firm strategies and path dependencies an emerging economic geography of industrial data this paper analyses how firms engaged in industrial data production in the power generation industry operating within the us energy sector produce collect store aggregate analyse and ultimatel

globalization and competitive strategy in europe s vulnerable regions firm industry and country effects in labour intensive industries clark g l palaskas t tracey p and tsampra m 2004 globalization and competitive strategy in europe s vulnerable regions firm industry and country effects in labour intensive industries regional studies38 1077 1092 european integration has prompted great interest in the adjustment capacities of small and medium enterprises in regions characterized by high levels of unemployment and lower than average incomes at issue in these circumstances is the extent to which economic competitiveness can be enhanced by technological change and the resources of european and national governments relying upon the results of a detailed survey of small and medium sized firm competitive strategies in selected vulnerable regions across europe the paper focuses upon firm adjustment strategies in four labour intensive industries vulnerable to international competition it draws together the results of these surveys providing econometric and statistical analyses that demonstrate the commonalities and difference

what are the consequences of initiative taking in multinational subsidiaries the phenomenon of subsidiary initiative has received increasing attention in recent years but the consequences of initiatives and the associated dynamics of headquarters subsidiary relationships have received much less research attention building on resource dependence theory and self determination theory we argue that two basic goals subsidiary managers pursue are to achieve autonomy vis a vis corporate headquarters and influence over other units we investigate how a subsidiary s past initiatives contribute to its bargaining power and how headquarters response through granting attention or monitoring affects the realization of the subsidiary s goals using structural equation modeling our hypotheses are tested by drawing on a sample of 257 subsidiaries located in three different countries australia canada and the united kingdom our results show that subsidiaries are not able to increase their influence through initiatives unless they get headquarters attention we also find that subsidiary initiatives have a direct effect on subsidiary autonomy but the caveat is that initiatives also evoke headquarters monitoring which in turn decreases the subsidiary s autonomy in addition to providing insights into how subsidiaries can achieve their goals the paper also sheds light on the critical role headquarters plays in leveraging initiatives and the influence of individual subsidiaries in the multinational enterprise

collective learning tacit knowledge and regional innovative capacity lawson c and lorenz e 1999 collective learning tacit knowledge and regional innovative capacity reg studies 33 305 317 the paper reviews key ideas in the firm capabilities literature and shows how they can be usefully extended to develop a conception of collective learning among regionally clustered enterprises the paper also explores the relationship between codifiable and tacit knowledge in the innovation process and investigates the claim that tacit knowledge because it is difficult to transfer in the absence of labour mobility may constitute a basis for sustained regional competitive advantage the closing section uses case study material based on minneapolis and cambridge to illustrate the importance for innovation of a regional capability for combining and integrating diverse knowledge and of the sources of such capabilities as pre conditions for successful high technology regions lawson c et lorenz e 1999 l apprentissage collectif la connaissance implicite et la capacite regio

internal capital markets and the competition for corporate resources this article examines the role of corporate headquarters in allocating scarce resources to competing projects in an internal capital market unlike a bank headquarters has control rights that enable it to engage in winner picking the practice of actively shifting funds from one project to another by doing a good job in the winner picking dimension headquarters can create value even when it cannot help at all to relax overall firm wide credit constraints the model implies that internal capital markets may sometimes function more efficiently when headquarters oversees a small and focused set of projects this article analyzes the process by which internal capital markets channel limited resources to different uses inside a company in so doing it seeks to address two related sets of questions first what is the fundamental economic rationale for creating an internal capital market that is under what circumstances can it make sense to combine several technologically distinct projects under one roof and have them seek funding from corporate headquarters as opposed to setting them up as stand alone companies that each raise external financing on their own second given this rationale what is the optimal size and scope of an internal capital market should headquarters be involved in funding a large number of projects or just a few and should these projects be unrelated to one another or in similar lines of business the answers to both sets of questions flow from the insight that in a credit constrained setting where not all positive npv projects can be financed headquarters can create value by actively reallocating scarce funds across projects for example the cash flow generated by one division s activities may be taken and spent on investment in another division where the returns are higher or alternatively one division s assets may be used as collateral to raise financing that is then diverted to the other division simply put individual projects must compete for the scarce funds and headquarters job is to pick the winners and losers in this competition

exchange rate dynamics under gradual portfolio and commodity price adjustment abstract this paper studies exchange rate dynamics within the context of a model that allows for gradual portfolio and commodity price adjustment the model encompasses as a special limiting case the orthodox portfolio balance model wherein portfolio adjustment is instantaneous the focus of the paper is on the process of adjustment to a once and for all open market operation under a bond financed government budget deficit the generalized portfolio balance model which we formulate generates a varied menu of adjustment paths for the exchange rate and the aggregate price level which are more successful than the orthodox instantaneous portfolio equilibrium models in accomodating the divergent experiences of various countries

