How increased foreign competition motivates domestic firms to do good: an examination of foreign entry mode and domestic CSR response

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hyun-Soo Woo ◽  
John Berns ◽  
Kaushik Mukherjee ◽  
Jisun Kim
Keyword(s):  
Boundary Condition ◽  
Fixed Effects ◽  
Entry Mode ◽  
Interactive Effects ◽  
Industry Concentration ◽  
Domestic Firm ◽  
Foreign Competition ◽  
Content Type ◽  
Domestic Firms ◽  
Foreign Entry

PurposeWe examine whether domestic firms react differently to foreign direct investment (FDI) entry modes –mergers and acquisitions (M&A) versus greenfield. Specifically, we ascertain whether the entry mode of foreign competition motivates different corporate social responsibility (CSR) responses from domestic firms and when such relationships hold.Design/methodology/approachWe employ fixed-effects models using 1,331 US firm-year observations for 2015–2018. Furthermore, we examine the interactive effects of industry concentration to examine a key boundary condition.FindingsForeign entry via greenfield mode has no effect on domestic firm CSR. Entry through M&A has a significantly positive effect. We attribute these findings to the increased threat to domestic firms from foreign M&A whereas foreign entry through greenfield mode is less threatening as entrants face significantly more challenges in host countries. We identify industry concentration as a boundary condition of our findings. The effect of foreign M&A entries on domestic firms' CSR becomes weaker as industries are more concentrated.Originality/valueThis study offers novel insights on FDI by parsing out different reactions to entry mode by domestic firms. We add to our understanding of CSR as a mechanism to stave off foreign competition, offer insights into a key boundary condition of such actions and demonstrate the robustness of our findings.

scholarly journals Global and local corporate social responsibility: a study of foreign entry mode choice in Spanish quoted firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Francisco José Mas-Ruiz ◽  
Carla Rodriguez-Sanchez ◽  
Franco Manuel Sancho-Esper ◽  
Esther de Quevedo-Puente
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Ad Hoc ◽  
Entry Mode ◽  
Binary Logistic Regression ◽  
Content Type ◽  
Explanatory Variables ◽  
Foreign Entry ◽  
Corporate Social ◽  
The Relationship

PurposeThis study examines the relationships between the foreign entry mode (FEM) used by a company, its global corporate social responsibility (CSR) and the host country's local CSR environment in Spanish quoted firms. Additionally, it seeks to explore the moderating role of the host country's CSR in the relationship between firm's global CSR and FEM.Design/methodology/approachTo test the proposed hypotheses, binary logistic regression is used with a sample of 418 foreign direct investment (FDI) operations between 2002 and 2008. This period is chosen with the aim of knowing what happened after the boom in Spanish investments abroad in the 1990s and the uncertainty of the early 2000s.FindingsThe results reveal firm patterns of behaviour regarding the FEM of companies and the two types of CSR according to the proposed hypotheses. Furthermore, it is found that the host country's local CSR may not only have a direct influence on the FEM decision but may also moderate the relationship between the firm's global CSR and firm's entry mode in a host country.Originality/valueThis is one of the first studies to propose as explanatory variables of FEM two types of CSR (firm's global CSR and host country's local CSR). This has been possible by the creation of an ad-hoc database with data from different information sources of FDI (Instituto Español de Comercio Exterior) and CSR [Eikon™ and AccountAbility National Corporate Responsibility Index (NCRI)].

Sales nationality and debt financing impact on firm’s performance and risk

2017 ◽  
Vol 12 (1) ◽  
pp. 103-126 ◽  
Author(s):  
Ahmad Y. Khasawneh ◽  
Qais A. Dasouqi
Keyword(s):  
Fixed Effects ◽  
Negative Impact ◽  
Stock Exchange ◽  
Systematic Risk ◽  
Debt Financing ◽  
Industrial Firms ◽  
Content Type ◽  
Domestic Firms ◽  
Amman Stock Exchange ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of debt financing on both performance and systematic risk in Amman Stock Exchange listed firms. The authors focus the study to analyze the differences between services and industrial firms in one sense and the differences between international and domestic firms in the other sense, as the study depends on the geographical distribution of sales to classify the nationality of firms. Design/methodology/approach The study sample includes all listed Jordanian firms in Amman Stock Exchange from 2005 to 2013 for both industrial and services sectors. Using panel data techniques, fixed effects regression with modified Driscoll-Kraay standard error as a remedy for heteroscedasticity problem is employed. Findings The results show that there is a significant negative impact of debt financing on the firm’s performance, where the sector and the sales nationality play an important role. Moreover, the results indicate that there is a significant positive impact of debt financing on the firm’s systematic risk. Taking the sector and sales nationality into consideration, the authors find that the debt financing has no significant impact on the systematic risk of services firms and domestic firms. Additionally, the findings indicate that services firms and international firms are, on average, more riskier than industrial firms and domestic firms, respectively. Originality/value The paper provides a visibility on the comparison between international and local firms in Jordan in terms of the impact of debt financing on the financial performance and systematic risk in one research.

