decentralized and concentrated investments in china and the performance of taiwanese listed electronic companies abstractever since china surpassed taiwan to become the largest exporter of electronic products dependence between the two sides has deepened which prompts taiwanese companies to go public in china this study conducted the data envelopment analysis dea and regression analysis to analyse the impacts of the depth and breadth of investments in china on the performance of taiwanese listed electronic companies the empirical results show that the breath of the investments in china has a positive correlation with the performance of taiwanese companies while the depth of investments in china has a negative and significant effect on the performances due to the companies lack of know how which leads to a high learning cost in summary companies should strategize their decentralized and concentrated investments in china

managing currency pegs the combination of a fixed exchange rate and downward nominal wage rigidity creates a real rigidity in turn this real rigidity makes the economy prone to involuntary unemployment during external crises this paper presents a graphical analysis of alternative policy strategies aimed at mitigating this source of inefficiency first and second best monetary and fiscal solutions are analyzed second best solutions are prudential whereas first best solutions are not

three lenses on the multinational enterprise politics corruption and corporate social responsibility scholars who analyze multinational enterprises mnes recognize the complex relationship between international business ib and society however compared with other ib topics research on politics corruption and corporate social responsibility three lenses on the mne remains somewhat embryonic with unresolved issues regarding frameworks measurement methods and theory this presents unique opportunities for integration and extension of disciplinary perspectives which we explore in this article we provide an introduction to potential linkages across these three lenses an agenda for additional theoretical and empirical research and a review of the papers in the jibs focused issue

nonverifiability noncontractibility and ownership determination models in foreign direct investment with an application to foreign operations in japan abstract firms intangible assets are important inputs for their foreign operations inputs of intangible assets and the resulting output are often not contractible in that neither precise use of such inputs nor potential products which can be produced by taking advantage of such inputs can be completely delineated in a contract where such incomplete contracts prevail control of residual rights becomes essential for protecting firms intangible assets ownership is often used to control residual rights in international operations in this paper we present a few interrelated models of ownership determination for firms international operations we show that a firm s ownership share in its foreign operation reflects the importance of the firm s intangible assets used in the operation and the resulting bargaining power relative to its local partners we test our theoretical implications using data on foreign firms manufacturing operations located in japan our empirical results are consistent with theoretical predictions

excessive volatility in capital flows a pigouvian taxation approach this paper analyzes prudential controls on capital flows to emerging markets from the perspective of a pigouvian tax that addresses externalities associated with the deleveraging cycle it presents a model in which restricting capital inflows during boom times reduces the potential outflows during busts this mitigates the feedback effects of deleveraging episodes when tightening financial constraints on borrowers and collapsing prices for collateral assets have mutually reinforcing effects in our model capital controls reduce macroeconomic volatility and increase standard measures of consumer welfare

the role of key stakeholders in the international joint venture negotiations case studies from eastern europe recent literature has suggested that a key stakeholder may be able to shift the balance of bargaining power during a joint venture negotiation and thus change the outcome of the process this paper explores the role of central and eastern european transitional governments as key stakeholders and how they influence international joint venture negotiations this role is described and analyzed by examining eight dyads of western european and central eastern european enterprises that have recently negotiated agreements the findings suggest that transitional governments as key stakeholders intervene at different stages of the negotiation process have both direct and indirect influences on the process and that they can change the balance of power in the negotiations sometimes to the detriment of their own state owned enterprise

multinational parent companies influence over human resource decisions of affiliates u s firms in mexico this study provides empirical evidence for the relationship between the degree of influence u s parent companies have over the human resource decisions of their mexican affiliates and the affiliates resource dependencies on the parent company both wholly owned and joint venture affiliates are examined resource dependence was the factor most closely related to parent influence over affiliate human resource decisions the importance of an affiliate to a parent company the nationality of affiliate managers and the type of ownership arrangements were also found to affect parent influence but to lesser extents than resource dependencies

legitimacy and multi level institutional environments implications for foreign subsidiary ownership structure in this study we examine from an institutional perspective the legitimacy rationale behind the choice of subsidiary ownership structure among multinational corporations mncs we suggest that when under a strong pressure to conform at the host country and local industry levels of their institutional environment mncs are likely to take a lower ownership stake in exchange for external legitimacy in the host country or local industry that their foreign subsidiaries are entering we also suggest that mncs are likely to take a higher ownership stake in response to strong internal pressure to sustain their internal legitimacy at the corporate level of their institutional environment we also propose that mncs are more likely to exchange ownership for legitimacy in local industries than in host countries and in local markets with a high level of political instability than in those with a low level of political instability these propositions are generally supported by our analysis of 4451 subsidiaries established by 898 japanese mncs that operated in 39 countries across 52 industries two digit sic between 1988 and 1999

