Assessing international diversification of West German corporations

While product diversity has primarily attracted strategic management scholars, this paper examines the performance of corporate international diversification from a market point of view. The results indicate that in a highly industrialized, but relatively small, West German market, companies going abroad create shareholder wealth.     

Some evidence on the gains from international diversification for Canadian investors

It is easily demonstrated ex post that international portfolio diversification results in increased returns and reduced risk. However, to determine the value of international diversification as an effective portfolio management strategy, it is necessary to form portfolios based on information available at the time of their composition, and then evaluate the performance of the portfolio in the following months. This is the main focus of our study, which adds several innovations to past research. First, we use daily rates of return on 23 national indices to evaluate the value of international diversification for a Canadian investor. Second, we evaluate the predictive value of the historical variance-covariance matrix vis-à-vis alternative models. Third, we use the Bayes-Stein correction to reduce errors in the historical return vector. Finally, we use a quadratic programming model in order to introduce the effects of constraints on the optimisation process. The results, obtained over the 1986–1989 period, are not in favour of international diversification. Returns on diversified portfolios were often lower than returns on the low-risk Canada market during the low-performance portfolio test periods. In other cases, higher returns on diversified portfolios could not be justified by their higher volatility. It is possible that these results may be partially due to the effects of the market crash in October 1987. Nevertheless, our study brings up many directions for future research. Is international diversification in fact profitable? Is portfolio optimisation appropriate in an international context? Finally, what is the best way to estimate the expected return vector in various markets?     

Product diversification in international joint ventures: performance implications in an emerging market

This study extends product diversification research to a new organizational form (IJV) and a new environmental context (emerging market). It explores the extent to which product relatedness with both foreign and local parents affects IJV performance as perceived by venture managers. After controlling for relevant variables, analysis of the data containing 134 IJVs in China validates our major premise: the relatedness of an IJV's products with that of its foreign and local parents is positively associated with its performance. An IJV maintaining bilateral related diversification (i.e., with both parents) performs better than a venture maintaining a unilateral related linkage (i.e., with one parent), which in turn outperforms an IJV which is unrelated to either parent. When resource complementarity or goal congruity between parents is higher, there is a stronger positive relationship between product relatedness and IJV performance. When structural opportunities are fewer or institutional deterrence is higher, there is a weaker positive relationship between product relatedness and IJV performance. Copyright © 2002 John Wiley & Sons, Ltd.     

The role of family management and family ownership in diversification: The case of family business groups

This study undertook a panel data analysis of the top 100 family business groups in Taiwan between the years 1988 and 2002 to investigate the role of family management and family ownership structures in diversification using an agency theory approach. The results show that, in the institutional context under study, family management and family ownership play key roles in diversification decisions in family business groups. Specifically, the likelihood of diversification declines as a controlling family assigns more family members to an affiliate firm’s key leadership positions. In contrast, the level of diversification increases as the degree of pyramidal ownership structure increases. The research findings presented in this study (1) clarify the roles that family management and the pyramidal ownership structure play in the diversification decisions of family business groups and (2) provide insights into family business groups’ growth.     

Power plays: Regulation,diversification, and backward integration in the electric utility industry

This paper explores how regulatory oversight influences strategic management. Predictions of the extent to which a firm diversifies and integrates upstream based on transaction-cost economics are developed and then tested among 49 American electric utilities from 1974 through 1986, a period that witnessed increasingly hostile regulatory relations. The results confirm the influence of regulation on both diversification and backward integration, supporting the transaction-cost view of these phenomena. The implications of these findings for the study of interorganizational relations, the concept of implicit contracting as a governance mechanism, and the pursuit of longitudinal theory-building are discussed.     

Neglected elements in vertical integration analysis: The case of retail price preticketing

The “conventional wisdom” with respect to the advantages to be gained through vertical integration are highly overrated. That associated with increased efficiency tops the list. Also, those advocating vertical integration have tended to ignore the preticketing phenomenon. In these cases the best that can be said is that there may exist a neutral effect. On the other hand, empirical analysis shows that, at the worost, negative effects may prevail.     

