decentralized and concentrated investments in china and the performance of taiwanese listed electronic companies abstractever since china surpassed taiwan to become the largest exporter of electronic products dependence between the two sides has deepened which prompts taiwanese companies to go public in china this study conducted the data envelopment analysis dea and regression analysis to analyse the impacts of the depth and breadth of investments in china on the performance of taiwanese listed electronic companies the empirical results show that the breath of the investments in china has a positive correlation with the performance of taiwanese companies while the depth of investments in china has a negative and significant effect on the performances due to the companies lack of know how which leads to a high learning cost in summary companies should strategize their decentralized and concentrated investments in china

state characteristics and the location of foreign direct investment within the united states a conditional logit model of the location decision of foreign firms investing in manufacturing facilities in the united states is developed and estimated the authors results for 1981 83 indicate that states with higher per capita incomes and higher densities of manufacturing activity attracted relatively more foreign direct investment in addition higher wages deterred foreign direct investment while higher unemployment rates attracted it surprisingly higher unionization rates were associated with increased foreign direct investment overall higher taxes deterred foreign direct investment however more extensive transportation infrastructures and larger promotional expenditures were associated with increased foreign direct investment copyright 1991 by mit press

factors determining the location decisions of spanish mnes an analysis based on the investment development path on the basis of theoretical assumptions approached via the investment development path idp this study examines the most important factors for and against the location decisions in foreign direct investment taken by multinational enterprises considering host countries at very different stages of economic development latin american and european union countries we carry out different kinds of analysis on a sample of 103 firms belonging to a medium sized country that has recently achieved the status of developed country the results reveal that the importance that home country firm managers give to diverse location factors depends to a certain extent on the stage that each group of host countries has reached in the idp in line with prior research we find that firm managers consider mainly the group of factors associated with strategic asset seeking when deciding to locate their investments in the group of more developed countries european union in contrast our results show that when these firm managers choose the group of less developed countries latin america social and cultural factors play a more determinant role thus suggesting the importance of historical and cultural ties between the home and host countries

global economic integration in developing countries the role of corruption and human capital investment globalization is multifaceted and involves the interaction among businesses services governments and societies beyond national borders as a result the flow of foreign direct investment fdi international trade in goods and services and the economic interdependence of the nations of the world have been increasing at the same time much attention has been paid to the effect of corruption prevalent within many cultures and societies and its impact on the economies especially developing economies this paper examines the relationship between human capital investment the level of national corruption and the global economic integration gei of a nation in developing countries based on the data collected from over 60 countries and building on the fdi and human capital theories it was found that human capital investment and corruption are related to gei it was also found that the level of corruption moderates the relationship between human capital investment and gei of developing economies the findings of the study can help to deepen our understanding of gei and have practical implications for developing countries in terms developing human capital which plays a critical role in today s knowledge based economy

the mix of international banks foreign claims determinants and implications we analyze the cross country determinants and financial stability implications of the mix of international banks foreign claims we distinguish between local claims extended by host country affiliates and cross border claims booked outside the receiving country using data on italian spanish and us banks foreign claims we find that the share of local claims is driven by restrictions on banking sector openness and by local scale economies business opportunities the impact of limits on property rights entry requirements start up and informational costs is less robust finally foreign claim volatility is lower in countries with a larger share of local claims

the locational determinants of direct investments among industrialized countries abstract market size and growth rate as well as tariff barriers have already been shown to influence u s direct investments in the eec the present paper enlarges the field of observation to all bilateral flows of direct investments among six industrialized countries the united states germany france the united kingdom the netherlands and belgium over the years 1969 1982 it also tests the impact of two other would be locational determinants of foreign direct investments namely unit labour costs and export flows moreover a new and alternative specification is put forward and tested which assumes that in the investment decision process foreign locations are in competition not only with each other but also with the home country of the investor

why and how fdi stocks are a biased measure of mne affiliate activity many international business ib studies have used foreign direct investment fdi stocks to measure the aggregate value adding activity of multinational enterprises mne affiliates in host countries we argue that fdi stocks are a biased measure of that activity because the degree to which they overestimate or underestimate affiliate activity varies systematically with host country characteristics first most fdi into countries that serve as tax havens generate no actual productive activity thus fdi stocks in such countries overestimate affiliate activity second fdi stocks do not include locally raised external funds funds widely used in countries with well developed financial markets or volatile exchange rates resulting in an underestimation of affiliate activity in such countries finally the extent to which fdi translates into affiliate activity increases with affiliate labor productivity so in countries where labor is more productive fdi stocks also result in an underestimation of affiliate activity we test these hypotheses by first regressing affiliate value added and affiliate sales on fdi stocks to calculate a country specific mismatch and then by regressing this mismatch on a host country s tax haven status level of financial market development exchange rate volatility and affiliate labor productivity all hypotheses are supported implying that fdi stocks are a biased measure of mne affiliate activity and hence that the results of fdi data based studies of such activity need to be reconsidered