the expansion of foreign direct investments discrete rational location choices or a cultural learning process it is recognized in the literature that experience may affect the cost and the uncertainty of operating in foreign markets and experience and market knowledge may therefore influence the location decisions of fdis economic theory does not however predict a general expansion pattern of fdis across industries on the other hand the theory associated with the internationalization process approach highlights the importance of cultural distance and predicts a movement from close to more distant markets as more experience is acquired by the firm the internationalization process approach is rooted in a behavioral theory of the firm

organization in between the evolution of the mother daughter structure of managing foreign subsidiaries in swedish mncs in depth case studies of 4 firms and a questionnaire survey of 52 companies show that the mother daughter structure prevalent in swedish mncs is changing firms tends to adopt organizational structures in between a pure mother daughter one and one divided along product or technology lines rather than introducing formal matrix structures relatively simple organizational forms are complemented by changes in information systems budgeting procedures rotation of personnel and so forth the control style is changing in the direction of slightly more formal performance evaluation the changes can be understood as adaptations to growing size of the firms increased product diversity acquisitions of foreign companies technological maturity entry of new managers and slower demand growth

global cities and the geographical transfer of value the central argument of this article is that global cities are due to their clustering of producer service firms critical governance nodes in global production networks more in particular the article scrutinises the role of producer service firms in uneven development and especially in the geographical transfer of value hadjimichalis 1984 because the direct as well as the indirect mechanisms through which value is transferred geographically require the intervention of producer service firms global cities can be theorised as governance nodes for centripetal wealth transfers along global commodity chains moreover and in the context of the persisting criticism that the global city concept has a bias towards northern western cities the article argues that the claim that global cities are critical places for the organisation of uneven development also holds for cities beyond the usual suspects referring to cases of how producer service firms in hamburg and mexico city erect entry barriers to p

public utility regulators are only human a positive theory of rational constraints positive models of public utility regulation should capture personal incentives of regulators a regulatory objective function is specified by appea l to standard human concerns coupled with politics and processes pecu liar to public utility regulation constraints a rational regulator w ould impose on the firm are thereby derived and connections between regulatory objectives and regulatory rules illuminated results inclu de theoretical rationales for rate of return regulation in a worl d of certainty and a largely neglected type of rate of return re gulation under symmetric uncertainty other forms of regulation sho uld also be explicable in terms of personal motives of human regulato rs copyright 1988 by american economic association

globalization countries cities and multinationals mccann p and acs z j globalization countries cities and multinationals regional studies this paper explores the relationship between the size of a country the size of its cities and the importance of economies of scale in the modern era of globalization in order to do this it integrates three different literatures namely the literature on the optimal size of a country the literature on historical processes of urbanization and the performance of cities and the literature on the role of multinational firms in the global economy using an economic geography perspective but looking at these issues through the lens of economic history it is demonstrated that the importance of agglomeration effects and in particular relationship between city size and the prosperity of the nation state has changed over the different eras of globalization in earlier eras of globalization the importance of agglomeration was represented by a fairly simple relationship between the scale of the city and the scale

competitiveness of regions from an evolutionary perspective boschma r a 2004 competitiveness of regions from an evolutionary perspective regional studies38 993 1006 do regions compete as firms do how does one deal with the fact that regions unlike organizations are entities that do not act does it make sense to talk about the ability of regions to generate new variety this paper aims to address these questions from an evolutionary perspective it is meaningful to talk about regional competitiveness when the region affects the performances of local firms to a considerable degree this is especially true when the competitiveness of a region depends on intangible non tradable assets based on a knowledge and competence base embedded in a particular institutional setting that are reproduced and modified through the actions and repeated interactions of actors although regions are increasingly becoming collective players actively responding to an increasing exposure to extra regional competition the paper explains why there are serious limits in enhancin

subordinate financialization and financial subsumption in south korea this paper analyzes the peculiarity of financialization in south korea after the 1997 asian financial crisis financialization research originally focused on the us experience and primarily underst

configurations of strategy and structure in subsidiaries of multinational corporations a three fold typology of subsidiary roles world mandate specialized contributor local implementer was induced from the literature and its empirical validity was confirmed adopting a configurational approach we then explored the ways in which subsidiary structural context varies across subsidiary role types structural context characteristics were determined through a discussion of the underlying principles of the hierarchy and heterarchy models of multinational organization the key findings were a higher strategic autonomy in world mandates than in local implementers b a more internationally configured value chain in world mandates and specialized contributors than local implementers c lower levels of internal product flows in world mandates than the other two types and d a significantly lower performance in specialized contributors implications for a configurational model of subsidiary management and for heterarchy as a higher level conceptualization are discussed