Antecedents to supplier integration in China: A partial least squares analysis

The aim of this paper is to identify antecedents to supplier integration in China. A deductive approach was deployed by building on a qualitative pre-study and various strands of SCM literature. All in all, 14 hypotheses were derived and subsequently tested by drawing on an empirical sample collected from 88 manufacturing firms operating in China. The data was then analyzed using partial least squares (PLS) analysis. The results indicated that supplier integration was positively influenced by collaborative supplier capabilities, continuous supplier development, and supplier quality mindset. These in turn proved to be sequentially influenced by supplier top management support, buyer-side leadership effectiveness and internal support.     

The buying network in international project business: A comparative case study of development projects

While previous research has found project buying to be distinct from other buying situations, in that it typically involves a multi-organizational network, to date there has been very little empirical research on this phenomenon. Our aim in this paper is therefore to investigate the structure and decision-making processes of the project buying network during the project cycle and its interactions with project sellers. We first develop a preliminary conceptual framework for analyzing the project buying network, which is then applied to a comparative case study of three development projects. The findings from the case study allow us to propose a revised conceptual framework for analyzing the dynamics of the project buying network during the project cycle, as well as interaction with sellers. Our findings also contribute an understanding of development projects, in particular the role of financiers.     

The impact of diversification strategy on risk-return performance

This study examines the impact of diversification strategy on risk and return in diversified firms. Following an assessment of previous research on strategic risk, relationships between risk, return, and diversification strategy are hypothesized. Regression analysis shows that differences in risk-return performance among diversified firms are more closely associated with structural factors associated with markets and businesses than with the particular diversification strategy chosen. Returns also influence the choice of diversification strategles which, in turn, do not get rewarded with higher profits. A curvilinear risk-return relationship is also observed which is consistent with previous theoretical suggestions. Implications for the strategic management of risk are then drawn.     

Technological and non-technological innovations,performance and propensity to innovate across industries: The case of an emerging economy

Innovation in a firm may be non-technological, such as organizational and marketing innovation, and technological, such as product and process innovation. The aim of this article is to explore how different types of innovation affect the innovation development of the firm across industries. We chose Chile as an emerging market context. Our results show that only product innovations affect significantly innovation performance across industries. However, different types of propensities to innovate are affected differently by technological and non-technological innovations. We discuss implications for managers and policy makers in emerging economies, in which data tends to be scarce to develop new policy models and increase the effect of non-technological innovation on innovative performance.     

National grain policies: The international dimension

Government intervention in the pricing and marketing of grains has led to increased use of restrictive trade practices to preserve domestic price levels and ensure orderly marketing of domestically produced and imported grain. The author examines this relationship between domestic agricultural and trade policies of a selected group of grain importing and exporting countries. The article suggests that, because of the strong link between domestic and trade policies, it will be difficult to reduce trade restrictions in international grain markets in future trade negotiations.     

Engineering consultants' perceptions of corporate branding: A case study of an international engineering consultancy

The corporate branding literature on B2B markets has developed fairly rapidly over the past decade. However, empirical support on employees' perception of corporate branding is very limited, particularly with respect to employees who fall outside the marketing/branding function within their organizations. This paper explores engineering consultants' views - as an under-researched context - on the implications of corporate branding. Findings reveal engineers' views about the significance of personal brands, the implications of incorporation, the ways in which corporate branding is carried out in their organizations, and associations of technical proficiency with the corporate brand. From the findings, four hypotheses have been developed for future research.     

The determinants of merger waves: An international perspective

One of the most conspicuous features of mergers is that they come in waves that are correlated with increases in share prices and price/earnings ratios. We use a natural way to discriminate between pure stock market influences on firm decisions and other influences by examining merger patterns for both listed and unlisted firms. If “real” changes in the economy drive merger waves, as some neoclassical theories of mergers predict, both listed and unlisted firms should experience waves. We find significant differences between listed and unlisted firms as predicted by behavioral theories of merger waves.     