prices and quality effects in cross sectional demand analysis a conceptual clarification of the sources and meaning of cross sectional price variability is used to motivate a theoretical and econometric framework for the estimation of cross sectional demand functions quality effects are distinguished from supply related price variability to identify cross sectional demand for disaggregated food commodities an empirical application using data from the 1977 78 nationwide food consumption survey indicates that parameter differences resulting from a failure to adjust cross sectional prices for quality effects are likely to be small for relatively homogenous disaggregated food commodities in demand analysis with cross sectional household budget data it is usually assumed that prices are constant allen and bowley prais and houthakker george and king given this assumption engel functions are estimated where expenditure or quantity is regressed on income or total expenditures family size and other demographic characteristics the assumption that cross sectional price effects are absent or are captured adequately by spatial and temporal dummy variables has not been evaluated empirically whether cross sectional price effects can be treated in this manner has implications for the specification of cross sectional demand functions as well as the estimation of engel functions there is a considerable literature on estimating price elasticities with cross sectional data most of the applications utilize timeseries cross sectional data annual or quarterly household consumption surveys and

quality quantity and spatial variation of price this paper develops and implements a method for estimating price elasticities of demand using cross sectional household survey data geographically clustered households report unit values which when corrected for quality effects and for measurement error indicate the underlying spatial variation in prices and can be matched to variation in demand patterns a simple model of quality choice is proposed while the correction for measurement error exploits the clustered design of such surveys data from a 1979 household survey from the ivory coast are used to estimate price elasticities for beef meat fish cereals and starches copyright 1988 by american economic association

entry of foreign banks in the people s republic of china a survival analysis this study uses survival analysis to examine the factors determining the decision of a foreign bank to establish a branch in the prc bank size and international diversification are found to have a significant positive impact on the probability of entry banks from asia have particular cultural and locational advantages in this context and are found to be more likely to enter this market market conditions in the host economy exemplified by an improved political environment and increasing levels of international trade are also found to be significant determinants of the timing of entry access to china s banking sector will increase upon entry to the wto and again cultural links and location are likely to play a key role for foreign entrants particularly for those operating in local currency markets

automobile safety regulation and offsetting behavior some new empirical estimates suppose that engineers can demonstrate that air bags will reduce the risk of death in an automobile by 25 percent for any given frequency and severity of accidents would the installation of these devices necessarily reduce the fatality rate by 25 percent the answer depends upon the response of drivers to the increased protection from dangerous accidents if they increase their driving intensity speed recklessness driving while intoxicated driving in unsafe conditions etc they may realize substantially less than a 25 percent reduction in expected fatalities such offsetting behavior is not irrational it merely represents a substitution of the marginal benefits of driving intensity for the reduced marginal cost of risk if offsetting behavior actually occurs it may be realized in increased risks for bicyclists motorcyclists and pedestrians these externalities could be substantial unless there is a reduction in risk taking among these groups as a result the net effect of mandating air bags or any other safety device is far from obvious there may be no net reduction in fatalities or serious injuries these theoretical considerations are at the core of sam peltzman s classic study 1975 of automobile safety regulation for policymakers however the key question is how much offsetting behavior actually occurs as peltzman 1977 acknowledges offsetting behavior could be trivial or substantial in this paper we explore this issue providing new empirical estimates of the effects of crashworthiness standards established for automobiles over the past fifteen years these standards have required the installation of lapshoulder belts energy absorbing steering columns head restraints padded dashboards crush resistant passenger compartments safer windshield mounting more secure locks and a variety of other features

the decision to establish a foreign bank branch or subsidiary an application of binary classification procedures this paper has two purposes first we model a key decision for inter national banks using data on the foreign direct investment fdi behavior of foreign banks in japan and california second we examine the utility of linear discriminant analysis and maximum likelihood logit analysis as statistical techniques for relating a qualitative dependent variable to a vector of inde pendent variables we apply these techniques to the decision by parent banks as to whether or not to have a subsidiary branch in california japan we treat the deci sion as a binary choice based on a consideration of various relevant factors the population for each of the countries consists of those foreign to the host country banks that already have a presence in the country the research ques tion then becomes given that a foreign bank is in the country does the extent of the parent bank s experience internationally and in the host country affect the probability that it will deepen its presence the choice of statis tical tools by which to examine this question gives rise to our methodological concerns

effects of inward investment on outward investment the venture capital industry worldwide 1985 2007 we identify inward investment as an important impetus to outward investment supplemental to the impetuses depicted in conventional internationalization frameworks by incorporating both the spillover and competition effects of foreign entrants we develop an integrated framework of the inward outward investment relationship for different investment modes and different home country and host country pairs our analysis of venture capital vc investments worldwide from 1985 to 2007 shows a positive spillover effect on outward investment for inward co investments and a negative competition effect on outward investment for inward standalone investments we find the strongest effects when the host country is a laggard in the vc industry and the home country is a leader