Institutional distance and international ownership strategies in Russia

2014 ◽  
Vol 9 (3) ◽  
pp. 254-276 ◽  
Author(s):  
Päivi Karhunen ◽  
Riitta Kosonen ◽  
Svetlana Ledyaeva
Keyword(s):  
Home Country ◽  
Mode Choice ◽  
Entry Mode ◽  
Foreign Ownership ◽  
Institutional Distance ◽  
Russian Regions ◽  
Content Type ◽  
Entry Mode Choice ◽  
Foreign Entry ◽  
The Impact

Purpose – The purpose of this paper is to analyse the impact of institutional distance, extended to capture subnational institutional variation, on foreign entry mode choice. Design/methodology/approach – As an empirical study, it focuses on manufacturing firms established in Russia by foreign investors from developed countries. The dependent variables, the share of foreign ownership and the entry mode choice binary variable (equal to 1 for full foreign ownership and zero for a joint venture) were obtained from the registry of foreign-owned firms in Russia. The World Bank's regulatory quality (RQ) index on a national level and a respective indicator for the various Russian regions on a subnational level were utilised to measure institutions. Multilevel cross-classified analysis including foreign firms, the various Russian regions and characteristics of the foreign owners’ home countries was applied to for making empirical estimations. Findings – The empirical results show, first, that the regionally adjusted institutional distance, i.e. the distance between the home country and the Russian region in question, when measured in terms of RQ, shifts the ownership structure towards shared ownership. However, nation-level institutional distance between the home country and Russia does not show any statistically significant relationship with the modal choice. Originality/value – The results indicate that with the exception of industries of strategic importance to the state, the most important “rules of the game” for foreign entry strategies are provided not by the federal government but by the regional governors. The theoretical value of the paper lies in the extension of the institutional distance concept to the subnational level. At the same time, the paper identifies those institutional features that foreign entrants eyeing Russia need to take into account when selecting an entry mode and location within Russia.

Industry drivers of multinational companies’ externalization choice: a conceptual framework and application to Korea–China film co-productions

2020 ◽  
Vol 35 (11) ◽  
pp. 1633-1644
Author(s):  
Hwy-Chang Moon ◽  
Wenyan Yin
Keyword(s):  
Entry Mode ◽  
Multinational Companies ◽  
Entry Modes ◽  
Content Type ◽  
Domestic Firms ◽  
Chinese Film ◽  
Specific Factors ◽  
Host Government ◽  
The Government ◽  
Film Market

Purpose This conceptual paper aims to explore under what conditions multinational companies (MNCs) are more likely to internationalize through externalization modes. Design/methodology/approach This paper complements previous studies by proposing three industry-specific factors that affect MNCs’ decision for externalization. It then applies this framework to the case of Korean MNCs’ strategic choice when entering the Chinese film market which is highly regulated by the government, to illustrate how such a framework works in practice. Findings This paper suggests that MNCs are more likely to choose externalization entry modes under the three industry conditions: when the business grows fast, when there are best practices of industry standard and when the business requires multi-competence. It also shows that the three conditions explain well the growing Korea–China co-productions in the Chinese film market. Practical implications This paper provides useful implications for the government’s regulatory effectiveness. The protectionist policies of the host government are valid only in an industry where the three conditions are met, as they increase the possibility of domestic firms’ participation by encouraging foreign MNCs to shift their entry mode from sole venture toward alliances with domestic firms. Originality/value This paper enriches the entry-mode research by indicating that MNCs’ externalization decisions need to consider these industry-specific factors. In addition, it also contributes to the understanding on why some countries maintain their high attractiveness for foreign MNCs, whereas other countries do not, given the similar level of restrictive government regulations.

Spillover effects of marketing expertise on market performance of domestic firms and MNEs in emerging markets

2016 ◽  
Vol 54 (1) ◽  
pp. 107-129 ◽  
Author(s):  
Qiang (Steven) Lu ◽  
Chinmay Pattnaik ◽  
Mengze Shi
Keyword(s):  
Multinational Enterprises ◽  
Market Performance ◽  
Spillover Effects ◽  
Loyalty Programs ◽  
Domestic Firm ◽  
Gasoline Market ◽  
Loyalty Program ◽  
Content Type ◽  
Domestic Firms ◽  
The Impact

