information processing theory and the multinational enterprise this paper attempts to extend information processing theory so that it can be meaningfully applied to mncs a specific multidimensional framework is developed that can be used to measure the information processing capacities of macro level features of mnc organizational design an applied example transnationalism is used to illustrate how to apply the framework and demonstrate that it can contribute meaningful new insight to this complex organizational problem

environmental regulations under simple negligence or strict liability we use negligence and strict liability as the basis for environmentalregulations and show that when jurisdictions compete for firms that engagein environmentally risky behaviour strict liability implements the sociallyoptimal outcome while simple negligence does not even if the jurisdictionsfully cooperate in setting standards of care consequently we argue that even if jurisdictions delegate standard setting to a central authority likein the european union this would not implement the socially optimaloutcome we also demonstrate that harmonization of environmental regulationsmakes more sense if strict liability is used rather than simple negligence

environmental federalism and environmental liability abstract environmental federalism considers what level of government should optimally regulate pollution this paper addresses this question for accidental pollution which government regulates through the ex post liability regimes of either negligence or strict liability we find that decentralizing the choice between these regimes does not in general induce the socially optimal outcome when firms can pay all damages all regions may choose negligence and impose an overly strict standard of due care when firms may be bankrupted by damages all regions may choose strict liability which induces too little care in addition asymmetric equilibria are possible in which some regions choose negligence others strict liability combining negligence with a pigovian tax or strict liability with a bonding requirement can align regional authorities incentives with those of a central government

control and coordination in multinational corporations the integration of french and british subsidiaries into u s based multinationals is examined a theory linking the use of control and coordination mechanisms to the need for predictability flexibility and the cost of achieving them is investigated by relating organizational structure technology foreign commitment financial performance and nationality to the use of coordination and control

developing acquired foreign subsidiaries the experience of mnes in transition economies drawing on subsidiary evolution and dynamic capabilities research i test how development and growth of subsidiaries recently acquired in transition economies are affected by multinational enterprise mne and target capabilities these subsidiaries often lack important resources their cross border transfer enhancement and exploitation are problematic however data on 170 acquisitions in central and eastern europe confirmed the importance of the pre acquisition experiences of both target and mne for subsidiary growth although cultural differences moderated the predicted effects notably

responding to public disclosure of corporate social irresponsibility in host countries information control and ownership control we extend the internalization literature by theorizing on how public disclosure of corporate social irresponsibility csi can damage reputation based firm specific advantages of multinational companies mncs and how foreign subsidiary governance can subsequently be used as strategic responses specifically we distinguish between two foreign subsidiary governance mechanisms information control and ownership control that the prior literature has often assumed operate in parallel and posit that they function in divergent directions in this context furthermore we explain how two host country characteristics press freedom and regulatory quality amplify the need for mncs to utilize different governance mechanisms as responses to csi disclosure

a context based procedure for assessing participatory schemes in environmental planning the efficiency of participatory schemes in environmental planning is an emerging research area and many issues are not solved yet regarding the assessment of such procedures it is essential for decision makers to identify improvement opportunities of participatory schemes we propose an original procedure to address such issue through a bargaining model from the signaling game literature which accounts for participation design as well as for agents preferences beliefs and bargaining power the model is calibrated using qualitative data from surveys in french local communities involved in municipal solid waste management model simulations are used to test for assumptions on the stakeholder dialogue and explore sensitivity of game outcomes to structural parameters we propose a set of performance indicators to identify the most effective participatory schemes in achieving convergence in stakeholder positions regarding environmental and land use planning

does social capital affect investment in human capital family ties and schooling decisions we analyse whether traditional sharing norms within kinship networks affect education decisions of poor black households in kwazulu natal theory predicts that the size of the kinship network ambiguously impacts on the incentive to invest in human capital due to opposing empathy and free rider effects our empirical analysis based on a range of different estimators suggests the latter effect dominates forced solidarity within the network discourages investments in human capital

a framework for integrated risk management in international business treatments of risk in the international management literature largely focus on particular uncertainties to the exclusion of other interrelated uncertainties this paper develops a framework for categorizing the uncertainties faced by firms operating internationally and outlines both financial and strategic corporate risk management responses

