Russian Manufacturing Subsidiaries of Western Multinational Corporations: Support from Parents and Cooperation with Sister-Subsidiaries

This article presents the results of a survey of executives of Russian manufacturing subsidiaries of Western multinational corporations (MNCs) regarding their relationship with parents and sister-subsidiaries. Manufacturing subsidiaries are dependent on parents to finance development projects. Accordingly, the subsidiary receives intensive support from the parent for all stages of implementation of such projects. Further, the intensity of cooperation with sister-subsidiaries strongly coincides with the intensity of support from the parent. However, a high intensity of cooperation with sister-subsidiaries was observed for subsidiaries established before 2009. Finally, several practical implications for new entrants into the Russian manufacturing industry are presented.     

Einzelbesprechungen

Ohne Zusammenfassung     

Assessing the Performance of Real Estate Auctions

This article investigates the performance of real estate auctions relative to negotiated sales. It uses a repeat-sales methodology to control for unobserved differences in the quality of auction properties. Properties auctioned in Los Angeles during the 1980s boom sold at an estimated discount of 0%–9%, while sales in Dallas following the oil bust obtained discounts of 9%–21%. This evidence is consistent with the theoretical prediction that the auction discount increases in downturns when a seller trades-off a longer expected selling time in a search market against an immediate auction sale. The study finds no evidence of the declining price anomaly.     

The cul-de-sac of foreign industrial investments to Russia

Abstract

The aim of this article is to determine the rationale for the ‘irrational’ investment behaviour of multinational corporations (MNCs) in Russia. During the on-going recession in a number of major sectors, MNCs have undertaken only a very limited number of divestments and, instead, have commissioned a record number of new manufacturing facilities (by opening new plants and expanding the capacities of existing plants). To explain this phenomenon, we first provide an overview of existing theoretical and empirical studies on investments in difficult locations and divestments of foreign subsidiaries, and identify the major weaknesses of the prevailing approaches and underlying assumptions of such studies. Next, we present a detailed picture of both industrial investments and divestments in Russia from January 2015 to March 2017. Finally, we indicate how a combination of systemic and contingent factors (pressure from the host country’s government, subsidiaries’ orientation towards the host country’s markets, and the absence of potential local and international acquirers for existing Russian manufacturing facilities of Western MNCs) has created ‘cul-de-sac’ conditions for foreign-owned industrial assets in Russia.     

Technology, Families, and Privacy: Can We Know Too Much About Our Loved Ones?

Both an array of privacy advocates and a body of privacy policies have emerged to reduce threats to personal privacy posed by Big Government and Big Business. Technologies that threaten personal privacy when employed by large institutions are increasingly being used by family members to track one another, but without a comparable level of societal scrutiny and control. This paper examines four such technologies – internet tracking software, global positioning systems, miniature cameras, and genetic tests – to gauge their level of use and public acceptance and then to consider their impact on family relations, especially those between parent and child and between spouses. While these technologies are intended to promote the safety of family members, by disrupting personal privacy, they may also provoke a number of counterproductive responses that reduce safety. Moreover, the deployment of these technologies may inhibit the development of trust and trustworthiness within the family. Partly owing to a lack of understanding of how new technologies affect family relations, both formal and informal efforts to control these technologies have been slow to develop.     

Ownership structure and investment finance in transition economiesA survey of evidence from large firms in Hungary and Poland1

Using survey data on 157 large private Hungarian and Polish companies this paper investigates links between ownership structures and CEOs’ expectations with regard to sources of finance for investment. The Bayesian estimation is used to deal with the small sample restrictions, while classical methods provide robustness checks. We found a hump‐shaped relationship between ownership concentration and expectations of relying on public equity. The latter is most likely for firms where the largest investor owns between 25 percent and 49 percent of shares, just below the legal control threshold. More profitable firms rely on retained earnings for their investment finance, consistent with the ‘pecking order’ theory of financing. Finally, firms for which the largest shareholder is a domestic institutional investor are more likely to borrow from domestic banks.     

Trade in the Triad: how easy is the access to large markets?

Abstract. In this paper, we measure market access between the United States, the EU, and Japan (the Triad), using the effect of national borders on trade patterns. We investigate overall and industry‐level trends of bilateral trade openness and provide explanations for those using proxies for bilateral observed protection (tariffs and NTBs), home bias of consumers, product differentiation, and levels of FDI. The explanations related to actual protection, home bias and substitutability of goods put together explain a large part of the border effect between blocs of the Triad, although they do not explain the whole of the border effect puzzle. JEL classification: F12, F15