mne strategic intervention in violent conflict variations based on conflict characteristics since the end of the cold war there has been a substantial increase in the number of intrastate conflicts around the world during the last two decades there have been more than 125 violent conflicts resulting in 7 million deaths smith 2003 given the prevalence of these conflicts the inability of some governments to resolve them and the reluctance of multilateral institutions to intervene multinational enterprises mnes engaged in international ventures may find themselves in situations where they must respond to violent conflict to minimize investment risk and to promote stability in countries where they operate research on business response to violent conflict has tended to treat conflict as a homogeneous problem when in fact conflicts vary on several dimensions the purpose of this article is to extend the research with a focus on how the characteristics of the conflict affect mne intervention strategies drawing on insights from the research on conflict resolution and the risk that violent conflict poses to the firm we develop a framework and propositions that provide guidance to mnes confronting violent conflict with respect to existing projects or facilities

bargaining power ownership and profitability of transnational corporations in developing countries as the bargaining power of the transnational corporations tncs in the sample increased relative to the bargaining power of the host country and as the desire of the tncs for a high level of equity ownership increased the percent equity ownership of the tncs in their subsidiaries increased the relationship between percent equity ownership and subsidiary success from the tncs viewpoint however was j shaped high and low levels of equity ownership were associated with high levels of success control of critical operational variables by the tnc was directly related to success

performance of transnational corporations in less developed countries this study analyzes the determinants of the performance of a sample of 153 tncs in 6 light manufacturing industries in the 5 asean countries firm profitability increased as the firm s market share advertising and r d intensity increased and as the market shares of the 2 largest firms in the industry and tariffs increased profitability decreased as the market share of the third largest firm in the industry increased as import penetration increased as the growth in the firm s sales increased and as the number of home countries of the tncs in the industry increased

from hybrids to hierarchies shareholder wealth effects of joint venture partner buyouts this study examines the parent firm performance implications of joint venture jv partner buyouts which involve the conversion of a hybrid governance structure to an internal unit within the firm s hierarchy transaction cost theory as developed and applied in the international literature and market entry research is extended to the post entry investment setting to isolate sources of value creation or dissipation from the governance changes effected by jv partner buyouts the evidence complements recent research on jv longevity and its determinants copyright 2001 john wiley sons ltd

prior conditions and early international commitment the mediating role of domestic mindset our study investigates why some firms engage in low international commitments such as exports in the early phases of internationalization whereas others leapfrog the internationalization process and start with high international commitments in the form of foreign direct investment fdi process models of internationalization propose that firms start with low commitment activities and gradually increase their commitments to international markets however recent empirical evidence has shown that many firms make high international commitments from the start our findings suggest that domestic resources and competitive action propensity affect early international commitments indirectly through domestic mindsets a domestic mindset refers to the knowledge structures of the top management team prior to starting international activities based on their managerial experience and learning in domestic markets our results suggest that knowledge and learning gained in domestic markets through diverse resource and competitive activities may be crucial in early international commitments

the choice between joint venture and wholly owned subsidiary an institutional perspective the study of foreign entry mode choice has been based almost exclusively on transaction cost theory this theory focuses mainly on the impacts of firm and industry specific factors on the choice of entry mode taking the effects of country specific contextual factors as constant or less important in contrast the institutional perspective emphasizes the importance of the influence of both institutional forces embedded in national environments and decision makers cognitive constraints on the founding conditions of new ventures still this theoretical perspective has yet to provide insights into how institutional factors influence the choice of foreign entry mode the primary goal of the present study is to provide a unifying theoretical framework to examine this relationship we synthesize transaction cost and institutional perspectives to analyze a sample of 364 japanese overseas subsidiaries our results support the notion that institutional theory provides incremental explanatory power of foreign entry mode choice in addition to transaction cost theory in particular we found that multinational enterprises tend to conform to the regulative settings of the host country environment the normative pressures imposed by the local people and the cognitive mindsets as bounded by counterparts and multinational enterprises own entry patterns when making foreign entry mode choices

use of minority and 50 50 joint ventures by united states multinationals during the 1970s the interaction of host country policies corporate strategies this article examines geographical sectoral and corporate trends in the use of minority and 50 50 joint ventures by u s multinational manufacturing and mining firms in less developed countries ldcs during the 1970s it is based primarily on data found in the harvard multinational enterprise data base as updated through the mid 1970s and supplemented with corporate performance data for the 1975 1980 period from a new international competitive analysis ica database developed with support from the general electric foundation

choice of foreign market entry mode impact of ownership location and internalization factors firms interested in servicing foreign markets face a difficult decision with regards to the choice of an entry mode the options available to a firm include exporting licensing joint venture and sole venture several factors that determine the choice of a specific foreign market entry mode have been identified in previous literature these factors can be classified into three categories ownership advantages of a firm location advantages of a market and internalization advantages of integrating transactions this study examines the independent and joint influences of these factors on the choice of an entry mode multinomial logistic regression model is employed to test the hypothesized effects

credible enticements can host governments tailor multinational firms organizations to suit national objectives abstract this article discusses the impact of host government policy inconsistency on multinational corporations relationships with local suppliers that benefit from public funding empirical findings suggest that such relationships suffer from transactions cost disadvantages due to concerns that unexpected losses of funding may cause the suppliers to demand new contracts the findings reflect statistical tests on a structural equation latent variable model using data from a survey of 111 affiliates of mncs operating in 36 countries