foreign direct investment in the united states an analysis by country of origin given the large size and rapid growth of foreign direct investment in the united states this subject is a central concern of u s firms and u s government policymakers this study explores the factors that contribute to the explanation of fdi in the united states by country of origin of investment evidence from the past twelve years shows that the main significant positive influences are home country s exports to the united states and home country market size significant negative influences include the home country s imports from the united states the cultural and geographic distances of the home country from the united states and the exchange rate fx

trademarking activities and total factor productivity some evidence for british commercial banks using a metafrontier approach in this paper we compute a non parametric metafrontier malmquist index to evaluate the total factor productivity tfp change among uk based trademarking and non trademarking commercial banks between 2005 and 2013 the use of the metafrontier approach allows us to a identify the drivers of tfp growth for each group of banks b compare the tfp growth of each group to the tfp growth experienced by the whole industry and c assess the extent to which the former catches up with the latter measured along the metafrontier our results suggest that tfp has been increasing among trademarking banks up to the onset of the financial crisis but this process has since reversed the catch up indexes suggest that both groups of banks were catching up with the metafrontier up to the financial crisis although the drivers of this process differed between the two groups after the financial crisis improvements in technology have been driven by a small number of commercial banks i e the non trademarking banks these results suggest that a large section of the commercial banking sector has not been able to overcome the effects of the financial crisis

the entry and the activity level of foreign banks in italy an analysis of the determinants abstract although the theory of multinational banking has pointed out the importance of local profit opportunities the empirical evidence is still poor and deserves further investigation to this end we analyse entry decisions and activity levels of foreign banks operating in italy between 1983 and 1998 we consider 22 oecd countries 10 of which had at least one bank branch or subsidiary in italy entries and activity levels were related to the degree of economic integration as well as to the financial market features of the home country relative to italy unlike other studies besides economic integration the relative profitability of the banking activity proves to be a significant variable in that it highlights the importance of local market conditions in the past decade increased competition in the italian banking sector has reduced these profit opportunities driving foreign banks towards more innovative sectors of financial intermediation

understanding the cell phone effect on vehicle fatalities a bayesian view this article examines the potential effect of various factors on motor vehicle fatality rates using a rich set of panel data and classical regression analysis combined with bayesian extreme bounds analysis eba bayesian model averaging bma and stochastic search variable selection ssvs procedures the variables examined in the models include traditional motor vehicle and socioeconomic factors in addition the models address the effects of cell phone usage on such accidents the use of both classical and bayesian techniques diminish the model and parameter uncertainties which afflict more conventional modelling methods which rely on only one of the two methods

international banking a survey two distinct sets of issues are involved in the analysis of international banking one set the industrial organization issues centers on the patterns of expansion of foreign branches and subsidiaries of banks headquartered in the united states great britain japan and a few other industrial countries and on the nature of the advantage that these branches and subsidiaries have in relation to their host country competitors the second set the international finance issues involves the role of banks in cross border and cross currency financial flows both from their head offices and from their foreign branches and subsidiaries despite the attention to international banking there are few uniquely international institutions rather international banks are a subset of domestic banks with significant numbers of foreign branches and subsidiaries moreover there are few uniquely international banking activities although foreign exchange trading may seem to be one in many countries most or all foreign exchange trading involves domestic banks with few if any foreign branches the growth of foreign branches and subsidiaries of major banks occurred in two waves the first occurred in the decades before world war i when the war started

source country characteristics and the inflow of foreign direct investment into saudi arabia the paper examines the impact of source country characteristics on the inflow of fdi into saudi arabia using a gravity type model including economic distance and socio political variables a unique database listing all new investments involving foreign ownership is used to construct a panel of 33 countries in the period 1980 2005 to account for many country year observations with zero fdi the negative binomial regression the tobit regression and the heckman selection procedure are used the conclusions drawn from the analysis employing panel based techniques differ from the results obtained from pooled regression models also the determinants of fdi differ depending on whether foreign investment is measured in terms of investment expenditure or the number of individual foreign projects the heckman selection results reveal that there are a large number of factors affecting the decision to invest in saudi arabia compared with relatively few determinants of the actual size of investment traditional size and distance characteristics hold to a great extent but the relationship between fdi and bilateral trade is unclear and there is some evidence that the countries that export to saudi arabia do not invest there in terms of scope for possible spillovers there is mixed evidence on whether the investment comes from more technologically advanced economies but volume wise important investments originate from countries characterised by high income per capita

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

an economic evaluation of market development programmes for us dairy products abstract this study measured the effectiveness of us dairy export promotion programmes on increasing foreign demand and enhancing producers revenues an import demand equation based on panel data was used to test whether export promotion has a positive and significant impact on us dairy exports the effects of various promotion scenarios on the dairy market were then simulated and benefit cost ratios bcrs for these programmes were estimated there were three key findings first the combined effort of public and private dairy export promotion expenditures had a positive and statistically significant impact on demand for us dairy products in the world market the findings indicated that export promotion stimulated total dairy exports by 4 14 billion pounds on average per year which represented 55 8 of total exports second us dairy export promotion has been highly profitable for the nation s dairy farmers the calculated bcrs based on assumed elasticity of supply ranged from a low of 8 54 for th

