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Multinational Firms (multinational + firm)
Selected AbstractsWealth Effects of International Investments and Agency Problems for Korean Multinational FirmsJOURNAL OF INTERNATIONAL FINANCIAL MANAGEMENT & ACCOUNTING, Issue 3 2003Wi Saeng Kim This paper recognizes the recent surge in cross-border investments by MNCs from newly industrialized countries and investigates the wealth effects of FDI announcements by Korean firms, which are the leading FDI providers in Asia. The empirical results indicate that for Korean MNCs: 1) cross-border investments increase shareholder wealth; and 2) they do not obtain the firm-specific technological advantages over international competitors. The paper also presents evidence that cross-border investments do not increase shareholder wealth for the 30 largest chaebol -affiliates, and that shareholder wealth losses are greater when corporate ownership is concentrated, as suggested by Shleifer and Vishny (1997) and La Porta et al. (1998, 2000). [source] A Multinational Perspective on Capital Structure Choice and Internal Capital MarketsTHE JOURNAL OF FINANCE, Issue 6 2004MIHIR A. DESAI ABSTRACT This paper analyzes the capital structures of foreign affiliates and internal capital markets of multinational corporations. Ten percent higher local tax rates are associated with 2.8% higher debt/asset ratios, with internal borrowing being particularly sensitive to taxes. Multinational affiliates are financed with less external debt in countries with underdeveloped capital markets or weak creditor rights, reflecting significantly higher local borrowing costs. Instrumental variable analysis indicates that greater borrowing from parent companies substitutes for three-quarters of reduced external borrowing induced by capital market conditions. Multinational firms appear to employ internal capital markets opportunistically to overcome imperfections in external capital markets. [source] Designing Your International M&A StrategyJOURNAL OF CORPORATE ACCOUNTING & FINANCE, Issue 6 2001Peter A. Stanwick A European multinational firm may want to buy your company! Or perhaps you are considering acquiring a foreign company. Either way, more companies are considering international M&As. But do you have a strategy that is well thought out? The authors show how to develop one,and successfully implement it. © 2001 John Wiley & Sons, Inc. [source] Transfer prices and the structure of intra-firm tradeCANADIAN JOURNAL OF ECONOMICS, Issue 1 2000Vibhas Madan In this paper the structure of intra-firm trade within the context of transfer price manipulation by a multinational firm is endogenized. ,High' and ,low' values of host-country tax rates give rise to intra-firm trade in final goods and intermediate inputs, and ,intermediate' values of the tax rate are associated with intra-firm trade in either the intermediate inputs or the final goods only. Higher tariffs and stricter local content restrictions bias intra-firm trade towards intermediate-good trade and final-good trade, respectively. In the presence of endogenous transfer prices host-country sales may increase if the multinational faces stricter trade restrictions and higher host-country tax rates. JEL Classification: F23, F12 Prix de cession interne et structure du commerce itnra-firme. Ce mémoire endogénéise la structure du commerce intra-firme dans le contexte d'un modèle qui permet la manipulation du prix de cession interne par une firme plurinationale. Des taux de taxation hauts et bas par le pays hôte entraînent un commerce international intra-firme tant dans les biens finaux que dans les intrants intermédiaires; des taux moyens de taxation sont associés à un commere intra-firme soit dans les intrants intermédiaires, soit dans les biens finaux mais pas dans les deux. Des droits de douane élevés et des restrictions sur le contenu intérieur plus importantes créent des distorsions en faveur du commerce intra-firme dans les biens intermédiaires et dans les biens finaux respectivement. Quand il existe des prix de cession interne endogènes, les ventes de la firme nationale peuvent s'accroître si la firme plurinationale fait face à des restrictions au commerce plus importantes et à des taux de taxation plus élevés de la part du pays hôte. [source] National Adoption of International Accounting Standards: An Institutional PerspectiveCORPORATE GOVERNANCE, Issue 3 2010William Judge ABSTRACT Manuscript Type: Empirical Research Question/Issue: Effective corporate governance requires accurate and reliable financial information. Historically, each nation has developed and pursued its own financial standards; however, as financial markets consolidate into a global market, there is a need for a common set of financial standards. As a result, there is a movement towards harmonization of international financial reporting standards (IFRS) throughout the global economy. While there has been considerable research on the effects of IFRS adoption, there has been relatively little systematic study as to the antecedents of IFRS adoption. Consequently, this study seeks to understand why some economies have quickly embraced IFRS standards while others partially adopt IFRS and still others continue to resist. Research Findings/Results: After controlling for market capitalization and GDP growth, we find that foreign aid, import penetration, and level of education achieved within a national economy are all predictive of the degree to which IFRS standards are adopted across 132 developing, transitional and developed economies. Theoretical/Academic Implications: We found that all three forms of isomorphic pressures (i.e., coercive, mimetic, and normative) are predictive of IFRS