geographical linkages in the financial services industry a dialogue with organizational studies geographical linkages in the financial services industry a dialogue with organizational studies regional studies this article proposes a conceptualization of the geographical linkages in the fin

the explicit economics of knowledge codification and tacitness this paper attempts a greater precision and clarity of understanding concerning the nature and economic significance of knowledge and its variegated forms by presenting the skeptical economist s guide to tacit knowledge it critically reconsiders the ways in which the concepts of tacitness and codification have come to be employed by economists and develops a more coherent re conceptualization of these aspects of knowledge production and distribution activities it seeks also to show that a proposed alternative framework for the study of knowledge codification activities offers a more useful guide for further research directed to informing public policies for science technological innovation and long run economic growth copyright 2000 by oxford university press

the dark side of ny lon financial centres and the global financial crisis this paper brings financial centres into the debate on the causes and consequences of the global financial crisis by focusing on new york and london it argues that the degree of commonality comp

when competitive advantage doesn t lead to performance the resource based view and stakeholder bargaining power what if rent from a competitive advantage is appropriated so it cannot be observed in performance measures the resourcebased view was not formulated to examine who will get the rent yet this essay argues that the factors leading to a resource based advantage also predict who will appropriate rent knowledge based assets are promising because firm specificity social complexity and causal ambiguity make them hard to imit ate however the roles of internal stakeholders may grant them a great deal of bargaining power especially relative to investors this essay integrates the resource based view with the bargaining power literature by defining the firm as a nexus of contracts this new lens can help to explain when rent will be generated and simultaneously who will appropriate it in doing so it provides a more robust theory of firm performance than the resource based view alone it is also suggested that this lens might be useful for examining other theories of firm performance

regionalization of r d activities dis economies of interdependence and inventive performance abstract this paper examines the impact of the extent of the regionalization of mnes r d activities on their inventive performance by joining the regionalization theory with the recombinant view of invention we challenge the implicit assumption that all foreign knowledge seeking activities will necessarily offer new knowledge to the firm we introduce the dis economies of interdependence defined as the dis advantages that the firm derives due to the interdependence among countries within a region as a new theoretical mechanism explaining the benefits and costs of regionalization our analysis of global pharmaceutical firms shows that an inverted u shaped relationship exists between the number of regions in which a firm has r d activities and its inventive performance our results also indicate that a firm s recombinant capability moderates the inverted u shaped relationship in such a way that when a firm s recombinant capability is high it reaches its turning point in a larger number of regions and the inverted u shaped relationship is flatter these results underscore that recombinant capability significantly influences the firm s ability to derive benefits and reduce costs from the regionalization of its r d activities our findings suggest that it is through the consideration of the dis economies of interdependence that offers the essential reasoning needed to unwind the inferred assumption that all foreign knowledge seeking activities will offer access to new knowledge

domestic alliance networks and regional strategies of mnes a structural embeddedness perspective we draw on a social network perspective to explain multinational enterprises mnes propensity to distribute their operations unevenly across various regions of the world we focus on how the positioning of mnes in their domestic network of strategic alliances affects their geographic scope i e whether they concentrate on their home region or expand beyond it we theorize that embeddedness in alliance networks constitutes a double edged sword to the geographic scope of mnes strong embeddedness in domestic alliance networks drives the development of location bound firm specific advantages fsas which may narrow down mnes geographic scope in contrast moderate embeddedness leads to more non location bound fsas which reduce liability of foreignness and hence motivate mnes to widen their geographical scope we thus predict a non linear relationship between domestic alliance network embeddedness and mne geographic scope furthermore the impact of the domestic alliance network on mne geographic scope hinges on the organizational ability to efficiently and effectively absorb resources stemming from the network we test our hypotheses using fdi data from 302 us mnes in the information and communication technology industry for the period of 2001 2008 and generally find robust support for the hypothesized relationships

integrating finance into global production networks coe n m lai k p y and wojcik d integrating finance into global production networks regional studies while successful in its aim of globalizing regional development the global production network gpn approach has thus far paid less attention to the role of finance in the dynamics of the global economy and regional development this lacuna is significant as finance is arguably even more globalized and networked than production to address this gap the paper distils the concept of the global financial network gfn from financial geography and related scholarship with advanced business services world cities and offshore jurisdictions at the core interactions between the gpn and the gfn are discussed focusing on the financing and financializing of gpns and the co evolution of globalization and financialization integrating finance into gpn research entails more than a simple extension of the approach it would also enrich it conceptually and enable it methodologically and empirically