Purpose – The purpose of this paper is to study the spillover effects of marketing expertise on the market performance of domestic firms and multinational enterprises (MNEs). Specifically, this study examines how the adoption of frequency loyalty programs by a domestic firm following an MNE affects the competitive dynamics and the market performance of both firms in a Chinese retail gasoline market. Design/methodology/approach – This study is based on empirical data that were obtained from a quasi-field experiment in which the MNE entered the market with a frequency loyalty program and the domestic firm later responded with a similar loyalty program. The authors measured the impact of the adoption of a frequency loyalty program by the domestic firm on the market performance of both the domestic firm and the MNE. Findings – The authors find that the domestic firm’s adoption of a similar loyalty program significantly increased its market share in the regular gasoline market. The domestic firm’s adoption of a loyalty program also increased the market performance of the MNE in the premium gasoline market. Originality/value – This study explicitly demonstrates the spillover benefits through demonstration effects and provides empirical evidence on specific spillover benefits to domestic firms and MNEs based on their competencies in distinct market segments where they compete.

Foreign Entry and Profitability of Domestic Firms: Evidence from China

2013 ◽  
Vol 12 (2) ◽  
pp. 34-60 ◽  
Author(s):  
Dahai Fu ◽  
Yanrui Wu
Keyword(s):  
Ownership Structure ◽  
Manufacturing Sector ◽  
Domestic Firm ◽  
Business Enterprise ◽  
Export Intensity ◽  
Growth And Survival ◽  
Domestic Firms ◽  
Firm Profitability ◽  
Foreign Entry ◽  
The Impact

Profitability provides a yardstick for judging the operational efficiency, growth, and survival of a business enterprise. This study investigates the determinants of firm profitability in the Chinese manufacturing sector, with a focus on the impact of foreign entry on the profitability of domestic firms. Our findings show an inverted-U relationship between foreign entry and the profitability of domestic firms. Furthermore, we also find that the effect of foreign entry on domestic firm profitability varies according to the ownership structure of domestic firms and the export intensity of foreign newcomers.

Categorization flexibility and unconventional choices: is life an adventure?

2020 ◽  
Vol 54 (8) ◽  
pp. 1963-1986
Author(s):  
Tilottama G. Chowdhury ◽  
Feisal Murshed
Keyword(s):  
Interactive Effect ◽  
Interactive Effects ◽  
Cognitive Capacity ◽  
Purchase Behavior ◽  
Consumer Decision Making ◽  
Cross Sectional ◽  
Content Type ◽  
Cross Domain ◽  
Multiple Domains

Purpose This paper proposes that categorization flexibility, operationalized as the cognitive capacity that cross-categorizes products in multiple situational categories across multiple domains, might favorably influence a consumer’s evaluation of unconventional options. Design/methodology/approach Experimental research design is used to test the theory. An exploratory study first establishes the effect of categorization flexibility in a non-food domain. Study 1 documents the moderating role of decision domain, showing that the effect works only under low- (vs high-) consequence domain. Studies 2A and 2B further refine the notion by showing that individuals can be primed in a relatively higher categorization flexibility frame of mind. Study 3 demonstrates the interactive effect of categorization flexibility and adventure priming in a high-consequence domain. Study 4 integrates the interactive effects of decisions with low- vs high-consequence, adventure priming and categorization flexibility within a single decision domain of high consequence. Findings Consumers with higher- (vs lower-) categorization flexibility tend to opt for unconventional choices when the decision domain entails low consequences, whereas such a result does not hold under decision domain of high consequences. The categorization flexibility effects in case of low-consequence decision domain holds true even when consumers are primed to be categorization flexible. Furthermore, with additional adventure priming, consumers show an increased preference for unconventional options even under a decision domain with high consequence. Research limitations/implications This study could not examine real purchase behavior as results are based on cross-sectional, behavioral intention data. In addition, it did not examine the underlying reason for presence of cross-domain categorization flexibility index. Practical implications The results suggest that stimuli may be tailored to consumers in ways that increase the salience and the perceived attractiveness of unconventional choices. Further, data reinforce the notion of cross-categorical interrelations among different domains, which could be leveraged by marketers. Originality/value This study represents the first documentation of the potential ways by which unconventional product choice might be a function of individuals’ categorization flexibility level across different types of decision domains. The findings yield implications that are novel to both categorization and consumer decision-making literature.