managing the mne subsidiary advancing a multi level and dynamic research agenda abstract multinational enterprise mne subsidiaries abroad are important organizations in their own rights they typically hold some of the mne s most critical resources and operate at the forefront of complex international environments in this review we identify and organize theoretical and empirical research on subsidiary management based on over 600 articles in leading academic journals we develop a conceptual framework that integrates complementary streams of theoretical and empirical research with the subsidiary as its focal unit of analysis in particular we review six lines of research on subsidiary scope practices knowledge management engagement with local market and nonmarket actors performance and individuals within subsidiaries we highlight theoretical perspectives that have contributed to and been advanced by research on mne subsidiaries based on the review we explore future research agendas linking the contemporary research themes with two main thrusts first subsidiary management is a multi level phenomenon that would benefit from more microfoundational research second subsidiary management operates at key interfaces of technology paradigm shifts and of disruptions in the political and institutional environment research into the dynamics of subsidiary management would thus enhance our understanding of international business in a volatile global economy

environmental regulations and productivity growth the case of fossil fueled electric power generation this paper measures and analyzes the effect of sulfur dioxide emission restrictions on the rate of productivity growth in the electric power industry over the 1973 79 business cycle a firm specific measure of regulatory intensity is developed which depends on the severity of the emission standard the extent of enforcement and the unconstrained emission rate relevant to each utility the results indicate that emission regulations result in significantly higher generating costs primarily from the increased use of low sulfur fuels the average rate of productivity growth was reduced by 0 59 percentage points per year for constrained utilities

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

multinational corporations vs domestic corporations financial performance and characteristics the analysis in this paper is composed of two segments first the financial performance of a sample of multinational corporations mncs is compared with that derived for a control group of domestic corporations dmcs using market based performance measures then the paper presents a comparison of selected financial characteristics of the firms in the two groups the results suggest the dmcs appear to have a significantly superior risk adjusted market based performance are significantly less capitalized and have higher total risk as well as higher systematic risk the fact that mncs are substantially larger than dmcs is not found to be a significant factor in explaining the observed difference between the two groups performance

the choice of a liability regime when there is a regulatory gatekeeper consider a firm planning a project that poses a risk of environmental spillovers such a firm might be deterred by the threat of legal liability or restrained by gatekeeper regulation if regulators would be perfect gatekeepers then negligence based liability combined with regulation is more efficient that strict liability with or without regulation however if the regulator has incomplete information then any of a variety of regimes could be the most efficient harsher regimes regulation rather than laissez faire and strict liability rather than negligence are more appropriate for larger risks the choice of a liability regime is more complicated however if regulators are biased if they are biased against projects then negligence plus regulation is less likely to be the most efficient regime if regulators are biased toward projects then it is possible that apparently soft liability regimes are more desirable when risk is high

global strategy implementation at the business unit level operational capabilities and administrative mechanisms the study examines the impact of internationally strategy on organizational design and the influence of the organizational design on effectiveness at the business unit level the empirical findings are based on survey responses from eighty two business units competing in global industries the findings are supportive of the contingency notion which suggests that business unit effectiveness is a function of the fit between the international strategy and the organizational design

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 compensation regime in liability law incentives to curb environmental harm ex ante and ex post this paper analyzes private incentives for precautions against environmental harm before accidents occur and for clean up after the fact we consider the compensatory regimes used in various jurisdictions which differ in terms of the basis for compensation the level of harm clean up costs or some combination of the two and the resulting levels of compensation we establish that socially optimal decisions are usually not induced by liability law in any of the compensatory regimes however the different types and levels of compensation have distinct effects allowing the policy maker to identify the most appropriate regime for specific circumstances

an empirical analysis of the integration responsiveness framework u s construction equipment industry firms in global competition in this study businesses competing as part of the global u s construction equipment industry were categorized into three subgroups according to the integration responsiveness framework i r in an attempt to further understand industry pressures confronting businesses that compete internationally the results show that three generic strategies suggested by the i r framework do appear in a single industry context globally integrated locally responsive and multifocal beyond providing additional insight into the nature of competition in a single global industry several broad extensions to the integration responsiveness framework are suggested

