Liability of country foreignness and liability of regional foreignness: their effects on geographic diversification and firm performance

The costs of inter- and intra-regional diversification have been widely discussed in the existing international business literature, but the findings are mixed. Explanations for the mixed findings have important managerial implications, because business managers have to estimate accurately the costs of doing business within and across regions before they make their internationalization decisions. To explain the existing mixed findings, this study differentiates between liabilities of foreignness at the country and regional levels, and explores the joint effects of liability of country foreignness (LCF) and liability of regional foreignness (LRF) on the performance of internationalizing firms. Using data from 167 Canadian firms, we find that LCF may not necessarily be negatively correlated with intra-regional diversification, but LRF is positively correlated with inter-regional diversification. LCF moderates the relationship between LRF and inter-regional diversification, and also mediates the relationship between intra-regional diversification and firm performance. LRF mediates the relationship between inter-regional diversification and firm performance. Missing one or more of these variables may result in different cost estimates. Identification of the relationships between these variables helps to improve the accuracy of estimating the costs of doing business aboard.

The end of the opportunism vs trust debate: bounded reliability as a new envelope concept in research on MNE governance

Modern transaction cost economics (TCE) thinking has developed into a key intellectual foundation of international business (IB) research, but the Williamsonian version has faced substantial criticism for adopting the behavioral assumption of opportunism. In this paper we assess both the opportunism concept and existing alternatives such as trust within the context of IB research, especially work on multinational enterprise (MNE) governance. Case analyses of nine global MNEs illustrate an alternative to the opportunism assumption that captures more fully the mechanisms underlying failed commitments inside the MNE. As a substitute for the often-criticized assumption of opportunism, we propose the envelope concept of bounded reliability (BRel), an assumption that represents more accurately and more completely the reasons for failed commitments, without invalidating the other critical assumption in conventional TCE (and internalization theory) thinking, namely the widely accepted envelope concept of bounded rationality (BRat). Bounded reliability as an envelope concept includes two main components, within the context of global MNE management: opportunism as intentional deceit, and benevolent preference reversal. The implications for IB research of adopting the bounded reliability concept are far reaching, as this concept may increase the legitimacy of comparative institutional analysis in the social sciences.

Closed-loop feedback computation model of dynamical reputation based on the local trust evaluation in business-to-consumer e-commerce

Trust and reputation are important factors that influence the success of both traditional transactions in physical social networks and modern e-commerce in virtual Internet environments. It is difficult to define the concept of trust and quantify it because trust has both subjective and objective characteristics at the same time. A well-reported issue with reputation management system in business-to-consumer (BtoC) e-commerce is the “all good reputation” problem. In order to deal with the confusion, a new computational model of reputation is proposed in this paper. The ratings of each customer are set as basic trust score events. In addition, the time series of massive ratings are aggregated to formulate the sellers’ local temporal trust scores by Beta distribution. A logical model of trust and reputation is established based on the analysis of the dynamical relationship between trust and reputation. As for single goods with repeat transactions, an iterative mathematical model of trust and reputation is established with a closed-loop feedback mechanism. Numerical experiments on repeated transactions recorded over a period of 24 months are performed. The experimental results show that the proposed method plays guiding roles for both theoretical research into trust and reputation and the practical design of reputation systems in BtoC e-commerce.

Consumer trust, risk and food safety: a review

Consumers' attitudes to trust and risk are key issues in food safety research and attention needs to be focused on clearly defining a framework for analysing consumer behaviour in these terms. In order to achieve this, a detailed review of the recent literature surrounding risk, trust and the relationship between the two must be conducted. This paper aims to collate the current social sciences literature in the fields of food safety, trust and risk. It provides an insight into the economic and other modelling procedures available to measure consumers' attitudes to risk and trust in food safety and specifically notes the need for future research to concentrate on examining risk and trust as inter-related variables rather than two distinct, mutually exclusive concepts. A framework is proposed which it is hoped will assist in devising more effective research to support risk communication to consumers.

Domestically produced food: Consumer perceptions of origin, safety and the issue of trust

It is becoming increasingly difficult for the public to attempt to assess risks using traditional methods such as smell, taste or other physical attributes of food. The existence of extrinsic cues such as the country of origin (COO) of food can help to make food purchase decisions easier for consumers. However, the use of extrinsic cues depends heavily on the extent to which consumers trust such signals to be indicative of quality or safety, which in turn depends on the credibility behind that cue. This paper aims to examine consumers association of domestically produced food with increased food safety standards and the association of COO and food safety information with socio-demographics and other aspects of consumer psychology such as attitudes, risk perception and trust. Using an ordered probit model, domestic production is examined as an extrinsic cue for food safety by looking at the relationship with trust in food safety information provided by national food standards agencies (NFSAs) and other socio-demographic characteristics, based on nationally representative data from 2725 face-to-face interviews across five European countries. Results suggest that domestic production of food is an extrinsic cue for food safety and as consumers place increasing importance on food safety they are more interested in food produced in their own country. This, coupled with consumer trust in a strong, and independent national food standards agency, suggests the potential exists for the increased consumption of domestically produced foods.