the globalisation of technology what remains of the product cycle model this paper reexamines two hypotheses associated with earlier versions of the product cycle model the first hypothesis that innovations are almost always located in the home country of the parent company is rejected on the basis of evidence drawn from one hundred years of u s patent office data the second hypothesis that the international dispersion of activity is led by technology leaders is historically valid however over the last twenty years technology leaders have been ahead instead in the globalization of technology that is in developing internal international networks to exploit the locationally differentiated potential of foreign centers of excellence c 1995 academic press inc copyright 1995 by oxford university press

empirical models of the exchange rate separating the wheat from the chaff various popular exchange rate models a standard monetary model a portfolio balance model and sticky price models are estimated and evaluated using u s canadian data for the 1970s nonnested hypothesis tests demonstrate that none are correctly specified the data suggest 1 the exchange rate persistence observed is not fully explained by any of the models 2 the small durbin watson statistics indicate longer lags are required 3 the current account is a useful explanatory variable 4 the portfolio balance model fits the data well but has potentially serious problems measuring the stock of foreign assets this abstract was borrowed from another version of this item

behavior of the firm under regulatory constraint a recent article by akira takayama discusses an earlier paper by harvey averch and leland l johnson on fair rate of return regulation of public utilities although takayama p 255 agrees with averch and johnson s general conclusions that a firm will tend to increase its investment with the introduction of an active constraint on its rate of return he criticizes the a j argument as being confusing ambiguous and in error takayama then attempts a clarification and presents a new formulation which leads to the a j result quoted above this comment will discuss several of takayama s criticisms in addition to showing that the so called a j effect cannot be derived from the basic assumptions made by both averch and johnson and takayama 1 we will show that the very assumptions used to prove the a j effect by defining the region of x require an assumption that the a j effect exists in the first place

transfer pricing mechanisms an experimental investigation abstract this study evaluates in a laboratory setting the performance of the ronen and mckinney 1970 and the ronen 1992 transfer pricing schemes both mechanisms possess in theory the property of inducing efficient production and truth telling while decision making autonomy is maintained the ronen mckinney scheme however allows for multiple nash equilibria and if the divisions managers coordinate their messages they are expected to exploit the mechanism at the expense of the overall profitability of the firm the ronen 1992 scheme was designed to prevent this towards this end a penalty factor was incorporated into the original ronen mckinney scheme to make truth telling and optimal production a unique equilibrium the basic results are that under the ronen mckinney scheme and with coordination of messages being allowed subjects collude and earn significantly higher profits than amounts implied by the overall optimal solution without the penalty factor subjects seemed not to converge towards the efficient level of transacting at the end of the experiment it is not clear whether with additional trials such conversion would have occurred the inclusion of the penalty factor however eliminated the collusive behaviour in fact most of the pairs implementing the ronen mechanism reached the efficiency predicted by the theory whether or not coordination of messages was allowed

the role of duration in multinational investment strategies the location of investment by multinational enterprises has been investigated from many perspectives it has been suggested that investment may be motivated by experience of a particular location represented by tenure of operations in contrast portfolio considerations suggest that increased investment in a given location increases risk exposure in this paper the question of whether a multinational with a longer duration of operations at a particular location is more likely to invest further is addressed after taking portfolio risk into account a conceptual model of multinational investment strategy is developed and empirically tested using data from a survey of multinational enterprises operating in the west midlands region of the united kingdom two innovative non parametric tests for duration dependence are applied after normalising for portfolio considerations it is found that multinational investment is significantly duration dependent i e firms with a longer tenure of operations are significantly more likely to invest in any given period this finding has important implications for the strategy of inward investment agencies in particular an investment agency is short sighted if it seeks to attract new investors if that is at the expense of neglecting multinationals with current operations in its jurisdiction

risk and global economic architecture why full financial integration may be undesirable integration of global financial markets was supposed to lead to greater financial stability as risks were spread around the world the finan cial crisis has thrown doubt on this conclusion a failure in one part of the global economic system caused a global meltdown the recent crisis has shown that in the absence of appro priate government intervention privately profit able transactions may lead to systemic risk this paper provides a general analytic framework within which we can analyze the optimal degree and form of financial integration within this general framework full integration is not in general optimal indeed faced with a choice between two polar regimes full integration or autarky in the simplified model autarky may be superior

