scholarly journals Globalization and Innovation in Emerging Markets

2010 ◽  
Vol 2 (2) ◽  
pp. 194-226 ◽  
Author(s):  
Yuriy Gorodnichenko ◽  
Jan Svejnar ◽  
Katherine Terrell
Keyword(s):  
Emerging Markets ◽  
Multinational Enterprises ◽  
Emerging Market ◽  
Foreign Firms ◽  
Foreign Competition ◽  
Domestic Firms ◽  
Service Sectors ◽  
Using Data ◽  
The Relationship ◽  
Robust Evidence

Globalization brings opportunities and pressures for domestic firms in emerging markets to innovate and improve their competitive position. Using data from 27 emerging market economies, we estimate the effects of foreign competition and linkages with foreign firms on innovation by domestic firms. We provide robust evidence of a positive relationship between foreign competition and innovation, broadly defined. The supply chain of multinational enterprises and trade are also important channels. There is no evidence for an inverted U relationship between innovation and foreign competition. Moreover, the relationship between globalization and innovation does not differ across the manufacturing and service sectors. (JEL F02, F23, M16, O33)

The impact of artificial intelligence (AI) finance on financing constraints of non-SOE firms in emerging markets

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jun Shao ◽  
Zhukun Lou ◽  
Chong Wang ◽  
Jinye Mao ◽  
Ailin Ye
Keyword(s):  
Emerging Markets ◽  
Emerging Market ◽  
Financing Constraints ◽  
Content Type ◽  
Emerging Market Countries ◽  
Finance Development ◽  
Cash Flow Sensitivity ◽  
The Impact ◽  
The Relationship ◽  
Practical Implications

PurposeThis study investigates the impact of AI finance on financing constraints of non-SOE firms in an emerging market.Design/methodology/approachUsing a sample of non-SOE listed companies in China from 2011 to 2018, this research employs the cash–cash flow sensitivity model to examine the effect of AI finance on financing constraints of non-SOE firms.FindingsWe find that the development of AI finance can alleviate the financing constraints of non-SOE firms. Further, we document that such effect is more pronounced for smaller firms, more innovative firms and firms in developing areas.Practical implicationsThis study suggests that emerging market countries can ease the financing constraints of non-SOE firms by promoting AI finance development.Originality/valueThis study, to the best of our knowledge, is the first one to explore the relationship between AI finance development and financing constraints of non-SOE firms in emerging markets.

The influence of motivations on international location choice in least developed, emerging and developed countries: evidence from Chinese MNEs

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fernando Angulo-Ruiz ◽  
Albena Pergelova ◽  
William X. Wei
Keyword(s):  
Emerging Markets ◽  
Multinational Enterprises ◽  
Location Choice ◽  
Emerging Market ◽  
Developed Countries ◽  
Asia Pacific ◽  
Institutional Constraints ◽  
Least Developed Countries ◽  
Content Type ◽  
Developed Economies

Purpose This research aims to assess variations of motivations when studying international location decisions. In particular, this study aims to assess the influence of diverse motivations – seeking technology, seeking brand assets, seeking markets, seeking resources and escaping institutional constraints – as determinants of the international location choice of emerging market multinational enterprises (EM MNEs) entering least developed, emerging, and developed countries. Design/methodology/approach The authors develop a set of hypotheses based on the ownership–location–internalization framework and complement it with an institutional perspective. The conceptual model posits that the different internationalization motivations (seeking technology, seeking brand assets, seeking markets, seeking resources and escaping institutional constraints) will impact the location choice of EM MNEs in developed economies, emerging markets or least developed countries. This study uses the 2013 survey data collected by the China Council for the Promotion of International Trade and the Asia Pacific Foundation of Canada. The final sample of analysis of this research includes 693 observations. Findings After controlling for several variables, two-stage Heckman regressions show there is a variation of motivations when EM MNEs enter least developed countries, emerging markets and developed economies. EM MNEs are motivated to enter least developed countries to seek markets and resources. Conversely, those firms enter developed countries in their search for technological assets and to escape institutional constraints at home. While the present study findings show a clear difference in the motivations that lead to location choice in least developed vs developed countries, the results are not as clear for location in other emerging countries. Research limitations/implications The paper offers empirical support for the importance of motivations as crucial determinants of location choice. Originality/value This paper provides a detailed quantitative study on the internationalization location choice of EM MNEs based on their motivations. Though theoretical models underscore the importance of motivations, we know very little about how, in practice, motivations drive location choice. This study contributes to the international location choice literature a deeper understanding of how diverse motivations drive choices of expansion into developed economies, emerging markets or least developed countries.