Farm wages and public works

2015 ◽  
Vol 8 (1) ◽  
pp. 19-72 ◽  
Author(s):  
Kanika Mahajan
Keyword(s):  
Theoretical Model ◽  
Wage Rate ◽  
Fixed Effects ◽  
Positive Impact ◽  
Wage Growth ◽  
State Level ◽  
Random Allocation ◽  
Farm Sector ◽  
Content Type ◽  
The Impact

Purpose – The purpose of this paper is to examine the impact of National Rural Employment Guarantee Scheme (NREGS) on farm sector wage rate. This identification strategy rests on the assumption that all districts across India would have had similar wage trends in the absence of the program. The author argues that this assumption may not be true due to non-random allocation of districts to the program’s three phases across states and different economic growth paths of the states post the implementation of NREGS. Design/methodology/approach – To control for overall macroeconomic trends, the author allows for state-level time fixed effects to capture the differences in growth trajectories across districts due to changing economic landscape in the parent-state over time. The author also estimates the expected farm sector wage growth due to the increased public work employment provision using a theoretical model. Findings – The results, contrary to the existing studies, do not find support for a significantly positive impact of NREGS treatment on private cultivation wage rate. The theoretical model also shows that an increase in public employment work days explains very little of the total growth in cultivation wage post 2004. Originality/value – This paper looks specifically at farm sector wage growth and the possible impact of NREGS on it, accounting for state specific factors in shaping farm wages. Theoretical estimates are presented to overcome econometric limitations.

Is the equalization/normalization lens dead? Social media campaigning in US congressional elections

2018 ◽  
Vol 42 (5) ◽  
pp. 718-731 ◽  
Author(s):  
Jason Gainous ◽  
Andrew Segal ◽  
Kevin Wagner
Keyword(s):  
Social Media ◽  
Design Methodology ◽  
Power Structure ◽  
Congressional Elections ◽  
Campaign Spending ◽  
Interactive Effects ◽  
Content Type ◽  
Electoral Success ◽  
The Masses ◽  
Practical Implications

Purpose Early information technology scholarship centered on the internet’s potential to be a democratizing force was often framed using an equalization/normalization lens arguing that either the internet was going to be an equalizing force bringing power to the masses, or it was going to be normalized into the existing power structure. The purpose of this paper is to argue that considered over time the equalization/normalization lens still sheds light on our understanding of how social media (SM) strategy can shape electoral success asking if SM are an equalizing force balancing the resource gap between candidates or are being normalized into the modern campaign. Design/methodology/approach SM metrics and electoral data were collected for US congressional candidates in 2012 and 2016. A series of additive and interactive models are employed to test whether the effects of SM reach on electoral success are conditional on levels of campaign spending. Findings The results suggest that those candidates who spend more actually get more utility for their SM campaign than those who spend less in 2012. However, by 2016, spending inversely correlates with SM campaign utility. Research limitations/implications The findings indicate that SM appeared to be normalizing into the modern congressional campaign in 2012. However, with higher rates of penetration and greater levels of usage in 2016, the SM campaign utility was not a result of higher spending. SM may be a greater equalizing force now. Practical implications Campaigns that initially integrate digital and traditional strategies increase the effectiveness of the SM campaign because the non-digital strategy both complements and draws attention to the SM campaign. However, by 2016 the SM campaign was not driven by its relation to traditional campaign spending. Originality/value This is the first large N study to examine the interactive effects of SM reach and campaign spending on electoral success.

Economies of scale in European life insurance

2018 ◽  
Vol 19 (2) ◽  
pp. 190-207 ◽  
Author(s):  
Udo Klotzki ◽  
Alexander Bohnert ◽  
Nadine Gatzert ◽  
Ulrike Vogelgesang
Keyword(s):  
Life Insurance ◽  
Fixed Effects ◽  
Economies Of Scale ◽  
Insurance Markets ◽  
Fixed Effects Model ◽  
Content Type ◽  
Administrative Costs ◽  
Life Insurers ◽  
Acquisition Costs ◽  
The Uk

Purpose Due to the continuing low interest rate environment as well as the increase in acquisition costs, price transparency, cost transparency and competition with banks, the cost of life insurance becomes increasingly important for customers, insurers and shareholders. Against this background, the purpose of this paper is to study the development of insurers’ economies of scale in regard to administrative costs for four of the largest European life insurance markets. Design/methodology/approach The analysis on economies of scale is based on a comprehensive set of 477 life insurers in Germany, Italy, Spain and the UK, yearly data between 2000 and 2014, and regression calculations that are based on 4,855 observations. Findings The results show that economies of scale exist for all considered markets and for most of the considered years. However, the extent of economies of scale varies considerably across countries. Originality/value Overall, the existing academic literature on costs and corresponding economies of scale in life insurance primarily deals with analyses of total costs instead of administrative costs, a single year or a single market. This paper contributes to the existing literature by conducting an analysis of recent market dynamics and economies of scale in regard to administrative costs for the period from 2000 and 2014 for four of the largest European life insurance markets for which the respective data were available (Germany, Italy, Spain and the UK) and 477 life insurers in total. This is done by means of a log-log transformation of premiums and costs and a fixed effects model based on these transformed figures for 4,855 observations. In addition, for each market, the authors analyze the development of administrative costs for a total of 477 insurers.

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