Michael Carney, Marc Van Essen, Saul Estrin and Daniel Shapiro
The purpose of this paper is to examine two prominent perspectives on business group functioning, institutional void (IV) and entrenchment/exploitation (EE), that make different…
Abstract
Purpose
The purpose of this paper is to examine two prominent perspectives on business group functioning, institutional void (IV) and entrenchment/exploitation (EE), that make different predictions about the effect of business group (BG) on the economy. The authors examine the effects of BG prevalence in an economy and its effect on macroeconomic outcomes including foreign direct inward and outward investment, innovation and development of the financial sector.
Design/methodology/approach
The authors build a unique database by extracting estimates of BG prevalence for multiple countries between 1978 and 2012 from the existing literature and use this to test conflicting predictions derived from the IV and EE perspectives, respectively.
Findings
The authors find no consistent evidence that BG prevalence diminishes over time with economic development as IVs diminish, which is predicted by the IV perspective. Instead, the long-term persistence of BGs in many countries appears to be more consistent with the EE perspective. However, this study also finds no support for the perspective that high levels of BG prevalence are negatively associated with country-level indicators and determinants of economic development and competitiveness, as suggested by that perspective.
Originality/value
The authors conclude that there is no robust support for either the IV or the EE perspective and highlight the need for more contextualized theorizing about the evolution of BGs.
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Michael Carney, Saul Estrin, Zhixiang Liang and Daniel Shapiro
This study aims to advance an international political economy (IPE) perspective that geo-political events can have long-lasting imprint effects on countries and their firms. The…
Abstract
Purpose
This study aims to advance an international political economy (IPE) perspective that geo-political events can have long-lasting imprint effects on countries and their firms. The study also aims to explore the idea that shared political history and geography combine to create specific structural conditions that shape the international competitiveness of all firms in a region. In particular, the authors consider whether the Monroe Doctrine of 1823, which asserted American influence in the Western Hemisphere, contributed to the creation of institutional structures across Latin America (LA) affecting the strategies of all firms to this day. The authors also illustrate the IPE perspective using the example of the contemporary international competitiveness of LA business groups.
Design/methodology/approach
The authors illustrate the IPE perspective using the example of the contemporary international competitiveness of LA business groups. The exploratory framework of this study leads to a proposition about the export performance of Latin American business group affiliates. The authors use firm-level performance data for 32,000 firms across emerging economies to explore the proposition empirically while controlling for alternative explanations. To do this, the authors draw on the World Bank Economic Surveys.
Findings
The authors derive a proposition that argues the Monroe Doctrine has had a long-run imprint effect on economic policymaking in LA, resulting in a common, persistent and negative impact on the international competitiveness of firms. The authors find strong and consistent evidence that in terms of export performance, all Latin American firms export less and group affiliates do not outperform independent firms, This finding contrasts with the results for all the other emerging market regions around the world.
Research limitations/implications
The main contribution of this study has been to suggest the potential importance of shared regional geopolitical history and geography in explaining firm-level outcomes. However, this study is preliminary and introductory, although the authors seek to control for alternative country-specific explanations of the results. The analysis considers the effects of one particular IPE phenomenon, the Monroe Doctrine, in one particular location: LA. Future work should seek to contrast LA with other geopolitical security and alternative IPE structures. They might also address the time dimension from a historical perspective: is imprinting in LA driven by the length of the Monroe Doctrine arrangements?
Practical implications
The most important managerial learning point concerns the relevance of geography and political economy factors for multinational enterprises strategy formation. There is widespread understanding that context is an important determinant of subsidiaries’ performance, and that strategies need to be constructed to take account of country-specific characteristics, most importantly, in emerging economies and institutional arrangements. This paper proposes that managers also need to take account of IPE structures, including security arrangements, and to consider the resulting regional as well as national context.
Social implications
The analysis suggests that not only the performance of firms, including emblematic firms, but also the socially beneficial spillovers that might be generated from them, are contingent on the regional as well as national characteristics. Thus, business groups in most emerging economies are found to yield better performance and to provide higher levels of social impact, including concerning ESG goals. However, the findings of this study suggest that the former is not true for LA, which, the authors argue, is a consequence of imprinting as a result of the Monroe Doctrine. Further work is needed to establish whether the latter effect is also not true, but if that is the case, then regionally specific policies may be required to address the resulting corporate social shortfalls.
Originality/value
The core idea is that geo-political events can have long-lasting imprint effects on countries and their firms: that shared political history and geography create specific structural conditions that shape the international competitiveness of all firms in a region. The authors explore this concept with reference to the Monroe Doctrine, asking whether its assertion of US influence across the Americas contributed to the creation of institutional structures across LA affecting the strategies of all firms to this day.
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Randolph L. Bruno, Nauro F. Campos and Saul Estrin
This paper aims to conduct a systematic meta-analysis on emerging economies to summarize these effects and throw light on the strength and heterogeneity of these conditionalities.
