divestment of foreign production operations this study investigates some determinants fo the divestment of foreign manufacturing operations by norwegian companies to date very few studies have taken a closer look at what might influence whether foreign subsidiaries are divested or not although foreign direct investment in principle represent long term commitments to foreign manufacturing operations divestments are in fact quite common this study shows that more than half of a sample of foreig subsidiaries woned by norwegian companies in 1982 wee divested within a period of ten years the empirical findings indicate that foreign divestment is inversely related to economic growth in the host country and that the propensity to divest is significantly higher for subsidiaries that had been acquired than for greenfield establishments also related horizontal subsidiaries are less likely to be divested than unrelated non horizontal subsidiaries

efficiency growth and concentration an empirical analysis of hospital markets taking an evolutionary view of markets harold demsetz hypothesized that firms differ persistently in efficiency and that industry concentration results from growth of efficient firms at the expense of inefficient ones we test the hypothesis with high quality microdata from the us hospital industry an industry of keen policy and scientific interest we measure efficiency by firm in the early 1980s and relate it to subsequent growth of efficient firms to the persistence of profit differences and to changes in the concentration of markets initial hospital efficiency and subsequent growth and profitability are significantly and positively related also greater initial variation in hospital efficiency within local markets is positively related to subsequent growth in market concentration these findings support the logic of demsetz s evolutionary efficiency hypothesis though they cannot confirm the stronger idea that variation in firm efficiency is the dominant explanation for changes in concentration

investigating the cost performance of uk credit unions using radial and non radial efficiency measures abstract this paper examines the relative efficiency of uk credit unions radial and non radial measures of input cost efficiency plus associated scale efficiency measures are computed for a selection of input output specifications both measures highlighted that uk credit unions have considerable scope for efficiency gains it was mooted that the documented high levels of inefficiency may be indicative of the fact that credit unions based on clearly defined and non overlapping common bonds are not in competition with each other for market share credit unions were also highlighted as suffering from a considerable degree of scale inefficiency with the majority of scale inefficient credit unions subject to decreasing returns to scale the latter aspect highlights that the uk government s goal of larger credit unions must be accompanied by greater regulatory freedom if inefficiency is to be avoided one of the advantages of computing non radial measures is that an insight into potential over or under expenditure on specific inputs can be obtained through a comparison of the non radial measure of efficiency with the associated radial measure two interesting findings emerged the first that uk credit unions over spend on dividend payments and the second that they under spend on labour costs

the impact of joint venture status on the longevity of japanese stakes in u s manufacturing affiliates a number of well known studies report that between one third and two thirds of international joint ventures eventually break up while many generalizations explanations and prescriptions have been based on these statistics their meaning is unclear first all foreign affiliates are subject to normal business risk and to the risk that they will be divested by parents for strategic or financial reasons are these risks higher for joint ventures than for wholly owned subsidiaries second joint ventures may be shorter lived not because of their joint venture status but because affiliates which are joint ventured have other characteristics that make them more likely to exit to know whether joint ventures are shorter lived one must control for the other factors that affect the longevity of affiliates whether wholly owned or joint ventured third many joint ventures contracts contain clauses that allow partners to sell their stakes to one another at specific intervals because they make exit easier joint ventures should have shorter lives but these shorter lives should only be due to sell offs not to liquidations it is therefore important to see whether the supposedly higher termination rate of joint ventures stakes is due to a higher rate of selloffs or to a higher rate of liquidations in this paper we 1 compare the longevity of stakes in joint ventures versus those in wholly owned subsidiaries 2 while controlling for other factors that affect the longevity of such stakes and 3 while distinguishing between two types of exit those through sale and those through liquidation while past authors have addressed these three issues in piecemeal fashion we believe we are the first to address them simultaneously we analyze the factors that affect the longevity of 355 japanese stakes in u s manufacturing affiliates controlling for all the factors that affect exit rates we find that japanese parents are more likely to terminate their stakes in u s joint ventures than in wholly owned subsidiaries this higher termination rate of joint venture stakes is explained by a higher probability of selling them but not of liquidating them most of the other factors that have been found significant in explaining gross divestment of foreign affiliates do in fact only affect exits through sales but not exits through liquidations hence it is true that joint ventures have shorter lives but dangerous to interpret this finding as necessarily meaning that they are more likely to fail

unobserved heterogeneity in stochastic cost frontier models this paper applies a number of stochastic cost frontier models to a panel data set and compares their ability to distinguish unobserved heterogeneity from inefficiency variation among firms the main focus is on greene s 2005 panel data model that incorporates firm specific effects in a stochastic frontier framework in cases where the unobserved heterogeneity is correlated with explanatory variables while the random effects estimators can be biased the fixed effects model may overestimate inefficiency in line with mundlak a simple method is proposed to include such correlations in random effects specification the sample includes 36 swiss nursing homes operating from 1993 to 2001 the results suggest that the proposed specification can avoid the inconsistency problem while keeping the inefficiency estimates unaffected

foreign and domestic divestment and investment decisions like or unlike the managerial literature on foreign investment and divestment is much less developed than the economic literature on foreign direct investment theory nevertheless surveyed with the purpose of better understanding foreign divestment decisions the research to date reveals some noticeable differences between investment and divestment divisions whether foreign or domestic and even more substantial differences between foreign divestment and domestic divestment decisions additional research however is clearly in order

