beijing or shanghai the strategic location choice of large mnes host country headquarters in china we argue that a multinational enterprise s mne s location choice for its host country headquarters hchq in the geographic space of the host country is determined by the interplay between the strategic roles of hchq in the organizational space of the mne and the institutional space external and internal to the mne we focus on the location choice between beijing and shanghai we test our arguments using data for a sample of fortune global 500 corporations in china 1979 2005 this study contributes to international business ib research by reinvigorating research on hchq we also complement economic geography research on subnational agglomeration by using an ib perspective with a focus on the institutional idiosyncrasies of cities

the disciplinary role of takeovers this paper presents a theory of the disciplinary role of takeovers based on an explicit model of managerial incentive problems stemming from asymmetric information it is argued that an informed raider can reduce incentive problems by making managerial compensation more sensitive to information unavailable to shareholders the paper also highlights the importance of specifying the source of contractual inefficiencies when analyzing the effect of takeovers on incentives

the internationalisation of r d by multinationals a trade off between external and internal proximity overseas production is frequently seen as a force inducing the decentralization of rd it should on the contrary be completed by the implementation of relations of proximity internal to the firm which they refer to as internal proximity from this perspective the multinational firm that manages dispersed r d units is seen as facing a tension an organizational trade off between external proximity and internal proximity copyright 1999 by oxford university press

ties that bind how business connections affect mutual fund activism we investigate whether business ties with portfolio firms influence mutual funds proxy voting using a comprehensive data set spanning 2003 to 2011 in contrast to prior literature we find that business ties significantly influence promanagement voting at the level of individual pairs of fund families and firms after controlling for institutional shareholder services iss recommendations and holdings the association is significant only for shareholder sponsored proposals and stronger for those that pass or fail by relatively narrow margins our findings are consistent with a demand driven model of biased voting in which company managers use existing business ties with funds to influence how they vote abstract from author

core or periphery the effects of country of origin agglomerations on the within country expansion of mnes we show how the initial subnational entry location of foreign multinational enterprises mnes in china influences their subsequent within country location choices and expansion speed we distinguish between mnes that establish their first subsidiary in co ethnic cores dense agglomerations of other firms from the same country of origin and mnes that locate their first subsidiary in the periphery i e outside of these co ethnic cores to identify co ethnic cores in china we employ a geo visualization methodology which draws the boundaries of cores organically and dynamically over time we contrast our findings with the prevailing approach of using static administrative boundaries for identifying agglomerations our results provide evidence of path dependency in that a entry through subnational locations with strong co ethnic communities is followed by expansion into other locations where co ethnic communities are present and that b entry through co ethnic communities accelerates the pace at which mnes establish additional subsidiaries in china we also find that co ethnic community effects continue to influence within country mne activities over time despite a host of economic institutional and investment developments

the effect of poison pill securities on shareholder wealth abstract this paper examines empirical evidence about the effect of poison pill takeover defenses on shareholder wealth i find evidence that announcements of the most restrictive forms of the pill defense are associated with stock price declines also the most restrictive forms of the pill defense are associated with abnormally high rates of defeat of unsolicited tender offers although this evidence is consistent with managerial entrenchment the evidence implies that on average poison pill defenses have seemingly had only a modest effect on firm valuation

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

why higher takeover premia protect minority shareholders posttakeover moral hazard by the acquirer and free riding by the target shareholders lead the former to acquire as few sharcs as necessary to gain control as moral hazard is most severe under such low ownership concentration inefficiencies arise in successful takeovers moreover share supply is shown to be upward sloping rules promoting ownership concentration limit both agency costs and the occurrence of takeovers furthermore higher takeover premia induced by competition translate into higher ownership concen tration and are thus beneficial finally one share one vote and simple majority are generally not optimal and socially optimal rules need not emerge through private contracting

global technology development by colocating r d and manufacturing the case of swedish manufacturing mnes in this study we analyze the role of colocation between research and development r d and manufacturing for global technology development by multinational enterprises mnes the extant literature suggests that the main strategic role of colocated r d units is to locally adapt existing products and processes however data from 146 foreign r d units of sweden s 17 largest manufacturing mnes in 2013 show that they instead mainly develop new technology not only for the local and regional markets but to a large extent for the global market a likely explanation is that colocation positively contributes to joint problem solving and transfer of tacit knowledge between production and r d personnel all of which is necessary in new product development especially in industries characterized by complex products and systems and rapid technological change a theoretical implication is that depending on industry characteristics internal cross functional linkages between r d and manufacturing can be more critical than external supply and demand side factors when it comes to influence where r d units are located globally

