How Does FDI Affect Domestic Firms’ Exports? Industrial Evidence

Using a Heckman sample selection model estimated using pooled four‐year firm‐level data, this paper explores the export spillovers from the FDI in the cultural, educational and sporting product manufacturing industry of the manufacturing sector in China from 2000 to 2003. The manufacturing sector contributes around 40 per cent of the GDP in the Chinese economy, and the cultural, educational and sporting product manufacturing industry has a significant proportion of FDI activities, and firms in this sector are active in exporting. Through the empirical exercise, we find that there exist export spillovers from FDI in the industry, for which the magnitude depends on firms’ geographical location, sale cost and revenue ratio, and ownership structure. On average, domestic firms located in Western China suffer from a foreign presence, irrespective of whether they are privately owned or state and collectively owned. For firms in Central China, both the privately owned and state and collectively owned firms appear to benefit from foreign presence. Regarding firms located in Coastal China, the privately owned firms suffer from the foreign presence, while in contrast the state and collectively owned firms benefit from the foreign presence. In addition, in this industry there are more firms that benefit from the presence of FDI than those that suffer, which to some extent justifies the government's policy to attract the FDI inflow.     

Linking Environmental and Financial Performance for Privately Owned Firms: Some Evidence from Australia

The debate over whether the “green” strategy pays off has been centered overwhelmingly within large public firms. It remains unclear whether “being green” matters to smaller firms such as privately owned or family controlled firms, which are equally heavy polluters but subject to much less public scrutiny. Using a sample of 138 private companies registered in the Australian National Greenhouse and Energy Reporting database over the 2009–2013 period, this study finds that embracing environmental/carbon responsibility has helped these companies gain higher financial returns. However, reducing carbon emissions has not paid off for environmentally sensitive firms, although lowering energy consumption is evidenced to be value creation.     

Collectivism and Corruption in Commercial Loan Production: How to Break the Curse?

Recent research suggests that collectivism breeds corruption in bank lending. This finding, together with the stickiness of culture, poses a direct challenge to economic growth in collectivist societies. In this paper, we address this grim outlook by examining the types of firms that are susceptible to the detrimental effect of collectivism on lending integrity and the formal institutions that can help alleviate such effect. We find that the adverse effect of collectivism on bank corruption is more severe in small and medium-sized firms, privately owned firms, and non-exporting firms, while it is considerably weaker in countries with more effective private monitoring, a higher (lower) fraction of foreign-owned (government-owned) banks, a more competitive banking sector, better information sharing, and stronger legal and political institutions. Our findings are robust to using alternative measures of collectivism and alternative dependent variables. These results highlight how firm-level characteristics and formal institutions interact with collectivism in affecting firms’ access to bank credit.     

China's outward foreign direct investment: Location choice and firm ownership

This article evaluates the international location decisions made by public listed Chinese firms during the period 2006-2008, using a Poisson count data regression model. Further, we categorize the firms into state-controlled and privately owned according to majority ownership. We find that the determinants of internationalization differ based on ownership. State-controlled firms are attracted to countries with large sources of natural resources and risky political environments. Private firms are more market seekers. Although all firms have strategic intent, the attraction is commercially viable technology rather than core research content. Our findings also show that existing theories can sufficiently explain the actions of private Chinese firms, but adjustments are needed to understand the behavior of state-controlled multinationals.     

International Opportunity Recognition among Small and Medium‐Sized Family Firms*

Current research in the field of entrepreneurship emphasizes the importance of opportunity recognition as a key element in the entrepreneurial process. It has been recognized that network ties, activeness and alertness, and prior knowledge are related to how entrepreneurs recognize new opportunities. However, it is unclear how important these factors are when a firm explores opportunities for entry into a foreign market. In this exploratory case study, covering the international opportunity recognition of eight family‐owned small and medium‐sized enterprises (SMEs), we found that the firms in question mainly recognized international opportunities by establishing new formal ties rather than using existing informal or family ties. The findings also indicated that due to the small size and the flexibility of the management team in family SMEs, these firms were able to react quickly to new international opportunities. However, there was no direct relationship between the prior knowledge of the firms and their international opportunity recognition. In addition, we found that trade exhibitions formed the primary context for the international opportunity recognition of the SMEs in this study. These findings motivate a set of five propositions that may lead to further studies on this topic.     