trends in family labour hired labour and contract work on french field crop farms the role of the common agricultural policy abstract this paper investigates french field crop farms use of various types of labour during the period 1990 2007 we explore the determinants of the three types of labour used on farm family labour hired labour and contract labour with a particular emphasis on the impact of common agricultural policy cap reforms and subsidies on the three labour types we estimate a system of three equations including a censored model using the french farm accountancy data network fadn database we find that hired labour and contract labour are substitutes as expected but that hired labour and family labour are complements this may reveal complementarities between management tasks which are specifically for the farm head and family labour and technical operations the only operations performed by hired labour in addition we find that in general crop area payments and single farm payments sfp have reduced farm labour while agri environmental payments less favoured area lfa payments and investment subsidies have increased it our results agree with most of the literature that coupled and decoupled area payments reduce labour use on farms

the pace of mnes sequential entries cumulative entry experience and the dynamic process this study examines the pace with which multinational enterprises undertake sequential entries in a foreign market we focus on learning effects from cumulative entry experience of different modes within a host market moreover we investigate the dynamic process of entry mode switch and how cumulative entry experience reduces the expansion constraint using a dataset of sequential entries by us firms in china during 1979 2002 we find that the impact of cumulative entry experience on the pace of sequential entries varies across different modes further firms with more cumulative entry experience can cope with the constraint of entry mode switch

foreign entry cultural barriers and learning this paper examines the longevity of foreign entries hypotheses are developed on the mode start ups vs acquisitions and ownership structure wholly owned vs joint ventures in relation to cultural distance the hypotheses are tested within a framework of organizational learning using data on 225 entries that 13 dutch firms carried out from 1966 onwards results show that the presence of cultural barriers punctuates an organization s learning cultural distance is a prominent factor in foreign entry whenever this involves another firm requiring the firm to engage in double layered acculturation we also identify locational paths of learning the longevity of acquisitions is positively influenced by prior entries of the firm in the same country similarly the longevity of foreign entries in which the firm has a majority stake improves whenever the expanding firm engaged in prior entries in the same country and in other countries in the same cultural block

firm size and efficiency in the german mechanical engineering industry research usually finds a positive size efficiency relationship but few studies focus on sectors dominated by small and medium sized firms smes this paper fills this gap by analyzing this relationship in the german mechanical engineering industry sector which is both successful and increasingly dominated by smes the analysis using a large and representative dataset finds that small and large firms are on average the most efficient ones while medium sized firms have on average the greatest inefficiencies thus the size efficiency relationship is u shaped rather than monotonically increasing additionally the analysis finds that companies with active owner s are significantly more efficient and that capital firms are less efficient than firms with personally liable owners being located in either east or west germany has no effect

liabilities of regional foreignness and the use of firm level versus country level data a response to dunning et al 2007 we are pleased that dunning et al have provided macro country level data demonstrating the increased internationalization of many nations over the past decade we also appreciate their findings lending support to our perspective on the regional nature of world business our work was based solely on micro firm level data both country level data and firm level data have methodological problems which we attempt to reconcile in this commentary we also address the broader conceptual issues of how to interpret country level vs firm level data

liability of country foreignness and liability of regional foreignness their effects on geographic diversification and firm performance the costs of inter and intra regional diversification have been widely discussed in the existing international business literature but the findings are mixed explanations for the mixed findings have important managerial implications because business managers have to estimate accurately the costs of doing business within and across regions before they make their internationalization decisions to explain the existing mixed findings this study differentiates between liabilities of foreignness at the country and regional levels and explores the joint effects of liability of country foreignness lcf and liability of regional foreignness lrf on the performance of internationalizing firms using data from 167 canadian firms we find that lcf may not necessarily be negatively correlated with intra regional diversification but lrf is positively correlated with inter regional diversification lcf moderates the relationship between lrf and inter regional diversification and also mediates the relationship between intra regional diversification and firm performance lrf mediates the relationship between inter regional diversification and firm performance missing one or more of these variables may result in different cost estimates identification of the relationships between these variables helps to improve the accuracy of estimating the costs of doing business aboard

cultural industries in international business research progress and prospect cultural industries systems of organizations that produce and distribute cultural goods with substantive symbolic aesthetic or artistic value represent an important exciting and complex context that receives growing scholarly attention as the first review of management research on cultural industries this paper aims to provide a systematic synthesis of current research summarizing distinctive characteristics of cultural industries and highlighting research gaps we also illustrate how the unique nature dynamics and evolution of cultural industries provide opportunities to broaden international business theories in four research themes i e internationalization strategy cross border innovation social inclusion in the global economy and emerging market research

economic distance and the survival of foreign direct investments taking a theoretical perspective contrasting resource exploitation with resource exploration we argue that foreign direct investments fdis hazard rates are lower in countries that are either m

the casino model of internationalization an alternative uppsala paradigm forty years after the publication of the original uppsala model we revisit the empirical observations that inspired its conceptual development the empirical evidence we suggest invites the formulation of an alternative and complementary model of the internationalization process of the firm one that we have named the casino model of internationalization the casino model uncovers a number of new research issues pertaining to internationalization and to the nature of strategic decision making under conditions of environmental uncertainty and partial ignorance