location decisions of foreign banks and competitor remoteness this paper examines the role of competitor remoteness the weighted average distance of all competing banks to a host country on the location decision of a foreign bank it uses unique bilateral data on 1 199 foreign banks from 75 home countries present in 110 host countries it finds that besides bilateral distance competitor remoteness importantly drives foreign banks location decisions the impact of distance and competitor remoteness is stronger for non oecd home and host countries when the scale of foreign bank inward and outward investment is limited and for host countries where foreign banks dominate

the role of location related factors in u s banking involvement abroad an empirical examination this study examines the role of major location specific advantages in the international branch banking involvement of u s banks using pooled time series 1976 82 cross sectional thirty countries regression analysis this study finds that the u s business presence in foreign country has a strong positive effect on u s branch banking activity in that country in contrast the local market opportunity appears to have no significant effect these results hold for the entire set of countries as well as each of five subsets developed less developed european latin american and asian countries the openness of the host country to the establishment of new foreign bank branches does affect u s branch banking involvement this effect is most pronounced in the less developed countries particularly those in asia

the efficacy of government safety policies on traffic related fatalities empirical estimates from japan a time series analysis of japanese data for the period 1966 85 estimates the effectiveness of seat belt and government safety policies on various types of traffic related fatalities the results indicate that these policies reduce the risk of death for both motor vehicle occupants and non occupants

home country political risk and foreign direct investment in the united states this study investigates the proposition that home country political risk factors influence outward foreign direct investment investment data from the u s department of commerce is used to model investment activity in the united states from various industrialized source countries foreign direct investment is regressed on home country domestic and international economic and political risk measures for the western industrial countries results indicate that investment activity from the ics in the u s is dependent on home country economic and political conditions

the performance implications of relationship banking during macroeconomic expansion and contraction a study of japanese banks social relationships and overseas expansion we propose a social perspective emphasizing the opportunities and constraints of bank firm relationships to understand the determinants of relationship banks performance using japanese banks to test our theory using social exchange and role theories we found banks that have strong social relationships performed differently during japan s macroeconomic expansion and contraction cycles however our results indicate that social exchange and role relationships are context specific banks benefited from internationalization during a domestic macroeconomic expansion as a result of their home country social relationships but they were less constrained by the same social relationships in their international operations during a domestic macroeconomic contraction

the location of international financial activity an interregional analysis goldberg m a helsley r w and levi m d 1989 the location of international financial activity an interregional analysis reg studies 23 1 7 this paper examines the determinants of the spatial distribution of financial activity the determinants of the sizes of the financial services sector are estimated using data for a sample of us states although our analysis is limited by the availability of data the results are strong and clear the level of international financial activity is positively and significantly related to per capita income the level of imports and the number of corporate headquarters the results indicate that international trade is intensive in its use of financial services and that financial services tends to be exported along with goods goldberg m a helsley r w et levi m d 1989 la localisation des operations financieres internationales une analyse interregionale reg studies 23 1 7 cet article examine les determinants de la distribution geographique des opera

structural analysis of manufacturer pricing in the presence of a strategic retailer consumer goods manufacturers usually sell their brands to consumers through common independent retailers theoretical research on such channel structures has analyzed the optimal behavior of channel members under alternative assumptions of manufacturer retailer interaction vertical strategic interaction research in empirical industrial organization has focused on analyzing the competitive interactions between manufacturers horizontal strategic interaction decision support systems have made various assumptions about retailer pricing rules e g constant markup category profit maximization the appropriateness of such assumptions about strategic behavior for any specific market however is an empirical question this paper therefore empirically infers 1 the vertical strategic interaction vsi between manufacturers and retailer 2 the horizontal strategic interaction hsi between manufacturers simultaneously with the vsi and 3 the pricing rule used by a retailer the approach is particularly appealing because it can be used with widely available scanner data where there is no information on wholesale prices researchers usually have no access to wholesale prices even manufacturers who have access to their own wholesale prices usually have limited information on competitors wholesale prices in the absence of wholesale prices we derive formulae for wholesale prices using game theoretic solution techniques under the specific assumptions of vertical and horizontal strategic interaction and retailer pricing rules we then embed the formulae for wholesale prices into the estimation equations while our empirical illustration is using scanner data without wholesale prices the model itself can be applied when wholesale prices are available early research on the inference of hsi among manufacturers in setting wholesale prices using scanner data e g kadiyali et al 1996 1999 made the simplifying assumption that retailers charge a constant margin this assumption enabled them to infer wholesale prices and analyze competitive interactions between manufacturers in this paper we show that this model is econometrically identical to a model that measures retail price coordination across brands hence the inferred cooperation among manufacturers could be exaggerated by the coordinated pricing category management done by the retailer we find empirical support for this argument this highlights the need to properly model and infer vsi simultaneously to accurately estimate the hsi when using data at the retail level functional forms of demand have been evaluated in terms of the fit of the model to sales data but recent theoretical research on channels lee and staelin 1997 tyagi 1999 has shown that the functional form has serious implications for strategic behavior such as retail passthrough while the logit and linear model implies equilibrium passthrough of less than 100 lee and staelin call this vertical strategic substitute vss the multiplicative model implies optimal passthrough of greater than 100 vertical strategic complement vsc because passthrough rates on promotions have been found to be below or above 100 chevalier and curhan 1976 armstrong 1991 we empirically test the appropriateness of the logit vss and the multiplicative vsc functional form for the data we perform our analysis in the yogurt and peanut butter categories for the two biggest stores in a local market we found that the vss implications of the logit fit the data better than the multiplicative model we also find that for both categories the best fitting model is one in which 1 the retailer maximizes category profits 2 the vsi is manufacturer stackelberg and 3 manufacturer pricing hsi is tacitly collusive the fact that the retailer maximizes category profits is consistent with theoretical expectations the inference that the vsi is manufacturer stackelberg reflects the institutional reality of the timing of the game retailers set their retail prices after manufacturers set their wholesale prices note that in the stores and product categories that we analyze the two manufacturers own the dominant brands with combined market shares of about 82 in the yogurt market and 65 in the peanut butter market the result is also consistent with a balance of power argument in the literature the finding that manufacturer pricing is tacitly collusive is consistent with the argument that firms involved in long term competition in concentrated markets can achieve tacit collusion managers use decision support systems for promotion planning that routinely make assumptions about vsi hsi and the functional form the results from our analysis are of substantive import in judging the appropriateness of assumptions made in such decision support systems

