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

the role of agriculture and its prerequisites in economic development a vision for foreign development assistance abstract the aim of this paper is to establish a vision for foreign development assistance based upon the evolution of thought and empirical evidence found in the development literature the paper spotlights the agricultural led approach the empirical record shows that agricultural growth had a more pronounced impact on increases in developing country income than did growth in the nonagricultural sector the reason for the differential impact is that developing countries focusing on agricultural development experienced more broad based income growth and increases in the demand for domestically produced goods whereas the developing countries promoting rapid industrialization experienced narrow based income growth with a demand pattern oriented toward nonfood and capital intensive products a precondition for agriculture to play its proper role is the existence of a conducive environment in which private enterprise can flourish developing country governments need to assume responsibility for the creation and maintenance of essential institutions government investments are required in education infrastructure and other areas where the commercial market is not capable of delivering critical services finally governments must responsibly manage the macroeconomy pursuing sustainable pricing policies and fiscal and monetary policies that are consistent with real equilibrium exchange rates

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

getting agriculture moving do markets provide the right signals abstract political discrimination has often pushed the domestic value of agriculture in developing countries below its value in markets at the border this paper seeks to explain the reasons why border prices themselves undervalue the linkages that agriculture has to economic growth in the early stages of development if agriculture is critically important to stimulating and sustaining rapid economic growth those countries that fail to correct this discrimination exact a heavy toll in economic performance furthermore the poorest countries will suffer the most agricultural development and development of the non agricultural economy are closely linked the traditional market mediated linkages form the core of economic analysis of the role of agriculture in economic development providing labour for an industrial work force food for an expanding population with higher incomes savings for industrial investments markets for industrial output export earnings to pay for imported capital goods and raw materials for agro processing industries a second category of linkages is not well mediated by market forces even when markets are working well the impact of agricultural growth on the rest of the economy through non market linkages can be traced using a simple growth accounting framework that examines contributions to the labour force capital investment and the productivity with which these two physical factors are utilised several linkages stand out as likely to be important and potentially measurable because they draw on the efficiency of decision making in rural households the low opportunity cost of their labour resources the opportunity for farm investment without financial intermediaries the potential to earn high rates of return on public investments that correct for urban bias the contribution of food price stability to increased efficiency in investment decisions and the impact of growth in food production on widespread improvement in nutrient intake and labour productivity each of these factors alone as public investment and favourable policy stimulate growth in the agricultural sector should cause an increase in the efficiency of resource allocation and thus higher total factor productivity several of these mechanisms will also serve to speed factor accumulation by increasing the savings rate or improving factor mobility

the political roots of corporate social responsibility this article argues that whether and how a firm chooses to adopt corporate social responsibility csr initiatives is conditional in part upon the domestic political institutional structures present in its home market it demonstrates that economic globalization has increased the pressure applied to companies to develop csr policies that might help overcome specific governance gaps associated with the globalization phenomenon drawing upon an examination of domestic institutions and overall political structure it argues that the political conditions and expectations present in a company s home market will condition whether a firm might pursue csr activity for home markets it is posited that perceived electoral salience will be filtered through government type and ideology and state societal structures will influence if and how firms will use csr specific arguments are developed from these categorizations the article concludes with a discussion of how researchers might further explore links between csr domestic political structures and corporate political activity

a global survey and review of the determinants of transaction costs of forestry carbon projects reducing carbon emissions in the forestry sector by means of market based schemes is considered a cost effective measure for tackling climate change impacts however the transaction costs tcs involved are typically unknown or unquantified and therefore often neglected in this study three types of tcs search design and negotiation costs were measured in person days and monetary terms based on a global survey of forestry carbon projects implemented across latin america asia and africa cost estimates vary between zero and 1 201 tco2 for person days and from zero to us 1 738 tco2 for monetary costs key drivers of tcs are identified based on the characteristics of the project in general the transaction the transactors involved and institutional design the latter type of characteristic is shown to have a particularly large impact on tcs