adoption. Consequently, institutional theory with its emphasis on legitimacy-seeking by social actors was relatively well supported by our data. This suggests that the IFRS adoption process is driven more by social legitimization pressures, than it is by economic logic. Practitioner/Policy Implications: For policy makers, our findings suggest that the institutional pressures within an economy are the key drivers of IFRS adoption. Consequently, policy makers should seek to influence institutional pressures that thwart and/or enhance adoption of IFRS. For executives of multinational firms, our findings provide insights that can help to explain and predict future IFRS adoption within economies where their foreign subsidiaries operate. This ability could be useful for creating competitive advantages for foreign subsidiaries where IFRS adoption was resisted, or avoiding competitive disadvantages for foreign subsidiaries unfamiliar with IFRS standards. [source] National Culture and the Composition and Leadership Structure of Boards of DirectorsCORPORATE GOVERNANCE, Issue 5 2008Jiatao Li ABSTRACT Manuscript Type: Empirical Research Question/Issue: How and to what extent does national culture influence the composition and leadership structure of the boards of directors of multinational firms? Research Findings/Insights: Societal norms about corporate structure are treated as components of national culture. Hofstede's measures of national culture were shown to predict the board composition and leadership structure of firms based in that culture. The hypotheses were tested with data on 399 multinational manufacturing firms based in 15 industrial countries. The results suggest that national culture can have strong effects on corporate governance and should be considered in any transnational study. Theoretical/Academic Implications: The predictive accuracy of the culture variables provides strong support for the argument that norms embedded in a society's culture affect organizational structure, at least at the board level. The results of the study contribute to our understanding of institutional theory in explaining observed variations in corporate board composition and leadership structure across countries. By linking board composition to the cultural environment, institutional theory provides an explicit framework for analyzing variations in board structure across national boundaries. Practitioner/Policy Implications: When considering board composition and leadership structure, it is important to consider national culture norms. The findings of the study also have important implications for multinational firms setting up boards for their subsidiaries in different countries. [source] Impact of Supermarkets and Fast,Food Chains on Horticulture Supply Chains in ArgentinaDEVELOPMENT POLICY REVIEW, Issue 4 2002Graciela Ghezán In the 1990s, the supermarket and fast,food sectors grew rapidly in Argentina. Both were dominated by multinational firms, and their growth drove profound change in food market systems and farming. This article analyses the impact of this development on fruit and vegetables supply chains, in particular the way the advent of McDonald's affected the supply chain for frozen French fried potatoes. It shows that there is a tendency for such changes to favour medium and large producers, with evidence of the exclusion of small farmers. [source] Exporting the German Model: The Establishment of a New Automobile Industry Cluster in ShanghaiECONOMIC GEOGRAPHY, Issue 1 2005Heiner Depner Abstract: Recent work has provided evidence that the establishment of new industry clusters cannot be jump-started through policy initiatives alone. This evidence does not imply, however, that the genesis of a new cluster cannot be planned at all. Especially in the context of a developing economy, it seems useful to reinvestigate the relation among economic development, the strategies of multinational firms, and state intervention in this respect. Drawing from the case of the automobile industry and its supplier system in Shanghai in which German firms play an important role, we provide empirical evidence of the evolution of a new cluster that is supported by the state in various forms and characterized by a focal, hierarchically structured production system. We use a multidimensional approach to clusters, which leads to a more nuanced understanding of the evolution and growth of a cluster than that provided by earlier accounts. This approach allows us to distinguish the development of the Shanghai automobile industry cluster along its vertical, horizontal, external, institutional, and power dimensions. We provide evidence that another dimension,"culture",plays an important role, especially in its relation to issues of power and institutions. The role of this dimension is demonstrated in the case of German firms, which tap into the Chinese innovation system. This system is characterized by particular business relations, institutions, norms, and various social practices that are new to German firms. We demonstrate how this difference creates problems in establishing local production and supplier relations and how these problems can be overcome. [source] Does multinational activity displace trade?ECONOMIC INQUIRY, Issue 2 2000KA Clausing Using two-panel data sets on the operations of U.S. multinational firms abroad and the operations of foreign multinational firms in the United States, this article examines the empirical relationship between international trade and multinational activity. The evidence supports the conclusion that multinational activity and trade are complementary activities, particularly multinational activity and intrafirm trade. This empirical result is consistent with the theoretical