International Business and Institutions after the Financial Crisis

313 Pages·2014·3.168 MB·English

by  Yama Temouri, Chris Jones (eds.)

THE ACADEMY OF INTERNATIONAL BUSINESS
Published in Association with the UK Chapter of the Academy of
International Business
Titles already published in the series:
International Business and Europe in Transition (Volume 1)
Edited by Fred Burton, Mo Yamin and Stephen Young
Internationalisation Strategies (Volume 2)
Edited by George Chryssochoidis, Carla Miller and Jeremy Clegg
The Strategy and Organization of International Business (Volume 3)
Edited by Peter Buckley, Fred Burton and Hafi z Mirza
Internationalization: Process, Context and Markets (Volume 4)
Edited by Graham Hooley, Ray Loveridge and David Wilson
International Business Organization (Volume 5)
Edited by Fred Burton, Malcolm Chapman and Adam Cross
International Business: Emerging Issues and Emerging Markets (Volume 6)
Edited by Carla C. J. M Millar, Robert M. Grant and Chong Ju Choi
International Business: European Dimensions (Volume 7)
Edited by Michael D. Hughes and James H. Taggart
Multinationals in a New Era: International Strategy and Management (Volume 8)
Edited by James H. Taggart, Maureen Berry and Michael McDermott
International Business (Volume 9)
Edited by Frank McDonald, Heinz Tusselman and Colin Wheeler
Internationalization: Firm Strategies and Management (Volume 10)
Edited by Colin Wheeler, Frank McDonald and Irene Greaves
The Process of Internationalization (Volume 11)
Edited by Frank MacDonald, Michael Mayer and Trevor Buck
International Business in an Enlarging Europe (Volume 12)
Edited by Trevor Morrow, Sharon Loane, Jim Bell and Colin Wheeler
Managerial Issues in International Business (Volume 13)
Edited by Felicia M. Fai and Eleanor J. Morgan
Anxieties and Management Responses in International Business (Volume 14)
Edited by Rudolf Sinkovics and Mo Yamin
Corporate Governance and International Business (Volume 15)
Edited by Roger Strange and Gregory Jackson
Contemporary Challenges to International Business (Volume 16)
Edited by Kevin Ibeh and Sheena Davies
Resources, Effi ciency and Globalization (Volume 17)
Edited by Pavlos Dimitratos and Marian V. Jones
DOI: 10.1057/9781137367204.0001
Firm-Level Internationalization, Regionalism and Globalization (Volume 18)
Edited by Jenny Berrill, Elaine Hutson and Rudolf Sinkovics
International Business (Volume 19)
Edited by Simon Harris, Olli Kuivalainen and Veselina Stoyanova
The Changing Geography of International Business (Volume 20)
Edited by Gary Cook and Jennifer Johns
International Business and Institutions after the Financial Crisis (Volume 21)
Edited by Yama Temouri and Chris Jones
DOI: 10.1057/9781137367204.0001
International Business
and Institutions after
the Financial Crisis
Edited by
Yama Temouri and Chris Jones
Economics and Strategy Group, Aston Business School, UK
DOI: 10.1057/9781137367204.0001
Introduction, selection and editorial matter © Yama Temouri
and Chris Jones 2014
Individual chapters © Respective authors 2014
Softcover reprint of the hardcover 1st edition 2014 978-1-137-36719-8
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in accordance with the Copyright, Designs and Patents Act 1988.
