This paper points out new directions for the deepening and broadening of the institution-based view, by drawing on three streams of research with which I have been involved…
Abstract
This paper points out new directions for the deepening and broadening of the institution-based view, by drawing on three streams of research with which I have been involved recently: (1) outward foreign direct investment from emerging economies, (2) bankruptcy laws and entrepreneurship development, and (3) institution-based research focusing on Africa. Such deepening has been accomplished by enhancing our institution-based understanding of foreign direct investment with a focus on emerging multinationals, while broadening has been done both substantively by probing into the impact of bankruptcy laws on entrepreneurship development around the world and geographically by calling for enhanced research attention on Africa via an institution-based lens.
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Hang Jiang, Yi-Chung Hu, Jan-Yan Lin and Peng Jiang
With the development of economy, China’s OFDI constantly increase in recent year. Meanwhile, OFDI has spillover effect on economic development and technological development of…
Abstract
Purpose
With the development of economy, China’s OFDI constantly increase in recent year. Meanwhile, OFDI has spillover effect on economic development and technological development of home country. Thus, accurate OFDI prediction is a prerequisite for the effective development of international investment strategies. The purpose of this paper is to predict China’s OFDI accurately using a novel multivariable grey prediction model with Fourier series.
Design/methodology/approach
This paper applied a multivariable grey prediction model, GM(1,N), to forecast China’s OFDI. In order to improve the prediction accuracy and without changing local characteristics of grey model prediction, this paper proposed a novel grey prediction model to improve the performance of the traditional GM(1,N) model by combining with residual modification model using GM(1,1) model and Fourier series.
Findings
The coefficients indicate that the export and GDP have positive influence on China’s OFDI, and, according to the prediction result, China’s OFDI shows a growing trend in next five years.
Originality/value
This paper proposed an effective multivariable grey prediction model that combined the traditional GM(1,N) model with a residual modification model in order to predict China’s OFDI. Accurate forecasting of OFDI provides reference for the Chinese Government to implement international investment strategies.
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Weijing He, Patrick Ring and Agyenim Boateng
Over the past decade internationalisation by banks from emerging market economies has accelerated. The purpose of this study is to examine the role of government and home country…
Abstract
Purpose
Over the past decade internationalisation by banks from emerging market economies has accelerated. The purpose of this study is to examine the role of government and home country institutions in the international expansion process of Chinese commercial banks (CCBs).
Methodology/approach
By employing qualitative research method, data was collected via interviews from 30 senior managers based on a sample of 10 CCBs involved in international expansion over the 2001–2013 period.
Findings
The study finds that the Chinese government and home institutions play an important role in motivating CCBs’ internationalisation. Evidence from this research illustrates the effect institutional factors have in emerging economy firms’ internationalisation.
Practical implications
The managerial implication of these findings is that CCBs could take great advantage of government policy by developing proper internationalisation strategies and capabilities that would enhance CCBs’ competitiveness in global market. On the institutional front, removal of the institutional constraints imposed on Chinese banking industry is required. Using market-oriented management and regulatory rules rather than imposing administrative restrictions could therefore accelerate CCBs’ adaption and integration in the international market and enhance their competitive power.
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Yipeng Liu and Ping Deng
This chapter focuses on the Chinese cross-border merger and acquisition (M&A) amid the rising trend of multinational companies from emerging economies. Based on a systematic…
Abstract
This chapter focuses on the Chinese cross-border merger and acquisition (M&A) amid the rising trend of multinational companies from emerging economies. Based on a systematic review of published papers in top international business/strategy/organization journals on Chinese overseas M&A, we offer a tentative multilevel framework to consolidate the past achievement, consider contemporary debates, so as to direct future research efforts. We suggest that Chinese overseas M&A research should emphasize on a process perspective ranging from pre-acquisition to post-acquisition. In addition, qualitative research and methodological pluralism should be embraced to achieve this goal due to the nature of this emerging field of Chinese cross-border M&A. By allocating the extant literature into the multilevel framework, we articulate the demand and identify several potential topics for scholarly inquiry in the future in order to gain a nuanced understanding of this important phenomenon of Chinese cross-border M&A for both China and the rest of the world.
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Weiwei Gao, Wanli Li and Zhen Huang
This paper aims to investigate whether family CEOs benefit investment efficiency under uncertainty with Chinese family firms and to test the moderating effect of ownership…
Abstract
Purpose
This paper aims to investigate whether family CEOs benefit investment efficiency under uncertainty with Chinese family firms and to test the moderating effect of ownership structure, including family ownership, the separation of family control from family ownership and the multiple large shareholder structure.
Design/methodology/approach
Fixed-effects models are designed for a sample of 5,734 firm-year observations for Chinese family firms from 2009 to 2014.
Findings
The results show that investment efficiency is low under uncertainty, and having family CEOs can reduce this negative relationship. Further analysis reveals that for firms with family CEOs, the negative effect of uncertainty on investment efficiency is weaker when the family has higher ownership, when family control is less separated from family ownership, or when family firms have multiple large shareholder structures.
Research limitations/implications
The authors do not distinguish founder-CEOs and descendant-CEOs. Most of Chinese family firms are still managed by founders, so the authors cannot explore the generation effect although different generations manage firms differently. Because family succession is becoming a more and more important problem in China, further research may be able to explore the generation effect.