control changes in multinational corporations adjusting control approaches in practice the issue of control in multinational corporations mncs is central to international business scholarship however prior literature tends to provide a static perspective offering few theoretical insights on control changes especially the practices that enable control adjustments adopting a practice theory perspective we consider control as in the making whereby adjustments emerge through a social accomplishment constituted and reconstituted as headquarters and subsidiaries engage in a co creating process using a longitudinal case study approach we had the rare opportunity to track and compare an unsuccessful and a successful attempt to adjust control in an mnc over time our main theoretical contribution is a model of adjusting control in mncs that details the practices that enable control changes this model offers theoretical implications for organizational control theory in mncs especially in relation to theorizing the subsidiary contribution in the design of control the reconciliation of raised tensions in headquarters subsidiary relationships and the nature of unintended consequences in the adjustment process our study also contributes to theories on mnc change as it details the construction of an ongoing strategy structure alignment for strategic flexibility

implementing global strategy characteristics of global subsidiary mandates implementing a global strategy requires coordinating subsidiary activities across country locations the assumption often made is that such coordination must be managed at headquarters however an alternate approach is decentralized centralized responsibilities in which different subsidiaries within the multinational are given worldwide mandates to manage specific products or products lines this study identifies subsidiary characteristics that are associated with receiving a global mandate by examining foreign subsidiaries located in france germany japan u k u s and canada

an empirical analysis of the integration responsiveness framework in global industries in this study businesses competing in global industries were categorized into three groups according to the integration responsiveness framework for conceptualizing industry pressures confronting business competing internationally using this framework contextual conditions associated with each group were examined competitive attributes distinguishing each group were then identified to clarify alternate business level strategies for competing within a global industry context beyond providing additional insight into the nature of competition in global industries several broad extensions to the integration responsiveness framework are suggested

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

modelling the choice between regulation and liability in terms of social welfare using a formal political economy model with asymmetric information we illustrate the conditions under which an environmental protection system based on extending liability to private financiers is welfare superior inferior or equivalent to a system based on an incentive regulatory scheme subject to capture by the regulatees we explicitly consider the following factors the cost of care and its efficiency in reducing the probability of an environmental accident the social cost of public funds the net profitability of the risky activities the level of damages and the regulatory capture bias we characterize in such a parameter space the regions where one system dominates the other jel classification d82 k32

ex post liability for harm vs ex ante safety regulation substitutes or complements this paper concerns the regulation of hazardous economic activities economists have generally viewed ex ante regulations safety standards pigouvian fees that regulate an activity before an accident occurs as substitutes for ex post policies exposure to tort liability for correcting extemalities this paper shows that where there is uncertainty there are inefficiencies associated with the exclusive use of negligence liability and that ex ante regulation can correct the inefficiencies in such a case it is efficient to set the safety standard below the level of precaution that would be called for if the standard were used alone jel 619

transactions cost economics and the multinational enterprise an assessment abstract this paper applies transactions cost principles to the multinational enterprise in order to ascertain its distinctive properties as a mode of economic organization the analysis helps identify just when and where contractual alternatives to the multinational firm are likely to be viable this turns out to depend upon the nature of the technology the regime of appropriability within which the firm operates and the characteristics of the markets in question transactions cost analysis is also extended to the multinational enterprise host country relationship implications for management and public policy are derived

multinational corporations control systems and delegation issues the paper has 2 major objectives first to identify control and delegation issues confronting multinational corporation managers second to develop a conceptual model to assist multinational corporation managers in selecting appropriate control systems and determining the extent of delegation to be provided to subsidiary managers finally the paper suggests directions for future research

patterns of strategic control within multinational corporations the management of multinational operations is often required to balance conflicting priorities between responsiveness at the national subsidiary level and central coordination for global competitiveness such balancing requires that relevant data be brought to bear on decisions that consensus be created among key managers and that relative power among them be carefully balanced in large complex mncs the balancing process can be institutionalized through the structuring of relationships between headquarters and subsidiaries

market seeking mnes in an emerging market how parent subsidiary links shape overseas success this study extends research on parent subsidiary links applying new theoretical perspectives those of resource dependence and dynamic capability to the new empirical setting of an emerging market we suggest that parent subsidiary links help to mitigate emerging market threats by reducing external dependence and help to capitalize on emerging market opportunities by enhancing local responsiveness