reasons one might expect a complementary relationship between the two activities and is also robust to different approaches and specifications. [source] Determinants and effects of foreign direct investment: evidence from German firm-level data*ECONOMIC POLICY, Issue 41 2005Claudia M. Buch SUMMARY FDI Firm-level evidence Foreign direct investment is an essential aspect of ,globalization' yet its empirical determinants are not well understood. What we do know is based either on poor data for a wide range of nations, or good data for the US and Swedish cases. In this paper, we provide evidence on the determinants of the activities of German multinational firms by using a newly available firm-level data set from the Deutsche Bundesbank. The specific goal of this paper is to demonstrate the relative role of country-level and firm-level determinants of foreign direct investment. We focus on three main questions: First, what are the main driving forces of German firms' multinational activities? Second, is there evidence that sector-level and firm-level factors shape internationalization patterns? Third, is there evidence of agglomeration effects in the foreign activities of German firms? We find that the market access motive for internationalization dominates. Firms move abroad mainly to gain better access to large foreign markets. Cost-saving motives, however, are important for some manufacturing sectors. Our results strongly suggest that firm-level heterogeneity has an important influence on internationalization patterns , as stressed by recent models of international trade. We also find positive agglomeration effects for the activities of German firms that stem from the number of other German firms that are active on a given foreign market. In terms of lessons for economic policy, our results show that lowering barriers to the integration of markets and encouraging the formation of human capital can promote the activities of multinational firms. However, our results related to the heterogeneity of firms and agglomeration tendencies show that it might be difficult to fine-tune policies directed at the exploitation of synergies and at the creation of clusters of foreign firms. , Claudia M. Buch, Jörn Kleinert, Alexander Lipponer and Farid Toubal [source] Commodity chains, foreign investment and labour issues in Eastern EuropeGLOBAL NETWORKS, Issue 2 2003Laszlo Czaban In terms of ownership and operations, many companies in Eastern Europe have now been integrated into the world economy. In this article, informed in part by a critical engagement with the Global Commodity Chains (GCC) perspective, we explore the nature and significance of international linkages among firms in Eastern Europe. In particular, we argue that it has been the legacies of the state socialist past embedded in the inherited macro- and microeconomic structures, on the one hand, and the strategies of multinational firms on the other, rather than the international linkages in any simple sense, that have been the main influencing factors. While we do not deny the existence of inter-firm relations similar to the ones described in the GCC literature, we point out that these relationships are much more complex than assumed in that approach and that this complexity is a product of the very different historical backgrounds and modes of incorporation into the world economy of the various Eastern European societies. Drawing on empirical evidence from Hungary and focusing specifically on employment and other labour issues, we argue that there are a variety of firm development paths in Eastern Europe and that these have differing implications for the integration of firms, regions and countries of Eastern Europe into the world economy. [source] Human Resource Management Practices at Subsidiaries of Multinational Corporations and Local Firms in TaiwanINTERNATIONAL JOURNAL OF SELECTION AND ASSESSMENT, Issue 1 2000Tung-Chun Huang Global competition has forced corporations to invest overseas in order to gain or maintain competitive advantage. International investment entails not only the movement of capital, machinery, and products but also the spread of corporate cultures to host countries. This is so because, to maintain managerial consistency among its branches, a multinational corporation (MNC) will attempt to transplant its management system to any country in which it invests.However, it is also recognized that cultural contexts differ markedly among nations, and that multinational firms must adjust their management practices to accommodate specific conditions in host-country environments. [source] Due diligence issues in ChinaJOURNAL OF CORPORATE ACCOUNTING & FINANCE, Issue 2 2009Jo Ann McGee The People's Republic of China was identified as one of the most attractive locations for anticipated mergers and acquisitions (M&As) over the next 18 months. Unfortunately, it is also considered to be one of the riskiest locations for investment,partly due to the growth of white-collar crime (WCC). So any multinational firm planning M&A activities in China should include a search for WCC in their due diligence. However, conducting due diligence in China is very difficult. The authors take a critical look at these issues and detail the challenges that multinational firms will face. They also give some practical advice on how to handle those problems. © 2009 Wiley Periodicals, Inc. [source] U.S. versus Global Auditing: Why the Differences MatterJOURNAL OF CORPORATE ACCOUNTING & FINANCE, Issue 4 2001Kay W. Tatum You know we now live in a global economy. U.S auditors must comply with global standards when dealing with multinational firms. But did you know that some international auditing requirements are more demanding