how multinational subsidiary mandates are gained and lost a subsidiary mandate is a business or element of a business in which the subsidiary participates and for which it has responsibilities beyond its national market this research studied thirty one mandates in six canadian subsidiaries of u s owned multinational corporations a life cycle framework was proposed and used to explore the factors associated with the gain development and loss of mandates by subsidiaries two key findings emerged first it was shown that there is a risk in having a full scope world product mandate because it is possible to become marginal to the corporate strategy second it was observed that the engine of subsidiary growth is its distinctive capabilities and that for a mandate to be effective it must be built on those capabilities implications for mandate sustainability are proposed on the basis of these two insights

the role of international assignees social capital in creating inter unit intellectual capital a cross level model we conceptualize international assignees as informational boundary spanners between multinational enterprise units and develop a cross level model that explores how assignees social capital translates into inter unit intellectual capital first as knowledge brokers assignees create inter unit intellectual capital by linking their home and host unit social capital thereby enabling cross unit access to previously unconnected knowledge resources second as knowledge transmitters assignees host unit social capital facilitates their creation of individual intellectual capital which in turn translates into inter unit intellectual capital we conclude that individual social capital needs to be explicitly transferred to the organizational level to have a sustained effect on inter unit intellectual capital

internalization an event study test abstract the internalization theory of multinational firms proposes that direct international investment occurs when a firm has information related intangible assets with public good properties we find that firms with characteristics suggesting the presence of information based assets experience a significantly positive stock price reaction upon announcing a foreign acquisition on the other hand firms apparently lacking such assets experience at best zero abnormal returns upon announcing overseas acquisitions

a review of renewable energy investment in the brics countries history models problems and solutions abstract this paper reviews the history of renewable energy development in the brics countries the financing models for renewable energy development of brics countries include bank financing institutional loans industry funds and international financing this paper identified several problems with financing in brics countries including a lack of financing channels investment shortage for small and medium sized enterprises and imperfect government policies the solutions to these problems include expanded capital markets the financing of leasing services and build operate transfer and build own operate projects further a financial citizen participation model should be employed similar to that as germany and european union emissions trading system eu ets a financial citizen participation model means that legal entities private individuals and agricultural enterprises invest in renewable energy infrastructure through equity a regional reserve ratio monetary policy is suggested to allow regions to develop renewable energy

a synthesis of keynesian monetary and portfolio approaches to flexible exchange rates the purpose of this paper is to extend our earlier systhesis of monetary and keynesian approaches to balance of payments theory under fixed exchange rates to the analysis of flexible exchange rates

london s rise as an offshore rmb financial centre state finance relations and selective institutional adaptation abstractlondon s rise as an offshore rmb financial centre state finance relations and selective institutional adaptation regional studies china s currency the renminbi rmb is increasingly important in global financial markets facilitated by the global expansion of offshore rmb centres this paper examines london s development as the first western offshore rmb centre established in 2013 drawing on original research conducted between 2013 and 2015 in london and china the longitudinal analysis reveals that the development of rmb finance in london is characterized by selective adaptation in which state private bargaining dynamics have shifted from strategic alignment to a bifurcation of interests understanding these state finance relations has important implications for research and policy making concerned with offshore financial centres and rmb internationalization

price cap versus rate of return regulation in a stochastic cost model a stochastic cost model is used to show that both price cap and rate of return regulation lead to overinvestment in capital and to excessive managerial slack however they differ in stochastic versus fixed intervals between hearings and in the use of test year costs versus average costs since the previous hearing a numerical example illustrates that fixed intervals between hearings improve welfare if hearings are not held too frequently but most gains go to the firm more significantly the use of average cost data combined with fixed intervals results in dramatic welfare improvements with most gains going to consumers

selling resistance and reconciliation a critical discursive approach to subsidiary role evolution in mnes studies of political dynamics between multinational enterprise mne parents and subsidiaries during subsidiary role evolution have focused largely on control and resistance this paper adopts a critical discursive approach to enable an exploration of subtle dynamics in the way that both headquarters and subsidiaries subjectively reconstruct their independent interdependent relationships with each other during change we draw from a real time qualitative study of a revealing case of charter change in an important european subsidiary of an mne attempting to build closer integration across european country operations our results illustrate the role of three discourses selling resistance and reconciliation in the reconstruction of the subsidiary parent relationship from this analysis we develop a process framework that elucidates the important role of these three discourses in the reconstruction of subsidiary roles showing how resistance is not simply subversive but an important part of integration our findings contribute to a better understanding of the micro level political dynamics in subsidiary role evolution and of how voice is exercised in mnes this study also provides a rare example of discourse based analysis in an mne context advancing our knowledge of how discursive methods can help to advance international business research more generally

