) announcements by UK firms in seventy-five emerging markets (EM). Our results show that acquirers enjoy highly significant gains during the announcement period of FDI. Perhaps surprisingly, the highest gains are accrued to acquirers investing in countries with high political risk and high corruption ratings. The type of asset acquired has also a significant effect on the gains of acquirers’ shareholders, with the highest gains accrued to acquirers of physical assets. Also, investments in physical assets in EM with a high corruption rating elicit the highest gains. We contend that UK firms following resource-seeking strategies in EM with a high corruption rating are facilitated access to resources on favorable terms and this is viewed positively by the market participants. Our results are robust to alternative model specifications and the endogenous choice to expand internationally.     

Does quality of innovation,culture and governance drive FDI?: Evidence from emerging markets

This study examines how technology, culture and corporate governance drive inward FDI in emerging economies. A study of 22 emerging economies shows that technology is the major attractive factor influencing inward FDI. Further, FDI increases as technology absorption and innovation capacity increase. The greater the quality of country governance, the greater the influence of corporate governance on FDI. Cultural dimensions such as individualism, masculinity and uncertainty avoidance exhibit a weaker influence on inward FDI, while power distance and indulgence have a stronger influence on inward FDI. Our results support the leapfrogging approach of emerging economies towards promoting innovation and enhancing technology adoption to drive FDI. Interaction effect of country governance further highlighted that the better the governance of a country the impact of technology, innovation, corporate governance and culture in attracting inward FDI also increases.     

Restructuring of the Danish pork industry: The role of mergers and takeovers, 1960–2010

This article examines the origins and effects of the evolution of the Danish pork industry characterised by three main merger waves resulting in 43 realised mergers and takeovers. The findings illuminate – in contrast to the traditional strategically motivated rationale – that the majority of the mergers were realised by cooperatives due to the inability to give the pig farmers competitive yearly refunds vis-à-vis local competitors, to financial difficulties or to the lack of investment capability of one of the merging parties. Despite a high-risky strategy, mergers and takeovers became the preferred consolidation mean due to capital constrains and the ‘close’ ownership structure of the cooperatives. Moreover, the study demonstrates that the outcomes of the M&A activities were generally positive.     

Ownership structure and earnings management in emerging markets—An institutionalized agency perspective

Previous earnings management research has largely focused on firm-level governance mechanisms in single countries or on macro-level variables in multiple countries. Building on this research, we incorporate firm ownership predictors along with national institutional dimensions to explore why firm decision makers in emerging markets vary in their earnings management behavior. Our theoretical framework integrates agency and institutional theories proposing that firm-level ownership mechanisms do not function in isolation, but are reinforced or attenuated by elements of the institutional governance environment. The multilevel empirical analysis of 1200 firms in 24 emerging markets indicates that controlling ownership is positively related to earnings management. We find that the level of minority shareholder protection in a country weakens this positive relationship. We also find that regulatory quality strengthens the negative relationship between institutional ownership and earnings management activity. It is hoped that awareness of how firm ownership structures interact with national-level institutions in affecting firm-level behavior will help managers and investors develop skills and practices to better cope with business norms in emerging economies.     

Country and industry factors in returns: evidence from emerging markets’ stocks

This study examines the influence of country and industry factors on the cross-sectional variance and correlation structure of returns. I use new data on emerging markets’ stocks obtained from the Emerging Markets Data Base. I find that emerging markets’ returns are mainly driven by country factors, as it was shown previously in studies for mature markets, and that cross-market correlation is not affected by the industrial composition of the indices. These results have important implications in regard to international portfolio diversification: cross-market diversification seems to be a better bet than cross-industry diversification. A finer industry partition shows, however, that ignoring the industrial mix leads to an important loss of diversification benefits.     

The trilogy of China cotton markets: The lead–lag relationship among spot,forward, and futures markets

China is a leading participant in the world cotton market. China’s distinctive regulatory structure and procedures and business environment provide an opportunity to explore some unique market dynamics. This study investigates the interrelationship among the spot, futures, and forward cotton markets in China over a period of a major policy change: A temporary State reserve program for cotton that was established in 2011 and ended in 2014. This government intervention significantly distorted the way farmers, manufacturers, and speculators interacted and was not sustainable. Overall, our results support futures market’s dominant role in the price discovery process.     

International business–government relations research 1945–2015: Concepts,typologies, theories and methodologies

Seventy years after its postwar inception, the field of international business–government relations (IBGR) is rich in new concepts, typologies, theories and methodologies that have broadly reflected the three post-WWII periods of Confrontation, Accommodation and Competition. This analysis discusses the correspondence between these “new terms” and IBGR practice during each one of these periods which have continuously brought up new actors, issues and ideologies whose study keeps growing in quantity if not always in quality. It concludes with what can be anticipated regarding the international relations between business and governments in a future marked by much greater political disorder and less economic multilateralism as well as by nonmarket strategies that may remain localized.     

International SMEs from emerging markets—Insights from the Colombian textile and apparel industry

The internationalization of firms from emerging markets has been studied mainly from the perspective of large firms. Smaller and younger international firms based in emerging markets suffer from underrepresentation in the literature. This study sheds light on the internationalization of emerging market SMEs, focusing on Colombian textile and apparel exporters. Using mixed research methods, it illustrates the role of firm age in influencing internationalization strategy. It examines 1165 export contracts by 50 SMEs, discussing export intensity, speed, and geographic scope using recurrence analysis and cluster analysis. It contributes to international entrepreneurship by exploring new empirical evidence and examining it using a novel methodological approach.     

Religion,social capital and business bankruptcy in the United States, 1921–1932

We consider the value of social capital that derives from membership in a church. American states with larger churchgoing populations had lower business bankruptcy rates from 1921 to 1932, and states in which the churchgoing population was concentrated in few churches had business bankruptcy rates that were lower still. Both voluntary and involuntary bankruptcy were lower in states with higher church membership. The evidence suggests that church membership acted on bankruptcy through a safety net mechanism and not solely through indicating a preference for honouring commitment.     

Networks and business development: Convict businesspeople in Australia, 1817–24

This article uses social network analysis to examine accounting records in order to establish and analyse business relationships. It applies this methodology to accounting transactions recorded at Australia's first bank, the Bank of New South Wales (BNSW) in order to establish whether a business network existed among ex-convict businesspeople in Sydney during 1817–24. Uncertainty regarding distance from suppliers and credit facilities, lack of markets and business connections plus the social stigma of ‘convictism’ meant that it was difficult but not impossible for ex-convicts to establish businesses. The network among BNSW shareholders and depositors served the purpose of pooling of resources and information and alleviating uncertainty.