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

mne subsidiaries versus domestic enterprises an analysis of their ownership and location specific advantages this paper compares the ownership advantages of multinational enterprises mnes subsidiaries and domestic enterprises dmes in greece previous studies have tested the hypothesis that ownership specific advantages oa are a major source of firm differences this study analyses the processed food sector sic 20 the leading industrial sector in greece with the highest inward and outward internationalization degree using a panel data set of 75 firms and 5 years the findings of a probabilistic regression analysis indicate that there are significant differences between the two groups of firms in the degree of possession of observed ownership advantages mne subsidiaries have higher market shares use multiplant operations and have higher advertising and r d to sales ratios compared to dmes dmes use their well established position knowledge of domestic and regional market conditions and size economies in order to compete effectively with mne subsidiaries it is inferred that pursuit of domestic ma

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

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

internal equity financing and the performance of multinational subsidiaries in emerging economies we examine the internal equity financing of the multinational subsidiary which retains and reinvests its own earnings internal equity financing is a type of firm specific advantage fsa along with other traditional fsas in innovation research and development brands and management skills it also reflects subsidiary level financial management decision making here we test the contributions of internal equity financing and subsidiary level financial management decision making to subsidiary performance using original survey data from british multinational subsidiaries in six emerging countries in the south east asia region our first finding is that internal equity financing acts as an fsa to improve subsidiary performance our second finding is that over 90 of financing sources including capital investment by the parent firms in the british subsidiaries come from internal funding our third finding is that subsidiary level financial management decision making has a statistically significant positive impact on subsidiary performance our findings advance the theoretical empirical and managerial analysis of subsidiary performance in emerging economies

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

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

the korean manufacturing multinationals as an extension of the export led growth of national economy overseas direct investment by korean multinationals has been rapidly increasing this article explores the development of the overseas manufacturing direct investment by korean firms and the relationship between parent firms and overseas affiliates three main issues are discussed the ownership specific assets location specific factors and government policies are the important sets of variables that help to explain the internationalization of the korean firms in the manufacturing sector the nature of technology transfer by korean multinationals to their subsidiaries and the benefits as a result of its overseas investment to korean the data for this study were gathered through structured interviews with the parent companies of 18 out of 21 manufacturing overseas subsidiaries and joint ventures formed by korean firms

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

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

why do transaction costs of agricultural policies vary policy related transaction costs tcs is an important issue when evaluating different policy options however tcs are often not taken into account in policy evaluations but may be as important for efficiency as the direct production costs different policies may result in different tcs and the main aim of this article is to explore possible reasons for these differences we compare the level of tcs for 12 different agricultural policy measures in norway and we analyze the causes of the differences along three different dimensions asset specificity frequency and point of policy application at the national level we find that all three dimensions are of importance when explaining the differences while variation in tcs incurred by farmers are mainly due to differences in point of policy application and asset specificity data show that direct price support has the lowest tcs while more direct payments for environmental amenities has the highest

transaction costs and environmental policy design abstract this article synthesizes the growing empirical literature on transaction costs to identify pragmatic design recommendations for environmental and natural resource policies the new institutional economics literature recognizes that appropriate policy choice and design will be a function of the specific characteristics of the problem the physical and institutional determinants of both transaction costs and abatement costs should be considered in the policy design process due to potential interactions between them analysts also need to incorporate the extent to which the technologies institutional environment governance structures or policy designs can be changed some factors can only be adjusted to or designed around while others can be designed differently this framework highlights the importance of property rights since transaction costs will be incurred to obtain or retain property rights and since the rights assignment may affect both the magnitudes and distribution of costs another implication is that education and extension programs or use of behavioral economics concepts to affect choices can be cost effective in some circumstances policy design should take advantage of economies of scale and foster technical change appropriate sequencing of policy instruments may decrease transaction costs particularly if there is potential for technical change

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

contagion influence on trade and investment policy a network perspective adopting a network perspective we demonstrate that two different yet complementary forces influence the formation of trade and investment policy one the one hand nations that are trading partners develop similar policies through a process of close and enduring interaction on the other hand nations that compete for trading opportunities adopt comparable policies through a process of establishing similar types of relations with other nations even though they may not have direct ties to each other implications for managers of multinational enterprises are developed