The influence of unilateral supplier transaction-specific investments on international buyer opportunism: empirical findings from local suppliers in China

2020 ◽  
Vol 37 (2) ◽  
pp. 213-239 ◽  
Author(s):  
Lei Wang ◽  
Chun Zhang ◽  
Jun Li ◽  
Dong Huo ◽  
Xing Fan
Keyword(s):  
Emerging Market ◽  
Multiple Informants ◽  
Supplier Relationships ◽  
Content Type ◽  
Relationship Length ◽  
Cross Border ◽  
Specific Investments ◽  
Using Data ◽  
The Relationship

PurposeThis study examines how unilateral supplier transaction-specific investments (TSIs), directly and indirectly, influence international buyer opportunism and the extent to which detailed contracts enable suppliers to safeguard against international buyer opportunism. The study also examines whether relationship length affects the efficacy of detailed contracts in cross-border outsourcing relationships.Design/methodology/approachThe hypotheses are tested by using data collected from multiple informants working for 229 manufacturing suppliers in China. Multiple regression with a three-way interaction is used to test the hypotheses.FindingsUnilateral supplier TSIs encourage international buyer opportunism through increased supplier dependence. Contract specificity negatively moderates the effect of supplier dependence on international buyer opportunism. This moderating effect is stronger in long-term cross-border buyer–supplier relationships than in short-term ones.Originality/valueThe current study extends the cross-border outsourcing literature by examining how emerging-market suppliers in a weak power position can proactively safeguard against international buyer opportunism by using detailed contracts. Our findings show that supplier dependence mediates the relationship between unilateral supplier TSIs and international buyer opportunism; detailed contracts, however, can help dependent suppliers safeguard against international buyer opportunism. In particular, the findings highlight the importance of long-term buyer–supplier relationships that enhance the efficacy of detailed contracts.

FDI inflows and intellectual property rights for MNEs in emerging markets: an alternative approach through the lens of trademarks in Vietnam (1986-2016)

2020 ◽  
Vol 28 (4) ◽  
pp. 483-519
Author(s):  
Amy Linh Thuy Nguyen
Keyword(s):  
Intellectual Property ◽  
Emerging Markets ◽  
Multinational Enterprises ◽  
Emerging Market ◽  
Research Process ◽  
Intellectual Property Right ◽  
Intangible Asset ◽  
Ip Protection ◽  
Fdi Inflows ◽  
Content Type

Purpose While the current anti-globalisation wave is considered as a regional and cyclical relapse among Western countries, the new era of globalisation has shifted away from stagnant developed economies towards the rising prosperity of emerging Asia, where it is attracting substantial global inward foreign direct investment (FDI). Focussing on Vietnam, the country that is seen as Asia’s next economic tiger, the question of how important intellectual properties (IP) protection is in the international competition for FDI inflows is still unsettled, especially on the under-researched topic of trademarks. Design/methodology/approach This paper takes on the business history approach, which allows rich evidence from the dynamic and evolving natures of multinational enterprises (MNEs) to drive the research process, so that international business scholars can test models rigorously. The evidence provided in this paper is essentially qualitative and combines trademark registrations data, with trade and FDI statistics between 1986 and 2016, also draws on companies’ archives, industry reports and related newspaper articles. Findings This paper provides the chronology of intellectual property right (IPR) legal landscapes and the dynamic co-evolution of trademarks and FDI inflows in Vietnam. Three trademark protection strategies for MNEs and their patterns here are addressed. The paper also argues that trademarks bring new insights and IP protection strategy for pharmaceutical MNEs for the case of Vietnam is as important in trademarks as it is in patents. In emerging markets with strong incentives for FDI such as Vietnam, MNEs are not necessarily put off by weak IPR, but rather create alternative strategies for dealing with the lack of IP protection in these emerging market settings. Originality/value This study challenges the stream of thoughts that view trademarks as a “neglected intangible asset” among different IPRs, while in fact, trademarks advance MNEs’ knowledge by ensuring competitiveness and long-run survival in emerging markets. This paper is among the first few attempts to look at pharmaceutical industry through the lens of trademarks, moving away from the traditional patent-focussed approach. It extends the understanding of OLI paradigm and highlights that MNEs need to possess Oa and Op advantages not only at the beginning of internationalisation process but rather evolving through the time to cope with imitation risks in the host country.

