In this article, we sought to empirically validate an instrument for measuring country institutional profiles for the promotion of entrepreneurship in a sample of 254 business students from three emerging economies: Bulgaria, Hungary, and Latvia. Results from the confirmatory factor analysis suggest high reliability, internal consistency, and construct validity of the instrument. Further, we find important differences in the three dimensions (regulatory, cognitive, and normative) of the institutional profiles across the three emerging economies, reflecting their idiosyncratic cultural norms and values, traditions, and institutional heritage in promoting entrepreneurship. Implications for future research, managerial practice, and public policy are discussed.
PurposeThe purpose of this paper is to investigate the impact of ISO 9000 certification on three dimensions of firm performance that are theoretically derived to have a relationship with the adoption of ISO 9000 standards, namely, sales revenue, cost of goods sold/sales revenue, and the asset turnover ratio (sales/total assets).Design/methodology/approachEmploying a panel data approach covering all publicly traded companies in Brazil that had adopted the ISO 9000 standards from 1995 to 2006, the authors investigate the impact of the certification on firm performance using three categories of economic regression models: the pooling of cutting data with ordinary least squares, the fixed effects and the random effects.FindingsISO 9000 certification is found to be associated with an increase in sales revenues, decrease in cost of goods sold/sales revenue and increase in the asset turnover ratios of the certified firms.Research limitations/implicationsThe research findings suggest that companies large or small, irrespective of their capital structure (i.e. debt/equity) and cutting across industries will benefit from the adoption of ISO 9000 standards. However, the extent to which firms benefit from such adoption is likely to vary. Moreover, the generalizability of the research findings is limited by the size of the sample.Originality/valueThe paper's chief contribution lies in the validation of the signaling theory in the context of business organizations and extending the domain of research on this topic to emerging markets generally.
PurposeThe paper aims to evaluate the relative importance of various factors that influenced the flow of foreign direct investment (FDI) into Brazil in recent years. Analysis of empirical data indicates that evolution of the consumer market and strength of consumer sales are more important in explaining capital movements into Brazil than other frequently offered explanations such as exchange rates and country risk.Design/methodology/approachThe paper uses two‐stage least squares regression to estimate the coefficients of a system of simultaneous equations relating FDI flows into Brazil to various influential factors.FindingsThe results indicate that internal market growth represented by aggregate consumer sales was a significant determinant of FDI into Brazil. Increase in interest rate on consumer financing was negatively related and the attractiveness of the Brazilian market had no impact on FDI flows during the captioned period.Research limitations/implicationsWhile factors such as inflation and exchange rates might be more important for smaller, less stable markets, in the case of larger emerging markets such as Brazil, multi‐national firms might be less concerned with short‐term fluctuations and more guided by internal market growth that affords greater opportunities to achieve economies of scale and scope.Practical implicationsThe findings suggest that policy planners in big emerging markets should try to stimulate their internal markets rather than tweak fiscal and monetary policies to attract FDI.Originality/valueThe paper extends and expands the knowledge of international capital flows and provides a more nuanced understanding of the importance of internal market dynamism in attracting FDI into emerging markets.
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