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

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

organizational complexity in the regional cultural economy markusen a organizational complexity in the regional cultural economy regional studies cultural industries offer a truncated understanding of the regional cultural economy undercounting self employed workers and others outside the for profit sector commercial public non profit and unincorporated community sectors produce present train organize guide and regulate elements of the cultural economy each with distinctive structures goals and operational systems using survey and census data on artists for two large california regions inter relationships among the sectors are explored the size of the cultural economies of both regions would be underestimated if confined to for profit cultural industries in closing policy implications for regional policy makers are drawn out and avenues for further research are suggested markusen a la complexite organisationnelle de l economie culturelle regionale regional studies les industries culturelles fournissent une explication partielle de l econo

explaining ijv survival in a transitional economy through social exchange and knowledge based perspectives in this study we combine social exchange and knowledge based perspectives to develop a general path model of ijv survival we further refine our expectations by considering the transitional economic context of our study and the somewhat unique managerial values resulting from the legacy of marxist ideology results from structural equation modeling suggest that an imbalance in the management control structure between the parents leads to parental conflict and an increased likelihood of ijv failure an imbalance in the ownership control structure however had no influence on conflict or survival in general support from the foreign parent is positively related to ijv learning and ijv survival however higher levels of technical support provided by the foreign parent to the ijv reduced the level of parental conflict whereas management support had no effect on conflict our results suggest some dilemmas for firms pursuing ijvs in transitional economies although the foreign parent often contributes critical resources to the ijv providing it with bargaining power and a high level of influence an imbalance in management control between the partners may ultimately be detrimental to ijv survival copyright 2000 john wiley sons ltd

equity ownership in international joint ventures the impact of source country factors this study examines the impact of four source country factors on the equity ownership in international joint ventures ijvs these factors are exchange rate cost of borrowing export capability and management orientation based on a sample of 8 078 ijvs in china this study shows that equity ownership tends to be higher for parent firms from a source country with strong currency low cost of borrowing strong export capability and high uncertainty avoidance

international expansion of emerging market enterprises a springboard perspective in this article we present a springboard perspective to describe the internationalization of emerging market multinational corporations em mnes em mnes use international expansion as a springboard to acquire strategic resources and reduce their institutional and market constraints at home in so doing they overcome their latecomer disadvantage in the global stage via a series of aggressive risk taking measures by aggressively acquiring or buying critical assets from mature mnes to compensate for their competitive weaknesses we discuss unique traits that characterize the international expansion of em mnes and the unique motivations that steer them toward internationalization we further delineate peculiar strategies and activities undertaken by these firms in pursuit of international expansion as well as internal and external forces that might compel or facilitate their propulsion into the global scene we finally explain the risks and remedies associated with this international springboarding strategy and highlight major issues meriting further investigation

make buy or ally a transaction cost theory meta analysis since the publication of williamson s markets and hierarchies many empirical articles have investigated the tenets of transaction cost theory using meta analytic techniques we quantitatively syn

factors that influence transaction costs in development offsets who bears what and why abstract environmental policy instruments generate transaction costs to public and private parties there is a growing literature reporting on the size of transaction costs produced by environmental policy instruments this paper extends that literature through an analysis of the factors that influence transaction costs in environmental policy and how this influence occurs the theory based factors that influence transaction costs are categorised as 1 transaction characteristics 2 transactor characteristics 3 nature of the institutional environment and 4 nature of the institutional arrangements we examined how these factors influenced transaction costs through the analysis of two australian based development offset schemes with different policy designs we found evidence of all four theory based categories of influence in the policy case studies the degree of influence and how each factor influenced transaction costs varies across the two policies and between parties policy design as a component of the institutional environment had a particularly large bearing on transaction costs of offset buyers and the policy administrator an important contribution to transaction cost theory assumes the institutional environment as given

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

the characteristics and performance of korean joint ventures in ldcs little has been reported on joint ventures between firms from newly industrialized countries and developing countries this paper examines twelve characteristics of a sample of korean firms with partners in developing countries ldcs and contrasts them with existing research where a developed country firms have linked with firms in other developed countries and b developed country firms have linked with local firms in developing countries as part of the analysis ten hypotheses were formulated and tested

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

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

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

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

policy uncertainty and the sequence of entry by japanese firms 1980 1998 we extend the stages model of internationalization to incorporate a sophisticated consideration of temporal and cross national variation in the uncertainty of the policy environment using a sample of 6465 international expansions of 665 japanese manufacturing firms in 49 countries we develop arguments from internationalization and bargaining power perspectives to show how japanese firms manage policy uncertainty in host country environments through the within country sequencing of investments although a distribution to manufacturing entry sequence tends to prevail in countries with low levels of policy uncertainty as uncertainty in the policy environment increases initial entry by distribution is increasingly likely to be eschewed in favor of an initial entry by a joint venture manufacturing plant we suggest that this change in investment sequence occurs as firms shift from an emphasis on developing knowledge about local markets and consumers in low hazards markets to an international expansion strategy in uncertain policy environments that places knowledge development of the policy environment at the forefront of a firm s strategy