resource security competition for global resources strategic intent and governments as owners we develop a resource security theory by examining the intent of acquisitions of scarce resources by multinational firms results suggest that owners of firms can shape the intent of resource acquisitions specifically state owned enterprises soes tend to acquire and pay more for resources for exploration rather than exploitation this is because soes owners governments are most concerned with securing their country s future we contribute to the literature by suggesting that ownership influences resource acquisitions that resource security is of importance to multinational enterprises and that soes invest abroad to safeguard both their own and their home countries future

brownfield entry in emerging markets this paper focuses on the brown field entry mode as a special case of acquisition in which the resources transferred by the investor dominate over those provided by the acquired firm we see this mode as having particular relevance for entry strategies in emerging markets the choice of entry mode is analyzed on the basis of a framework utilizing both resource based and transaction cost theories the resource requirements have to be matched with resources available to the investor through an acquired firm and the decision has to account for the costs of acquiring and integrating the resources

productivity with general indices of management and technical change abstract we propose a model of production where technical change is both time and management induced we define a general management index in addition to the general time index of baltagi and griffin 1988 and use them as arguments in the translog production function time and management induced technical change are then defined in terms of these general indices for comparison we also consider models in which time and management are specified as continuous variables we report empirical results for a sample of manufacturing firms in the us uk germany and france

a general index of technical change this paper outlines a procedure for estimating a general index of technical change within the context of a quite general production technology specifically when panel data are available for firms in an industry time specific dummies can be combined in a nonlinear estimation procedure to yield a general index of technical change that may be both nonneutral and scale augmenting this approach offers numerous advantages over the traditional time trend representation of technical change for example the general index can serve as the basis for analysis of the determinants of technical change results for a sample of 30 electric utilities over the period 1951 78 show that the productivity decline of the 1970s can be attributed primarily to sulphur oxide restrictions and secularly declining capacity utilization due to rapidly increasing peak load demands

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

generalized progress of abatement technology incentives under environmental liability law this paper considers the incentives environmental liability creates to improve pollution abatement technology our analysis considers technical progress in end of pipe abatement and in the production technology used thereby generalizing the approach taken by endres et al environ resour econ 36 341 366 2007 we establish that this generalization has drastic repercussions on incentives under negligence liability while the performance of strict liability is not compromised furthermore it is demonstrated that the social desirability of investment in abatement or production technology or both decisively determines how ex ante and ex post regulation fare with respect to welfare maximization in the case of negligence liability

mnc subsidiary channel relationships as extended links implications of global strategies foreign subsidiaries of multinational corporations mncs rely on external partners such as channel partners to achieve global objectives we conceptualize the subsidiary s channel partner as an extended link of the mnc s internal network thus the subsidiary s adaptation and execution of the mnc s global strategies should influence the subsidiary s channel relationship and performance building on the strategy environment alignment framework we study the influence of mnc global strategies global efficiency multinational flexibility and worldwide learning on a subsidiary s channel commitment and the moderating influence of the host country environment survey data from german and japanese mncs in the united states indicate the importance of global strategies to a channel relationship for example we find that an emphasis on multinational flexibility is detrimental but worldwide learning benefits the subsidiary s channel commitment we also find that the host country environment plays a contingent role for example a global efficiency strategy is beneficial for channel commitment in a stable environment but detrimental in a dynamic environment our research offers key implications for mncs we suggest that when mncs decide to lay emphases on global strategies the mncs should consider not just their internal subsidiary network but also their extended channel partner links that function in foreign markets

building capabilities for international operations through networks a study of indian firms in this study we seek to explain how firms from emerging markets build capabilities to operate in international markets through learning from parental networks the building of these capabilities is of particular interest as firms from emerging markets may not necessarily possess the monopolistic advantages commonly referred to in ib literature which allow a firm to succeed in international markets using lagged cross sectional regression models on a sample of 794 indian firms we found that firms draw on the international experience of their parental and foreign networks to build such capabilities findings also indicate that network scope is beneficial for increasing exposure to international markets only in the case of networks that are either small or medium sized additionally we found that firms lacking market power in their home market benefit through foreign partnerships when internationalizing operations