partner contributions as predictors of equity share in international joint ventures the type of expertise that a company contributes to a joint venture may affect the amount of equity that it owns this research observes the ownership patterns associated with four common combinations of partner expertise in international joint ventures the results rank company assets with respect to the contributor s ability to negotiate majority ownership in the original joint venture contract and that company s tendency to buy up equity from the partner later on

classifying exchange rate regimes deeds vs words abstract most of the empirical literature on exchange rate regimes uses the imf de jure classification based on the regime announced by the governments despite the recognized inconsistencies between reported and actual policies in many cases to address this problem we construct a de facto classification based on data on exchange rates and international reserves from all imf reporting countries over the period 1974 2000 which we believe provides a meaningful alternative for future empirical work on the topic the classification sheds new light on several stylized facts previously reported in the literature in particular we find that the de facto pegs have remained stable throughout the last decade although an increasing number of them shy away from an explicit commitment to a fixed regime hidden pegs we confirm the hollowing out hypothesis but show that it does not apply to countries with limited access to capital markets we also find that pure floats are associated with only relatively minor nominal exchange rate volatility and that the recent increase in the number of de jure floats goes hand in hand with an increase in the number of de facto dirty floats fear of floating

effective sterilized foreign exchange intervention evidence from a rule based policy abstract this paper investigates the effectiveness of sterilized foreign exchange interventions by exploiting a discontinuous policy rule used by the central bank of colombia we use a unique data set that comprises tick by tick intervention and order book data daily capital in and outflows and balance sheet information of financial institutions we apply regression discontinuity methods to identify the surprise component of rule based interventions and use this variation to measure how they affect exchange rates and capital flows our findings indicate that interventions had significant effects on the exchange rate albeit short lived 2 3 weeks moreover capital controls amplify the effect of intervention though some effect remains even in the presence of free capital flows a methodological contribution of the paper is to extend regression discontinuity designs to a time series environment and to show how these techniques can be used to identify and estimate local non linear impulse response functions a clearly defined policy rule and high frequency data are crucial in exploiting local variation around the policy cutoff

a dynamic theory of countervailing power in this article i develop a model of an infinitely repeated procurement auction with one buyer and several sellers the buyer can accumulate a backlog of unfilled orders which similar to a boom in demand forces the sellers to collude on a low price to prevent undercutting if the buyer s cost of shifiing its consumption over time is low enough then the extent of collusion is bounded away from the joint profit maximizing level even for discount factors approaching one the model is extended to allow for multiple buyers large buyers are shown to obtain lower prices from the sellers buyer mergers increase pro t for all buyers not just the merging pair at the expense of the sellers in contrast buyer growth through addition harms buyers that do not grow and benefits sellers

the effect of capital structure on a firm s liquidation decision abstract a firm s liquidation can impose costs on its customers workers and suppliers an agency relationship between these individuals and the firm exists in that the liquidation decision controlled by the firm as the agent affects other individuals the customers workers and suppliers as principals the analysis in this paper suggests that capital structure can control the incentive conflict problem of this relationship by serving as a pre positioning or bonding mechanism appropriate selection of capital structure assures that incentives are aligned so that the firm implements the ex ante value maximizing liquidation policy

extending the bargaining power model explaining bargaining outcomes among nations mnes and ngos participants in international bargaining include different types nation states mnes ngos and multilateral organizations and different numbers of these actors our theoretical contribution is to extend the bargaining power paradigm with a framework that models bargaining in this complex environment as a network the configuration of supports and constraints among all participating actors in the bargaining environment is captured in the structure of the network antecedents of an actor s bargaining influence in the network include the actor s basis of power network position bargaining outcome preferences and motivation to influence bargaining the network bargaining power nbp model uses network theory to build upon and integrate insights from previous literature in a way that allows us to simultaneously apply these different insights to explain bargaining outcomes these insights include effects of coalitions strategies of less powerful actors leveraging more powerful allies integration of international and domestic politics and applicability to mne related issues beyond fdi finally we illustrate nbp in a scenario of privatized utilities in the dominican republic in which the bargaining power outcome predicted by nbp differs from that of the canonical bargaining power perspective

the integration of subsidiary political activities in multinational corporations just as the competitive activities of mnc subsidiaries exhibit differentiation as well as integration so might mnc political activities this paper combines the literatures on international business government interactions and on multinational corporations with resource dependence theory as a foundation we develop and test hypotheses on factors that might influence the degree to which subsidiary political activities are integrated with affiliated organizations we find that subsidiary strategic integration and the economic integration of the host country significantly influence integration of subsidiary political activities

power in a theory of the firm transactions take place in the firm rather than in the market because the firm offers power to agents who make specific investments past literature emphasizes the allocation of ownership as the primary mechanism by which the firm does this within the contractibility assumptions of this literature we identify a potentially superior mechanism the regulation of access to critical resources access can be better than ownership because i the power agents get from access is more contingent on their making the right investment and ii ownership has adverse effects on the incentive to specialize the theory explains the importance of internal organization and third party ownership