mnes and market valuation of firms a cross sectional study of indian electrical and electronic goods manufacturing firms this paper argues that inter firm differences in the direction of change in market valuation will depend mainly on the salience and unique risk characteristics of the firms these characteristics are largely influenced by mulinational enterprise mne affiliation the sample for the study consists of electrical and electronic manufacturing firms in india for 1994 1996 maximum likelihood estimates of the probit model show that even during a downswing in the stock market mne affiliates were able to hold their own and increase their market valuation these results hold good for a wide variety of products produced in this sector where both mnes and local firms compete the results have implications for theories relating to mnes stock market valuation and also for policy makers

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

an institutional analysis of payments for environmental services abstract in this paper the characteristics and functioning of pes is analyzed from an institutional perspective while in theory pes is seen as a market solution to environmental problems as an alternative to state hierarchical and community governance a review of a large amount of case studies shows that pes in practice depends rather fundamentally on state and or community engagement hence pes are foremost a reconfiguration of the roles of public bodies and communities becoming core intermediaries or buyers first to establish pes rights to the land that delivers the environmental service must be clarified this demands public action second transacting over environmental amenities is very costly creating markets for environmental services depends therefore crucially on state and community facilitation hence buyers are often public agencies high transaction costs also influence price setting payments do not follow the market format as intermediaries frequently are setting the price with users often being unaware even of the fact that they pay finally the distinction between payments as incentives and as fair compensations is emphasized while payments may strengthen community relations and simplify action for environmental care they may also introduce a purely instrumental logic and in some cases worsen the environmental status by crowding out environmental virtues for the future greater awareness of these dynamics is warranted

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

determinants of foreign ownership in ldc manufacturing an indonesian case study this paper examines the determinants of foreign investment shares in the manufacturing sector of indonesia a large rapidly industrializing developing country with a comparatively rich industrial database particular emphasis is given to the interplay between industrial organization and policy factors in determining these shares most of the industrial organization factors were found to be significantly correlated with ownership shares although the two variables capturing intangible assets were not two of the three policy variables were found to be significant since the policy regime in developing countries is typically more interventionist than that in oecd economies this suggests that studies of the former ignore the policy context at their peril it is also demonstrated that the results of these types of studies are sensitive to the precise definition of foreign ownership

outward direct investment by indonesian firms motivation and effects as part of indonesia s opening to the world economy over the past several years indonesian firms have begun to invest abroad this study compares indonesian firms that have invested abroad and those that have not and with third world multinationals and other mnes it found that the performance of indonesian firms that invested abroad improved dramatically after their investment in terms of management expertise exports quality and costs relative to their past performance and relative to the other firms in the sample these results support a conclusion that indonesian multinationals have gone abroad not only to exploit their ownership advantages but also to access and develop ownership advantages they did not previously possess

inter partner credible threat in international joint ventures an infinitely repeated prisoner s dilemma model we use an infinitely repeated prisoner s dilemma model to examine the role of inter partner credible threat in international joint ventures ijvs inter partner credible threat refers to the certainty of either partner s retaliation given the other partner s earlier cheating we argue that inter partner credible threat represents the first order determinant and partners management control represents the second order determinant of partner payoffs when inter partner credible threat is present both partners achieve balanced payoffs whereas when it is absent partners relative control will determine their relative payoffs in depth interview data from four ijvs in china provide preliminary support for our theoretical arguments

is agriculture the engine of growth we seek to address formally the question raised by gardner 2003 in his elmhirst lecture as to the direction of causality between agricultural value added per worker and gross domestic product gdp per capita using the granger causality test in the panel data analyzed by gardner for 85 countries we find overwhelming evidence that supports the conclusion that agricultural value added is the causal variable in developing countries while the direction of causality in developed countries is unclear we also examine further the use of the granger causality test in integrated data and provide evidence that the performance of the test can be increased in small samples through the use of the bootstrap