do takeover defense indices measure takeover deterrence many researchers use the g index or e index to measure firms takeover defenses others argue that these indices are not related to firms takeover likelihoods we find that unlike their raw values the instrumented versions of these indices are significantly and negatively related to acquisition likelihood the difference between the raw and instrumented results indicates that the g index and e index include an endogenous component and highlights the importance of accounting for endogeneity in tests that use takeover indices to measure takeover deterrence we provide data on new instruments that researchers can use to address these issues received april 13 2016 editorial decision october 14 2016 by editor david dennis

knowledge seeking and location choice of foreign direct investment in the united states to what extent do firms go abroad to access technology available in other locations this paper examines whether and when state technical capabilities attract foreign investment in manufacturing from 1987 1993 we find that on average state r d intensity does not attract foreign direct investment most investing firms are in lower tech industries and locate in low r d intensity states suggesting little interest in state technical capabilities in contrast we find that firms in research intensive industries are more likely to locate in states with high r d intensity foreign firms in the pharmaceutical industry value state r d intensity the most at a level twice that of firms in the semiconductor industry and four times that of electronics firms interestingly not only firms from technically lagging nations but also some firms from technically leading nations are attracted to r d intensive states this suggests that beyond catching up firms use knowledge seeking investments also to source technical diversity

diplomatic and corporate networks bridges to foreign locations firms and governments operate in broad networks in which the home government and its diplomatic service are a critical node or a referral point between firms and potential partners in foreign locations thus diplomatic relations between countries matter for the choice of foreign investment location using a network perspective we argue that the extent to which good diplomatic relations induce firms to invest in friendly host countries depends on their political connections to home governments those with stronger ties to home governments can better access and leverage intergovernmental diplomatic connections thus benefiting potentially from enhanced access to information reduced political risks and increased legitimacy such ability of politically connected firms is more useful where weak institutional impartiality in the host country inhibits neutral treatment of foreign investors empirically using overseas investment location decisions by chinese firms we find that the types of home government ties i e whether they are organizational or personal and whether those relationships are with central or local goverments and the impartiality of host institutions are both important contingencies affecting firms utilization of diplomatic relations we discuss the implications of our study to research on network theory political ties and internationalization of emerging market firms

price and probability decomposing the takeover effects of anti takeover provisions we study the effects of anti takeover provisions atps on the takeover probability the takeover premium and target selection voting to remove an atp increases both the takeover probability and the takeover premium that is there is no evidence of a trade off between premiums and takeover probabilities we provide causal estimates based on shareholder proposals to remove atps and address the endogenous selection of targets through bounding techniques the positive premium effect in less protected firms is driven by better bidder target matching and merger synergies

the globalization of r d results of a survey of foreign affiliated r d laboratories in the usa abstract this paper examines the globalization of innovation and the phenomenon of foreign direct investment fdi in research and development to do so it draws from a survey of foreign affiliated r d laboratories in the united states while the literature on foreign direct investment has emphasized the role of markets in driving off shore investments the main conclusion of this research is that the globalization of innovation is driven in large measure by technology factors of particular importance is the objective of firms to secure access to scientific and technical human capital

location choices of multinational firms in europe the role of eu cohesion policy using data on 5509 foreign subsidiaries established in 50 regions of 8 eu countries over the period 1991 1999 we estimate a mixed logit model of the location choice of multinational firms in europe in particular we focus on the role of eu cohesion policy in attracting foreign investors from both within and outside europe we find that after controlling for the role of agglomeration economies as well as a number of other regional and country characteristics and allowing for a very flexible correlation pattern among choices structural and cohesion funds allocated by the eu to laggard regions have indeed contributed to attracting multinationals these policies as well as other determinants play a different role in the case of european investors as opposed to non european ones