First published 2014 by
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ISBN 978-1-349-47443-1 ISBN 978-1-137-36720-4 (eBook)
DOI 10.1057/9781137367204
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Contents
List of Figures v ii
List of Tables v iii
Foreword x i
Acknowledgements x ii
Notes on the Editors and Contributors xiii
Introduction: International Business and Institutions after
the Financial Crisis 1
Yama Temouri and Chris Jones
Part I Keynotes
1 Internationalization of Firms from Emerging Markets:
Location Choice and the Impact of Institutions and State Ownership 9
Saul Estrin
2 The Role of International Business in the Global Spread of
Technological Innovation 22
John Cantwell
Part II Institutions and Foreign Direct Investment
3 The Entry of Multinational Companies to the Base of the
Pyramid: A Network Perspective 39
Misagh Tasavori, Pervez Ghauri and Reza Zaefarian
4 FDI and Property Rights in Resource-Rich Countries 5 3
Chiara Amini
5 The Impact of the Financial Crisis on the Performance of
European Acquisitions 73
Rekha Rao Nicholson and Julie Salaber
6 Internal Capital Markets and outward Foreign Investment
from India and China 9 3
Abubakr Saeed and Suma Athreye
7 The Investment Development Path in the Context of Poland’s
Accession to the European Union and the Global Financial
and Economic Crisis 109
Ewa Kaliszuk and Agata Wancio
DOI: 10.1057/9781137367204.0001 v
vi Contents
8 A doption of the Global Reporting Initiative by FT500 firms:
Overcoming the Liability of Foreignness 1 30
Stephen Chen and Petra Bouvain
Part III Knowledge Flows and Firm Performance
9 I nward Investment, Technology Transfer and Innovation:
Direct Evidence from China 151
Meng Song, Nigel Driffield and Jun Du
10 K nowledge Sources of Persistent Exporters: Effects on the
Growth and Productivity of Firms 174
Hans Lööf, Pardis Nabavi, Gary Cook and Börje Joansson
11 Financing Patterns, Multinationals and Performance:
Firm-level Evidence from 47 Countries 194
Sushanta Mallick and Yong Yang
12 T he Role of Language in Bilateral FDI: A Forgotten Factor? 2 12
Palitha Konara and Yingqi Wei
13 The Impact of Foreign Direct Investment on Economic
Performance in the Enlarged Europe: A Meta-Regression Analysis 228
Randolph Luca Bruno and Maria Cipollina
14 D rivers of Technology Upgrading: Do Foreign Acquisitions
Matter to Chinese Firms? 251
Sourafel Girma, Yundan Gong, Holger Görg and Sandra Lancheros
15 International R&D Spillovers, TFP and Institutional Distance 267
Dolores Añón-Higón and Miguel Manjón-Antolín
Index 281
DOI: 10.1057/9781137367204.0001
List of Figures
2.1 H erfindahl index of patents and licensing revenues 32
2.2 R oyalty and licensing fees (1950–2003) 33
3.1 D imensions of the relationship 41
4.1 Property rights and oil and metal export 6 0
4.2 Property rights and agricultural export 61
5.1 Deal characteristics across two sub-periods (pre- and post-crisis)
and for different categories of deals 83
7.1 The growth rate of inward FDI in Poland in different currencies,
2007–11 (year-on-year) 1 21
7.2 The IDP of selected new EU member states from 1995 to 2011 123
9.1 F oreign capital share and patent counts 159
9.2 Granted invention patent counts by sector 1 59
9.3 Granted UM patent counts by sector 160
9.4 Foreign capital share by sector 1 61
9.5 I nvention patent counts by region 161
9.6 U M patent counts by region 1 62
9 .7 Foreign capital share by region 1 62
9.8 Food and beverages 163
9.9 T extiles and clothing 164
9.10 W ood and furniture 164
9.11 Paper and printing 165
9.12 P etroleum and plastic 1 66
9.13 Electronics 1 66
9.14 M etal and non-metal 1 67
9.15 M achinery 1 68
9.16 Pharmaceutical 168
11.1 Distribution of TFP of parents and their subsidiaries 205
11.2 Distribution of leverage of parents and TFP of subsidiaries 206
13.1 F unnel graph of individual estimates 242
14.1 N umber of acquisitions by foreign ownership structure 2002–6 2 56
14.2 D istribution of initial productivity for majority- and
