Host country institutional diversity and MNE performance persistence

Zhao, Yang; Parente, Ronaldo; Song, Mohan; Wenger, Lucas

doi:10.1016/j.jbusres.2020.03.018

Cited by 8 publications

(4 citation statements)

References 75 publications

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“…Moreover, as commented by Zhao, Parente, et al. (2020), the host country should attempt to promote a favorable investment environment to boost the confidence of foreign investors in these less‐developed regions.…”

Section: Final Remarks and Policy Implicationsmentioning

confidence: 99%

“…As shown by many location-choice studies (Jordaan, 2008;Li et al, 2018;McCann & Mudambi, 2004), several aspects such as infrastructure, market size, human capital, and financial aspects could be used to facilitate shifting the investors' interest toward these regions. Moreover, as commented by Zhao, Parente, et al (2020), the host country should attempt to promote a favorable investment environment to boost the confidence of foreign investors in these less-developed regions.…”

Section: Final Remark S and Policy Implicationsmentioning

confidence: 99%

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Are foreign companies a blessing or a curse for local development in Brazil? It depends on the home country and host region's institutions

et al. 2021

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Latin America is an important destination for foreign direct investment (FDI). The debate on whether FDI is beneficial or harmful to the region is ongoing. Our study investigates how institutions from the home country and the host region affect the FDI‐human development nexus in Brazil. Specifically, we employ a unique data set comprising 92 municipalities and companies from 52 countries. We use threshold regressions to scrutinize the heterogeneous effects of FDI on the municipalities' income, education, health, and productivity levels. Our results indicate that locations with a high concentration of companies from countries with well‐developed institutions tend to experience a more positive effect of FDI on local development than regions with a high concentration of companies from emerging economies with less developed institutions. This effect is nonlinear, though, and more significant in institutionally weak regions. Our findings suggest that the FDI‐human development nexus is neither always positive or negative. Instead, it varies depending on which human development aspect is being analyzed and on institutions. Finally, we discuss policy implications for Brazil and Latin America.

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Section: Final Remarks and Policy Implicationsmentioning

confidence: 99%

Section: Final Remark S and Policy Implicationsmentioning

confidence: 99%

Are foreign companies a blessing or a curse for local development in Brazil? It depends on the home country and host region's institutions

et al. 2021

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“…(i) Product diversification-related-Product diversity has been studied in general [8] and differentiated by related and unrelated products [9][10][11][12] in relation to firm financial and risk performance and competitiveness [13,14]. (ii) Country diversification related-Countries' diversification in terms of geographic scale and scope [15], target or host country characteristics [16,17] and distance [18,19] has been linked with financial and risk performance [9,[20][21][22] and reputation [23], with dependencies such as firm size [24] in several studies. (iii) Integrated products and countries' diversification-related-Studies that have linked firm performance with both product and country diversification have investigated the dimensions of degree of products diversification [25], reasons for diversification [5,26], profitability [27], high financial return-low risk performance strategies [11] and the complexity of managing globally dispersed operations and the higher costs of corporate governance [9].…”

Section: Literature Reviewmentioning

confidence: 99%

Revealing Integrated Product and Geographical Diversification Trajectories in Multinational Pharmaceutical Enterprises

et al. 2023

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Multinational Enterprises (MNEs) periodically decide on both which products to launch (or phase out) and in which global regions, thereby conducting an integrated products-countries consideration in diversification strategies. Over time, these diversification decisions can have a cumulative impact on the structure. Diversification literature has primarily focused on one of these two metrics rather than providing an integrated view; this work investigates both metrics. Considering deal-making as an execution instrument of strategies, a comparison of historic deals of MNEs with their current structure offers insights into the nature of the diversification strategies that were pursued. For the most active global deal-making pharmaceutical firms, we derive normalized deal diversity profile metrics in terms of their cumulative past product-countries’ preferences and compare them with the product-countries’ operations of their current subsidiaries. We rationalize MNE deal behaviors as means to shed, acquire and consolidate businesses to enable their market leadership aspirations. The analysis reveals two trajectories that have been actively favored in deals: one directed at niche products offered globally, and one directed at niche products in selected countries. The former is characterized by deals in a high number of countries, whereas the latter by two identifiably different product concentration levels. In contrast, trajectories directed at widely diverse products have been disfavored in deals. Understanding such directions and their pace can aid in global- or group-level strategy formulation, monitoring strategy execution, interpreting competitor moves and designing regional policies.

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“…Regarding host country characteristics, internationalizing firms are required to sense the dynamic environmental impediments in the host markets carefully, such as the perceived level of environmental hostility and industrial policies (Zhao et al. , 2020). When internationalizers face impediments (e.g.…”

Section: The Concept and Modes Of Sme De‐internationalizationmentioning

confidence: 99%

Understanding the De‐internationalization of Entrepreneurial SMEs in a Volatile Context: A Reconnoitre on the Unique Compositions of Internal and External Factors

Jafari‐Sadeghi

Mahdiraji

Budhwar

et al. 2022

British J of Management

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In recent years, the global business environment has witnessed a wave of deinternationalization not only among multinationals but also among small-and mediumsized enterprises (SMEs). This disengagement of cross-border activities is deemed to be driven by various firm-specific factors, as well as by external factors. Building on the premise of the non-linear internationalization debate and focusing on the dynamic capabilities view and institutional theory, this paper aims to disentangle the extent to which internal factors (IFs) and external factors (EFs) drive SMEs towards deinternationalization. To do this, we take advantage of a hybrid multilayer decisionmaking mathematical modelling approach to explore SME de-internationalization at two levels. Our findings at the exhaustive level contribute to the de-internationalization literature by proposing distinct frameworks that highlight the interrelationship amongst IFs and EFs. And our results at the subordinate level constitute the identification of four unique compositions leading to different de-internationalization modes. In this vein, we define two categories of factors, namely reducing and terminating factors, which drive SMEs into respectively partial and full de-internationalization.

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Host country institutional diversity and MNE performance persistence

Cited by 8 publications

References 75 publications

Are foreign companies a blessing or a curse for local development in Brazil? It depends on the home country and host region's institutions

Are foreign companies a blessing or a curse for local development in Brazil? It depends on the home country and host region's institutions

Revealing Integrated Product and Geographical Diversification Trajectories in Multinational Pharmaceutical Enterprises

Understanding the De‐internationalization of Entrepreneurial SMEs in a Volatile Context: A Reconnoitre on the Unique Compositions of Internal and External Factors

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