Practical/implications
This paper suggests that in emerging economies with weak investor protection, outside minority shareholders can avoid expropriation from family owners by investing in firms with large family ownership, little separation of family control from ownership or multiple large shareholder structure. In addition, policymakers can encourage institutional investors to participate in family business to improve corporate governance.
Originality/value
Drawing on both Type I and Type II agency theory perspectives, the authors argue that although family CEOs can generally benefit firms’ investment efficiency, the benefits vary with firms’ ownership structure. In other words, family CEOs are not absolute agents or stewards but some extent of combination of both.
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Cici Xiao He and Masoud Karami
This study explains the international opportunity development of SMEs from emerging economies during institutional transition. This research enriches our understanding of how…
Abstract
This study explains the international opportunity development of SMEs from emerging economies during institutional transition. This research enriches our understanding of how these firms adopt different approaches to developing international opportunities when they confront the turbulent institutional environment. We develop a phase-based framework for the evolution of transitional institution for SMEs’ internationalization and the SMEs’ internationalization process in that framework. By providing an empirical case study of a privately owned SME from China, the main finding is that SMEs from emerging economies become more entrepreneurial and proactive in developing the international opportunity during the institutional transition.
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In developed markets, emerging market multinational enterprises (EMNEs) seem to be more discriminated by host country nationals than foreign developed market multinational…
Abstract
Purpose
In developed markets, emerging market multinational enterprises (EMNEs) seem to be more discriminated by host country nationals than foreign developed market multinational enterprises (DMNEs). They are challenged with host country nationals’ prejudices and face a stigma of being from emerging markets. While literature agrees that EMNEs suffer from additional disadvantages due to their country-of-origin, research fails to identify those factors that may lead to a higher discrimination against EMNEs than against foreign DMNEs.
Design/methodology/approach
Based on institutional theory, we look at institutional-related and resource-related antecedents that have an impact on various forms of direct and indirect discrimination by host country nationals.
Originality/value
Our framework analyzes the crucial differences between host country nationals’ perception of EMNEs and foreign DMNEs and the resulting challenges for EMNEs in the developed world. It enhances our understanding of the importance of institutional environments in explaining differences in host country nationals’ discrimination against foreign MNEs.
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Xiaojia Guo, Hao Chen and Peng Jiang
This case describes a real-time crisis experienced by the co-founder (Mr Yang) of a multi-national Chinese company operating in Vietnam during the 2014 Vietnam riot. After the…
Abstract
Subject area
This case describes a real-time crisis experienced by the co-founder (Mr Yang) of a multi-national Chinese company operating in Vietnam during the 2014 Vietnam riot. After the strike broke out, Mr Yang made several critical decisions to protect and save both his factory and employees.
Study level/applicability
This case is applicable to graduate-level management courses such as: Business ethics, Decision-making, Business Communication and Cross-Cultural Management. Students should have some knowledge in Decision-Making concepts (e.g. “bounded rationality”); in Cross-Cultural Management concepts (e.g. “culture norms”); and in Strategic management theory such as “institution-based view” (e.g. formal vs informal institutions).
Case overview
Part A of the case introduces the main character (Mr Yang) and his factory in Vietnam, the escalation of the strike and the course of the crisis. It also elaborates the important critical decisions Mr Yang made to save both his factory and employees. Part B of the case describes the rescue of Mr Yang and his Chinese employees, his actions after the crisis and strategic positioning in future business. Part C of the case introduces the aftermath of the riot and Mr Yang's reflection regarding the crisis.
Expected learning outcomes
The instructors may emphasize different learning objectives in different courses. Business Ethics: help the students learn to recognize, clarify, speak and act on their values when conflicts arise. Decision-Making: helps the students understand the logic of sense-making in crisis and the concept of bounded rationality. Business Communication: helps the students learn to raise issues in an effective manner and learn to deliver their own responses effectively. Cross-Cultural Management: helps the students identify and analyze the many ways in which managers can voice and implement their values in the face of critical moments in a different cultural environment.
Supplementary materials
Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.
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This research seeks to understand how shareholder constituencies including controlling family, nonfamily insiders, as well as domestic and foreign institutions in the corporate…
Abstract
Purpose
This research seeks to understand how shareholder constituencies including controlling family, nonfamily insiders, as well as domestic and foreign institutions in the corporate governance system of emerging economy firms perceive institutional risks in terms of regulative, normative, and cognitive institutions and influence strategic choices in the internationalization of their invested firms.
Design/methodology/approach
The sample data are Taiwanese publicly listed companies in the electronics and computer industry. Panel data of the parent firms and their overseas affiliates are available from the annual report and Taiwan Economic Journal database. Country-level data are available from the World Investment Report and the IMD World Competitiveness Report. Statistical regression models including tobit and logistic regression are used to analyze the data.
Findings
Controlling family and nonfamily insider shareholders tend to influence their invested firms to enter in institutionally smaller host countries through a shared ownership. Domestic institutional shareholders tend to influence their invested firms to adopt a shared ownership and enter in host countries with larger and smaller institutional distances in terms of regulative and normative institution, respectively. Foreign institutional shareholders tend to influence their invested firms to enter in institutionally smaller host countries through a whole ownership.
Originality/value
The strategic choices of foreign market entry made by emerging economy firms are significantly shaped by the different risk perceptions of shareholder constituencies in their corporate governance system toward the institutional distances between the home and the host country.