Resources, strategies, location determinants, and host country location choice by emerging market firms

The extant literature had studied the determinants of the firms’ location decisions with help of host country characteristics and distances between home and host countries. Firm resources and its internationalization strategies had found limited attention in this literature. To address this gap, the research question in this dissertation was whether and how firms’ resources and internationalization strategies impacted the international location decisions of emerging market firms. ^ To explore the research question, data were hand-collected from Indian software firms on their location decisions taken between April 2000 and March 2009. To analyze the multi-level longitudinal dataset, hierarchical linear modeling was used. The results showed that the internationalization strategies, namely market-seeking or labor-seeking had direct impact on firms’ location decision. This direct relationship was moderated by firm resource which, in case of Indian software firms, was the appraisal at CMMI level-5. Indian software firms located in developed countries with a market-seeking strategy and in emerging markets with a labor-seeking strategy. However, software firms with resource such as CMMI level-5 appraisal, when in a labor-seeking mode, were more likely to locate in a developed country over emerging market than firms without the appraisal. Software firms with CMMI level-5 appraisal, when in market-seeking mode, were more likely to locate in a developed country over an emerging market than firms without the appraisal. ^ It was concluded that the internationalization strategies and resources of companies predicted their location choices, over and above the variables studied in the theoretical field of location determinants.^

Resource, Strategies, Location Determinants, And Host Country Location Choice By Emerging Market Firms

The extant literature had studied the determinants of the firms’ location decisions with help of host country characteristics and distances between home and host countries. Firm resources and its internationalization strategies had found limited attention in this literature. To address this gap, the research question in this dissertation was whether and how firms’ resources and internationalization strategies impacted the international location decisions of emerging market firms. To explore the research question, data were hand-collected from Indian software firms on their location decisions taken between April 2000 and March 2009. To analyze the multi-level longitudinal dataset, hierarchical linear modeling was used. The results showed that the internationalization strategies, namely market-seeking or labor-seeking had direct impact on firms’ location decision. This direct relationship was moderated by firm resource which, in case of Indian software firms, was the appraisal at CMMI level-5. Indian software firms located in developed countries with a market-seeking strategy and in emerging markets with a labor-seeking strategy. However, software firms with resource such as CMMI level-5 appraisal, when in a labor-seeking mode, were more likely to locate in a developed country over emerging market than firms without the appraisal. Software firms with CMMI level-5 appraisal, when in market-seeking mode, were more likely to locate in a developed country over an emerging market than firms without the appraisal. It was concluded that the internationalization strategies and resources of companies predicted their location choices, over and above the variables studied in the theoretical field of location determinants.

A fresh look at decision making in international investment choices: Firm international coherence and home-host country relatedness

Understanding how decisions for international investments are made and how this affects the overall pattern of investments and firm’s performance is of particular importance both in strategy and international business research. This dissertation introduced first home-host country relatedness (HHCR) as the degree to which countries are efficiently combined within the investment portfolios of firms. It theorized and demonstrated that HHCR will vary with the motivation for investments along at least two key dimensions: the nature of foreign investments and the connectedness of potential host countries to the rest of the world. Drawing on cognitive psychology and decision-making research, it developed a theory of strategic decision making proposing that strategic solutions are chosen close to a convenient anchor. Building on research on memory imprinting, it also proposed that managers tend to rely on older knowledge representation. In the context of international investment decisions, managers use their home countries as an anchor and are more likely to choose as a site for foreign investments host countries that are ‘close’ to the home country. These decisions are also likely to rely more strongly on closeness to time invariant country factors of historic and geographic nature rather than time-variant institutions. Empirical tests using comprehensive investments data by all public multinational companies (MNC) worldwide, or over 15,000 MNCs with over half a million subsidiaries, support the claims. Finally, the dissertation introduced the concept of International Coherence (IC) defined as the degree to which an MNE’s network comprises countries that are related. It was hypothesized that maintaining a high level of coherence is important for firm performance and will enhance it. Also, the presence of international coherence mitigates some of the negative effects of unrelated product diversification. Empirical tests using data on foreign investments of over 20,000 public firms, while also developing a home-host country relatedness index for up to 24,300 home-host pairs, provided support for the theory advanced.