than ours,and even conflict with them? © 2001 John Wiley & Sons, Inc. [source] Intra-firm trade in the context of European integration: evidence from the French multinational agribusinessAGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 1 2009Emmanuelle Chevassus-Lozza This article identifies the factors that lead multinational firms to internalize their international exchanges and aims to determine the impact of the implementation of the Single European Market on firms' strategies. We analyze the interaction between the microeconomic characteristics of firms and those of their environment because this interaction determines a multinational firm's decision to internalize trade. The empirical work is based on the ,industrial globalization' survey conducted by the French statistics institutes in 1993 and 1999. With regard to the French agri-food trade, there has been an increase in intra-firm (IFT) trade within the EU-15 borders and the European multinational networks. The main determinants of intra-firm trade are the firms' need to generate economies of scale and to protect and exploit their ,firm-specific advantages' related to the technology and nature of the product. The model sheds light on the role and the development of intra-regional networks of subsidiaries. [JEL classifications: F10, F14, F23]. © 2009 Wiley Periodicals, Inc. [source] Determinants of foreign direct investment in the food industry: The case of PolandAGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 3 2001Peter Walkenhorst; In this article, a statistical model is developed to analyze determinants of foreign direct investment (FDI) in the Polish food industry. Data on FDI inflows from three investor home country clusters is related to characteristics of 12 food industry branches. The results indicate that firm size, privatization speed, value-added, and import share are important determinants of food industry FDI. The findings confirm the importance of a swift reduction of state control over agro-industrial enterprises, while pointing to the need for effective competition policies in transition countries to contain potentially emerging market power of foreign multinationals in oligopolistic food industry branches. [Econ-Lit citations: F23 (multinational firms); P33 (international linkages in transition); Q13 (agribusiness)] © 2001 John Wiley & Sons, Inc. [source] A Comparison of Reporting Lags of Multinational and Domestic FirmsJOURNAL OF INTERNATIONAL FINANCIAL MANAGEMENT & ACCOUNTING, Issue 1 2008Ho-Young Lee This study examines whether multinational firms report earnings sooner than domestic firms. When compared with domestic firms, the reporting environment and business operations of multinational firms are significantly more complex. There is a greater amount of information asymmetry between managers and shareholders of multinational firms. Therefore, multinational firms potentially face higher monitoring and external financing costs. To reduce these costs, we conjecture that managers of multinational firms take steps to reduce the information asymmetry between shareholders and management by increasing the timeliness (a proxy for relevance) of their earnings reports. Specifically, we expect multinational firms to announce earnings earlier than domestic firms. We separate earnings reporting delay into auditor-related delay and management's discretionary delay. While test results weakly support the hypothesis that auditors take longer to audit multinational firms, there is strong evidence that managers of multinational firms release their earnings reports sooner than domestic firms. [source] Network Resources for Internationalization: The Case of Taiwan's Electronics Firms*JOURNAL OF MANAGEMENT STUDIES, Issue 5 2003Tain-Jy Chen ABSTRACT This paper illustrates foreign direct investment (FDI) as the management of important network relations, using Taiwan's electronics firms as an example. Through FDI, seemingly small and weak firms propel the process of internationalization by making maximum use of external resources to which they have access. FDI often starts at a location close to the home base where support from the domestic networks can be drawn, subsequently moving on to more distant locations after investors have accumulated new network resources. The location chosen is usually an area rich in network resources or in close proximity to such rich networks. FDI enables the investors to construct a regional, or even global, sub-network under their control to supply a set of wide-ranging, differentiated and low-cost products in a flexible fashion, and sometimes within close proximity to the markets. With this capacity for versatility, investors become valuable partners for multinational firms that offer global services. [source] Inter-firm sharing of process knowledge: exploring knowledge marketsKNOWLEDGE AND PROCESS MANAGEMENT: THE JOURNAL OF CORPORATE TRANSFORMATION, Issue 1 2002David G. Bell Markets and communities are two modalities of knowledge exchange between firms; and this study concludes with a model that addresses the tension between the two modalities. The model resulted from an exploratory study conducted under the umbrella of a national consortium, using the methodology of participatory action research. The study involved three large multinational firms, where one firm supplied knowledge of three different processes used in product development to two other non-competitive firms outside their supply chain. The knowledge was shared within the framework of an intervention that included the following: (1) individual work with process-related course materials via the web or compact disc, followed by (2) interactive group sessions supported by videoconference facilities and