who profits from innovation in global value chains a study of the ipod and notebook pcs in an era when new ideas are brought to the market by global value networks of specialists rather than by one company a key question is who captures the most value from innovation in such a structure and why this paper addresses the question of who benefits from innovation in global value chains by looking at specific computer and electronics products we apply a novel industry studies methodology for measuring the distribution of financial value across the supply chains for two models from apple s ipod family and notebook pc models from lenovo and hewlett packard hp these are all examples of globally innovated products combining technologies from the u s japan and other countries and assembled in china our analysis shows that the gross margins of apple for its high end ipod products are generally higher than those earned by hp and lenovo for notebook pcs although not so high as to be considered supernormal a key reason for the difference is that apple s control of the core software proprietary standards and complementary infrastructure of the ipod enables it to retain greater profits whereas a large share of the pc industry profits are siphoned off to microsoft and intel who control key technical standards consistent with teece 1986 our results confirm the importance of stages of technical evolution appropriability regimes and complementary assets as determinants of profiting from innovation on the other hand we find that manufacturing has become commoditized and is no longer a key to profiting from innovation in final electronic products also contrary to recent suggestions in the literature we find no evidence of a causal link between product and industry architectures instead there is a vast electronics industry architecture that can easily support product level value chain configurations ranging from modular to integrated

leadership beliefs and coordination an explorative discussion although recent economics contributions represent important strides forward in the understanding of leadership behavior the cognitive and symbolic dimensions of the phenomenon have attracted virtually no interests from economists and game theorists i argue that an understanding of these dimensions may be founded on coordination games particularly to the extent that these illustrate interactive belief formation in this context leadership is defined as the taking of actions that coordinate the complementary actions of many people through the creation of belief conditions that at least substitute for common knowledge and where these actions characteristically consists of some act of communication directed at those being led the concept of common knowledge or its approximation by means of notions of common belief is argued to be particularly important to understanding leadership thus leaders may establish common knowledge conditions and assist the coordination of strategies in this way or make decisions in situations where coordination problems persist in spite of common knowledge acknowledgments

is knowledge power knowledge flows subsidiary power and rent seeking within mncs in recent years as multinational corporation mnc subsidiaries have become more closely linked to international networks their knowledge intensity has risen and some of their r d has gained a more creative role simultaneously and often connectedly many subsidiaries have acquired considerable strategic independence in all aspects of their operations and therefore are able to exercise considerable intra firm bargaining power to influence the distribution of the firm s resources in this context we suggest that intra mnc knowledge flows are a key determinant of subsidiary bargaining power we argue that subsidiary managers can exploit such power to pursue their own ends such rent seeking behavior is implicit in much of the literature on managerialism but our analysis suggests that such behavior can now occur in headquarters subsidiary and subsidiary subsidiary relations thus subsidiary strategic independence designed to enhance the competitiveness of outputs market knowledge and inputs asset seeking and learning can be corroded when the pursuit of subsidiary objectives encourages rent seeking empirical analysis of a sample of high technology subsidiaries in the uk provides strong support for the theory we examine several avenues whereby the incentives of units within the mnc can be aligned

the components of talent company size and financial centres in the european investment management industry clark g l the components of talent company size and financial centres in the european investment management industry regional studies as the centre for advanced financial services and having the complex array of services needed to invest beyond europe s borders london dominates the european financial services industry as in other global financial centres there is a premium on talented investment managers identified in the media as star performers investment companies rely on such employees for risk adjusted rates of return on the basis of asset and or style specific investment strategies while protecting their clients against the risks occasioned by market uncertainty drawing upon frameworks from organizational ecology this paper integrates the size of companies with the market for talent sectorally and geographically

innovation systems and inertia in r d location norwegian firms and the role of systemic lock in abstract this paper seeks to enquire why firms ceteris paribus tend to concentrate their r d activities at home using a systems of innovation si approach we argue that r d inertia is associated with structural inertia and resultant systemic lock in interaction within an si is a self reinforcing mechanism which may or may not lead to ex post efficiency lock in can be efficient when technologies and institutions maintain the competitiveness of firms on the other hand radical innovations or technological discontinuities may require new institutions and resources but systemic lock in may prevent rapid reaction firms can use a voice strategy by intervening to modify the appropriate institutions in the existing si or an exit strategy by seeking alternative si which more closely fit their needs in the case of norway two groups of firms exist group a benefit from a systemic lock in these are large firms in traditional sectors which are highly embedded and around whom the norwegian si has been built these firms engage in voice and loyalty group b are in science based sectors for whom lock in results in inefficiencies and use exit slowly expanding r d abroad to seek competences in technologies not available domestically