joint venture formation of very large multinational firms large firms differ from smaller firms in many aspects in this research note we investigate the relationship between the size of firm and the characteristics of equity joint ventures ejvs empirically we found that very large firms are more likely to have a higher equity stake in their ejvs seek alignment with other foreign firms engage in global industries and invest in large scale ejvs than smaller firms they are also less affected by the risk conditions of the host country empirical testing is based on a sample of 1 298 foreign ejvs in the people s republic of china between 1981 and 1998 interesting differences also exist among firms that are based in the u s japan and europe

foreign direct investment and host country policies a rationale for using ownership restrictions abstract this paper examines host governments motivation for restricting ownership shares of multinational firms mnfs in foreign direct investment fdi projects an mnf with a productivity advantage is willing to invest in a host country the host government wants to capture the mnf s surplus yet cannot observe it due to the mnf s private information about its firm specific advantage in contrast a joint venture jv partner might observe this surplus depending on its ownership share the host government can alleviate its informational constraints by using ownership restrictions to force a jv this calls into question the wisdom of calls for liberalizing fdi flows by the wholesale elimination of domestic jv requirements we show that the optimal mechanism involves ownership restrictions that decrease as the size of the mnf s firm specific advantage increases

performance and survival of joint ventures with non conventional ownership structures the international joint venture jv literature has focused on two parent jvs formed between one foreign and one local firm yet other types of jvs exist this paper identifies four distinct forms of jvs based on the jv partners nationality and equity affiliation these are i jvs that are formed between affiliated home country based firms ii jvs that are formed between unaffiliated home country based firmsl iii jvs that are formed between home country based and local firms and iv jvs that are formed between home country and third country based firms our analysis of 737 japanese jvs in asia demonstrates that the conventionally assumed form of jv represented only 30 percent of the total further each of the four jv forms significantly differed in terms of incidence performance and survival likelihood

knowledge diffusion market segmentation and technological catch up the case of the telecommunication industry in china abstract this paper examines the growth of technological capability in the telecommunication industry in china we apply a modified version of lee and lim s lee k lim c 2001 the technological regimes catch up and leapfrogging findings from the korean industries research policy vol 30 model of technological learning and catching up using the three cases of the shanghai bell the cit led r d consortium and indigenous companies such as huawei we analyze how the catching up in the telecommunication industry occurred we find that the important factors in the catch up are the strategy of trading market for technology the knowledge diffusion from shanghai bell both to the r d consortium and to huawei and industrial promotion by the government as a condition for successful catch up the paper points out that the technological regime of the telephone switches is featured by a more predictable technological trajectory and a lower cumulativeness these conditions and strategies helped the chinese firms to achieve a stage skipping catch up namely by skipping the stage of analogue electronic switches to jump to digital electronic switches

do capital controls make gross equity flows to emerging markets less volatile the impact of capital controls on the magnitude of international capital flows has been a subject of much interest and research far fewer studies have examined if and how capital controls affect the volatility rather than the level of capital flows this paper investigates whether capital controls affect the volatility of gross equity inflows direct investment and portfolio investment we are interested in both the effects of controls on equity flows on the volatility of corresponding inflows own effects as well as the impact of controls of a certain type on another component of capital flows cross effects so as to ascertain whether there are any unintended consequences using a panel consisting of 37 emerging market economies over the period 1995 2011 we find a highly robust result that controls on fdi outflows appear to lower the volatility of fdi inflows

social knowledge as a control system a proposition and evidence from the japanese fdi behavior building upon the concept of clans this paper introduces the value of social knowledge as a control mechanism available for an mnc to manage its foreign subsidiaries social knowledge is defined as one s ability to understand and predict others general patterns of behavior the hypotheses are empirically tested with japanese fdi data into four host countries the united states singapore taiwan and korea the results offer broad support for the proposition that for mncs with social knowledge the need to resort to ownership for control purposes is reduced

control and performance in international joint ventures the authors examine the meaning of control in international joint ventures ijvs and the relationships of potential means of control in such organizations to the performance satisfaction of the foreign partner they propose a conceptual model that provides both a traditional ownership focused internalization perspective on those issues and an integrated approach combining a broader transaction cost interpretation of control with a resource input based bargaining power model a set of simultaneous structural equations with endogenous explanatory variables provides multiple possible paths from various resource and power inputs through different means of control to perceived performance satisfaction in such a model intermediate variables act both as dependent and independent variables thus the complex theoretical interactions of the variables are modeled more comprehensively and realistically than in single equation models to test the model and compare the theoretical relationships the authors used dat

capital controls in the 21st century abstract governments have rarely imposed or removed capital controls in response to short term fluctuations in output the terms of trade or financial stability considerations we show empirically that controls on the international flow of financial capital are highly durable often remaining in place for decades their duration is striking compared with related phenomena such as exchange rate regimes this represents a challenge to any proposed use of capital controls as an instrument of macroeconomic and macro prudential management since we have little experience in using capital controls at high or medium frequencies any new policy initiative mandating frequent shifts in controls will be based on theory rather than data driven experience