Modelling risk perception and trust in food safety information within the theory of planned behaviour

This study suggests a statistical strategy for explaining how food purchasing intentions are influenced by different levels of risk perception and trust in food safety information. The modelling process is based on Ajzen's Theory of Planned Behaviour and includes trust and risk perception as additional explanatory factors. Interaction and endogeneity across these determinants is explored through a system of simultaneous equations, while the SPARTA equation is estimated through an ordered probit model. Furthermore, parameters are allowed to vary as a function of socio-demographic variables. The application explores chicken purchasing intentions both in a standard situation and conditional to an hypothetical salmonella scare. Data were collected through a nationally representative UK wide survey of 533 UK respondents in face-to-face, in-home interviews. Empirical findings show that interactions exist among the determinants of planned behaviour and socio-demographic variables improve the model's performance. Attitudes emerge as the key determinant of intention to purchase chicken, while trust in food safety information provided by media reduces the likelihood to purchase. (C) 2006 Elsevier Ltd. All rights reserved.

Food scares and trust: A European study

The complex interactions between the determinants of food purchase under risk are explored using the SPARTA model, based on the theory of planned behaviour, and estimated through a combination of multivariate statistical techniques. The application investigates chicken consumption choices in two scenarios: ( a) a 'standard' purchasing situation; and (b) following a hypothetical Salmonella scare. The data are from a nationally representative survey of 2,725 respondents from five European countries: France, Germany, Italy, the Netherlands and the United Kingdom. Results show that the effects and interactions of behavioural determinants vary significantly within Europe. Only in the case of a food scare do risk perceptions and trust come into play. The policy priority should be on building and maintaining trust in food and health authorities and research institutions, while food chain actors could mitigate the consequences of a food scare through public trust. No relationship is found between socio-demographic variables and consumer trust in food safety information.

Trust and governance of global value chains: The case of a Brazilian beef processor

Purpose - The purpose of this paper is to offer an exploratory case study comparing one Brazilian beef processor's relationships supplying two different distribution channels, an EU importer and an EU retail chain operating in Brazil. Design/methodology/approach - The paper begins with a short review of global value chains and the recent literature on trust. It gives the background to the Brazilian beef chain and presents data obtained through in-depth interviews, annual reports and direct observation with the Brazilian beef processor, the EU importer and the retailer. The interviews were conducted with individual firms, but the analysis places them in a chain context, identifying the links and relationships between the agents of the chains and aiming to describe each distribution channel. Findings - Executive chain governance exercised by the domestic retailer stimulates technical upgrading and transferring of best practices to local. suppliers. Consequently, this kind of relationship results in more trust within the global value chain. Practical implications - There are difficulties and challenges facing this Brazilian beef processor that are party related to the need to comply with increasingly complex and demanding food safety and food quality standards. There is still a gap between practices adopted for the export market and practices adopted locally. The strategies of transnational retailers in offering differentiated beef should be taken in account. Originality/value - The research outlines an interdisciplinary framework able to explain chain relationships and the kind of trust that emerges in relationships between EU importer/retail and a developing country supplier.

Security, trust and privacy supported by context-aware middleware

Driven by new network and middleware technologies such as mobile broadband, near-field communication, and context awareness the so-called ambient lifestyle will foster innovative use cases in building automation, healthcare and agriculture. In the EU project Hydra1 highlevel security, trust and privacy concerns such as loss of control, profiling and surveillance are considered at the outset. At the end of this project the Hydra middleware development platform will have been designed so as to enable developers to realise secure ambient scenarios especially in the user domains of building automation, healthcare, and agriculture. This paper gives a short introduction to the Hydra project, its user domains and its approach to ensure security by design. Based on the results of a focus group analysis of the building automation domain typical threats are evaluated and their risks are assessed. Then, specific security requirements with respect to security, privacy, and trust are derived in order to incorporate them into the Hydra Security Meta Model. How concepts such as context security, semantic security, and virtualisation support the overall Hydra approach will be introduced and illustrated on the basis of a technical building automation scenario.