Abstract
Purpose
This paper aims to conduct a systematic meta-analysis on emerging economies to summarize these effects and throw light on the strength and heterogeneity of these conditionalities.
Design/methodology/approach
This paper proposes a new methodological framework that allows country- and firm-level effects to be combined. The authors hand collected information from 175 studies and around 1,100 estimates in Eastern Europe, Asia, Latin America and Africa from 1940 to 2008.
Findings
The two main findings indicate that “macro” effects are much larger than enterprise-level ones, by a factor of at least six and the benefits from foreign direct investment (FDI) into emerging economies are substantially less “conditional” than commonly thought.
Originality/value
The empirical literature has not reached a conclusion as to whether FDI yields spillovers when the host economies are emerging. Instead, the results are often viewed as conditional. For macro studies, this means that the existence and scale of spillover effects are contingent on the levels of institutional, financial or human capital development attained by the host economies. For enterprise-level studies, conditionality relates to the type of inter-firm linkages, namely, forwards, backwards or horizontal.
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Five years ago in a review of Jaroslav Vanek's The Labour‐Managed Economy published in this journal, the present writer ventured, inter alia, two general observations on the…
Abstract
Five years ago in a review of Jaroslav Vanek's The Labour‐Managed Economy published in this journal, the present writer ventured, inter alia, two general observations on the economics literature of the labour‐managed firm. First, “Vanek has contributed more words and analysis on this subject than the rest of the economics profession put together”. Secondly, “In spite of the increasing concern shown by the ‘men of deeds’ with participation, income sharing and producers' cooperatives over the last ten years the majority of the ‘men of words’ who have offered any advice have been of the sociological species… This reviewer is optimistic enough to hope that this is not because economists have nothing to contribute”. A review of three new books on the subject provides a timely opportunity to reassess these observations.
Jing‐Lin Duanmu and Yilmaz Guney
The upsurge of Chinese and Indian outward foreign direct investment (FDI) raises an unanswered question about locational determinants of direct investment from the two countries…
Abstract
The upsurge of Chinese and Indian outward foreign direct investment (FDI) raises an unanswered question about locational determinants of direct investment from the two countries. Using an unbalanced bilateral FDI database, we find that Chinese and Indian FDI are attracted to countries with large market size, low GDP growth, high volumes of imports from China or India, and low corporate tax rates. We also find important differences between China and India. While Chinese FDI is drawn to countries with open economic regimes, depreciated host currencies, better institutional environments, and English speaking status, none of these factors are important for Indian FDI. Chinese FDI is also deterred by geographic distance and OCED membership. However, neither of these has any impact on Indian FDI.
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Jamie D. Collins, Dan Li and Purva Kansal
This study focuses on home country institutions as sources of variation in the level of foreign investment into India. Our findings support the idea that institutional voids found…
Abstract
This study focuses on home country institutions as sources of variation in the level of foreign investment into India. Our findings support the idea that institutional voids found in India are less of a deterrent to investments from home countries with high levels of institutional development than from home countries with similar institutional voids. Overall, foreign investments in India are found to be significantly related to the strength of institutions within home countries. The levels of both approved and realized foreign direct investment (FDI) are strongly influenced by economic factors and home country regulative institutions, and weakly influenced by home country cognitive institutions. When considered separately, the cognitive institutions and regulative institutions within a given home country each significantly influence the level of approved/realized FDI into India. However, when considered jointly, only the strength of regulative institutions is predictive of FDI inflows.
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Wendy A. Bradley and Caroline Fry
The purpose of the present study is to investigate the extent to which female and male university students from low-income countries express different entrepreneurial intentions…
Abstract
Purpose
The purpose of the present study is to investigate the extent to which female and male university students from low-income countries express different entrepreneurial intentions. Specifically, the study empirically tests whether the anticipated financial returns to entrepreneurship versus salaried employment, or the perceived barriers to entrepreneurship exert a stronger influence on the relationship between gender and entrepreneurial intentions.
Design/methodology/approach
To test the relationship of anticipated rewards versus barriers to entrepreneurship on gender and entrepreneurial intention, the study uses new data from a field survey in Sierra Leone and employs multiple mediation analyses.
Findings
The authors find that the relationship between gender and entrepreneurial intentions operates through the mediator of perceptions of the financial returns to entrepreneurship but not perceived barriers to entrepreneurship.
Research limitations/implications
The authors study intent, not behavior, acknowledging that cognitive intent is a powerful predictor of later behavior. Implications for future research on entrepreneurship in the African context are discussed.
Practical implications
The results from this study can be applied to both pedagogic and business settings in the field of entrepreneurship, with concrete implications for policymakers.