capital account liberalization as a signal the authors present a model in which a government s current capital control policy signals future policies controls on capital outflows evolve in response to news on technology conditional on government attitudes toward taxation of capital when there is uncertainty over governmental types a policy of liberal capital outflows sends a favorable signal that may trigger a capital inflow this prediction is consistent with the experience of several countries that have liberalized their capital accounts copyright 1997 by american economic association

testing the bargaining hypothesis in the manufacturing sector in developing countries the bargaining power model of hc mnc host country multinational corporation interaction conceives of economic nationalism in terms of rational self interest and assumes both inherent conflict and convergent objectives in extractive industries there is strong evidence that outcomes are a function of relative bargaining power and that as power shifts to developing hcs over time the bargain obsolesces a cross national study of the bargaining model using data from 563 subsidiaries of u s manufacturing firms in forty nine developing countries indicates that while the bargaining framework is an accurate model of mnc host country relationships manufacturing is not characterized by the inherent structurally based and secular obsolescence that is found in the natural resource industries shifts in bargaining power to hcs may take place when technology is mature and global integration limited in industries characterized by changing technologies and the spread of global integration the bargain will obsolesce very slowly and the relative power of mncs may even increase over time

ownership patterns of u s joint ventures abroad and the liberalization of foreign government regulations in the 1980s evidence from the benchmark surveys data from the benchmark surveys of the commerce department show the beginning of a global liberalization in government restrictions on foreign equity in the 1980s this was manifested in a small but unmistakable across the board reduction in the share of 50 50 and minority affiliates out of all u s affiliates in a country across countries there remains a huge variation in this proportion and the second part of the paper seeks to statistically explain this variation in a cross sectional regression analysis

bargaining power of multinationals and host governments one of the outcomes of negotiation between multinationals and host governments in developing countries the extent of foreign ownership of subsidiaries is influenced by the bargaining power of the two parties foreign ownership measured in various ways appears to be affected by the level of technology of the multinational the degree to which a multinational attempts to differentiate its products the extent to which a subsidiary s output is exported to other parts of the multinational the diversity of products offered by the multinational and the extent of competition by other multinationals the relationship between some of these variables and ownership is not a simple one one variable that others have mentioned as probably affecting bargaining power size of the investment in question appears not to play a significant role in government policies toward ownership but many large projects tend to be located in countries that have lenient ownership policies

the effect of asset and ownership structure on political risk some evidence from mitterrand s election in france abstract previous research suggests that political risk varies considerably from firm to firm yet few empirical tests of the cross sectional variation in political risk exist french assets were massively revalued the day after mitterrand was elected in 1981 providing a unique opportunity to test for the effect of firm specific factors on political risk although foreign ownership tends to increase political risk other factors can reduce it a simple model of political behavior is presented in which politicians value among other things economic growth a foreign firm with significant future growth options is likely to experience less political risk than other foreign firms and under certain circumstances less risk than even other domestic firms tests of these hypotheses are conducted using data from the french and u s capital markets the results are generally consistent with the hypotheses

optimal capital structure bargaining and the supplier market structure abstract this paper studies the relationship between firm leverage and supplier market structure we find that firm leverage decreases with the degree of competition between suppliers specifically leverage decreases with the elasticity of substitution between suppliers leverage also decreases with the number of suppliers when the elasticity of substitution is high and increases with the number of suppliers when the elasticity is low we also provide empirical evidence that is consistent with the model predictions

government intervention in the venezuelan petroleum industry an empirical investigation of political risk two important aspects of political risk analysis that have not received much attention in the literature are a the reasons why multinational firms experience different types of intervention and b the timing of intervention in order to address these issues this research develops a conceptual model of political risk based on the premise that host government intervention is related to specific objectives of the government vis a vis multinational firms information reflecting the attainment of objectives motivates the government to intervene in a given manner the application of this model to the case of the venezuelan petroleum industry from years 1947 to 1976 provides some support for this model and gives insight into the timing of specific types of intervention

government intervention in less developed countries the experience of multinational companies it is a fact of international business that governments intervene in the operations of foreign direct investors these government actions create a high level of uncertainty in international planning and are very costly to the foreign investor it appears however that not all firms experience the same degree of intervention within almost all nations the government appears to intervene in some foreign companies more than in others at one extreme some firms are forced out of the nation while at the other extreme firms tend to grow and prosper the purpose of this paper is first to explain these different experiences of foreign firms and then to address the question how can foreign firms reduce the amount of intervention they experience the conclusions are based on the intervention histories of more than 100 firms

structuring international cooperative ventures we examine the effect of bargaining power and informational asymmetry on the design of international cooperative ventures in the presence of restrictions on equity participation and investment when the bargaining advantage rests with the multinational equity participation restrictions can increase the profits to domestic firms and encourage sub optimal investment policies overinvestment occurs when the multinational s bargaining advantage is reinforced by an informational advantage while underinvestment occurs when the domestic firm possesses the informational advantage in contrast when the bargaining advantage rests with the domestic firm equity participation restrictions do not affect investment levels

