Stephen B. Preece and Riad A. Ajami
This research considers the incidence of foreign firms investing between 10 percent and 50 percent equity in U.S. corporations, or Foreign Direct Minority‐Equity Investment…
Abstract
This research considers the incidence of foreign firms investing between 10 percent and 50 percent equity in U.S. corporations, or Foreign Direct Minority‐Equity Investment (FDMI). FDMI relationships are viewed with respect to international strategic alliances in general and are hypothesized to be motivated by market, technology, or production considerations. Both financial and operational performance measures are examined comparing three years prior to the FDMI with three years after. The research follows an ex post facto, quasi‐experimental design with two control groups consisting of 99 companies each. Results indicate declining performance measures related to FDMI companies receiving FDMI as compared to a matched sample of peer firms. Strategic management, agency theory and other explanations are explored in light of these findings.
Eugene H. Fram and Riad A. Ajami
Many manufacturers use informal approaches to engage newinternational industrial distributors, relying on phone contacts,correspondence and bank referencing to gather background…
Abstract
Many manufacturers use informal approaches to engage new international industrial distributors, relying on phone contacts, correspondence and bank referencing to gather background information. Reports on a study to determine the desirability of top managers taking time to visit new international distributors in order to develop a contract and to lead in building interpersonal relationships. Commercial attachés or senior embassy officials were interviewed to obtain their perspectives on the proper role of American top managers in the development of international distributor contracts. Nearly all concluded that a managerial visit was necessary to conduct contract negotiations. About one‐quarter of the respondents felt that top officials from American firms needed to be involved. The majority reported the issues could be negotiated by any level manager who had power to act decisively on contract matters. In most cases, however, long‐term contracting responsibilities are usually reserved for people with top management status. Consequently, another international travel duty for top managers may be developing.
Details
Keywords
Research suggests that the small‐ and medium‐sized Western European firms interested in direct investment in the United States are reluctant to co‐operate with state governments…
Abstract
Research suggests that the small‐ and medium‐sized Western European firms interested in direct investment in the United States are reluctant to co‐operate with state governments in formulating investment decisions. Research findings in the Upper Mid‐west indicate that the primary motivation of these firms to invest in the Upper Mid‐west is to shelter capital. The amount of importance the individual state governments place on reverse direct investment politicises the entire process of solicitation of potential direct investors. As a result, the small‐ and medium‐sized Western European firms tend to seek direct investment assistance from professional private sources.