Internationalization of Emerging-Market Multinationals

2020 ◽  
pp. 231-248
Author(s):  
Alvaro Cuervo-Cazurra ◽  
Alicia Rodríguez ◽  
C. Annique Un
Keyword(s):  
Emerging Markets ◽  
Multinational Enterprises ◽  
Emerging Market ◽  
Future Research ◽  
Frugal Innovation ◽  
Theoretical Concepts ◽  
Emerging Market Multinationals ◽  
Firm Internationalization

This chapter analyzes the internationalization of emerging-market multinational enterprises (EMNEs) to clarify past contributions and outline suggestions for future research. We critically review the novelty of the phenomenon associated with the foreign expansion of firms from emerging markets, the new theoretical concepts introduced from analyzing these firms, and the new explanations related to their internationalization. We propose that future research can advance our understanding of these firms by studying how the underdevelopment of the home country’s economy and institutions influences firm internationalization. We specifically discuss four areas that can yield promising insights for internationalization research: frugal innovation, contractual innovation, upgrading escape, and institutional escape.

Reverse Productivity Spillovers in the OECD: The Contrasting Roles of R&D and Capital

2016 ◽  
Vol 16 (1) ◽  
pp. 113-133 ◽  
Author(s):  
Peter Zámborský ◽  
Elena J. Jacobs
Keyword(s):  
Capital Investment ◽  
Multinational Enterprises ◽  
Developed Countries ◽  
Foreign Firms ◽  
The Czech Republic ◽  
Level Data ◽  
Foreign Affiliates ◽  
Knowledge Seeking ◽  
The Relationship ◽  
D Investment

This paper analyzes the relationship between research and development (R&D) and capital investment by domestic firms and the productivity of foreign affiliates of multinational enterprises in developed countries. We explain why “reverse spillovers” from domestic to foreign firms might differ when R&D and capital are considered as two separate channels. Using industry-level data for eight Organisation for Economic Co-operation and Development (OECD) economies (including the Czech Republic and Slovakia) in 2001–2007, we find robust evidence that R&D investment by local firms is positively associated with the productivity of affiliates of foreign firms. Our findings and theory add to the relatively scarce research on reverse spillovers and contribute to the literature on knowledge-seeking foreign direct investment (FDI).

The impact of gender diversity in foreign subsidiaries’ innovation outputs

2015 ◽  
Vol 7 (2) ◽  
pp. 148-167 ◽  
Author(s):  
Juan Fernández
Keyword(s):  
Gender Diversity ◽  
Process Innovation ◽  
Foreign Firms ◽  
Foreign Subsidiaries ◽  
Content Type ◽  
Domestic Firms ◽  
Gender Policies ◽  
The Impact ◽  
The Relationship ◽  
Innovation Outcomes

Purpose – This paper aims to examine the effect of R&D teams’ gender diversity on different innovation outputs. The paper argues that some innovations are best positioned to capitalize on the benefits of gender diversity because of the greater relevance of market insight and personal interactions. Moreover, it argues that gender diversity is not a source of innovation for foreign firms because of the subsidiaries’ role in the multinational group, the tacit nature of gender policies and the institutional distance between multinationals’ home and host countries. Design/methodology/approach – Drawing from data of the Spanish Survey of Technological Innovation Panel de Innovación Tecnológica (PITEC), this study uses multivariable probit models that allow for systematic correlations among the different innovation outcomes to determine the impact of R&D workforce gender diversity on the likelihood of introducing different innovation outputs. Findings – Allowing for systematic correlations among different innovation outcomes, results indicate that the relationship between gender diversity and product and process innovation has the shape of an inverted-U, while there is a positive linear association with service innovation. Moreover, gender diversity produces a greater impact on product innovation than on process innovation. Results also indicate that while gender diversity fosters every innovation outcome of domestic firms, it only contributes to foreign firms’ services innovation in a positive non-linear way. Research limitations/implications – Because of the availability of data, this paper has focused on how firms’ multinationality and group affiliation influence the relationship between gender diversity and innovation; however, other firms’ differences might also play a role on the effectiveness of the R&D workforce’s gender diversity. Firms differ on strategies, structures and capabilities (Nelson, 1991), and these differences may condition the potential of gender diversity. Therefore, this paper opens future research lines. Practical implications – Innovative firms should be concerned with human resource management practices for gender diversity regardless of their innovation output strategy. However, managers should not consider forming teams with equal proportions of men and women. Those firms aiming at introducing innovations that involve interactions among internal and external agents and those that require a better interface with the marketplace will benefit more from gender diversity than those firms pursuing innovations related to the solution of technical problems. Finally, the paper shows that foreign subsidiaries have problems with the implementation of gender policies, especially when it comes to service and process innovation activities. Originality/value – This paper contributes by examining the influence of two contextual factors that may affect the relationship between gender diversity and innovation. First, it examines how gender diversity affects the likelihood of introducing different innovation outputs (product, service and process) as the different tasks required by each innovation represent different contexts that may affect the effectiveness of gender diversity. Second, the paper analyzes whether the influence of R&D workforce’s gender diversity on innovation outputs is different for domestic and foreign firms as foreign firms’ national culture, organizational culture, strategy and HR practices differ from those of domestic firms.