the influence of firm s size and international experience on the ownership structure of italian fdi in manufacturing the literature on foreign direct investment fdi has analysed the entry mode choice by multinational enterprises mnes from several theoretical viewpoints nevertheless previous studies have mainly focused on the behaviour of large and established mnes while little attention has been given to small and medium sized firms the paper aims at providing further empirical evidence on the role of firm size and international experience in influencing the ownership structure of fdi the main hypothesis is that smaller firms characterised by financial and managerial con straints as well as firms lacking experience in managing foreign operations suffer from a condition of adverse asym metry in information costs compared to their competitors therefore they are forced to act prudently minimising risk and thus preferring a less control arrangement of foreign sub sidiaries a binomial logistic model is developed with reference to manufacturing foreign direct investments undertaken by italian firms in the period 1986 1993

the long path to the ibm mexico agreement an analysis of the microcomputer investment negotiations 1983 86 studies of negotiation have proliferated but few especially in international business have systematically detailed the complexity of negotiations in situ this paper describes and explains the widely publicized controversial talks between ibm and the mexican government that followed ibm s proposal to established a 100 owned personal computer assembly plant near guadalajara

firm ownership preferences and host government restrictions an integrated approach two approaches may explain how multinational enterprises mnes select ownership structures for subsidiaries the first argues that mnes prefer structures that minimize that transaction costs of doing business abroad the second argues that ownership structures are determined by negotiations with host governments whose outcomes depend on the bargaining power of the firm this paper presents a framework integrating these two approaches and uses statistical methods to separate their effects empirically

customer concentration and over investment this paper investigates the impact of customer concentration on a supplier firm s over investment behaviour based on a large sample analysis on the us market we find that a supplier firm with hig

what makes and what does not make a real option a study of equity shares in international joint ventures this paper examines the boundaries of real options logic with an application to joint ventures jvs we distinguish between forms of uncertainty that are resolved endogenously and those that are resolved exogenously and theorize that only exogenous uncertainty will have the impact predicted by real options theory on a foreign investor s choice of how large an equity share to take in a jv we theorize that macroeconomic and institutional variables generate exogenous uncertainty whereas by contrast cultural distance and choices pertaining to corporate scope and product or process development activities involve endogenous sources of uncertainty that investors can both assess and act upon without having to wait and see using a sample of 6472 sino foreign jvs we find support for our predictions we discuss and implement proper methods to test for the existence of null effects as is relevant to establish the boundaries of a theory such as real options theory we draw implications for research and practice on jvs specifically equity share decisions which deserve more attention and real options including suitable uses and desirable extensions of the concept

influences on foreign equity ownership level in joint ventures in china this study examines the determinants of foreign equity ownership in joint ventures in china drawing upon duning s ownership locational and internalization paradigm and the literature on bargaining power eleven variables that impact foreign ownership preferences and concessions are examined these variables are advertising intensity foreign capital input country risk of china ejv investment amount ejv contractual duration cultural distance competitive intensity local partner state ownership local partner alignment foreign partner alignment and ejv location the empirical findings are largely consistent with the hypotheses the empirical findings are largely consistent with the hypotheses further interesting differences were found among u s european and japanese firms with respect to the impact of these determinants

the state as strategist in international business research no matter what strategy managers choose cross national differences in states strategic capabilities and objectives affect multinational corporations capabilities to manage interdependent operations in this paper we develop four attribute dimensions along which states strategic economic capabilities vary we then apply these dimensions to show how they contribute to familiar international business models of managerial process mnc strategy and organizational structure and country competitiveness

the obsolescing bargaining model mnc host developing country relations revisited the traditional bargaining model of mnc host developing country relations has become obsolete today those relations are better understood as the result of a two tier multi party bargaining process tier 1 bargaining between the governments of host and home countries occurs bilaterally or through multilateral institutions it produces macro rules on fdi that affect micro negotiations in tier 2 per the traditional bargaining model the extent of fdi liberalization resulting from tier 1 bargaining varies predictably across home host country pairs and industries suggestions for testing the two tier bargaining model are also presented

enhancing the obsolescing bargain theory a longitudinal study of foreign ownership of u s and european multinationals this research attempts to enhance the obsolescing bargain theory for manufacturing companies by statistically testing the effects of nine explanatory variables on the static and dynamic manifestations of bargaining success with longitudinal firm level data in order to highlight those effects it develops a conceptual framework that provides a broader context in which the primary variables operate it demonstrates that the obsolescing bargain took effect in india over a fifteen year period following restrictive legislation unlike previous research this study measures the effect of benefits received by multinationals from the host government in exchange for equity dilution american companies are found to retain a smaller share of their foreign ownership over time than british and other european multinationals some explanatory variables that have previously been found to influence level of foreign ownership static bargaining success are found to be less important or have a different effect in explaining proportion of foreign ownership retained dynamic bargaining success

