Do Foreign Greenfields Outperform Foreign Acquisitions or Vice Versa? An Institutional Perspective

abstract Prior studies of the comparative performance of greenfields and acquisitions have advanced competing arguments, with some arguing that greenfields should outperform acquisitions because acquisitions are costlier to integrate, and others that acquisitions should outperform greenfields because greenfields suffer from a liability of newness. Moreover, while the costs of integration and the liability of newness are at their greatest during a subsidiary's first years, prior studies have tested their competing arguments on samples containing older subsidiaries. We extend these prior studies by (1) developing an institutional theory‐based framework that simultaneously considers the costs of integration and the liability of newness, (2) recognizing that both types of costs vary with the level of subsidiary integration, and (3) focusing on the stage of their life during which subsidiaries predominantly incur these costs. To measure subsidiary performance, we ask managers of Dutch multinationals how their ex ante performance expectations compare to the subsidiary's ex post performance during its first two years. Analysing a sample of 191 foreign subsidiaries and controlling for entry mode self‐selection and other factors, we find that acquisitions outperform greenfields at low and intermediate levels of subsidiary integration, but that greenfields outperform acquisitions at higher integration levels.     

The Effects of Trade Liberalization between Heterogeneous Countries on Endogenous Mergers

This paper examines the effects of trade liberalization on merger behavior. We endogenize merger choice among owners in an oligopolistic industry in asymmetric countries to analyze the consequences of trade cost reductions on competitiveness and welfare. In this context, the non‐cooperative game supports asymmetric market structures. We also find that trade liberalization is not necessarily pro‐competitive in countries with the competitive advantage, even if trade costs are completely abolished. Moreover, the tariff‐jumping explanation of international mergers does not necessarily apply. The welfare analysis shows that merger behavior can significantly alter any gains from liberalization. Countries should consider enforcing competition in regional agreements. Specifically, to avoid a reduction in domestic welfare following trade‐liberalizing reductions in trade costs, a high‐cost country's optimal policy may be to ban international mergers.     

Volunteerism,compassion and religiosity as drivers of donations practices

• The topic of donations is one of high relevance and has been widely covered in contemporary marketing literature. It is a topic of interest to both theoreticians and practitioners alike, particularly due to its implicit links to fundraising activities and research. The reality of what makes an individual donor ultimately part with his money and give it away to a nonprofit organization is a hot contemporary topic. This study looks into the role of religiosity as a predictor of donations practices. Also volunteerism and compassion, two acts of pro‐social behaviour are analysed as predictors of donations practices. Using data collected from a survey of 612 charity donors in Portugal, the results show unequivocally that religiosity does influence donations practices, and so being a predictor of donations practices. Moreover, pro‐social behaviour is a predictor of donations practices when in the case of volunteerism, but not in the form of compassion.
• The findings are particularly useful for nonprofit organizations that want to attract and retain individual charitable donors and may also help to increase donation regularity, to obtain higher amounts, and donations both to religious and to secular organizations. Finally, it can be stated that the understanding of religiosity sheds light on knowledge about donations practices, and that this study also makes an important contribution to academia, as it is the first study conducted in Portugal that assesses the drivers of donations practices.

Copyright © 2015 John Wiley & Sons, Ltd.     

China’s direct investment in the European Union: challenges and policy responses

The dramatic rise of Chinese direct investment into the European Union (EU) has sparked a debate about the control that China may be seeking to take over European economies. Quite naturally, these concerns have led to repeated calls that action be taken to slow down, if not to halt entirely, this growing trend. The objective of the article is to shed light on this debate. Following a thorough analysis of Chinese direct investment in the EU, this article suggests that the challenges posed by these inflows are widely overblown. Despite this, the article concludes that it is necessary to have a systematic approach to regulating inbound foreign investment (including from China) in the EU. Such an approach may help guard against the risk of a protectionist drift inside the EU, as well as the possibility that some investors may one day pose a threat to national security. This article concludes that although the current fragmented regulatory approach is unsatisfactory, because of the difficulties associated with a unified EU-wide review process, the most realistic option is to promote a more systematic and coordinated use of existing mechanisms such as competition policy. Also, pushing for the negotiation of a China–EU BIT is certainly a promising avenue to enhance the EU’s bargaining leverage based on the principle of positive reciprocity.     

Climate Change,Heterogeneities, and Stability of International Fiscal Harmonization

This paper analyzes the instability introduced into multilateral agreements by two types of heterogeneity: heterogeneity of countries (size and number of producing members) and heterogeneity of lobbies (asymmetric influence at the national versus the international level). The work extends theoretical prospective analyses on environmental taxation, as illustrated by the harmonization of fuel taxes. We show that the acceptability of the tax set at the multilateral level depends on the type of coalitions that participate in the multilateral negotiation (size and number of producing countries) and the asymmetry in the local (state-level) power of lobbies during negotiations.     

Service quality,scale economies and ownership: an econometric analysis of water supply costs

Issues related to service quality are crucial for water utility management and regulation. Omitting these aspects, especially when they are treated as exogenous, can lead to large biases in estimating cost functions as well as to misleading information concerning technology. In this article, we integrate the output multi-dimension in the cost function, considering delivered water volume and service quality as being endogenous. Network-related scale measures and private versus public ownership are investigated with the objective of evaluating how endogenous quality may affect their impact on costs. A translog cost model is estimated from a dataset of US water utilities. It is shown that including the quality level of the delivered services has a significant impact on scale economies and ownership effects. Significant economies of scope confirm the existence of trade-offs between water production and service quality.     

THE REVOLUTION WITHIN: ICT AND THE SHIFTING KNOWLEDGE BASE OF THE WORLD'S LARGEST COMPANIES

This empirical article analyses the importance of information and communications technologies (ICT) in the technological diversification trend among the world's largest manufacturing firms during the 1980s and 1990s. The objective of the research is twofold: first, to emphasise the emerging differences among technologies when companies from different industries patent outside their traditional technological capabilities; secondly, to investigate whether the tendency among large companies from all industries to patent in ICT is distinctive when compared with the tendency to patent in other technologies. We find that technological diversification in large companies has clearly occurred in ICTs. Non-ICT specialist industries increasingly develop, rather than just utilise, the cluster of ICT-related technologies. We conclude that the development of corporate capabilities in the key technologies of the emerging ICT paradigm is more widespread than previously emphasised in the literature. One implication of this observation is that technological diversification and the information revolution may be related phenomena.     

To challenge the world view or to flow with it? Teaching sustainable development in business schools

This paper explores the fundamental question of what ‘responsibility’ means to different sets of world views adopted implicitly by business students. The exploration adopts the stakeholder theory and three subsets of the Friedman mentality to explain how individuals may value sustainability initiatives. Subsequently, it explores whether it is better to flow with the dominant economic‐driven world view as prescribed by the business school or to challenge it in order to cultivate business students with sustainability‐driven values. The conclusion highlights implications for business and management education, as well as the role of entrepreneurship to promote sustainability values.