place space and geographical exposure foreign subsidiary survival in conflict zones this study focuses on the role of geography in foreign subsidiary survival in host countries afflicted by political conflict we argue that survival is a function of exposure to conflicts and depends on the characteristics of place the conflict zone and space geographic concentration and dispersion of other home country firms the roles of place and space are explored using street level analysis of geographic information systems data for 670 japanese multinational enterprises mne subsidiaries in 25 conflict afflicted host countries over 1987 2006 through dynamic modeling of conflict zones as stretchable and shrinkable places relative to subsidiary locations we develop a means of characterizing a foreign subsidiary s exposure to multiple threats in its geographic domain our results show that greater exposure to geographically defined threats in both a static and a dynamic sense reduces the likelihood of mne survival the findings indicate moreover that both concentration and dispersion with other firms affect survival however the effects depend on where the firm is spatially located whether the firm is in a conflict zone and with whom home country peers or sister subsidiaries

a two tiered earnings frontier estimation of employer and employee information in the labor market this pap er develops a two tiered frontier estimation procedure to decompose the residual of an earnings function into three components the first component can be interpreted as being purely random search theory is used to show that the other two components represent employee and employer ignorance of offer and reservation wages respectively relative employee and employer ignorance estimates are presented for various population strata copyright 1987 by mit press

explaining the effect of rapid internationalization on horizontal foreign divestment in the retail sector an extended penrosean perspective we adopt a penrosean perspective to study the effect of rapid international expansion on the subsequent divestment of international operations we draw on regional strategy theory and differentiate penrosean managerial resources by their geographical fungibility to argue that the effect of rapid international expansion on the divestment of international operations varies with the regional patterns of firms international expansion and international experience we test our hypotheses using two stage least squares 2sls estimation on data that capture the international expansion and divestment of retailers over the period 2003 2012

the impact of modes of entry and resource fit on modes of exit by multibusiness firms this study examines the choices of modes of entry and exit in the process of new business exploration we find that exit mode choices are determined by a different set of factors from those that are important for the entry mode decision and the exit decision per se our study indicates that when the resource profiles of a parent firm and the business unit are more dissimilar and there has been less development of firm specific idiosyncratic assets firms are more likely to sell businesses than dissolve them further the study reports a strong relationship between the mode of exit from a line of business sell off vs dissolution and the original mode of entry acquisition versus internal development copyright 1999 john wiley sons ltd

a perspective on regional and global strategies of multinational enterprises multinational enterprises mnes are the key drivers of globalization as they foster increased economic interdependence among national markets the ultimate test to assess whether these mnes are global themselves is their actual penetration level of markets across the globe especially in the broad triad markets of nafta the european union and asia yet data on the activities of the 500 largest mnes reveal that very few are successful globally for 320 of the 380 firms for which geographic sales data are available an average of 80 3 of total sales are in their home region of the triad this means that many of the world s largest firms are not global but regionally based in terms of breadth and depth of market coverage globalization in terms of a balanced geographic distribution of sales across the triad thus reflects a special and rather unusual outcome of doing international business ib the regional concentration of sales has important implications for various strands of mainstream ib research as well as for the broader managerial debate on the design of optimal strategies and governance structures for mnes journal of international business studies 2004 35 3 18 doi 10 1057 palgrave jibs 8400073

performance effects of added cultural distance in the path of international expansion the case of german multinational enterprises this paper contributes to the debate on the performance impact of added cultural distance in the multinational enterprise s mne s expansion path our research focuses on the ability of mnes to handle complexity associated with added cultural distance in international expansion and on the effect this may have on profitability we hypothesise that firms that make expansion moves involving a high level of added cultural distance per unit of time and those that expand in culturally distant countries in an irregular fashion that is with a higher variability will be less profitable we test these hypothesised relationships using detailed data on 2404 expansion moves undertaken by our panel of 91 german mnes whose expansion paths we tracked during periods ranging between 5 and 20 years

how does regional institutional complexity affect mne internationalization international business research is only beginning to develop theory and evidence highlighting the importance of supranational regional institutions to explain firm internationalization in this context we offer new theory and evidence regarding the effect of a region s institutional complexity on foreign direct investment decisions by multinational enterprises mnes we define a region s institutional complexity using two components regional institutional diversity and number of countries we explore the unique relationships of both components with mnes decisions to internationalize into countries within the region drawing on semiglobalization and regionalization research and institutional theory we posit an inverted u shaped relationship between a region s institutional diversity and mne internationalization extremely low or high regional institutional diversity has negative effects on internationalization but moderate diversity has a positive effect on internationalization larger numbers of countries within the region reduces mne internationalization in a linear fashion we find support for these predicted relationships in multilevel analyses of 698 japanese mnes operating in 49 countries within 9 regions regional institutional complexity is both a challenge and an opportunity for mnes seeking advantages through the aggregation and arbitrage of individual country factors

product line expansion and resource cannibalization abstract diversification research argues that new products are more successful when they leverage a firm s intangible resources which may support multiple activities without engendering rivalry for their use however numerous complementary resources may also be needed to exploit a firm s intangibles if these resources are in limited supply or if it takes time to acquire and assimilate additional resource capacity then new products may impose costs on existing products by cannibalizing the services of firm resources our analysis of product introductions within the pharmaceutical industry provides evidence of resource cannibalization and suggests that product market experience helps offset some of these costs