minority-acquired firms and non-acquired firms 257
DOI: 10.1057/9781137367204.0002 vii
List of Tables
3.1 O verview of interviewed MNCs 4 3
3.2 Summary of the MNC–NGO relationships and their role
in the BOP market entry of the MNCs 48
4.1 Effect of oil and metal export on FDI 62
4.2 Effect of ‘law and order’ on FDI inflow for meaningful levels
of fuels and oil, and ores and metal export intensity 63
4.3 T he impact of property rights on FDI 6 4
4.4 T he impact of oil production and oil rent relative to GDP on
the interplay between FDI and institutions 6 6
4.5 Analysis of resource-rich and non-resource-rich countries’
impact on ‘law and order’ 67
4A.1 V ariables 6 9
5.1 Number of deals by acquirer and target country 81
5.2 A cquirer’s country and stock market characteristics 8 2
5.3 C orrelation matrix 8 4
5.4 Univariate analysis 8 5
5.5 Cross-sectional regressions 87
6.1 Definition of variables used 101
6.2 Mean values of variables across countries 102
6.3 Effects of group affiliation and state ownership on financial
constraints of Indian firms 104
6.4 E ffects of group affiliation and state ownership on financial
constraints of Chinese firms 1 06
7.1 T he third stage of the IDP – the shift from investment-to
innovation-driven economy 1 14
7.2 E U-27 countries as a source of FDI in Poland and recipients
of Polish outward investment before and after Poland’s
accession to the EU 116
7.3 I nternal and external factors affecting FDI flows to/from
Poland after joining the EU 117
7.4 Change in the employment structure in the national economy
by sector 1 19
7.5 Total expenditure on innovation activity and expenditure on
R&D in industrial and service sector enterprises, 2006–11, in
PLN billion 1 25
8.1 C omposition of Fortune 500 1 38
8.2 C orrelation table 1 41
viii DOI: 10.1057/9781137367204.0003
List of Tables ix
8.3 E ffect of corruption control 1 41
8.4 E ffect of voice and accountability 1 42
8.5 Effect of environmental performance 1 43
8.6 E ffect of country exports 1 43
8.7 Effect of country inwards FDI 143
10.1 S ources, accession and generation of knowledge inputs to
innovation activities 179
10.2 D escriptive statistics manufacturing firms exporting all
years 1997–2008. Innovative activity based on patent
applications and location classified by accessibility to
knowledge producer services 183
10.3 D escriptive statistics manufacturing firms exporting all years
1997–2008. Innovative activity based on R&D engagement
applications and location classified by accessibility to
knowledge producer services 183
10.4 Summary statistics over exports 1997–2008. Innovative
activity based on patent applications and accessibility to
knowledge intense producer services 184
10.5 S ummary statistics over exports 1997–2008. Innovative
activity based on R&D and accessibility to knowledge intense
producer services 1 85
10.6 Dependent variable: log exports per employee. Heckman
selection model, patenting and non-patenting firms 186
10.7 D ependent variable: number of export products. Innovative
and non-innovative firms 187
10.8 D ependent variable: number of destination countries.
Innovative and non-innovative firms 1 88
10.9 D ependent variable: growth in value added, labour productivity
and employment. Innovative and non-innovative firms 190
11.1 Descriptive statistics 1 97
11.2 Number of firms and key variables per country 202
11.3 Sources of financing and total factor productivity 203
11.4 D escriptive statistics (a sample of 2280 multinational parents
and their 8132 subsidiaries) 203
11.5 List of number of firms and key variables in each country
(a sample of 2280 multinational parents and their 8132
subsidiaries) 2 04
11.6 P roductivity of subsidiaries and financing of headquarters
(a sample of 2280 multinational parents and their 5301
overseas subsidiaries and 2831 domestic subsidiaries) 208
12.1 V ariable measurement 2 18
12.2 D escriptive statistics and correlation matrix 2 21
DOI: 10.1057/9781137367204.0003