generalizing what is known about temporal aggregation and advertising carryover this paper provides a theoretical explanation for the inconsistent findings from previous econometric analyses of aggregated data concerning the duration of advertising carryover using this theoretical explanation and the knowledge of a data interval bias the paper reviews and summarizes the empirical work in the area of sales response modeling and then after adjusting for aggregation bias presents support for an empirical generalization that the average advertising duration interval is of brief duration typically between six and nine months

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

the effect of national corporate responsibility environment on japanese foreign direct investment we examine the relationship between japanese foreign direct investment fdi and the national corporate responsibility ncr environment in host countries using corporate social responsibility and international business theories based on data from the japanese government s ministry of finance accountability and other sources we find that the level of ncr has a positive relationship with fdi inflow for developing countries the relationship for developed countries is negative but not statistically significant the underlying host country development stage moderates the relationship the results can help deepen understanding of fdi behaviors and have practical implications for host countries in terms of attracting fdi

automobile safety inspection further econometric evidence 1990 automobile safety inspection further econometric evidence applied economics vol 22 no 12 pp 1697 1704

cooperative strategies between foreign firms in an overseas country in this paper we study the cooperative strategies between two firms in an overseas country in part 1 we examine the circumstances under which foreign firms would cooperate with another foreign firm in a third country market drawing upon existing literature we develop and test a set of hypotheses using a longitudinal data set from china the types of cooperative arrangements include all the major modes of operation in part 2 we further investigate what types of operation and level of control exist among the cooperative arrangements between two foreign firms in china we used a sample of 483 cooperative arrangements between two firms from hong kong the u s japan germany or britain this study offers interesting insight as to why foreign firms form cooperative arrangements in an overseas country and what types of cooperative arrangements these firms prefer

liberalization fdi and growth in developing countries a panel cointegration approach using a panel cointegration framework the article explores the two way link between fdi and growth for a panel of 23 developing countries in addition it investigates the impact of liberalization on the dynamics of the fdi and gdp relationship a long run cointegrating relationship is found between fdi and gdp after allowing for heterogeneous country effects the cointegrating vectors reveal a bidirectional causality between gdp and fdi for more open economies for relatively closed economies long run causality appears unidirectional and runs from gdp to fdi implying that growth and fdi are not mutually reinforcing under restrictive trade and investment regimes

foreign direct investment in the united states the state of knowledge in research this article categorizes and summarizes the major writings published during the 1970s concerning foreign direct investment in the united states it is based on the authors analysis of more than 100 works published in the english language in addition to analyzing what has been published the article also suggests directions for future research

internalization and experience japanese banks international expansion 1980 1998 we use an interdisciplinary approach to investigate multinational banks foreign activities we bridge core concepts from the stages theory of internationalization to internalization theory to extend the literature on the defensive expansion hypothesis unlike the primarily aggregate levels of analysis employed in previous research on multinational banking we utilize a firm level analysis of the internationalization experiences of 21 japanese banks in the period 1980 1998 we find that banks undertake foreign direct investment to secure internalization benefits by following their existing clients and to achieve economies of scale in the application of their intangible assets in international markets the magnitude of these relationships however is contingent upon the level of a bank s experience in the host countries consistent with predictions from internationalization theory we find that the motivations for international expansion can change over time

the structure of international banking abstract this paper investigates the factors that determine the number and form of foreign banking operations from 60 foreign countries in the united states our equilibrium model of three banking forms representative offices agencies and branches and three explanatory variables export activity merchant banking activity and capital market development explains more than 74 per cent of the variation in numbers of offices across the 60 different foreign countries in addition we identify the equilibrium model of competition among the types of operations that is most consistent with the empirical results jel f33

