Do Environmental Policies Affect MNEs’ Foreign Subsidiary Investments? An Empirical Investigation

Zilja, Flladina; Adarkwah, Gilbert Kofi; Sabel, Christopher Albert

doi:10.1007/s11575-021-00458-7

Cited by 6 publications

(6 citation statements)

References 109 publications

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“…We follow the products of coefficients approach, in which the effect of an independent variable (X) on a dependent variable (Y) is mediated by a mediator (M). We calculate this effect by multiplying β (X)-derived from regressions with M as the dependent variable and X as the independent variable-by β (M)-derived from regressions with Y as the dependent and X and M as the independent variables (Preacher and Hayes 2008;Sauermann 2018;Zilja et al 2022). For clarity, we individually show all four first-stage regressions which regress P2P design on the four mediators.…”

Section: Discussionmentioning

confidence: 99%

System Design Choice in the Sharing Economy: How Different Institutional Logics Drive Consumer Perception and Consumers’ Intention to Use Sharing Systems

Clemens

Sabel

Foege

et al. 2022

Schmalenbach J Bus Res

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The sharing economy provides consumers with temporary access to various products. As a growing business trend that continuously attracts new consumers, it motivates businesses to rapidly develop new system designs. In this study, we investigate how the system design choices of sharing systems for products affect consumers’ perceptions of the system and consequently their intention to use a system. Building on institutional logics, we examine how the logics inherent in two system designs—the community logic in peer-to-peer (P2P) systems and the corporate logic in business-to-consumer (B2C) systems—affect consumer perceptions. We argue that consumers perceive P2P and B2C logics differently regarding logics’ economic benefits, product scarcity, sustainability benefits, and social benefits. To test our theory, we conducted a scenario experiment with 1259 participants from the UK. Our findings suggest that consumers perceive P2P systems as yielding higher economic, sustainability, and social benefits than B2C systems, and that these benefits increase consumers’ intention to use the system. However, we also find that P2P systems suffer from the risk of product scarcity, reducing consumers’ intention to use such systems. In summary, our findings show that system design affects consumers’ perceptions and that different designs attract consumer groups with different preferences.

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Section: Discussionmentioning

confidence: 99%

System Design Choice in the Sharing Economy: How Different Institutional Logics Drive Consumer Perception and Consumers’ Intention to Use Sharing Systems

Clemens

Sabel

Foege

et al. 2022

Schmalenbach J Bus Res

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“…Still, MNCs can reduce the costs and effects of political risk on their bottom lines. In examining how to address such critical risk, the IB literature has so far focused on generic strategies MNCs can use, including attempts to avoid it by partnering with local firms (Bonardi et al, 2006), and developing organizational capabilities (Buckley et al, 2016), building on the notion that firms with unique capabilities are less sensitive to political risk (Albino-Pimentel et al, 2018;Zilja et al, 2022). When operating abroad, these MNCs supposedly rely on their organizational capabilities to protect their assets by exerting political influence on the host country's government (Albino-Pimentel et al, 2018;Baron, 1999).…”

Section: International Business and Host Country Political Risk Mitig...mentioning

confidence: 99%

“…When investment treaties exist between home and host countries, MNCs rely on such treaties as the first level of protection to reduce political risk. Indeed, research shows that MNCs are likely to invest more in countries that sign and ratify treaties with their home country (Frenkel & Walter, 2019;Zilja et al, 2022).…”

Section: Investment Treatiesmentioning

confidence: 99%

“…However, using the tools described above depends on the institutional arrangements of the home and host countries (which determine the availability of these tools), as well as on the nature of the economic activity, i.e., whether it is considered an investment as defined in existing institutional arrangements. As presented in Figure 2, the type of activity MNCs undertake and the destination country in which they choose to undertake such activities are influenced by the MNCs' motives and capabilities (Kim & Aguilera, 2016;Lu et al, 2014;Zilja et al, 2022) and by host countries' institutions and investment policies, such as whether there is investment agreement between the MNCs home and host country. We argue that the combination of MNCs' motives and capabilities, in addition to home and host country institutional arrangements, affect the types of investments MNCs pursue, which determines the possible institutional-based tools available to the MNC to reduce the cost of political risk should such risk materialize.…”

Section: A Framework For Reducing the Costs Of Political Risk Abroadmentioning

confidence: 99%

“…Investment treaties have been the focus of much recent IB research (Albino-Pimentel et al, 2018;Jandhyala & Weiner, 2014;Zilja et al, 2022), but areas shown herenot the only institutional-based tool that MNCs use to reduce the cost of political risk. Complementary tools include political risk insurance, investment contracts, and guarantees.…”

Section: A Framework For Reducing the Costs Of Political Risk Abroadmentioning

confidence: 99%

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Dealing with high-risk environments: Institutional-based tools to reduce political risk costs

Adarkwah

Benito

2023

Journal of International Management

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Geopolitical volatility and subsidiary investments

Adarkwah,

Dorobantu,

Sabel

et al. 2024

Strategic Management Journal

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Research SummaryWe examine how geopolitical volatility—the instability of bilateral political affinity between countries—affects foreign subsidiary investments. Building on prior work that shows that the level of political affinity between countries facilitates foreign investments, we argue that the volatility of political affinity impedes firms' ability to form expectations about stakeholder behavior and reduces subsequent investments in subsidiaries. We further argue that the effect of volatility of political affinity on foreign subsidiary investments is less pronounced when the level of political affinity between countries is high and when the firm has strong political connections at home. Our analyses examine 1054 US firms and their subsidiary investments in 106 countries from 2000 to 2015.Managerial SummaryGeopolitical risk has emerged as an important factor in foreign investment decisions in recent years. The rise of geopolitical tensions worldwide and the fragmentation of relationships between countries have introduced new dimensions to foreign investment risks. We study the propensity for sudden and unpredictable shifts in the political relationship between countries—that is, volatility of political affinity in their bilateral political relations—and its effect on firms' foreign subsidiary investments. We show that volatility of political affinity negatively affects the number of subsidiaries, employees, and local sales in the host country because when bilateral relations change suddenly, it is more difficult for multinational firms to predict how stakeholder behavior will impact the performance of their investments.

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Do Environmental Policies Affect MNEs’ Foreign Subsidiary Investments? An Empirical Investigation

Cited by 6 publications

References 109 publications

System Design Choice in the Sharing Economy: How Different Institutional Logics Drive Consumer Perception and Consumers’ Intention to Use Sharing Systems

System Design Choice in the Sharing Economy: How Different Institutional Logics Drive Consumer Perception and Consumers’ Intention to Use Sharing Systems

Dealing with high-risk environments: Institutional-based tools to reduce political risk costs

Geopolitical volatility and subsidiary investments

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