systematic departures from the frontier a framework for the analysis of firm inefficiency departures from a production or cost frontier may reflect the systematic effect of conditions that contribute to inefficiency to test whether some portion of frontier function departures can be systematically explained the frontier inefficiency error component is modeled as a function of various causal factors and a random component the functional form of the inefficiency error term model is chosen to assure strict one sidedness preliminary empirical results generated from electric utility data suggest the superiority of including both systematic and random components in the inefficiency error term

vertical integration and efficiency an application to the italian machine tool industry this paper analyzes the relationship between firm efficiency and vertical integration in the italian machine tool mt industry the link may really be the result of a two way causality the effect may run from productive efficiency to the type of vertical organization i e vertical integration or outsourcing as a self selection mechanism or an effect from the organizational mode to the firm s performance may also be at work this relationship is empirically investigated in a novel panel dataset comprising about 500 italian mt builders implementing two equations and instrumental variables for the two directions of causality the evidence clearly indicates the self selection mechanism of the most efficient firms in vertically integrated structures while an effect from the organizational mode to the firm s efficiency is not supported

rapid fdi expansion and firm performance today more firms are expanding rapidly into foreign markets to reach global scale quickly and to capture or nullify first mover advantages these trends run counter to the conventional theory of gradual internationalization which suggests that firms maximize the benefits of learning from prior experience thereby minimizing the hazard of failure we argue that this conventional wisdom does not consider the risk of being a perennial late mover in the face of increased global competition this study explores the circumstances under which rapid fdi expansion a strategy of undertaking fdi expansion at an accelerated speed can be a viable strategy using data on korean firm expansion we find that rapid fdi expansion enhances firm performance in industries where globalization pressures are high and when it is done by firms with superior internal resources and capabilities

learning to compete in a transition economy experience environment and performance does organizational learning as measured by experience in a host country affect international expansion performance if so does such a relationship between experience and performance hold over time how do the environmental forces in the host country affect such a relationship focusing on organizational learning by multinational enterprises mnes operating in a transition economy this study answers these three critical questions by exploring the relationships among experience environment and performance at the subsidiary level based on a recent survey of 108 mne subunits operating in china we find that the intensity and diversity of host country experience is an important predictor of subunit performance while the positive effect of the intensity of experience on performance diminishes over time the impact of the diversity of experience on performance remains unchanged moreover for mnes experiencing greater environmental dynamism complexity and hostility there is a stronger positive relationship between experience and performance

the production and consumption of the arts a view of cultural economics by most criteria the arts comprise a significant area of economic activity in 1990 american consumers spent 5 billion on admissions to theater opera galleries and other nonprofit arts events more than on admissions to spectator sports 4 1 billion on movie admissions and 17 6 billion on books because of difficulties in defining boundaries around the arts industry statistics on its contribution to gdp are problematical but available data suggest that the arts theater music opera dance visual arts crafts literature community and folk arts account for a little under one percent of the united states gdp and a little over one percent of the civilian labor force if the net is cast somewhat wider defining the cultural industries as including the arts motion pictures radio and television and printing and publishing an aggregate value of output can be measured for 1988 of about 130 billion or 2 5 percent of gdp national endowment for the arts 1992 likewise support for the arts and culture in the u s through government and voluntary contributions amounts to a significant annual commitment of funds combined federal state and local government expenditure on the arts and museums in 1987 amounted to about 0 8 billion and in 1990 6 4 percent of charitable giving was channeled to arts culture and the humanities yielding a total level of voluntary contributions in these areas of 7 9 billion in that year private markets in the arts too are of significant size looking at the international art trade for example we can note that the worldwide net sales of the two major art auction houses christie s and sotheby s amounted to 6 6 billion in 1989 90 1 yet despite the fact that production and consumption of art have been elements of human activity for longer than most of the phenomena that have en

technical efficiency in the italian performing arts companies this paper evaluates the determinants of firms technical efficiency in the italian performing arts pa sector by estimating a stochastic production frontier for an unbalanced panel of 107 firms over the period 2005 2012 the panel data setting allows us to control for both unobserved and observed heterogeneity of pa firms reaching several interesting and robust findings firstly it finds that the italian pa firms are scale inefficient as they generally operate in either an increasing or decreasing returns to scale landscape this result is reinforced by the fact that the smaller firms 10 49 employees are the most technically efficient firm size class secondly this research proves that the efficiency score is on average 66 demonstrating that pa firms output could be substantially increased without the use of new inputs thirdly it confirms that the quality matters and competences increase the efficiency in the sector finally the environmental factors especially the quality of institutions have a strong impact on technical efficiency of pa firms supporting that regional differences also exist in this sector

the eu s agenda 2000 reform for the agricultural sector environmental and economic effects in denmark abstract the agenda 2000 reform agreed on by the eu government leaders in the spring of 1999 implies considerable changes in eu agricultural policy the reform involves both reductions in price support and compensations in the form of hectare and animal support the agenda 2000 reform may have considerable environmental and economic effects and in this article we assess these effects within an integrated model system we calculate environmental effects changes in nitrogen loading in the terrestrial environment and the danish marine waters changes in oxygen concentrations in the inner danish marine waters and changes in emissions of the greenhouse gases methane and nitrous oxide as well as economic effects effects on private consumption gdp the balance of payments and employment the results indicate that the agenda 2000 reform has significant economic costs but almost no effects on the environment either positive or negative