institutions and inflows of foreign direct investment a fuzzy set analysis this study addresses the essential question of causal complexity and diversity related to the influence of institutions on the direct investments fdi of multinational enterprises using a relatively new methodological approach of fuzzy set analysis and 47 host countries from the period 1999 to 2003 the paper analyses how and why countries with different degrees of membership in different institutional constraints either attract or do not attract fdi the findings show that institutional factors have diverse influences similar institutions may even be associated with different outcomes if different regional categories of countries are examined countries may neither be attractive nor unattractive owing to the presence or absence of a single institutional factor instead the outcome usually results from a combination of institutional conditions moreover there typically are several possible paths to a specific outcome the study confirms some of the propositions of previous theory but most importantly it explains why earlier research has provided conflicting conclusions related to institutional factors the study also offers an approach for future international business research to apply fuzzy set methods and develop mid range theories

how effective is automobile safety regulation loeb 1989 questions the results of recent work on automobile safety inspection garbacz and kelly 1987 in which the results of a paper by leob and gilad 1984 were questioned specifically their time series model using new jersey data is missing a key economic variable accident price as well as some well known variables associated with traffic accidents yothful drivers and a proxy for drunk driving an estimate of their model with us data results in no statistical effect for automobile inspection variables garbacz and kelly 1987

modeling heterogeneity and state dependence in consumer choice behavior in frequently purchased consumer goods markets consumer brand choices exhibit substantial persistence across purchase occasions in this article i estimate a choice model that admits of both heterogeneity in preferences and true state dependence as sources of this persistence using nielsen scanner data on ketchup i find evidence for true state dependence in the choice process even after controlling for a rich heterogeneity structure simulation of the model indicates that the long term effect of a promotion induced purchase on future purchase probabilities is positive but small

network linkages and location choice in foreign direct investment this paper shows that network linkage is an important determinant of location choice in foreign direct investment fdi network linkages are divided into internal intra firm and external inter firm linkages external linkages are further separated into strategic and relational linkages we found that taiwanese firms are keen on making external linkages but are indifferent to or incapable of making internal linkages through fdi strategic linkages motivate taiwanese fdi in the united states while relational linkages facilitate taiwanese fdi in southeast asia and china small firms are more sensitive to relational linkages than large firms in their choice of fdi location

the effect of cultural distance on entry mode choice international diversification and mne performance a meta analysis although a growing literature indicates that cultural distance that is differences between national cultures is an important determinant of organizational actions and performance both empirical and theoretical concerns abound in this study the relationships of cultural distance with entry mode choice international diversification and mne performance are examined by meta analyzing data from 66 independent samples with cumulative sample sizes ranging from 2 255 to 24 152 regression results failed to provide statistical evidence of significant relationships between cultural distance and entry mode choice international diversification and mne performance the examination of moderator effects however yielded important results we found a strong negative association between cultural distance and entry mode choice for us based mnes the cultural distance international diversification relationship was negative for high technology industries while it was positive for other industries cultural distance also had a strong positive effect on mne performance for developed country investments a similar strong positive relationship was found between cultural distance and international diversification in studies with more recent samples results of this study indicate that substantial additional research is needed before the role of cultural distance is fully understood

macro determinants of fdi inflows to japan an analysis of source country characteristics this paper examines the source country determinants of fdi into japan the paper highlights certain methodological and theoretical weaknesses in the previous literature and offers some explanations for hitherto ambiguous results specifically the paper highlights the importance of panel data analysis and the identification of fixed effects in the analysis rather than simply pooling the data indeed we argue that many of the results reported elsewhere are a feature of this mis specification to this end pooled fixed effects and random effects estimates are compared the results suggest that fdi into japan is inversely related to trade flows such that trade and fdi are substitutes moreover the results also suggest that fdi increases with home country political and economic stability the paper also shows that previously reported results regarding the importance of exchange rates relative borrowing costs and labour costs in explaining fdi flows are sensitive to the econometric specification and estimation approach the paper also discusses the importance of these results within a policy context in recent years japan has sought to attract fdi though many firms still complain of barriers to inward investment penetration in japan the results show that cultural and geographic distance are only of marginal importance in explaining fdi and that the results are consistent with the market seeking explanation of fdi as such the attitude to risk in the source country is strongly related to the size of fdi flows to japan 2007 the authors journal compilation 2007 blackwell publishing ltd

a note on the location choice of multinational banks the case of japanese financial institutions abstract there are many studies investigating the location choice of foreign direct investment fdi of us banks nigh et al journal of international business studies 17 1986 59 72 find that the choice does not depend on local banking opportunity this paper examines what factors affect the location choice of japanese multinational financial institutions our results are consistent with previous studies analyzing us banks in that the fdi of the manufacturing industry is an important determinant of the location choice of japanese financial institutions however our results differ from nigh et al in that japanese financial institutions choose their locations at least partially based on the local banking opportunity in the host countries