beyond export led growth abstract in light of the adverse conditions in the current international economic environment this paper reassesses the feasibility of continuing to rely on manufacturing export led growth as the major development dynamic for most ldcs during the next decade this paper argues that after the initial stages of industrial development the emphasis in policy toward agriculture should shift from surplus extraction to surplus creation and to the generation of demand linkages with the rest of the economy the author compares the relative merits of two alternative open development strategies export led industrialization and agricultural demand led industrialization adli by means of several simulation experiments the experiments are performed with a computable general equilibrium model of a small low income semi industrial open economy which is a stylization of south korea of 1963 they are carried out in an international environment assumed to represent the next decade based on a rate of growth of international demand for imports of about half the 1960 1973 rate the results support the adli approach on all counts

the contribution of agriculture to economic growth some empirical evidence the paper analyzes the contribution of agriculture to economic growth by employing cross section data for the developing and developed countries during 1960 1970 and 1970 1979 it is found that in the context of mr chenery syrquin s model intercountry variation in agricultural growth explains a significant portion of intercountry variation in the industrial non agricultural growth further in the context of an aggregate production function agricultural growth is found to contribute significantly to productivity increases and thus to overall economic growth for the developing countries sample of the 1970 79 period the results show that a one percent increase in agricultural growth leads to approximately four tenths of a percentage point increase in productivity it is also found that export growth contributes positively to productivity growth while the inflation rate contributes negatively

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

exports export composition and growth cointegration and causality evidence for malaysia this paper comprehensively tests the export led growth elg hypothesis for malaysia for the period 1955 90 using cointegration and causality testing based on hsiao s synthesis of the granger test and akaike s minimum final prediction error criterion the results provide support for the elg hypothesis aggregate exports granger cause real gdp and non export gdp this relationship is found to be driven by manufactured exports rather than by traditional exports

public transaction costs of agri environmental schemes and their determinants analysing stakeholders involvement and perceptions despite an overall budget increase for rural development in the new programming period 2007 2013 most older member states in the now expanded european union are facing a substantial reduction in their budget for rural development and thus for agri environmental schemes aess it can be assumed that in most countries none or at best only part of this loss can be offset by national funds therefore the design of more efficient national governance structures for aess which decrease public transaction costs tcs would be an appropriate solution to this problem the objective of this paper is to define the factors that influence these public tcs so that appropriate action can then be taken to reduce them a statistical analysis with a proxy for public tcs is combined with an analysis of stakeholder perceptions excluding farmers concerning public tc influencing factors the research showed that it is mainly scheme related factors that are perceived to be important although the governance structure institutional environment and level of trust also play a role finally the analysis of perceptions concerning tcs also showed that aes related actors have a limited knowledge of tcs

measuring performance of international joint ventures international joint ventures ijvs are increasing in frequency and strategic importance however efforts to identify variables associated with ijv performance have been constrained by disagreements regarding the comparability and reliability of alternative performance measures and methods this study tests several hypotheses regarding the reliability and comparability of a range of objective and subjective measures of ijv performance as well as evaluating the relative utility of different data collection approaches

the intercountry agricultural production function and productivity differences among countries abstract the sources of differences in labor productivity in agriculture between developed countries dc s and less developed countries ldc s are identified by estimating an aggregate agricultural production function based on cross county data for 1960 1970 and 1980 the production function was found to be stable over the entire period agriculture in the dc s was characterized by increasing returns and in the ldc s by constant returns to scale the results imply that unfavorable man land ratios do not represent an immediate barrier to rapid agricultural development in the low income ldc s but they may create a serious agricultural adjustment problem as those countries advance into the middle income range

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

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

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

developing countries and mnes extending and enriching the research agenda foreign direct investment fdi through multinational enterprises mnes has emerged in the last decade as the principal source of foreign capital for developing countries meyer this issue underlines the need for international business ib scholars to understand the impact of these investments on host developing countries he offers a useful assessment of the literature and proposes a rich set of questions for further research however his research agenda can be extended and enriched in two ways first ib scholars must study as they always have causation in the opposite direction namely the impact of developing country context on mne behavior and the co evolution of these two variables over time in doing so they must incorporate into their models contemporary issues such as the continued inadequacy of rules for fdi in infrastructure sectors or the clever means by which mnes are rewriting the global rules under which they operate in developing countries e g on intellectual property rights second ib scholars must pay more attention to topics that are not mainstream within the field but are of great importance to developing countries examples include the behavior and performance of a new generation of home grown mnes the role of diaspora in homeland fdi in countries like china and india and the implications of global outsourcing of services

