Session 129

Foreign Direct Investments

Track G

Date: Tuesday, October 6, 2015

 

Time: 08:00 – 09:15

Common Ground

Room: Plaza Court 1


Facilitator:

  • TBD

Title: FDI and Institutional Distance in Emerging Economies

Authors

  • Madhurima Bhattacharyay, McGill University
  • Pouya Ebrahimi, HEC-Montreal

Abstract: Previous literature in management, economics and international business focused on exploring FDI in emerging economies have looked at FDI flows from developed source countries to emerging host economies. In contrast, we look at FDI flows from emerging source countries to emerging host countries to determine what makes a particular emerging host country an attractive choice for FDI investment. For our model, we use the construct institutional distance to explore differences in institutional environments between host and source emerging economies. We hypothesize and find empirical evidence to support our arguments that the regulative dimension or characteristics of institutional distance, using measures for regulatory quality and rule of law, are significant when both host and source countries are emerging economies. Implications and future research avenues are discussed.

Title: Foreign Direct Investment and Firm Performance: The Moderating Role of Firm Ownership

Authors

  • Gabriel R G Benito, BI Norwegian Business School
  • Asmund Rygh, BI Norwegian Business School

Abstract: Internationalization has been proposed as one factor that leads to superior firm performance, but the results from a large set of empirical studies have been mixed. In this study, we will consider how different types of firm ownership (state, foreign, institutional, family and industrial) moderate the relationship between foreign direct investment and firm performance. We will use an extensive dataset with accounting and ownership variables covering the population of Norwegian firms between 2004 and 2012, linked to firm-level data on Norwegian outward FDI. We will address important methodological issues such as self-selection and endogeneity in the multinationality-performance relationship, including through panel data techniques, generalized method of moments estimation and propensity score matching.

Title: On The Effect Of Development Aid On Foreign Direct Investment Activities

Authors

  • Marie-Ann Betschinger, University of Fribourg
  • Olivier Bertrand, SKEMA Business School

Abstract: This study explores whether development aid can increase Foreign Direct Investment (FDI) activities in developing economies and links the impact of aid to different types of FDI. Using Japanese firm level data for the period 1990-2004 we find that, on average, Japanese aid promotes FDI employment in the recipient country. Aid does not affect Japanese FDI employment in politically sensitive industries and when the FDI is market seeking. In contrast, FDI employment of firms within the high technology machinery manufacturing industries is more strongly influenced.

Title: Policy Support and International Investments: Evidence from FDI in the European Solar Electric Power Industry

Authors

  • Panayiotis Georgallis, University of Michigan
  • Joao Albino-Pimentel, University of South Carolina

Abstract: Vertical industrial policies are a common measure by which governments attempt to encourage entrepreneurial activity, promote innovation, or create national champions. But whereas evidence of their varying success in stimulating the growth of their target sectors continues to accumulate, we know much less about whether these policies influence foreign investment. In this paper we use data from foreign investments in the solar energy industry in European Union countries during the period 2003-2013, and find that policies implemented by governments to stimulate the industry also attract foreign investments. We further argue that firms’ attributes, such as country-of-origin and prior experience, influence their responsiveness to public policies in foreign countries. Overall, this study reveals new insights into the relationship between public policies and foreign investment.

Title: Role of Dynamic Capabilities Between Foreign Ownership and Level of OFDI by Emerging Market Multinationals

Authors

  • Dominic Buccieri, Cleveland State University
  • Jieun Park, Cleveland State University

Abstract: The capability development of emerging market multinational enterprises (EMNEs) started to develop in recent years. Much of the research focuses on EMNEs resource- and asset-seeking motivations for outward foreign direct investment (OFDI) activities. State-owned enterprises (SOEs) utilize these strategic orientations to build up their dynamic capabilities, and to enhance their countries’ global positioning. However minimal research explains the market-seeking orientation of private-owned enterprises (POEs), nor their dynamic capability development needed to conduct OFDI activities. The purpose of this conceptual paper is to explore how, (1) the spillover effects from developed market multinational enterprises (DMNEs) foreign ownership affects POEs’ dynamic capabilities, and (2) examine how these dynamic capabilities affect POEs OFDI activities.

Title: The Halo Effect: Violent Crime and Foreign Direct Investment

Authors

  • Alvaro Cuervo-Cazurra, Northeastern University
  • Miguel Ramos, University of Texas-El Paso
  • Nathan Ashby, University of Texas-El Paso

Abstract: We analyze the impact of domestic violent crime on Foreign Direct Investment (FDI). We build on cognition and decision-making literatures and propose a halo effect, whereby in the face of signals of high levels of violent crime in particular regions within a country, foreign investors draw broad impressions about the level of violence in the country and such views negatively impact investment beyond violent regions. Moreover, we propose three types of halo effects (general, expanded and certified) which reveal reactions to different signals. These ideas extend our understanding of the impact of extreme institutional uncertainty on FDI decisions.
Key words: crime, foreign direct investment, halo effect, international business

All Sessions in Track G...

Sun: 08:00 – 09:15
Session 32: Microfoundations of international strategic management: Opportunism, trust, and bounded reliability
Sun: 09:45 – 11:00
Session 279: Formal theory in strategy - A primer
Sun: 11:15 – 12:30
Session 33: Methodological challenges in publishing international strategy research
Sun: 16:15 – 17:30
Session 209: Institutions and Emerging Markets
Sun: 17:45 – 00:00
Session 315: Global Strategy Business Meeting
Mon: 08:00 – 09:15
Session 126: Entry Mode & Cross-Border Acquisitions
Mon: 11:15 – 12:30
Session 149: Management and Coordination of Multinationals
Mon: 13:45 – 15:00
Session 128: Emerging Markets
Mon: 16:45 – 18:00
Session 151: Networks and Collaborative Arrangements
Tue: 08:00 – 09:15
Session 129: Foreign Direct Investments
Tue: 11:00 – 12:15
Session 127: Institutional Context
Tue: 14:15 – 15:30
Session 266: Offshoring
Tue: 15:45 – 17:00
Session 130: International Diversification
Session 150: Location and Geography
Tue: 17:30 – 18:45
Session 208: Internationalization Strategies and Performance


Strategic Management Society

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