patterns and strategies of foreign direct investment the case of japanese firms this paper is to study globalization motives and strategies of japanese manufacturing industries by analyzing the causes and patterns of foreign direct investment fdi of japanese manufacturing firms we use regression analysis to determine internally driving out factors and externally inducing factors japanese fdi strategy has gone through three different stages from natural resource seeking investment in the 1950s and 1960s to market expansion investment in the 1970s and 1980s and to a combination of cost reducing low cost labor seeking investment and market penetrating investment in the 1990s our findings show that japanese fdi in asia and other developing countries tends to be in labor intensive sectors where japanese firms are losing their comparative advantages at home the main motive for fdi into these regions is low cost resource seeking on the other hand japanese fdi in the us and europe tends to be knowledge intensive sectors where japanese firms attempt to internalize transaction and i

the real exchange rate and foreign direct investment in the united states relative wealth vs relative wage effects abstract there has been a significant correlation between u s inward foreign direct investment and the united states real exchange rate since the 1970s in this paper we examine the determinants of four measures of inward foreign direct investment to the united states from seven industrial countries over the period 1979 1991 we find strong evidence that relative wealth significantly affects u s inward foreign direct investment we find no evidence that relative wages have a significant impact on the determination of u s foreign direct investment

exploring the regional distribution of inbound foreign direct investment in the uk in theory and practice evidence from a five region study fallon g and cook m exploring the regional distribution of inbound foreign direct investment in the uk in theory and practice evidence from a five region study regional studies this paper examines the main factors that attract inbound foreign direct investment fdi at the uk regional level using econometric data from five sample uk regions the south east the west midlands the north west wales and scotland broadly representing the country s regional economic divide the findings indicate that regional and national but not european union level factors linked to several underlying strategic determinants help determine the regional distribution of inbound foreign direct investment and its inter regional variation the paper concludes that governmental policy makers at the national and regional levels can have an important role to play in drawing targeted foreign direct investment inflows to the uk regions fallon g et cook m examiner la distribution regionale de l ide au royaume uni en the

foreign investor reactions to risk and uncertainty in antitrust u s merger policy investigations and the deterrence of foreign acquirer presence motivated by the potential for antitrust and competition policies to be protectionist in effect we formulate the theoretical prior that merger policy deters foreign acquirer participation in local m a markets the policy risk and policy uncertainty characteristic of merger review may negatively affect foreign acquirers more so than domestic acquirers thereby disadvantaging foreign acquisitions of local firms and deterring future cross border investment activities we test this prior by employing sector level data on u s merger policy investigations and foreign acquirer presence in u s m a markets over the 2002 2017 period our panel data methodological approach indicates that the risk and uncertainty characteristic of u s merger policy disproportionately deters the acquisition activities of foreign investors the empirical results also suggest that the application of competition and merger policies in other national jurisdictions where there is less of a strong commitment to antitrust principles might also be effectively protectionist

dyadic military conflict security alliances and bilateral fdi flows although multinationals operate under cross border jurisdictions the relevance of interstate security relations to international business has received little attention despite the impressive accumulation of knowledge in international business and international relations the two intellectual communities have largely ignored the insights from each other in this article we seek to bridge this gap we argue that interstate military conflict and security alliances as two central features of interstate security relations often change both government policies toward international business and investor expectations of political risk from the perspectives of both states and investors military conflict should reduce bilateral investment whereas security alliances increase it our empirical analysis applies the system gmm estimator to a gravity model of bilateral investment flows for 1117 directed dyads among 58 countries from 1980 to 2000 among 18 countries whose per capita real incomes remain consistently above 12 000 constant dollars the security factors do not affect bilateral investment in the high income low income dyads interstate military conflict and security alliances significantly influence bilateral investment as expected the findings depict two separate realms in which international politics does and does not interfere with international business helping us improve political risk assessments and understand the interactions between states and firms

recent trends in international banking abstract the paper defines international banking more as a geographical expression than as a particular type of activity and points out that the internationalization of the world s major banking systems was in many cases an evolutionary phenomenon governed by market or institutional developments it analyses both the development of international banking structures stressing the process that brought banks to prefer international retail activity rather than wholesale and the relationship between domestic and international banking finally the paper deals with the not easy to resolve problem of the establishment of lender of last resort facilities in international banking

foreign direct investment the role of institutional and cultural determinants abstractusing panel data for 29 source and 65 host countries in the period 1995 2009 we examine the determinants of bilateral fdi stocks focusing on institutional and cultural factors the results reveal that institutional and cultural distance is important and that fdi has a predominantly regional aspect fdi to developing countries is positively affected by better institutions in the host country while foreign investors prefer to invest in developed countries that are more corrupt and politically unstable compared to home the results indicate that foreign investors prefer to invest in countries with less diverse societies than their own

the location of financial sector fdi tax and regulation policy abstract this paper analyzes how corporate taxation and regulatory requirements affect the location of financial sector fdi we use novel information on new financial services entities established by multinational firms in 83 host countries we find a negative effect of host country taxes on the probability of choosing a particular host location we can also confirm a significant influence of the regulatory environment for example stricter equity capital requirements negatively affect location probabilities our empirical approach allows us to provide new insight in how a policy measure of a given country affects other countries by estimating cross country tax and regulation elasticities