takeover threats and managerial myopia this paper examines the familiar argument that takeover pressure can be damaging because it leads managers to sacrifice long term interests in order to boost current profits if stockholders are imperfectly informed temporarily low earnings may cause the stock to become undervalued increasing the likelihood of a takeover at an unfavorable price hence the managerial concern with current bottom line the magnitude of the problem depends on a variety of factors including the attitudes and beliefs of shareholders the extent to which corporate raiders have inside information and the degree to which managers are concerned with retaining control of their firms

global cities and multinational enterprise location strategy we combine the concept of location derived by economic geographers with theories of the multinational enterprise mne and the liability of foreignness developed by international business scholars to examine the factors that propel mnes toward or away from global cities we argue that three distinctive characteristics of global cities global interconnectedness cosmopolitanism and abundance of advanced producer services help mnes overcome the costs of doing business abroad and we identify the contingencies under which these characteristics combine with firm attributes to exert their strongest influence consistent with these arguments our analysis of a large sample of mne location decisions using a multilevel multinomial model suggests not only that mnes have a strong propensity to locate within global cities but also that these choices are associated with a nuanced interplay of firm and subsidiary level factors including investment motives proprietary capabilities and business strategy our study provides important insights for international business scholars by shedding new light on mne location choices and also contributes to our understanding of economic geography by examining the heterogeneous strategies and capabilities of mnes the primary agents of economic globalization that shape the nature of global cities

enjoying the quiet life corporate governance and managerial preferences much of our understanding of corporations builds on the idea that managers when they are not closely monitored will pursue goals that are not in shareholders interests but what goals would managers pursue this paper uses variation in corporate governance generated by state adoption of antitakeover laws to empirically map out managerial preferences we use plant level data and exploit a unique feature of corporate law that allows us to deal with possible biases associated with the timing of the laws we find that when managers are insulated from takeovers worker wages especially those of white collar workers rise the destruction of old plants falls but the creation of new plants also falls finally overall productivity and profitability decline in response to these laws our results suggest that active empire building may not be the norm and that managers may instead prefer to enjoy the quiet life

auctions versus negotiations which is the more profitable way to sell a company an auction with no reserve price or an optimally structured negotiation with one less bidder we show under reasonable assumptions that the auction is always preferable when bidders signals are independent for affiliated signals the result holds under certain restrictions on the seller s choice of negotiating mechanism the result suggests that the value of negotiating skill is small relative to the value of additional competition the paper also shows how the analogies between monopoly theory and auction theory can help derive new results in auction theory jel d44 g34 there are close analogies between standard price theory and the theory of auctions in an absolute english auction in which the price rises continuously until only one bidder remains and the seller is required to accept the final bid the sale price equals the lowest competitive price at which supply equals demand in the theory of optimal auctions the seller is treated as a monopolist who can choose any

the lab and the plant offshore r d and co location with production activities the literature has highlighted that the propensity of mnes to co locate offshore r d labs with their production plants can vary substantially according to firm and industry characteristics in this paper we apply a novel two stage estimation procedure that allows us to tease out this heterogenous behavior and investigate the factors that are associated with a higher propensity to co locate production and r d activities abroad using data on 1483 greenfield international investments in r d activities made by 855 firms in 587 cities worldwide we uncover that the strength of the co location effect is indeed highly heterogenous across firms in particular it is higher among firms with less international experience and geographical dispersion of international activities as well as with a lower share of intangible assets these results are consistent with the idea that co location is a substitute for firms ability to coordinate complex and dispersed organizational structures and that firms relying relatively less on codified knowledge can use co location of offshore r d and production to facilitate knowledge transfer across activities

training wages and sample selection estimating sharp bounds on treatment effects this paper empirically assesses the wage effects of the job corps program one of the largest federally funded job training programs in the u s even with the aid of a randomized experiment the impact of a training program on wages is difficult to study because of sample selection a pervasive problem in applied microeconometric research wage rates are only observed for those who are employed and employment status itself may be affected by the training program this paper develops an intuitive trimming procedure for bounding average treatment effects in the presence of sample selection in contrast to existing methods the procedure requires neither exclusion restrictions nor a bounded support for the outcome of interest identification results estimators and their asymptotic distribution are presented the bounds suggest that the program raised wages consistent with the notion that the job corps raises earnings by increasing human capital rather than solely through encouraging work the estimator is generally applicable to typical treatment evaluation problems in which there is nonrandom sample selection attrition copyright wiley blackwell