financialisation and the dynamics of offshoring in the usa imports are linked to higher cost mark ups and firm profits and the gains from such non competitive imports the result of offshoring are increasingly associated with the reinvestment of these higher profits our regression analysis of 35 us manufacturing and service industries over the period 1998 2006 supports aggregate and firm level studies showing that offshoring is associated with a higher share of corporate profit in total value added but the dynamic gains from offshoring have not been fully realised because firms have purchased financial assets especially share buybacks and higher dividend payments to raise shareholder value rather than investing in productive assets that raise productivity growth employment and income despite the corporate sector s contribution to national savings over the past decade the offshoring financialisation linkage reduces the capacity of non financial corporations to act as a driver of the recovery from the economic crisis that emerged in 2008

internal capital market controls and financial performance in multidivisional firms it is proposed that within the population of m form firms the control systems necessary to realize economic benefits from interrelationships between subunits o f a firm are incompatible with the systems necessary to realize benef its from an m form type internal capital market this hypothesis is t ested on 156 large u k firms questionnaire data are used to classif y the firms according to their internal control characteristics the findings provide tentative support for the hypothesis copyright 1988 by blackwell publishing ltd

financialization of the global economy the instability of the world financial system starkly revealed in the recent debacle is not the only problem it poses its secularly increasing dominance over the real economy is in itself a phenomenon that needs examining the article traces the source of this increasing dominance not just to the increasingly leveraged and increasingly incomprehensible forms of intermediation between savers and those in the real economy who need credit and insurance but also to the increasingly universal doctrine that maximizing shareholder value is the sole raison d etre of the firm and the promotion by governments of an equity culture some of the social consequences of financialization are exacerbating inequalities greater insecurity misdirection of talent and the erosion of trust copyright 2008 oxford university press

financialisation and the slowdown of accumulation over the past decades financial investment of non financial businesses has been rising and accumulation of capital goods has been declining the first part of the paper offers a novel theory to explain this phenomenon financialization the shareholder revolution and the development of a market for corporate control have shifted power to shareholders and thus changed management priorities leading to a reduction in the desired growth rate in the second part the link between accumulation and financialization is tested econometrically by means of a time series analysis of aggregate business investment for usa uk france and germany extensive test of robustness are performed for the first three countries evidence that confirms the negative effect of financialization on accumulation is found author s abstract

regional financial development and bank competition effects on firms growth fernandez de guevara j and maudos j regional financial development and bank competition effects on firms growth regional studies this paper analyses the effect of regional financial development and bank competition on firms growth using the spanish provinces as a testing ground the results show that firms in industries with a greater dependence on external finance grow faster in more financially developed provinces the results also show that bank monopoly power has an inverted u effect on firms growth suggesting that market power has its highest effect at intermediate values the effect is heterogeneous among firms according to the financial dependence of the industry to which they belong this result is consistent with the literature on relationship banking which argues that bank competition can have a negative effect on the availability of finance for more informationally opaque firms fernandez de guevara j et maudos j le developpement financier regional et la concurrence bancaire l imp

accessing vs sourcing knowledge a comparative study of r d internationalization between emerging and advanced economy firms research and development r d internationalization is on the rise for advanced economy multinationals amnes as well as emerging economy multinationals emnes we study emne r d internationalization by comparing it to that by amnes in the context of an emerging knowledge intensive industry we find that these two are fundamentally different processes while the internationalization of amnes r d activities can largely be explained in terms of the twin strategies of competence exploitation and competence creation emne r d internationalization is rooted in the firms overall catch up strategy to get on par with industry leaders an in depth comparison of knowledge flows reveals that within amnes headquarters often serves the primary source of knowledge for r d subsidiaries in contrast within emnes headquarters accesses knowledge from r d subsidiaries in advanced economies for innovation catch up within this dichotomy the innovative capabilities of emne headquarters develop more slowly and with greater difficulty than those of amne subsidiaries

capital mobility and exchange rate overshooting abstract this paper examines the relation between the degree of capital mobility and the exchange rate overshooting phenomenon in a framework that employs a stock formulation of the capital account the results are compared with those emerging from the corresponding flow formulation and it is shown that the stock formulation modifies the quantitative but not qualitative implications of the model

the drivers of foreign direct investment into research and development an empirical investigation this paper examines the determinants of foreign direct investment fdi in research and development laboratories by 32 multinational enterprises in the pharmaceutical and electronics industries the paper applies a dichotomous set of motives for fdi results from an econometric analysis of 136 laboratory investments show that relative market size and relative strength of a country s science base determine whether fdi in research and development is carried out in order to exploit existing firm specific advantages or in order to build up new firm specific advantages this holds true in similar form for japanese european and u s firms and across the two industries