Originality/value
Results suggest that the gender gap in entrepreneurial intentions (EI) for science, technology, engineering and mathematics (STEM)- and business-educated students in Sierra Leone is predominantly influenced by anticipated financial returns to occupational choices, as opposed to perceived barriers to entrepreneurship, a more frequently studied antecedent to EI.
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Victor Zitian Chen, Jing Li and Daniel M. Shapiro
The purpose of this study is to extend the classic country-specific advantage (CSA) – firm-specific advantage (FSA) framework by integrating an institution-based view of CSAs into…
Abstract
Purpose
The purpose of this study is to extend the classic country-specific advantage (CSA) – firm-specific advantage (FSA) framework by integrating an institution-based view of CSAs into the discussion of FSAs. In his classic CSA – FSA framework, Rugman suggests that successful multi-national enterprises (MNEs) are often built on the interaction between strong FSAs and strong CSAs at home. In the case of emerging market multi-nationals (EMNEs), he argued that strong CSAs were of particular importance in allowing EMNEs to develop FSAs. In particular, we examine CSAs at the sub-national level.
Design/methodology/approach
The authors suggest that sub-national heterogeneity in market-supporting institutions is an important feature of emerging market economies, and that consideration of such heterogeneity contributes to our understanding of firm capabilities and overseas investment behavior of emerging market firms. The authors also identify explicitly the mechanisms through which sub-national institutions at home affect FSAs and, subsequently, the ability of emerging market firms’ entry into developed markets. Specifically, the authors argue that strong local institutions that support effective and well-functioning markets create the conditions that induce firms in that location to develop market-related capabilities in R & D and marketing, which, in turn, enable them to expand into developed countries.
Findings
Using a unique data set on overseas investment by Chinese firms and causal mediation analysis, the authors find strong evidence in support of the view that strong sub-national institutions help emerging market firms develop the capabilities to enter developed country markets.
Originality/value
This study extends the classic CSA–FSA framework by integrating an institution-based view of CSAs into the discussion of FSAs. In particular, the authors examine CSAs at the sub-national level.
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Boris Inkizhinov, Elena Gorenskaia, Dashi Nazarov and Anton Klarin
To provide a comprehensive systematic review of entrepreneurship in the context of emerging markets (EMs). The area of research is topical considering the rise of EMs on the…
Abstract
Purpose
To provide a comprehensive systematic review of entrepreneurship in the context of emerging markets (EMs). The area of research is topical considering the rise of EMs on the global scene and the importance of entrepreneurship in the development of EMs.
Design/methodology/approach
The paper utilizes scientometrics to provide a systematic review of the emerging field of entrepreneurship in EMs (EEMs). The entire Web of Science database was searched, and 2,568 scholarly outputs were extracted and analyzed as a result. The review further compares the EEMs research to the mainstream entrepreneurship research based on the top trending and high impact themes, demonstrates which countries published and are studied in the EEMs scholarship, and finally, it provides a proportion of empirical research done on EEMs to highlight methods utilized in the existing research.
Findings
The scientometric review reveals three broad domains of the EEMs scholarship–(1) Entrepreneurship in EMs and its implications; (2) MNEs, institutional environments, and FDI; and (3) Strategy, innovation and performance. The findings demonstrate that EEMs' scholarship primarily discusses environments within which EEMs takes place, the implications of EEMs, strategy and performance of EEMs (macro and meso-levels), thus highlighting the need for micro-level (individual-based) analysis of EEMs. Approximately, a third of the EEMs research is of empirical nature, more should be done especially in quantitative studies to develop this field further.
Originality/value
This research is unique in providing the largest review of EEMs scholarship. It divides the entire scholarship into three inter-related research streams and identifies future research directions in this immensely important field of research.
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It has been argued that traditional land transfer systems provide disincentives for farmers to trade their land, thus reducing land availability and depressing productivity. The…
Abstract
Purpose
It has been argued that traditional land transfer systems provide disincentives for farmers to trade their land, thus reducing land availability and depressing productivity. The purpose of this paper is to investigate the determinants of land rentals under customary land ownership in matrilineal and patrilineal traditions and under formal land registration in the rural areas of Malawi.
Design/methodology/approach
Using new data collected from around 100 households farming around 200 parcels in three regions of Malawi, a number of models are estimated with ordinary least squares.
Findings
The paper finds some evidence that some variables within the traditional system of land holding are crucial for land rentals. However, when land titles are used as a proxy for security of tenure, none of the relationships commonly hypothesized between land ownership security and land lease are corroborated. Land registration is found to have no significant effects on land and rentals.
Social implications
These results put into question the potency of sole land registration as a means of enhancing land market activities for rural masses in Malawi.
Originality/value
The uniqueness of this paper rests in it its use of context-specific constructs of land ownership security. Moreover the tested hypotheses emerge from a theoretical model that is unique to the literature on rural land markets and land tenure.