Multinational firms, exclusivity, and backward linkages

How does the nature of contractual relationships between a multinational and its local suppliers affect backward linkages and welfare in the local industry? We address this question in a two-tier oligopoly model where a multinational transfers technology to its suppliers if they accept an exclusive contract that precludes them from serving its local rivals. Invited suppliers balance the benefits of gaining access to new technology and the derived demand of the multinational against the opportunity of selling to other local firms. Exclusivity reduces competition among local suppliers and can lower backward linkages and local welfare relative to autarky.     

Exporting and productivity in business services: Evidence from the United States

Does exporting make firms more productive, or do more productive firms choose to become exporters? This paper considers the link between exporting and productivity for a sample of firms in US business services. We find that larger, more productive firms are more likely to become exporters, but that these factors do not necessarily influence the extent of exporting. This conforms with previous literature that there is a self-selection effect into exporting. We then test for the effect of exporting on productivity levels after allowing for this selection effect. We model both the relationship between exporting and productivity, and a simultaneous relationship between export intensity and productivity after allowing for selection bias. In both cases we find an association, indicating that productivity is positively linked both to exporting and to increased exposure to international markets.     

Involvement, satisfaction, and brand loyalty in a small business services setting

Considerable resources are expended annually on building business brands, yet the literature is virtually silent on brand loyalty in a business setting. This study examines the relationship between attitudinal loyalty and behavioral loyalty in a business services context, and attempts to identify two key antecedents of loyalty in this context. In particular, little is known about small businesses as customers, despite their significant contribution to the economies of developed nations. A longitudinal design is implemented, and data are captured on both attitudinal loyalty and subsequent loyalty behaviors (i.e., actual purchase behavior). The findings demonstrate the value of conceptualizing and measuring both attitudinal and behavioral components of brand loyalty. Specifically, the results indicate that attitudinal loyalty mediates the effects of the antecedents studied (category involvement and purchase satisfaction) on behavioral loyalty. Implications for marketing theory and practitioners are discussed, and possible directions for future research are sketched.     

Entry to foreign markets and productivity: Evidence from a matched sample of Turkish manufacturing firms

We examine the effects of international trading activities of firms on creating productivity gains in Turkey by using a recent firm-level data set over the period 2003–2010. We establish treatment models and investigate the productivity improvements of firms through trade by using propensity score matching techniques together with difference-in-difference estimates. Three different groups of treatment are constructed: (1) firms that are involved only with import activities, (2) firms that are involved only with export activities and (3) firms that are involved with both export and import activities. The results of the study suggest that both exporting and importing have positive significant effects on total factor productivity (TFP) and labour productivity (LP) of firms. Importing is found to have a greater impact on productivity of firms compared to exporting. Further, two-way trade is found to have more significant effects than those of one-way trade on firm productivity. Finally, our results indicate that international trade has greater impact on LP rather than TFP of firms.     

FDI decisions and business-group insider control: Evidence from Taiwanese group-affiliated firms investing in the Chinese market

Based on resource-dependence theory, three hypotheses are developed and tested regarding the negative relationship between equity stakes in group-affiliated firms held by business-group headquarters and (1) the slack resources of group-affiliated firms, (2) the products of group-affiliated firms that are similar to those of the business-group headquarters, and (3) the human capital of group-affiliated firms. OLS regressions are used to test the hypotheses on a sample of existing group-affiliates of 218 business-groups entering the China market to establish a new affiliate, including 1015 observations during the 2004–2011 period. This study points to a new avenue for research on international business and business-group literature regarding ownership relations between group-affiliated firms and business-group headquarters.     

Do persistence and passion matter: Evidence from the educational testing service major field test in business

The authors examined the determinants of success on the Educational Testing Service Major Field Test in Business. The authors find that gender, SAT performance, and concentration are significant predictors of performance. Additionally, they derive proxies for student passion and persistence, and find that the greater the student's passion for business is, the higher the score is. The authors discover that students who demonstrate persistence, as measured by the extent to which they outperform their grade point average expectations, also score higher on the exam.     

Grief recovery from the loss of a family business: A multi- and meso-level theory

In this article I develop a multi- and meso-level theory of grief recovery time from the loss of a family business. The multi-level aspect of the model suggests how primarily micro theories of grief and sense-making can help explain grief recovery time at the family group level. The meso-level aspect of the model provides insight into recovery from the loss of a family business by proposing how grief dynamics interact at the individual level through emotional intelligence and the family group level through emotional capability. By supplementing theories of grief with those of sense-making, the model provides a deeper understanding of the grief recovery process. This model has implications for scholars and practical implications for family business members and the family unit.     