Do cross-border mergers and acquisitions increase short-term market performance? The case of Chinese firms

Despite the new momentum in cross-border mergers and acquisitions (M&As) by emerging market firms, we have a limited understanding of the impact of these activities. Drawing on signalling theory and the institution-based view, this paper examines the extent of stock market reactions to the announcement of cross-border M&A deals, based on an event study of a sample of Chinese firms during the period 2000–2012. The findings indicate that the announcement of cross-border M&As results in a positive stock market reaction; this effect is more significant in the mainland Chinese stock markets (Shanghai and Shenzhen) than that in the Hong Kong market. The shareholders of Chinese firms that acquire a target firm in a host country with a low level of political risk gain higher cumulative abnormal returns than those firms targeting companies in countries with a high level of political risk. The shareholders of Chinese state-owned enterprises experience lower abnormal returns compared with those of Chinese privately owned firms when engaging in cross-border M&A deals.     

Home country institutions and the internationalization of state owned enterprises: A cross-country analysis

National institutions shape the ability of civil society and minority shareholders to monitor and influence decision-makers in listed state owned enterprises (SOEs), and thereby their strategies of internationalization. We argue that the weaker are such controls, the more likely such decision makers pursue self-serving motives, and thus shy away from international investment. Listed SOEs’ strategies will thus be more similar to those of wholly privately owned enterprises (POEs) when these controls are more effective. Building on Williamson's (2000) hierarchy of institutions, we examine how home country institutions exerting normative, regulatory, and governance-related controls affect the comparative internationalization levels of listed SOEs and POEs. Based on a matched sample of 153 majority state owned and 153 wholly privately owned listed firms from 40 different countries, we confirm that, when home country institutions enable effective control, the internationalization strategies of listed SOEs and POEs converge.     

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.     

Foreign Ownership and the Extensive Margins of Exports: Evidence for Manufacturing Enterprises in Germany

We examine how foreign ownership of a firm affects the variety of goods that the firm exports and the number of countries it trades with. We construct a simple theoretical model of how foreign ownership may affect these extensive margins of exports and take this model to data from Germany, one of the leading actors on the world market for goods. In line with theoretical predictions we find that foreign‐owned firms do export more goods to more countries after controlling for firm size, productivity and industry affiliation. These differences between foreign‐owned firms and domestically controlled firms are highly statistically significant, and they are large from an economic point of view, with foreign‐owned firms exporting up to 39 per cent more goods to up to 31 per cent more countries.     

Customer-driven philosophy in the banking industry under different ownership status: the case of Greece

Relationship banking (RB) philosophy has become a topic of increasing importance in strategic marketing management. RB concerns inter alia the applying of customer-driven strategies using advanced information technology. This study investigates RB in the Greek banking industry overall and also under different ownership status (privately owned vs. stated-controlled vs. foreign banks). Based on a wide field of research during the period 2005–2006, indeed, we find that banks in Greece apply the philosophy of RB; however, privately owned and foreign banks implement RB strategies more systematically and effectively in comparison with state-controlled banks. The usefulness of our results is twofold: they satisfactorily justify the considerable growth of the private banking sector in the Greek economy and significantly enrich the service-profit chain of this specific industry.     

As Different as Chalk and Cheese? The Relationship Between Entrepreneurial Orientation and SMEs’ Growth: Evidence from Russia and Finland

The purpose of this study is to investigate the relationship between entrepreneurial orientation (EO) and firm growth and the moderating role of business environment for Russian and Finnish small- and medium-sized enterprises (SMEs). For hypothesis testing, structural equation modeling is applied to the data set of 104 Russian and 117 Finnish privately owned SMEs. Results show that while in the Finnish market context EO dimensions are directly associated with firm growth, in the emerging Russian market the relationship is moderated by the dynamic and hostile environment. The results also provide evidence of the nature of EO for SMEs operating in Russia.     