The orbit-spectrum resource: Market allocation of international property

The author presents a formulation of a market system for the allocation of orbital space to geosynchronous communications satellites. Although based on a simplified model of satellite communications systems, the market system retains sufficient flexibility to be applicable to the allocation problems of the next two decades. Ultimately, the usage rights put forward in this article may need to be modified to include explicitly additional aspects of the orbital-spectrum resource. This formulation, however, includes in the definition of the usage right most of the information actually used today in picking an orbital location for a satellite.     

Trade in data services : The international context

This article explores the importance of data services within the service sector, and particularly with regard to international trade in services. International economic agreements have traditionally only dealt with trade in manufactured products and ignored the services, which now make up the largest economic sector. Some international organizations, encouraged particularly by the USA, are beginning to confront the problem of defining an open international framework covering foreign direct investment and trade in services. The national interests of different countries are explored, in the light of their existing data resources and their desire to build them up or be able to access foreign databases.     

The role of functional conflict in international buyer-seller relationships: Implications for industrial exporters

In their attempt to compete successfully in foreign markets, exporting firms must comprehend the decision-making and attitude of their overseas customers. Yet, there is a noticeable lack of research dealing with the import behavior of the firm. Focusing on import distributor firms trading with export manufacturers of industrial products, this study investigates the role of functional conflict in importer-exporter relationships. Results indicate that functional conflict is related positively to exporter cultural sensitivity and asset specificity and negatively to exporter opportunism. More importantly, importers' future purchase intentions are associated negatively with opportunism and positively with asset specificity and functional conflict. Theoretical and managerial implications of the findings are discussed along with suggestions for future research.     

Changing dynamics of the overseas marketplace for TV programming: The rise of international co-production

This article examines the recent strategy adopted by the US television production industry in coping with the changing worldwide media environment. Developments in the USA include the commercial networks' declining audience share, the increasing penetration of cable TV, and spiralling production costs; abroad, the coming of age and increased sophistication of the televesion industry and the strengthening of programme import regulations are significant. Access to foreign markets is becoming critical to the financial equation of US producers and distributors of high-budget TV programmes. International co-production is the response to the new dynamics of world-wide television programming and a product of economic necessities.     

The political economy of satellite business

Satellite communications systems are the outcome of the fusion of big governments, high technology and big business, whose needs they meet. As a major growth sector they are becoming extremely important in economic terms. But satellite communications raise wider issues of the relationships between rich and poor countries and within rich countries. They will crucially influence the location of economic activity and the future prospects for countries in terms of access to information, decision making and income. The article discusses these questions and suggests how Europe might improve its position. It also argues that participation in public policy on satellite communications should be opened to a wider range of parties.     

Credit scoring for commercial loans: The case of Singapore

This paper develops a credit scoring model which incorporates financial ratios as inputs by applying the statistical technique of discriminant analysis. The objective is to identify and analyse the common financial characteristics which distinguish bad from good accounts. The sample is drawn from the loan portfolio of a major local bank in Singapore. The results indicate that there is a 95 per cent classification accuracy for the model presented.Dr Kwan Kuen Chor is Senior Lecturer at the School of Management, National University of Singapore. Ms Julia Tan is with Paribas South East Asia Ltd. Singapore.     

B2B and internal relationships and curative international marketing: A polish case study

This paper follows the call of Lusch and Vargo (2010) expressed in their influential paper for a new science of the market to transcend the various sub-disciplines of Marketing, including B2B Marketing. The paper applies and expands the multidisciplinary components of this new science in the transitional context of Poland. The authors suggest that this new science, in the context of Poland's transition, is best reflected in the innovative term ‘Curative International Marketing’. The authors conclude that still existing transitional gaps in Poland can be the result of neglecting the micro internal and meso B2B relationships. Macro factor development can be partially seen as a success story but also negatively affected B2B and internal relationships. The unconsidered concept of identity is regarded center stage to explain the relationship related phenomena. Based on the philosophy of Curative International Marketing, a future focus on B2B and internal relationships is regarded to be on the top of the agenda to improve value co-creation, and provide for a better health level of market systems as a whole.