ideals versus dollars donors charity managers and government grants this paper demonstrates how changes in untied lump sum government grants or income from unrestricted endowments will affect the behavior of charities operated by managers with strong philosophical or professional commitments an increase in such funds will reduce the charity s accountability to private donors and lower its fund raising activities the grant will not be spent entirely on raising the quantity of output instead it will permit the charity manager to reduce his or her dependence on the costly solicitation of donors who do not completely share the manager s preferences in order to understand nonprofit charities one must recognize both their diversity and the independent role of their managers in furthering this diversity we will miss much of their special character if we view them as mere conduits seeking faithfully to reify the wishes of their contributors in this paper i demonstrate how an increase or a fall in untied lump sum government grants or income from unrestricted endowments will affect the behavior of charities operated by managers with strong philosophical or professional commitments to some service mixes rather than others an increase in such funds will reduce the charity s accountability to private donors and lower its fund raising activities the grant will not be spent entirely on raising

revisiting international business theory a capabilities based theory of the mne an introduction to this issue of the journal of international business studies in which the author discusses a capabilities based theory of multinational enterprises mne is presented

the effect of national culture on the choice of entry mode characteristics of national cultures have frequently been claimed to influence the selection of entry modes this article investigates this claim by developing a theoretical argument for why culture should influence the choice of entry two hypotheses are derived which relate culture to entry mode choice one focusing on the cultural distance between countries the other on attitudes towards uncertainty avoidance using a multinomial logit model and controlling for other effects the hypotheses are tested by analysing data on 228 entries into the united states market by acquisition wholly owned greenfield and joint venture empirical support for the effect of national culture on entry choice is found

the economics of performing shakespeare reply the comment by edwin west addresses my 1984 benefit cost analysis and more specifically its conclusion that the subsidy received by the royal shakespeare company rsc is justified west maintains that a broader inquiry may reverse that judgment and he raises three main points for discussion deadweight loss pseudo demands and benefit distribution i shall consider these matters seriatim first however it should be recalled that the original analysis took a narrow stance deliberately and that footnote 14 conveyed the message because of difficulty in determining how much patronage went to aldwych and stratford activities alone rsc patronage obtained from all sources public and private was treated as if it applied only to those two centers but besides performing there the rsc over the financial years 1968 69 to 1977 78 worked the warehouse the other place theatregoround and other domestic tours overseas proscenia and television inter alia therefore assigning total patronage exclusively to the centers imparted a bias that favored the case against the subsidy nevertheless the investigation did omit deadweight loss prompted by west s remarks on the subject i resurrected the data to try to obtain a rough but reasonable estimate of aldwych and stratford patronage in the exercise patronage was distributed conceptually across all rsc activities on the premise that each activity shared the total in the same proportion that it shared total expenses no attempt was made to separate private gifts from public ones table 1 which presents the pertinent details indicates that nominal patronage going exclusively to the centers averaged 513 778 about 85 percent of the total with the mean of the retail price index amounting to 801 this figure becomes 641 421 in real terms benefit the increase in real consumers surplus at the centers still registers 900 204 enabling the benefit cost ratio to rise from 1 18 to 1 40 2 these calculations ignore an important side effect of the subsidy namely the additional tax collections coming from both increased ticket sales and increased labor income as the earlier table 3 indicated a profit maximizing aldwych sells 16 528 tickets at a real price of 3 78 including the value added tax vat a vat rate of 8 percent not inappropriate for the period in focus therefore means a pretax real price of 3 50 and a real va t levy of 0 28 per ticket for a total of 4 628 under actual subsidized conditions the aldwych sells 234 045 tickets at a real tax inclusive price of 1 77 and pays a real vat of 30 426 an increase of 25 798 over the profit maximizer similarly actual stratford generates 9 153 more in real vat than does a profit maximizing stratford bringing the combined vat increase to 34 951 3 table 3 likewise showed that patronage expands employment by 461 448 man hours at

a multiproduct cost study of savings and loans this paper investigates the cost structure of savings and loans most studies of financial institutions have failed to take into account the multiproduct nature of these institutions using the multiproduct approach the existence of subadditivity multiproduct global and product specific economies of scale and scope and substitutability between inputs is investigated a translogarithmic cost function is estimated using 1982 data on california savings and loans restrictive functional forms also estimated are rejected standard errors for the statistics calculated are estimated and various statistical tests are conducted previous authors have not calculated standard errors for these statistics no evidence of subadditivity in the industry is found in order to investigate the impact of deregulation on the financial services industry it is necessary to know the cost structure of the industry optimal firm size and product mix can be determined once the structure is known the presence of scale economies would imply that smaller firms or entering firms that operate at a small scale would be at a cost disadvantage compared with larger established firms a finding of economies of scope i e economies of joint production would imply that firms that were specialized would be at a cost disadvantage and that regulations that restrict the outputs a firm is allowed to produce may lead to inefficient production