large firms in the production of the world s technology an important case of non globalisation us patenting by 686 of the world s largest manufacturing firms shows that their share of the world s production of technology is less than their share of r d activities and varies greatly amongst sectors in most cases the technological activities of these large firms are concentrated in their home country the characteristics of which influence the volume and trends in their technological activities much more strongly then the international component of these activities at the same time these large firms are major elements in the volume and the pattern of sectoral specializations in their home countries technological activities

decentralised r d and strategic competitiveness globalised approaches to generation and use of technology in multinational enterprises mnes abstract using material from surveys of multinational enterprise mne production subsidiaries and laboratories operating in the uk the paper seeks to discern vital changes in the roles of such r d facilities from the primarily tactical and technologically dependent role of adapting established group products for the local market these labs now take more committed positions in support of their group s strategic competitiveness this can involve a much more profound involvement in original product development or inputs into programmes of pre competitive basic or applied research to support the longer term evolution of the core technology of the mne group it is suggested that this evolution of decentralised labs positioning in mne knowledge strategies implies i an increasing involvement in product development rather than adaptation ii an interdependent rather than dependent position in group technology programmes iii increased relevance of supply side influences host country technology competencies capacities and heritage iv decline of centralising forces on r d e g economies of scale communication and co ordination problems concerns of knowledge security

covered interest parity uncovered interest parity and exchange rate dynamics a number of macroeconomic models of open economies under flexible exchange rate assume a strong version of perfect capital mobility which implies that currency speculation commands no risk premium if this assumption is dropped a number of important results no longer obtain first the exchange rate and interest rate cannot be in steady state unless both the government deficit and current account equal zero not simply their sum as would otherwise be the case second even in steady state the domestic interest rate can deviate from the foreign interest rate by an amount which de ends upon relative domestic asset supplies finally introducing risk aversion on the part of speculators can reduce the response on impact of the exchange rate to changes in domestic asset supplies in this sense rational speculators if they are less risk averse than other agents can destabilize exchange markets this abstract was borrowed from another version of this item

what happened to the transnational the emergence of the neo global corporation bartlett and ghoshal s transnational solution for managing the mnc remains popular among scholars and practitioners alike however our in depth qualitative study of unilever an exemplary case of a transnational found that in the period 2000 2012 the company evolved into a very different organizational form with a distinct set of characteristics we call this the neo global corporation in explaining how and why this transformation occurred we turn to organizational evolutionary theory and use our case to generate a multi cycle process model of mnc evolution given the dynamism of the mnc and its environments we anticipate that the neo global will also eventually transform and call for more organization level case studies of mncs in future international business research

technology strategy governance structure and interdivisional coordination abstract this paper studies how various organizational forms compare in their capacities to solve coordination problems created by technological interdependence between firms divisions i contrast the organizational mechanisms used by two firms ibm and general motors to address these problems while it is widely recognized that centralization distorts incentives facing division managers this paper highlights its benefits when there are large potential gains from agreement on technological standards the examples show how a centralized governance structure supported by lower powered incentives facilitates interdivisional coordination this suggests a refinement of the theory of organizational form based on how firms resolve the tensions between strategic planning and the measurement of organizational units performances

the timing of a rate request by a regulated firm the rate of return review is an integral part of the relationship between a regulated firm and its regulatory agency traditionally the agency has been portrayed as the aggressor demanding a rate review whenever the firm s earned rate of return exceeded the agency s authorized rate of return 2 13 15 although this approach has been widely criticized 7 12 9 11 evans and garber 8 argue that its primary advantage is in the tractability of the regulatory constraint alternative methodologies have been suggested but none has received general acclaim although baily and coleman 3 and bawa and sibley 4 have refined the role of the regulatory agency by modeling the enforcement of the rate of return constraint in a probabilistic sense the agency is still responsible for initiating rate review and the firm is still assumed to maximize expected profits subject to a rate of return constraint although the rate of return constraint has been diluted the roles of the agency and the firm are unchanged in a seminal article joskow 10 questioned whether the regulatory agency was the aggressor in the rate review process he argued that the firm initiates the process triggering a review to raise the level or change the structure of their rates further he suggests that the regulatory agency is concerned with price and not profit or rate of return data throughout the 1970s and 1980s supports joskow s argument that the firm is the aggressor in the rate review process further evidence in support of joskow s hypothesis is provided by burness montgomery and quirk 5 in a study of the electric power industry s acquisition of capital to explain industry actions they contrasted the predictive power of the averch johnson type model to that of a joskow type model and found joskow s model to be a better predictor of industry behavior if it is the firm that initiates the review process what causes the firm to set the process in motion again joskow 10 argued that the firm would file for rate review to keep earned rates