The internationalization of knowledge-intensive business services: the effect of collaboration and the mediating role of innovation

This study theoretically and empirically analyzes the mediating role of innovation on the relation between collaboration and internationalization strategies in knowledge-intensive business services (KIBS). The work also considers the impact of foreign-based partners and examines the potential direct and indirect effects via innovation of cross-border collaboration on the internationalization of KIBS. The empirical analysis uses a wide sample of Spanish KIBS for the period 2003–2005. The study finds that collaboration positively affects the internationalization of KIBS via innovation. The results related to cross-border collaboration indicate the existence of direct and indirect effects via innovation on internationalization.     

Banking Competition and SMEs Bank Financing. Evidence from the Italian Provinces

This work investigates whether local differences in banking competition impact on the amount of bank debt used by Italian small and medium sized manufacturing firms. Sample selection and Double Hurdle models are adopted as the process, which results in the choice of bank financing may differ from that determining its amount. Our main finding is that more competitive banking markets seem to be associated with relatively higher usage of bank debt by less transparent firms. On the other hand, a higher banking competition seems to have no effect on the probability of receiving bank loans.

Entrepreneurial orientation,market orientation,network ties,and performance: Study of entrepreneurial firms in a developing economy

Entrepreneurial orientation (EO), market orientation (MO) and network ties are typically modeled as separate antecedents of performance. However, the boundary conditions for such models are under-explored, as is their applicability to developing economy settings. Accordingly, drawing on institutional and social capital theories, the current paper argues that the performance benefits of EO and MO are complementary, and vary across different levels of social and business network ties. Using primary data gathered from entrepreneurial firms operating in Ghana, the study findings indicate that aligning high levels of EO and MO improves business performance, and particularly so when social and business network ties are well developed, since under these latter conditions, the performance benefits of aligning EO and MO are greatest.     

Understanding and breaking the rules of business: Toward a systematic four-step process

Knowing the rules of a business is a prerequisite of being successful. On the other hand, carefully and selectively breaking the rules of management is often the way to exceed the low margins of intensively competitive arenas, especially at a time when technological innovation is limited and industries are tending to consolidate. Drawing on their own practical know-how and intensive research into future business models, the authors of this article call for more dialectic in management thinking. Their “rule-breaking strategy creator” process is a combination of tested consulting and venture capital tools, and provides an entirely new approach to systematic rule-breaking and, thus, competitive advantages.     

The Role of Language in the Communication Process Between Business and Government: Evidence from Russian Firms

Abstract

The paper investigates how language facilitates communication process between government and business. We use Russian context to show barriers and challenges of using language in official communication between governmental authorities and Russian companies. In our work, we demonstrate how language may produce employee’s misunderstanding and discuss typical sources of ineffective usage of language. The results indicate that problematic issues of both linguistic and non-linguistic nature can lead to serious implications for successful communication between government and business in Russia. We found that documentations’ complexity, which is perceived as such due to a complicated subject area they belong to (legal, tax, etc.) and language insufficiency applied are most likely to raise multiple problems related to government’s communication with business.     

Invariances and Diversities in the Patterns of Industrial Evolution: Some Evidence from Italian Manufacturing Industries

This work explores and compares some basic properties of corporate growth process at both aggregate manufacturing level and disaggregated sectoral levels. Using an extensive dataset on Italian manufacturing firms, we investigate which properties of firm growth dynamics are robust under disaggregation. We compare the results obtained with three different definitions of firm size, namely total sales, number of employees and value added. Our analysis suggests that while different sectors are characterized by significant differences in firm size distributions, in the degrees of concentration and in the autoregressive structure of the growth processes, there are also regularities which hold across all of them, such as the approximate unit root nature of the growth process and the power exponential shape of the growth rates density. Together, these “stylized facts” suggest challenging puzzles on the drivers of corporate growth and the resulting industrial structures.     

The influence of firm-specific and country-specific advantages in the internationalization of emerging market firms: Evidence from Turkey

This paper examines the role of institutional factors that enable firm- and country-specific drivers of emerging market (EM) firms’ internationalization based on case-based research conducted in one EM, Turkey. Findings indicate that 10 major factors comprised of firm-specific and country-specific advantages drove the focal case study firms abroad: the firm-specific factors ranged from financial and operations supremacy; excellence in value chain activities; inexpensive human resources; rapid learning capabilities in production and technology development; and adaptability to foreign markets; while the country-specific factors included home-government policies supporting internationalization; logistical advantages arising from geographical position; adaptability capabilities resulting from former survival through institutional voids; strong social ties formed through networks; and availability of low cost resources. These findings are discussed and future research questions are offered.     