the regional nature of japanese multinational business in the world s largest 500 firms there are 64 japanese multinational enterprises mnes with data on regional sales but only three operate globally whereas 57 of them average over 80 of their sales and foreign assets in their home region why is there such a strong intra regional dimension to their activities using empirical data and a new framework for analysing both downstream sales assets and upstream production assets we analyse why most large japanese firms appear to have firm specific advantages fsas that are based in their home region a structural contingency approach is applied to two case studies to explain how home region bound fsas constrained the ability of japanese mnes to implement internationalisation strategies

the potential estimation and factor analysis of china s energy conservation on thermal power industry new huadu business school research fund national social science foundation of china 12zd059 ministry of education 10gbj013

interdependent behavior in foreign direct investment the multi level effects of prior entry and prior exit on foreign market entry this paper examines the interdependent foreign market entry decisions of multinational corporations mncs based on the argument that legitimacy and competition are two important forces in foreign market entry decisions we hypothesize that an mnc s market entry decisions are influenced by its own prior entry and prior exit decisions and those of other mncs we examine this general proposition at four levels of analysis the host country global industry an industry that spans host countries local industry an industry that is separately defined within each host country and parent firm level our analysis of a panel data of over 4000 market entry decisions that were made by japanese mncs shows that an mnc s market entry decision has a stronger inverted u shaped relationship with the prior entry and exit decisions of other mncs at the local industry level than the prior entry and exit decisions of other mncs at the host country and global industry levels we also find that both the prior entry and prior exit decisions of an mnc have a marginal influence on its own subsequent market entry decisions at the parent firm level

the measurement of efficiency in life insurance estimates of a mixed normal gamma error model abstract this paper make three contributions to the literature on efficiency in financial services first it presents estimates of a mixed error cost frontier in which the variances of both the normal and gamma distributions can vary with firm size second it extends the literature on life insurance scale and product mix economies by incorporating and measuring x inefficiency estimates of x inefficiency range from 35 to 50 ray scale economies exist up to 15 billion in assets third comparisons of normal gamma estimates with other methods 3 thick frontier weighted least squares half normal distributions 3 demonstrate some of their pitfalls

determinants of bank cost efficiency in transition economies evidence for latin america central and eastern europe and south east asia in this study we adopt wang s 2002 heteroscedastic stochastic frontier model which allows us to investigate bank cost efficiency and to measure the marginal effects of some variables on both the level and the variability of inefficiency in recent years the financial crisis has significantly affected the banking systems of the transition countries hence the efficiency is of major importance for the stability of the banks regarding the determinants of efficiency we find evidence that banks that follow a more cautious strategy characterized by lower risk appetite and average expectations on profitability have higher cost efficiency we also find that traditional deposit taking and loan making still remain the most efficient activity of the banks additionally the results showed that a higher gross domestic product growth rate implies an increase in the inefficiency level indicating an unsustainable bank management behaviour which in periods of economic growth adopts policies that can generate

phasing out of environmentally harmful subsidies consequences of the 2003 cap reform abstract subsidies linked to production have been classified as environmentally harmful by the oecd a core element of the eu 2003 common agricultural policy cap reform is to decouple income support from production this paper estimates the environmental consequences of this policy reform an agricultural sector model using a modified version of the positive mathematical programming method depicts the complex natural structural and political relationships of austrian farming changes in management measures can be analyzed with respect to their environmental effects by using appropriate indicators simulation results show that the 2003 cap reform will reduce the average cost of production and may improve environmental conditions regarding soil water and greenhouse gases when compared to a scenario without reform thus the new cap is likely to bring about outcomes which the previous reform agenda 2000 promised but did not deliver

regional and global strategies of mnes revisiting rugman verbeke 2004 we describe the extent to which the world s largest companies in terms of revenues achieve sales around the globe and have been able to penetrate markets outside of their home region we try to answer the following question has there been a recent increase in the world s largest firms achieving a global sales orientation meaning a balanced global distribution of sales rugman verbeke 2004 found that few of the 2002 fortune global 500 fortune magazine 2002 firms accounting for over 90 of the world s stock of fdi actually had a global sales orientation a majority of multinational enterprises mnes were home region oriented suggesting that much work on corporate globalization was normative rather than accurately describing reality we present the equivalent data for the 2017 fortune global 500 fortune magazine 2017 list our data confirm that many large firms are still home region oriented but to a lesser extent than before with 36 mnes up from only nine in the 2002 list now having widely distributed sales across the world s core economic regions the question arises whether this relative increase in the number of mnes with a global sales orientation holds any normative value for the firms that presently do not have such a sales distribution

speed of the internationalization process the role of diversity and depth in experiential learning by analyzing internationalization as a dynamic process we attempt to explain the speed of international operations in terms of learning acquired in the course of past international activities we consider that the speed of the internationalization process depends on the type of experiential learning that results from decisions implicit in the internationalization process choice of location and modes of operation firms develop two types of learning activities with respect to the selection of foreign markets and modes of operation diversity and depth of accumulated international activities we propose that depth of international activities has an inverted u shaped impact on the speed of the internationalization process while diversity of international activities has a u shaped influence on the speed of internationalization process the results of our longitudinal study of 889 firms over 23 years 1986 2008 suggest that diversity of international activities promotes long term learning by exposing the firm to richer experiences although such learning only takes place over time depth of international activities may accelerate the internationalization process in the short term but it eventually restrains its potential for development in the long term our research highlights the short term vs long term consequences of different types of decisions related to the internationalization process