introduction to the symposium multinationals the janus face of globalization panning the globe its af liates andstrategic partnerships linking coun tries in complex webs of alliances themultinational enterprise mne is theembodiment of globalization and itsprincipal agent nation states have con tributed towards making the mne thekey agent of globalization through pro moting technological innovation reduc ing tariff and non tariff barriers and lib eralizing their domestic nancial sys tems multinationals have been theprime movers behind globalization tak ing advantage of the increased opennessof domestic economies to integrate theiractivities across national markets and so cieties given their mobility and visibility itis not surprising that mnes have becomea lightning rod for groups concernedabout the various costs of globalization social cultural political and perhapsmost importantly the economic costs although international business ib scholars and policymakers emphasizethe bene ts of globalization and cooper ative relations with mnes the publicand non governmental organizationshave ignored these views and focused onthe dark side of mne state relations with the growing backlash against glob alization and mnes more research onthe janus face of globalization is neededif the pro mne pro globalization viewsof most ib scholars are to prevail in pub lic policy debates this research symposium served as aninvitation to international businessscholars to further explore the janus faceof globalization through organizing thissymposium we have come to appreciatethat when scholars look at problemsidenti ed with globalization s dark side they also often contribute to our under standing of the bright side the potentialfor globalization to bring with it wide spread bene ts for all we submit that asscholars we can learn more when we tryto ferret out the causal relationships be tween globalization the mne the state

developed country mnes investing in developing economies progress and prospect this study reviews research from 1970 through 2016 on developed country multinational enterprises dmnes entering and competing in developing economies to identify the current state of knowledge of this research and push it further we review the literature using bibliometric and qualitative content analyses covering leading journals and books we articulate frontier issues that are understudied yet critical to both theorization and practice of dmnes in developing economies we discuss the findings and conclusions from prior research along five key areas 1 entering developing economies 2 organizing local activities 3 managing alliances and joint ventures 4 competing in dynamic environments and 5 dealing with institutions governments and society we offer prospective insights into future agenda that have important implications for mne strategies and decisions and propose frontier directions that encompass strategic localization reverse transfer and adaptation co evolution with local business ecosystems reorganizing and restructuring and strategic responses to institutional and market complexity

liberalizing foreign direct investment regimes the vestigial screen abstract governments throughout the developing world are widely viewed to be liberalizing their foreign investment regimes this paper reports on a study that assesses the progress governments have made in implementing new investment regimes by comparing changes in the policies of governments toward foreign investment with changes in the structures and processes they use to screen foreign investment the data suggest that the implementation of new investment regimes has been slowed by political compromises among units within governments the paper points to the critical importance of strong central administrations that can muster the will to push liberalization efforts and provides recommendations on how governments can implement effectively policies of investment liberalization

sustaining satisfactory joint venture relationships the role of conflict resolution strategy the paper presents a conceptual framework that links international joint venture context cultural similarity relative power and relationship age and partners conflict resolution strategies to satisfaction special attention is paid to the mediation effect of conflict resolution behavior on the linkage from context to satisfaction the framework is assessed empirically using a sample of u s and chinese joint venture managers in china

tools for managing financial stability risks from capital inflows abstract we examine whether macroprudential policies and capital controls can enhance financial stability in the face of the risks typically associated with large capital inflows we construct new indices of foreign currency fx related prudential measures domestic prudential measures and financial sector specific capital controls for 51 emerging market economies over the period 1995 2008 our results indicate that both capital controls and fx related prudential measures are associated with a lower proportion of fx lending in total domestic bank credit and with a lower proportion of portfolio debt in total external liabilities other prudential policies appear to help restrain the intensity of aggregate credit booms experience from the global financial crisis suggests that prudential and capital control policies in place during the boom enhanced economic resilience during the bust

balancing private and state ownership in emerging markets telecommunications infrastructure country industry and firm influences bargaining between host states and investors over the terms of investment in sensitive sectors of the economy generates political and economic tensions in this study we investigate the factors that contribute to the outcomes of those negotiations as measured by the private vs state owned share of newly consummated telecommunications infrastructure projects we find that private ownership is positively associated with overall economic development and investment liberalization in the host country and with greenfield vs divestiture and joint venture vs wholly owned projects private ownership is negatively associated with existing telecommunications infrastructure higher levels of state ownership of foreign investing firms and the technological sophistication of the projects our analysis also shows a curvilinear inverted u shaped relationship between investment policy hazards and private ownership this finding supports the insight from transaction cost economics that potential gains from internalization are greatest at intermediate levels of uncertainty

the entry mode choice of mnes an evolutionary approach abstract the literature on foreign direct investment fdi has recently analysed the nature of the firm s entry mode choice in a foreign market particularly the choice between a joint venture and a wholly owned subsidiary the paper aims at providing further empirical evidence on the influence of some key variables in explaining it the theoretical framework relates to the resource based view of the firm and to the more recent competence based theory it focuses on the concept of the firm as a collection of productive resources and assets built through internal learning processes in the form of evolutionary experimentation the inability of the firm to build internally all the needed knowledge and competencies forces it to acquire them outside influencing the growth strategy of the firm as resources and complementary assets are spread out the firm has to deal with constraints which become more crucial when the firm enters into unfamiliar markets and areas of activity in particular when deciding about the entry mode on foreign markets the firm has to face transaction costs concerning actors and potential partners and their opportunism and costs related to the need for acquiring information about new institutional environments and their working according to this view the resort to co operative solutions and joint ventures allows firms to reduce costs and uncertainty related to foreign markets and rises if technological opportunities tacit skills and competencies constitute an important source of competitive advantage for the firm an empirical analysis with reference to a representative sample of fdi undertaken by italian firms in mining and manufacturing industries over the period 1986 1993 has been developed in order to test the hypotheses