The impact of credit constraints on exporting firms: Evidence from the provision and subsequent removal of subsidised credit

We study the causal impact of credit constraints on exporters using a natural experiment provided by two policy changes in India, first in 1998 which made small‐scale firms eligible for subsidised direct credit, and a subsequent reversal in policy in 2000 wherein some of these firms lost their eligibility. Using firms that were not affected by these policy changes as our control group in each case, we find that credit expansion increased the growth rate of bank borrowing and had a positive effect on exports. The subsequent policy reversal in 2000 had no impact on the growth rate of bank borrowing or on exports.     

Impact of international entry choices on the nature and type of innovation: Evidence from emerging economy firms from the Indian bio-pharmaceutical industry

As emerging economy multinational enterprises (EMNEs) enter foreign countries in search of new markets, seeking to expand their knowledge bases, research on the type and nature of innovation activity is needed to address the impact of EMNEs’ choices related to international expansion. Building on prior literature on entry mode and location choices, as well as on organizational learning, we argue that how and where an EMNE expands internationally will impact the nature of its innovation. We carry out empirical analysis on a sample of 167 Indian bio-pharmaceutical firms for the period from 1997–2017. Our findings suggest that greenfield ventures foster innovation in core technologies, while cross-border mergers and acquisitions (M&As) foster innovation in non-core technologies. In addition, locating subsidiaries in high income countries encourages product innovations, while locating in low income countries encourages process innovations. Our findings contribute to the growing literature on differences in learning outcomes of EMNE internationalization.     

The effect of a tax training program on tax compliance and business outcomes of starting entrepreneurs: Evidence from a field experiment

This paper estimates the long-term impact of a short, partly personalized, mandatory tax training program on tax compliance and business outcomes of first-time entrepreneurs. To this end, we combine survey data, audit data and unique register data from the Netherlands' Tax and Customs Administration with a three year long randomized experiment. The results show that the training affects specific domains of tax compliant behavior. Moreover, it has no impact on business survival, but treated entrepreneurs have significantly higher profits compared to the control group due to lower business costs. These outcomes are partially supportive of our hypotheses developed from theories on tax compliance and mental accounting.     

A comparative analysis of the role of national culture on foreign market acquisitions by U.S. firms and firms from emerging countries

Do firms from emerging economies differ from U.S. firms in their foreign market acquisition strategies? A comparison of cross-border acquisitions by firms from the United States and 18 emerging countries shows that (1) firms from both the United States and emerging countries target countries that are culturally closer to their home countries, (2) a strong interaction effect occurs between market potential and cultural distance for emerging country firms as the market potential increases (i.e., at high market potential, firms from emerging economies are willing to overlook cultural distance), (3) no interaction effect occurs between market potential and cultural distance for U.S. firms, and (4) different cultural dimensions affect the market entry strategies of U.S. firms and firms from emerging countries.     

Technological opportunism effects on IT adoption,intra-firm diffusion and performance: Evidence from the U.S. and Spain

The paper pursues a joint analysis of the direct influence of the level of a firm's technology opportunism capability on performance and on the adoption and intra-firm diffusion of Internet-based technologies. The study here examines the mediating effect that intra-firm diffusion exerts on the relationship between capabilities and performance. This study uses the results from a survey of 100 Spanish and 109 American franchise firms. Results indicate that the firm's level technological opportunism influences the adoption and intra-firm diffusion of technology and also has a positive impact on performance. While intra-firm diffusion is a driver of performance, adoption has no influence. Finally the indirect impact of technological opportunism on performance differs across countries. While for American firms, the integration of technologies into activities that related to communication with partners has a positive impact on performance; Spanish managers should focus on the integration of these technologies into back-end functionalities.     

Evaluation of technical efficiency among entrant and incumbent firms in the Spanish retailing sector: The effects of deregulation from a regional perspective

This study analyzes the efficiency of entrant and incumbent firms in the 1995–2003 period, after a significant shift in the institutional environment of the retail sector occurred with the deregulation of opening hours carried out imposed by decree law 6/2000. It also analyzes the evolution of efficiency in relation to the entrance cohorts and to their geographical localization. The results obtained show that the effects of opening hours by decree law 2000 have perhaps been negative on the level of efficiency of the new firms. The increasing of the inefficiency of the firms is observed through the cohorts with more intensity starting from the year 2000, although in general the tendency of the efficiency is negative at global level. There have not been statistically significant differences between the incoming firms and the incumbent ones for both specialized and non-specialized sectors. Finally, notable intersectoral and intrasectoral differences of efficiency exist among Autonomous Communities (i.e. regions).