government policy and agricultural productivity in indonesia we focus on the agricultural productivity implications of the complex of investment price and research policies the indonesian government has employed since the end of the green revolution in particular we employ a new 1985 2005 provincial panel dataset together with a stochastic output distance frontier framework to examine how government policies have affected the nation s agricultural productivity decomposing it into its technical progress and efficiency components government s primary contributions to technology growth have come through price and trade policies rather than public research most technology growth however appears to be due to informal technology diffusion copyright 2010 oxford university press

frontier estimation and firm specific inefficiency measures in the presence of heteroscedasticity the purpose of this article is to illustrate a straightforward and useful method for addressing the problem of heteroscedasticity in the estimation of frontiers a heteroscedastic cost frontier model is developed and estimated using bank cost data similar to that used by ferrier and lovell our results show dramatic changes in the estimated cost frontier and in the inefficiency measures when accounting for heteroscedasticity in the estimation process we find that the rankings of firms by their inefficiency measures is affected markedly by the correction for heteroscedasticity but not by alternative distributional assumptions about the one sided error term

biases in frontier estimation due to heteroscedasticity abstract this paper investigates the effects of heteroscedasticity on the parameters in frontier regression models a monte carlo experiment is employed to determine that heteroscedasticity leads to overestimation of the intercept and underestimation of the slope coefficients

fdi performance a stochastic frontier analysis of location and variance determinants the opening up process of the eastern european countries was marked by greater integration of fdi with their western neighbouring countries using the single step ml approach to stochastic frontier analysis the location and variance determinants of fdi are estimated using the knowledge capital kk model framework the findings based on a panel of bilateral fdi stocks from 10 western to 10 eastern european countries over the 1996 2007 period suggest fdi is determined by both horizontal and vertical motives while the process of liberalization and infrastructural developments significantly reduces the variance of fdi in using a stochastic frontier specification of the kk model the efficiency of fdi performance is identified relative to maximum levels the bilateral efficiency scores suggest a mixed performance indicating scope to improve the efficiency of fdi

partnering with leviathan the politics of innovation in foreign host state joint ventures forming international joint ventures ijvs with political institutions in emerging economies involves both benefits and risks for multinational enterprises mnes while political partners can provide ijvs with various resources their political status equips them with a strong position to appropriate rents in ijvs we address this tension by examining how host state ownership affects both innovation inputs and outputs in china based ijvs over 2008 2013 despite the potential government opportunism we find more r d investment innovation inputs made in ijvs with state partners than in those with private ones thus r d investment can be politically motivated and symbolically managed to ensure continued resource exchanges with the host state this political pressure is mitigated when foreign parents directly transfer home country based technology to ijvs when the host market dependence of ijv is weak and when ijvs are located in a deregulated region moreover we find foreign host state jvs deliver fewer innovation outputs measured by patent data than foreign private jvs which implies the failure of state partners to adequately absorb foreign technologies these findings highlight both the state partners powerfulness to boost ijv innovation investment and their limits in shaping ijv innovation outcomes and bear rich implications for the management of mne host government relationships

the estimation of frictional unemployment a stochastic frontier approach this paper reports an estimate of the frictional unemployment rate in u s manufacturing that is derived from a parametric statistical method for estimating stochastic frontiers the steady state perfect foresight solution to an estimated employment growth frontier provides a locus of technically efficient frictional rates of unemployment the mean frictional unemployment rate during the sample period is estimated to be 3 7 percent of the manufacturing labor force this estimate conforms closely to an estimate of 3 5 percent that is derived from manufacturing sector data presented by david m lilien 1980 for roughly the same time period copyright 1991 by mit press

a note on savings and loan ownership structure and expense preference a re examination this study extends the work of akella and greenbaum journal of banking finance 12 1988 419 through the use of a much larger nationwide sample of us saving and loan associations and supports their original finding of significant expense preference behavior in mutual savings and loans during their original study period 1979 80 this study also provides evidence that over the time period of substantial deregulation and changes in the competitive environment in the us financial services industry expense preference behavior for savings and loans decreased the results are consistent with the idea that the removal of barriers that restrict competition should improve managerial efficiency in firms that survive 2003 elsevier b v all rights reserved

estimation of a doubly heteroscedastic stochastic frontier cost function this article extends the results obtained by caudill ford and cropper in estimating and testing stochastic frontier cost functions in the presence of heteroscedastic inefficiency using cross section data it suggests the estimation of the model under the assumption of heteroscedasticity in both random terms this avoids any possible misspecification bias and the use of incorrect tests the same data as used by caudill et al supports the new specification moreover we find that firm specific inefficiency measures are extremely sensitive to the proposed correction for heteroscedasticity

the regional dimension of mnes foreign subsidiary localization this paper examines the regional effect of mnes foreign subsidiary localization we hypothesize that the number of subsequent foreign subsidiaries in a country is in part determined by a firm s prior foreign subsidiary activity at the regional level we test our hypotheses using data on 1076 japanese mnes that created 3466 foreign subsidiaries 1837 wholly owned fdis and 1629 joint ventures over the period 1996 2001 we use a multilevel negative binomial approach with three levels of analysis localization decisions in a country 49 countries in a region six regions and at the headquarters level in this way we test the regional effects controlling for country and corporate dimensions we also run separate models to differentiate wholly owned and joint venture localization decisions our results strongly support the semi globalization perspective in that the regional level effects are significant and different from the country level effects for all foreign subsidiaries for wholly owned subsidiaries and for jointly owned subsidiaries japanese mnes adopt a regional perspective that complements their decisions at the country and firm levels they seek regional agglomeration benefits and make arbitrage decisions between countries in the same region