the determinants of us banking activity abroad abstract the banking industry provides an excellent example of the internationalization of world business and economic interdependencies across countries analysis of the past growth of international banking operations can also prove useful to banks interested in augmenting their current business or expanding their international coverage and to banks who anticipated future competition in their markets from new or strengthened foreign competitors this study provides the most comprehensive examination of the development of us bank branches in other countries is presented and tested in order to facilitate the understanding of the expansion of international banking

an application of the theory of foreign direct investment to multinational banking in ldcs for assessing the determinants of mnbs expansion into ldcs a model that incorporates both supply and demand factors is constructed a reduced form of the model is tested by using pooled data over the period 1975 1982 for a sample of twenty three ldcs the results of the study indicate that market size the presence of multinational corporations from the home country the extent of economic development and the balance of payments are all significant determinants of the growth of mnbs in ldcs

international trade in banking services abstract this paper investigates which of the theories of international trade best explains trade in international banking in its various forms branches subsidiaries and representatives strong evidence is found to support the newer economies of scale theories and it is proposed that the foreign exchange and capital markets exhibit declining costs to production it is also discovered that the relaxation of exchange and capital controls by potential host countries diminishes the incentives of banks to seek direct representation

egalitarianism and international investment abstract this study identifies how country differences on a key cultural dimension egalitarianism influence international investment flows a society s cultural orientation toward egalitarianism is manifested by intolerance for abuses of market and political power and a desire for protecting less powerful actors we show egalitarianism to be based on exogenous factors including social fractionalization dominant religion circa 1900 and war experience from the 19th century we find a robust influence of egalitarianism distance on cross national flows of bond and equity issuances syndicated loans and mergers and acquisitions an informal cultural institution largely determined a century or more ago egalitarianism exercises its effect on international investment via an associated set of consistent contemporary policy choices but even after controlling for these associated policy choices egalitarianism continues to exercise a direct effect on cross border investment flows likely through its direct influence on managers daily business conduct

the intergovernmental network of world trade igo connectedness governance and embeddedness membership in certain intergovernmental organizations igos such as the world trade organization has long been argued to stimulate trade yet evidence linking igos to trade is mixed the authors argue that identifying the influence of igos requires attention not only to the institutions igos enact but also to the network through which they enact them this approach allows them to demonstrate that trade between two countries increases by an average of 58 with every doubling of the strength of igo connection between the countries they also contribute to debates regarding the mechanisms through which structural relationships influence economic behavior by showing that substantial trade benefits occur not only through economic igos but also through igos that were formed for social and cultural purposes and that connections through igos that are organizationally strong have more impact than those through minimalist igos

fdi versus exports evidence from german banks abstract we use a new bank level dataset to study the fdi versus exports decision for german banks we extend the literature on multinational firms in two directions first we simultaneously study fdi and the export of cross border financial services second we test recent theories on multinational firms which show the importance of firm heterogeneity helpman e melitz m j yeaple s r 2004 export versus fdi american economic review 94 1 300 316 our results show that fdi and cross border services are complements rather than substitutes heterogeneity of banks has a significant impact on the internationalization decision more profitable and larger banks are more likely to expand internationally than smaller banks they have more extensive foreign activities and they are more likely to engage in fdi in addition to cross border financial services

alliances in international governmental organizations regional trade agreement formation and multinational enterprise regionalization strategy abstract drawing from political science alliance theories we explain why countries are likely to enter regional trade agreements we argue that the probability that this will happen is higher if the countries are allies in the same international governmental organizations igos as such alliances can help build trust and reduce political risk our results show that igo scope and also partner reliability and influence in the igo network play important roles our findings provide guidance to multinational enterprises in formulating regionalization strategies

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

modelling household purchasing behaviour to analyse beneficial marketing strategies price promotion and generic advertising are two common strategies to increase consumer demand for food products which one is preferred over the other depends largely on the relative importance of

what factors cause foreign banks to stay in london the banking literature focuses extensively on the phenomenon of bank entry and pays less attention to the factors driving the continuation of banking activities in foreign markets in this paper we analyze this important but overlooked issue by constructing a unique database of foreign banks that continue operating and those that have withdrawn from arguably the world s most international banking center london this new data set comprises information on 408 offices from 77 countries spanning the period from 1945 to 1999 giving us 4643 observations of which 2795 represent offices that continue operating and 1848 that withdrew from london during this period our empirical work shows that the continuation of international banking activity in london is positively related to the setup of locally integrated organizational forms at entry the experience in the local market and the size of local operations continuation of banking activities is however negatively related to the setup of organizational forms integrated into the parent bank at entry and to the geographic distance of the home country to london we also find that higher global economic activity increases the likelihood of international banking operations continuing in london however the more volatile the global economic environment the greater the prospect of a cessation of this activity