scholarly journals Moderating Role of Financial Market Development on the Relationship between Stock Liquidity and Dividend

2020 ◽  
Vol 16 (2) ◽  
pp. 77-99
Author(s):  
Mohd Ashari Bakri ◽  
Amin Nordin Bany-Ariffin ◽  
Bolaji Tunde Matemilola ◽  
Wei Theng Lau
Keyword(s):  
Emerging Markets ◽  
Financial Market ◽  
Emerging Market ◽  
Investment Strategy ◽  
Market Development ◽  
Stock Liquidity ◽  
Financial Market Development ◽  
The Relationship ◽  
Moderating Role

This article aims to investigate the relationship between stock liquidity and dividend across emerging market countries as well as examined the moderating role of financial market development on the relationship between stock liquidity and dividend. Data were obtained from the World Bank and DataStream databases. The study examined 3,258 listed firms from 22 emerging markets to be extrapolated in the emerging market context. To analyse the data, this article used the panel data Tobit model and panel logistic regression, both with random effects. The analysis revealed that financial market development has a positive moderating effect on the relationship between stock liquidity and dividend by improving local market liquidity and mitigating information asymmetry. The study findings provide information for managers to devise investment strategy in the emerging markets. This article provides new insights into the financial market development moderating role on the relationship between stock liquidity and dividend.

scholarly journals CREDIT RISKS AND INTERNATIONALIZATION OF SMES

2009 ◽  
Vol 10 (4) ◽  
pp. 361-368 ◽  
Author(s):  
Özgür Arslan ◽  
Mehmet Baha Karan
Keyword(s):  
Emerging Market ◽  
Profit Margin ◽  
Corporate Tax ◽  
International Firms ◽  
Domestic Firms ◽  
Corporate Default ◽  
Credit Risks ◽  
Net Profit ◽  
Trade Credits ◽  
The Relationship

The purpose of the paper is to identify common attributable factors causing credit risks to domestic and international SMEs of an emerging market in Turkey. We call domestic firms as the ones only making local sales and international firms as the ones also making sales abroad. Therefore in this study, cross‐border sales are assumed to lead the firms to internationalization. We study totally 1,166 SMEs for the year 2007, which coincide with an economic expansion in Turkey. We find that different factors affect credit risks for the two types of firms. For domestic firms, our results present a direct relationship between the likelihood of corporate default and trade credits, corporate tax, financial expenses and net profit margin yet the relationship turns negative for gross profit margin. For international firms, likelihood of corporate default increases with the ratio of inventories to total assets but decreases with net profits and net sales.

Ownership, tax and intercorporate loans in China

2019 ◽  
Vol 27 (1) ◽  
pp. 111-129 ◽  
Author(s):  
Wei Huang
Keyword(s):  
Emerging Markets ◽  
Tax Reform ◽  
Emerging Market ◽  
Foreign Direct Investments ◽  
Governance Mechanism ◽  
Governance System ◽  
Tax System ◽  
Controlling Shareholder ◽  
Content Type ◽  
Domestic Firms

Purpose This paper aims to investigate the interconnections between corporate ownership, tax system and controlling shareholder tunneling through intercorporate loans in an emerging market setting. Design/methodology/approach China’s Enterprises Income Tax reform in 2008 abolished its previous multiple-tiers tax system under which foreign direct investment (FDI) firms enjoyed preferential tax rates than domestic firms by introducing a new unified-rate tax system. Using difference-in-differences tests, the author analyzes changes of controlling shareholders tunneling through intercorporate loans among Chinese listed companies around this reform. Findings The author documents significant reductions of intercorporate loans after the reform. More importantly, the author reveals that foreign-invested firms experienced larger reductions of intercorporate loans than domestic firms. The author also shows that state association matters for domestic firms’ response to the reform. In addition, the author documents positive stock market reaction to the tax reform announcement for firms that exhibited higher level of tunneling prior to the reform, indicating market expectation of reduced principal-principal conflict post-reform. Research limitations/implications The findings suggest effective corporate governance system is warranted to constrain intercorporate fund transfers in emerging markets where tax incentives are used for attracting inward foreign direct investments. Institutional reforms in emerging markets aimed at removing market frictions can alleviate the problem of controlling shareholder expropriations of minority interests or tunneling. Originality/value This is a pioneering study that reveals the role of tax as a public governance mechanism in weak minority investor protection environment.

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