theoretical foundations of emerging economy business research in probing theoretically into central and eastern europe transactions resources and institutions we outlined the contributions of research in central and eastern europe cee to theoretical debates in business research in this retrospective we reflect upon the evolution of the field over the past decade with the fading impact of cee s distinct shared history we suggest that cee best be analyzed as emerging economies rather than as a distinct geographic entity emerging economy business research is converging on common themes and shared theoretical ideas while identifying critical variations that constrain generalizations among and beyond emerging economies this research thus highlights the need to develop a better understanding of the boundary conditions of scholarly theories of business knowledge over the past decade the institution based view has emerged from distinct intellectual traditions in institutional economics organizational theory and the analysis of business government bargaining research in these converging lines of theorizing places contextual variations at the center of explanations of business phenomena around the world we suggest that the institution based view is evolving toward a paradigm and offer suggestions on how to advance this research agenda further in particular by exploring how firms engage with different sets of potentially conflicting institutions at multiple levels and locations

structural stability and reconfiguration of international joint ventures previous research suggests that international joint ventures ijvs are inherently unstable and fragile this view has failed however to explain why many ijvs have an extended longevity and stability this paper draws on two contrasting perspectives from organization theory structural instability and structural inertia to trace both the destabilizing and stabilizing forces in ijvs and argues that a complete understanding of an ijv s dynamic evolution requires consideration of both forces

market valuation of joint ventures joint venture characteristics and wealth gains abstract along with rd that is the nature of relationship between partners the relatedness and the strategic implication of joint ventures to partners the extent of partners control over joint ventures and the corporate governance in parent firms the data set consists of two party equity joint ventures in the electronics industry that were launched between 1979 and 1988 the unit of analysis is the 174 u s firms out of 158 joint ventures of which 113 were cross border agreements and 45 were between u s firms the study applies the event study method to assess stockholders risk adjusted wealth gains and a cross sectional analysis based on a generalized least squares model to test the hypotheses contrary to popular belief our results show an overall favorable reaction to joint venturing in the stock market even though there is substantial variation according to contextual influences the findings show that stock market valuations reflect the economic potential of joint ventures and are affected by the degree and type of control shareholders and partners can exercise the first key finding in the study is that the valuation effect of joint ventures is multifaceted the market valuation of joint ventures depends on the relationship between partners the nature of partners contributions the extent of partners control over joint ventures and the corporate governance in parent firms our findings also show that partner size which has not been studied in prior studies is a critical variable affecting wealth gains from joint ventures our results certainly shed light on understanding the effect of size on corporate wealth gains from joint ventures the results provide conflicting support for most hypotheses depending on firm size implying that joint ventures have different strategic and managerial implications for the partners depending on size shareholders tend to perceive joint ventures as a risky entrepreneurial operation particularly for the smaller partners it is indeed difficult to protect the smaller partners firm specific know how from being appropriated by the other partners accordingly smaller firms role and degree of control in a joint venture substantially affect wealth gains from their joint venturing with larger corporations shareholders value majority equity sharing by smaller partners as an important governance mechanism to control resource flows and avoid opportunistic behaviors by the larger partners whereas this study extends the previous findings on positive wealth gains of joint ventures by examining contextual influences it also attempts to fill the void in the field of corporate entrepreneurship despite the growing interest in corporate entrepreneurship there has been little attempt to empirically examine its potential association with corporate financial performance in particular with market based performance measures or wealth gains financial theory posits that accounting based performance measures do not properly measure the value of managers entrepreneurial decisions rappaport 1986 argued that the true measure of the long run value of an investment decision is economic value for shareholders as measured by abnormal stock returns i e wealth gains our study is an extension of this fast emerging field of study on the relationship between corporate entrepreneurship and financial performance by focusing on corporate wealth gains from joint venturing with other firms in pursuit of entrepreneurial goals

political behavior social responsibility and perceived corruption a structuration perspective this study unites the three lenses political behavior corporate social responsibility and corruption and evaluates the way in which multinational enterprises mnes manage political and social forces in a foreign emerging market using the theory of structuration as the conceptual foundation we propose that an mne s propensity to cooperate with the host government is positively related to its philanthropic contribution and resource accommodation whereas its propensity to be assertive with the host government is positively associated with its emphasis on ethics and organizational credibility we argue that when perceived corruption in the business segment increases an mne s propensity to cooperate and be assertive with the government decreases its focus on ethics heightens and its philanthropic contribution diminishes as to the three way interactions when perceived corruption in the business segment increases mnes that focus more on ethics have a greater propensity to use arm s length bargaining to deal with the government whereas those focusing less on ethics have a greater propensity to use social connections to deal with the government our analysis of sample mnes in china generally supports these propositions