Innovation and risk-taking in a transitional economy: A comparative study of chinese managers and entrepreneurs

This research was set in the People's Republic of China. As former socialist China moves from central planning toward a more market-driven economy, improved knowledge about the new environment and firm decisions within such an environment has significant implications. For organizational researchers, such a transition represents a genuine shift of paradigm, and thus offers a unique opportunity to test existing organizational theories and develop new ones. For multinational businesses seeking business opportunities, they have to compete or cooperate with these Chinese firms, whether state-owned or privately owned.Motivated by a deep curiosity in, using the language of Williamson (1996), “What is going on there” behind the “bamboo curtain,” and underpinned by a strong conviction that organizational researchers have much to gain as well as to offer by focusing on transitional economies, I undertook this study to examine characteristics of a regulatory environment and the impact on innovation and risk-taking among Chinese managers and entrepreneurs. I collected original primary data that represents managers from large state-owned enterprises (SOEs) and entrepreneurs from small privately-owned enterprises (POEs) through personal interviews and a survey. Significant differences were found between managers and entrepreneurs in their reported environmental characteristics, strategic orientations, size, and firm performance, indicating that managers are not as innovative and are less willing to make risky decisions than entrepreneurs. Being smaller and faster than SOEs, entrepreneurial firms have adopted some strategies that distinguish them from their larger and more established competitors. Speed, stealth, and sound execution allow entrepreneurs to harvest first-mover advantages and thus increase their chances for survival in a turbulent environment.     

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.     

Strategic Capabilities and Performance in Women‐Owned Businesses in Mexico

The dire economic situation in Mexico, with its high rate of unemployment, makes it necessary for many women to find some form of economic activity to provide income for their families. Although such conditions could encourage the creation of new firms, the results of the Global Entrepreneurship Monitor 2006 Report show a gap between the number of women involved in nascent and young entrepreneurship initiatives and the number who owns established firms. This gap may indicate that the firms created need to improve their competitiveness and their ability to survive. The model proposed adopts the resource‐based view of the firm as a theoretical framework from which to study how entrepreneurial orientation, market orientation, and learning orientation, as well as the interactions between them, influence the achievement of competitive advantage and superior performance in businesses owned by women. Our investigation analyzes businesses established and managed by women in Mexico and registered with the Asociación Mexicana de Mujeres Empresarias A.C. (Mexican Association of Business Women) and the Red de Empresarias del Instituto Nacional de Mujeres (Women Entrepreneurs Network of the National Women's Institute). To gather the information needed, the study used a questionnaire as a measuring instrument. The results are based on the 90 complete answers received from the questionnaires distributed. The results show that all of relationships in our model are positive except the hypothesis that learning orientation mediates in the relationship between market orientation and performance. The results suggest that entrepreneurial orientation reinforces the effect of two capabilities, market orientation and learning orientation, on firm performance. They also reaffirm that the three capabilities assessed may lead an organization to differentiate itself from its competitors by improving its performance. In addition to contributing to the literature on female entrepreneurship, the results have important implications for management. Understanding the relationships between capabilities and the performance of women‐owned businesses in Mexico can permit the identification of areas for improvement to promote the growth and survival of this type of firm.     

Born global or local? Factors influencing the internationalization of university spin-offs—the case of Halmstad University

A wealth of research in the past decades has examined born globals or international new ventures, which are firms that from inception view the whole world as a market and as a source to access resources. Many of these firms build their competitive advantage on high-tech knowledge. However, although many studies have shown how born globals can achieve success if they access resources through their relationships from actors in their networks, few studies have explored the relationship between born globals and universities. Universities are important actors in creating new technology knowledge, and many studies have shown how new firms, or so-called university spin-offs (USOs), are formed around universities. The current study explores why some USOs are successful in their international growth strategy and discusses the factors that influence and facilitate the internationalization process. The study investigates 10 USOs around the newly established Halmstad University in Sweden and finds that universities have a positive effect on firm creation and initial international growth. The regional competence base increases from the establishment of a local university, primarily by strengthening the regional human capital and by increasing university research. This study shows that researcher entrepreneurs’ ventures start as born globals, but that these firms do not continue to grow. Born global business models, per se, do not lead to competitive advantage and successful internationalization. Instead, a strategy built on customer focus and an ability to adapt to different customer demands lead to growth, and the location of growth is dependent on the size of the home market. This study also shows that student entrepreneurship can be a successful growth strategy for USOs focusing on both international and local markets.     