bad eggs learning by doing and the choice of technology we model long run economic development through technology adoption under scientific uncertainty about environmental effects there are four possible long run equilibria in a socially planned economy high growth adopt rapidly but abandon damaging technologies once revealed ddt cfcs cautious brake the introduction of new technologies to avoid mistakes genetically modified organisms no growth halt technological progress to preserve secondary knowledge and collapse adopt rapidly without ever abandoning damaging technologies in the base parameterization a short sighted social planner chooses the cautious strategy a far sighted planner chooses the high growth strategy unless damages are irreversible in which case the cautious strategy again dominates regulatory options in the market economy are investigated pollution taxes do not affect the firm s level of precaution if they can only be applied after the adopting firm has reaped the benefits however they do encourage the abandonment of damaging technologies liability rules do affect precaution but may lead to excessive caution or even a no growth trap

the use of process and output controls in foreign markets this study builds upon previous control research to propose a model of formal controls used in managing activities performed in foreign markets theoretically derived contingency relationships are also proposed to assess the performance consequences of different formal control types the findings support the importance of internal and external sources of uncertainty in determining the type of control used partial support was also found for the premise that the fit between the type of control used and the type of uncertainty perceived will contribute to superior performance

regulating an externality generating utility environmental taxes under limited information global warming is currently an important item on most nationalenvironmental agendas in many countries coal fired electricity generatingstations represent an important source of greenhouse gases we examinehow regulations to curb emissions affect public utility pricing regulationwhen regulators act non cooperatively we show that when there is limitedinformation on fixed abatement costs an environmental regulator prefersan emission tax over an output tax or a lump sum environmental tax thepublic utility regulator prefers the lump sum tax regime

product liability and regulation establishing the appropriate institutional division of labor society has several institutional mechanisms that promote the control of product health and safety risks and compensation of the income losses that these risks generated for risks traded in the market economic forces at work foster each of these objectives social insurance programs such as worker s compensation promote the compensation objective directly and influence safety incentives through the meritrating procedure two additional institutional mechanisms which are the focus of this paper are tort liability and regulation each of these institutions has assumed a more active role in the last two decades and has been the focus of considerable academic and policy debate what is most noteworthy about these discussions is that both policymakers and economic analysts generally view each institution as the only societal response to the risk in the field of legal scholarship this narrow approach has been termed the tortcentric perspective by richard stewart 1987a b such a piecemeal approach may be necessary in some cases as an analytic convenience but it neglects potentially important interactions of the two systems in this paper i explore the nature of the institutional interactions in section i and examine the appropriate institutional design in section ii the general conclusion is that risk regulation should play a dominant role in augmenting market incentives for risk reduction and that the scope of product liability remedies should be scaled back to reflect its subsidiary role

renegotiation design with multiple regulators abstract one striking feature of the internal organization of governments is the existence of multiple regulators this paper explains this organizational choice as coming from the government s limited ability to commit the separation of powers between two regulators is modeled as a stackelberg common agency game with respect to the case of a single regulator the allocative efficiency and the regulated firm s informational rent are both reduced in the unique equilibrium of this game however when regulators have a limited ability to commit this static cost of regulators separation becomes a dynamic benefit separation makes renegotiation harder and improves commitment journal of economic literature classification numbers d82 l51

strategic alliance based sourcing and market performance evidence from foreign firms operating in china although foreign multinational firms from the triad regions increasingly use mainland china as both a sourcing and a marketing location no study has directly examined the sourcing strategy performance linkage using resource complementarity and resource dependence theory we extend the sourcing literature and apply these perspectives to an important transitional economy china these two theoretical perspectives suggest that product and uncertainty factors moderate the relationship between strategic alliance based sourcing sa sourcing of major components and market performance we find that at low levels of product innovativeness and technological uncertainty the use of sa sourcing is positively related to market performance however the effects of product differentiation and demand uncertainty on the sourcing performance relationship are insignificant journal of international business studies 2005 36 187 208 doi 10 1057 palgrave jibs 8400120

centralization in headquarters subsidiary relationships research to date on centralization in mncs has produced many inconsistent findings the present study attempts to add clarity to the situation by re testing many of the existing hypotheses with data from a recent study of centralization in 50 large us uk and european mncs it examines how the degree of centralization inherent in the headquarters foreign subsidiary relationship varies in response to a variety of company wide and subsidiary level conditions the influence of company wide conditions on centralization appears to be much clearer than the influence of subsidiary level conditions the study also identifies several new contingency patterns that appear to be at work in mncs today