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

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

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

influences of transaction costs in environmental policy abstract there is a growing literature reporting the extent of transaction costs for environmental policies however understanding why transaction costs occur and why they are small or large is also important for efficient policy selection and evaluation following an analysis of the organisational economics literature and reports of the extent of transaction costs for a number of environmental policies three key influences to transaction costs in environmental policies are identified these are the following 1 the characteristics of the transaction for the environmental good 2 the nature of the transactors and 3 the current institutional environment and arrangements these affect transaction costs to the government and all other parties influenced by a policy transaction costs occur due to actions of information collection and policy design policy enactment and establishment implementation and contracting administration and monitoring and enforcement an interrogation of transaction cost influences reveals that 1 the influence varies between parties and is affected by the actions and interactions of and between all parties to a policy 2 how transaction costs are experienced varies across time and 3 who experiences transaction costs depends on the policy itself future policy selection and refinement will benefit from empirical analysis of the causes of transaction costs

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

an analysis of industrial agricultural interactions a case study in pakistan abstract this paper empirically analyzes the relationship between pakistan s industrial and agricultural sectors pakistan was chosen because of its status of a semi industrialized country with heavy dependence on the agricultural sector the relationship between cotton production and industrial growth is also evaluated due to the prominence of this crop in pakistani agriculture the results indicate that these sectors are complementary yet industry tends to benefit more from agricultural growth than vice versa the timing of this information is critical as pakistan s policy makers now face major agricultural policy reforms in their quest for continued industrial development

toward a cooperative view of mnc host government relations building blocks and performance implications this study examines cooperation based relations between mncs and host governments we theorize that resource commitment personal relations political accommodation and organizational credibility are four building blocks for improving an mnc s cooperative relationships with governments analysis of 131 mncs in china validates the importance of these blocks in shaping mnc government relations and the importance of these relations in shaping the performance of mnc subsidiaries

payments for ecosystem services from local to global abstract payment for ecosystem services pes is becoming increasingly popular as a way to manage ecosystems using economic incentives the environmental economics approach to pes tries to force ecosystem services into the market model with an emphasis on efficiency the ecological economics approach in contrast seeks to adapt economic institutions to the physical characteristics of ecosystem services prioritizing ecological sustainability and just distribution and requiring a transdisciplinary approach this paper summarizes the results of a participatory atelier workshop held in costa rica we developed a set of principles the heredia declaration for pes systems and report on evolving initiatives in several countries we discuss how the distinction between ecosystem goods which are stock flow resources and ecosystem services which are fund service resources and the physical characteristics of the fund services affect the appropriate institutional form for pes we conclude that pes systems represent an important way to effectively manage fund service resources as public goods and that this represents a significant departure from conventional market institutions

split management control and international joint venture performance a framework is presented to characterize four different ways in which management control is partitioned between a multinational enterprise mne and local partners within international joint ventures jvs split control management shared management mne partner dominant management and local partner dominant management the framework was tested using a sample of international jvs in korea we found that jvs following the split control management performed better than any other approach no performance differences were found among the remaining three types of management control this suggests that mnes and local partners should split control that is choose the activities to control so that those chosen activities can be matched with their respective firm specific advantages

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

exports as a factor of production a consistency test abstract for more than a decade economists have routinely introduced an export growth variable into a crosscountry production function framework as a way of examining various aspects of the growth process in developing countries the export promotion hypothesis in particular while the authors of these studies have rejected the argument that their results are biased by the accounting relationship between exports and gdp some recent studies offer evidence supporting this contention here a simple procedure is proposed to test for this bias the procedure consists of testing directly for the implied lower productivity in the nonexport sector of the economy

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

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

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

does post ante investment experience matter lessons from fdi in china ample efforts of fdi literature have researched on the motives and determinants of fdi flows based on ex ante conditions little has been studied with regard to the effects of post ante behaviour in determining future investment decisions post ante experience of fdi decisions with regard to foreign investors satisfaction or dissatisfaction and future profit expectations on recurrent decisions are critical this paper thus attempts to investigate fdi in the context of an emerging market environment with emphasis on how environmental and institutional factors and the micro firm effects of how investors post ante views on profits expectations and investment experience would affect mncs decisions on recurrent investment and firm relocation empirical results show that decisions in the short and long run were affected differently by the factors under study specifically the short run decisions were more affected by profit expectations while the long run by post ante experience on investment satisfaction dissatisfaction and environmental and institutional determinants