Simulating Partial Asset Divestitures to 'Fix' Mergers

In this paper, we apply and extend merger simulation methodology to analyze the effectiveness of partial divestitures as a 'fix' to remedy the possible anticompetitive effects of horizontal mergers. Typically, antitrust agencies require merging firms to divest assets so that the status quo before the merger is restored, that is, they favor a 'full divestiture'. We focus on the effectiveness of a partial divestiture as an antitrust remedy (where a subset of products owned by the merging firms is spun off). Although this is not the type of full divestiture favored by antitrust agencies, we argue here that a partial divestiture could leave consumers better off after the merger than they were before - under certain conditions. Using a real-world example, we show how divesting a relatively close substitute creates competition that offsets the anticompetitive effects of combining products that are relatively distant substitutes. This result stands even when the divestee is moderately inefficient.     

The Influence of Funding Approaches,Growth Expectations,and Industry Gender Distribution on High‐Growth Women Entrepreneurs

This study examines three key aspects of entrepreneurship associated with women business owners and their ability to achieve high growth: debt versus equity financing, growth expectations, and industry gender distribution. We present a number of theoretical lenses spanning disciplines such as gender studies, entrepreneurship, social psychology, and finance. Using longitudinal data from U.S. startups over an eight‐year period, our research reveals a number of interesting findings. We find that, proportionally, high‐growth women entrepreneurs are more likely to finance their growth with personal and business equity funding. Additionally, women‐owned firms in “feminine industries” are more likely to achieve high growth than women‐owned firms in “non‐feminine industries.”     

Determinants of corporate listings on stock markets in Sub-Saharan Africa: Evidence from Ghana

Sub-Saharan Africa (SSA) economies have established stock markets to encourage the mobilization of domestic funds and attract foreign capital in-flows for corporate investment and growth. But domestic corporate listings on stock markets have been abysmal. This study examines the reasons behind the low patronage of stock markets by domestic firms in SSA using Ghana as a case study. Data for the study was obtained from 110 out of the 200 largest firms in Ghana and included firms which were listed on the stock market and unlisted firms over three time-periods from 2002 to 2009. The findings show that knowledge about stock market dynamics and financial institutions' support encourages listing on the stock market. However, extensive information and disclosure costs requirements, and loss of ownership and control discourage listing on the stock market.     

Bidders’ gains and family control of private target firms

This paper examines the announcement returns of bidders acquiring private firms owned by families versus the returns of bidders acquiring non-family controlled private firms. The sample consists of 391 acquisitions of private targets in seven continental European countries for the period 1997–2008. We find evidence that bidder's cumulative announcement returns (CARs) are lower when they acquire family controlled targets compared to non-family controlled targets. We show that this result holds regardless of whether the deal is paid with shares or cash and whether or not the bidding firm is also privately owned. Moreover, the result is independent of the size of the acquisition relative to the size of the acquiring firm. Our findings are consistent with the notion that the bidder has to pay a higher price in order to convince the family owners to sell in return for giving up private benefits.     

Internationalization of South African Retail Firms in Selected African Countries

African markets are complex environments for foreign multinationals. The continent, which has recently attracted significant attention for its rich potential and growth prospects, presents a multitude of challenges for the South African retailers leading the charge of retail expansion. This qualitative study seeks a deeper understanding of the contextual challenges experienced by these firms in other African markets, and how they have managed this process. It further engages how these firms build networks with local stakeholders and how they overcome information deficits. This study confirms the rich variety of capabilities and approaches developed by South African retailers operating across the continent, as opposed to a single standard approach. The research has further confirmed that these firms typically use SA Inc. as a country specific advantage in their expansion, leveraging off their inter-firm networks and personal exchanges to gain a better understanding of African markets and their consumers.