led by a process expert from the supplying firm. Empirical data were gathered by interviewing participants before and after the intervention, and by observing interactive group sessions. Findings from the empirical data describe rationales for inter-firm sharing of process knowledge, which illustrate a market modality of exchange; and describe practices for effective knowledge sharing, which illustrate aspects of a community modality of exchange. The model induced from these findings compares the situational setting, constellation of meanings and associated knowledge sharing practices for both modalities of exchange: market and community. Copyright © 2002 John Wiley & Sons, Ltd. [source] Finance and Firm Export in ChinaKYKLOS INTERNATIONAL REVIEW OF SOCIAL SCIENCES, Issue 1 2007Jun Du SUMMARY Using a rich panel data set, we provide a rigorous analysis of the relationship between access to external finance, foreign direct investment and the exports of private enterprises in China. We conclude that, in order to foster the exports of indigenous enterprises, the elimination of financial discrimination against private firms is likely to be a more effective policy tool than the reliance on spillovers from multinational firms. [source] Penrose and the growth of multinational firmsMANAGERIAL AND DECISION ECONOMICS, Issue 2 2005Neil M. Kay In this paper, we look at the relationship of Penrose's theory of the growth of the firm to the multinational enterprise. We argue that one element in exploring the nature and evolution of the MNE may lie in asking the question; ,what was there before there was the MNE?' The answer to this may lie in examining corporate growth processes and the evolution of large firms through internal growth and external growth. By placing the MNE in the broader context of Penrosian growth processes, it may be possible to develop a fuller analysis of the globalisation of economic activity. We also argue that the potential benefits from pursuing such possible links may not just be limited to work in the international business field. By developing an approach to the multinational based on such foundations, it may be possible to contribute to understanding and analysis in areas (such as corporate growth) that have been traditionally regarded as the preserve of the industrial organisation theorists, but which have been relatively neglected by them in recent years. Copyright © 2005 John Wiley & Sons, Ltd. [source] The limits to the growth of multinational firms in a foreign marketMANAGERIAL AND DECISION ECONOMICS, Issue 8 2003Danchi Tan Theories of growth for firms have suggested that slow managerial growth is a major constraint why firms cannot grow faster. This paper is built on such a view and explores the factors that may influence the growth rate of Japanese firms in a given US industry. It is found that Japanese firms that allocated more internal and international managerial resources (proxied by expatriates) to their US operations tended to achieve higher growth rates. Japanese firms that were geographically diversified and those that spread their international investment projects evenly over time also achieved higher growth rates. Copyright © 2003 John Wiley & Sons, Ltd. [source] Firm Productivity and Foreign Direct Investment into Non-core Activities,ASIAN ECONOMIC JOURNAL, Issue 3 2009Andrzej Cie F23 As foreign direct investment (FDI) often originates from multinational enterprises (MNEs) with non-core activities and not single-product firms, as MNE theory typically suggests, we hypothesize that such firms are more productive than MNEs without non-core activities as well as non-MNE firms. We test this hypothesis using Kolmogorov,Smirnov stochastic dominance Tests and Japanese firm-level productivity and FDI data for the period 1985,2001. We find that both manufacturing and service multinational firms with non-core foreign investments stochastically dominate firms without non-core activities. We also find cost-complementarities between certain core and non-core FDI activities that span both manufacturing and service affiliates. [source] Multinationals and the creation of Chinese trade linkagesCANADIAN JOURNAL OF ECONOMICS, Issue 2 2008Deborah L. Swenson Abstract., This paper studies the relationship between multinational firm proximity and the formation of new export connections by private Chinese exporters between 1997 and 2003. The results indicate that growth in the presence of multinational firms is positively associated with the formation of new trade by local Chinese firms. Further exploration suggests that information spillovers may drive this result, as the positive association due to own-industry multinational presence is particularly strong in contexts where information improvements may be the most helpful. Thus, it appears that a growing presence of multinational firms may enhance the export capabilities of local domestic firms. Ce mémoire étudie la relation entre la proximité d'une firme plurinationale et la formation de nouveaux liens à l'exportation par des exportateurs chinois entre 1997 et 2003. Les résultats montrent que la croissance de la présence de firmes plurinationales est reliée de façon positive avec la formation de nouveaux liens commerciaux avec les firmes chinoises locales. Ces travaux suggèrent que les débordements d'information peuvent être à la source de ces résultats, car la relation positive attribuable à la présence de plurinationales dans la même industrie s'avère particulièrement forte dans des contextes où l'amélioration de l'information peut être la plus utile. Ainsi, il semble qu'une présence accrue de firmes plurinationales peut accroître les capacités d'exportation des firmes locales. [source] | |||||||||||||