real options and foreign affiliate divestments a portfolio perspective this paper develops a real options portfolio perspective on foreign affiliate divestments affiliates are less likely to be divested in response to adverse environmental change if they represent growth or switch option value to the multinational firm under conditions of macroeconomic uncertainty however the affiliate is partially redundant to the option value of the multinational firm s affiliate portfolio if the affiliate shares the manufacturing platform role in the host country with other affiliates or if macroeconomic conditions of the host country are highly correlated with those of other countries in which the multinational firm operates affiliates we find strong support for these arguments in tests on a comprehensive sample of 1078 asian manufacturing affiliates of japanese electronics multinationals

the measurement and sources of technical inefficiency in the indonesian weaving industry production function models are estimated with a time series of cross section data on indonesian weaving establishments the sources of technical inefficiency are investigated three firm attributes are identified as being potentially related to firm efhciency tbey are firm ownership age and size the importance of these attributes as sources of inefficiency in the indonesian weaving industry is investigated and the implications of the find ings discussed

which microfinance institutions are becoming more cost effective with time evidence from a mixture model italian speakers tend to stress the second component of german morphologically complex words such as compounds and prefix verbs even if the first component is lexically stressed to improve their prosodic phrasing an automatic pronunciation teaching method was developed based on auditory feedback of prosodically corrected utterances in the learners own voices basically the method copies contours of f0 local speech rate and intensity from reference utterances of a german native speaker to the learners speech signals it also adds emphasis to the stress position in order to help the learners better recognise the correct pronunciation and identify their errors a perception test with german native speakers revealed that manipulated utterances significantly better reflect lexical stress than the corresponding original utterances thus two groups of italian learners of german were provided with different feedback during a training session one group with manipulated utterances in their individual voices and the other with correctly pronounced original utterances in the teacher s voice afterwards both groups produced the same sentences again and german native speakers judged the resulting utterances resynthesised stimuli especially with emphasised stress were found to be a more effective feedback than natural stimuli to learn the correct stress position since resynthesis was obtained without previous segmentation of the learners speech signals this technology could be effectively included in computer assisted language learning software

foreign subsidiary and parents roles during strategic investment and divestment decisions empirical research is scarce to answer the concerns of governments unions and public opinion at large concerning how multinationals make decisions to restructure their international strategic portfolio or close plants overseas to ensure long run competitiveness based on three in depth analyses of different types of restructing decisions the author concludes that the foreign subsidiaries seem to carry most of the decisionmaking effort for their own plant closures while for strategic portfolio readjustments during which they change owners they are not consulted

what we talk about when we talk about global mindset managerial cognition in multinational corporations recent developments in the global economy and in multinational corporations have placed significant emphasis on the cognitive orientations of managers giving rise to a number of concepts such as global mindset that are presumed to be associated with the effective management of multinational corporations this paper reviews the literature on global mindset and clarifies some of the conceptual confusion surrounding the construct we identify common themes across writers suggesting that the majority of studies fall into one of three research perspectives cultural strategic and multidimensional we also identify two constructs from the social sciences cosmopolitanism and cognitive complexity that underlie the perspectives found in the literature we then use these two constructs to develop an integrative theoretical framework of global mindset we then provide a critical assessment of the field of global mindset and suggest directions for future theoretical and empirical research

a review of research on the growth of multinational enterprises a penrosean lens abstract we provide a comprehensive review of the growth of multinational enterprises mnes based on a quarter century 25 years of scholarly international business publications we synthesize research insights on the determinants of the growth of mnes through the lens of penrose s theory of firm growth which is the most influential theoretical perspective on firm growth the review takes stock of the research findings on the facilitators constraints and the trajectory of growth of mnes and elaborates on the commonalities and differences between research on the growth of mnes that draws on penrose s theory and research that does not this comparison highlights the opportunity to build an internally coherent theory of the growth of mnes that is a theory that connects what an mne is to what determines an mne s growth it also indicates that past research placed a strong emphasis on exogenous factors e g cross country distances as key constraints on growth even though the penrosean lens suggests a close consideration of endogenous factors that drive international growth as well as endogenizing the ostensibly exogenous growth determinants the review highlights the importance of firm specific managerial knowledge and learning which shapes the direction of the growth of mnes and ensures its administrative coherence

technical efficiency and ict investment in italian manufacturing firms the importance of information and communication technologies icts is a much debated question with extensive literature aimed at understanding the role of icts in increasing economic growth firm productivity and firm efficiency different methods to estimate firm efficiency are used in this study in particular both the translog and the cobb douglas production functions are used in order to estimate the impact of ict on technical efficiency te in italian manufacturing firms over the period 1995 to 2003 results show that ict investments positively and significantly affected firms te moreover group size and geographical position have a positive influence on te finally the results show that older firms are on average more efficient than newer ones