Toward a unified theory of task -oriented and relationship -oriented leader behavior: A multi -country generalizability study

The theoretical foundation of this study comes from the significant recurrence throughout the leadership literature of two distinct behaviors, task orientation and relationship orientation. Task orientation and relationship orientation are assumed to be generic behaviors, which are universally observed and applied in organizations, even though they may be uniquely enacted in organizations across cultures. The lack of empirical evidence supporting these assumptions provided the impetus to hypothetically develop and empirically confirm the universal application of task orientation and relationship orientation and the generalizability of their measurement in a cross-cultural setting. Task orientation and relationship orientation are operationalized through consideration and initiation of structure, two well-established theoretical leadership constructs. Multiple-group mean and covariance structures (MACS) analyses are used to simultaneously validate the generalizability of the two hypothesized constructs across the 12 cultural groups and to assess whether the similarities and differences discovered are measurement and scaling artifacts or reflect true cross-cultural differences. The data were collected by the author and others as part of a larger international research project. The data are comprised of 2341 managers from 12 countries/regions. The results provide compelling evidence that task orientation and relationship orientation, reliably and validly operationalized through consideration and initiation of structure, are generalizable across the countries/regions sampled. But the results also reveal significant differences in the perception of these behaviors, suggesting that some aspects of task orientation and relationship orientation are strongly affected by cultural influences. These (similarities and) differences reflect directly interpretable, error-free effects among the constructs at the behavioral level. Thus, task orientation and relationship orientation can demonstrate different relations among cultures, yet still be defined equivalently across the 11 cultures studied. The differences found in this study are true differences and may contain information about cultural influences characterizing each cultural context (i.e. group). The nature of such influences should be examined before the results can be meaningfully interpreted. To examine the effects of cultural characteristics on the constructs, additional hypotheses on the constructs' latent parameters can be tested across groups. Construct-level tests are illustrated in hypothetical examples in light of the study's results. The study contributes significantly to the theoretical understanding of the nature and generalizability of psychological constructs. The theoretical and practical implications of embedding context into a unified theory of task orientated and relationship oriented leader behavior are proposed. Limitations and contributions are also discussed. ^

Education policy and national income distribution: New evidence from recent cross -country data

In the mid 19th century, Horace Mann insisted that a broad provision of public schooling should take precedence over the liberal education of an elite group. In that regard, his generation constructed a state sponsored common schooling enterprise to educate the masses. More than 100 years later, the institution of public schooling fails to maintain an image fully representative of the ideals of equity and inclusion. Critical theory in educational thought associates the dominant practice of functional schooling with maintenance of the status quo, an unequal distribution of financial, political, and social resources. This study examined the empirical basis for the association of public schooling with the status quo using the most recent and comparable cross-country income inequality data. Multiple regression analysis evaluated the possible relationship between national income inequality change over the period 1985-2005 and variables representative of national measures of education supply in the prior decade. The estimated model of income inequality development attempted to quantify the relationship between education supply factors and subsequent income inequality developments by controlling for economic, demographic, and exogenous factors. The sample included all nations with comparable income inequality data over the measurement period, N = 56. Does public school supply affect national income distribution? The estimated model suggested that an increase in the average years of schooling among the population age 15 years or older, measured over the period 1975-1985, provided a mechanism that resulted in a more equal distribution of income over the period 1985-2005 among low and lower-middle income nations. The model also suggested that income inequality increased less or decreased more in smaller economies and when the percentage of the population age < 15 years grew more slowly over the period 1985-2000. In contrast, this study identified no significant relationship between school supply changes measured over prior periods and income inequality development over the period 1985-2005 among upper-middle and high income nations.

The World Trade Organization, competition policy, and developing countries: A cross -country examination of domestic policy actions

This dissertation addresses the following research question: in a particular policy area, why do countries that display unanimity in their international policy behavior diverge from each other in their domestic policy actions? I address this question in the context of the divergent domestic competition policy actions undertaken by developing countries during the period 1996-2007, after these countries had quite conspicuously displayed near-unanimity in opposing this policy measure at the World Trade Organization (WTO). This divergence is puzzling because (a) it does not align with their near-unanimous behavior at the WTO over competition policy and (b) it is at variance with the objectives of their international opposition to this policy at the WTO. Using an interdisciplinary approach, this dissertation examines the factors responsible for this divergence in the domestic competition policy actions of developing countries. ^ The theoretical structure employed in this study is the classic second-image-reversed framework in international relations theory that focuses on the domestic developments in various countries following an international development. Methodologically, I employ both quantitative and qualitative methods of analysis to ascertain the nature of the relationship between the dependent variable and the eight explanatory variables that were identified from existing literature. The data on some of the key variables used in this dissertation was uniquely created over a multi-year period through extensive online research and represents the most comprehensive and updated dataset currently available. ^ The quantitative results obtained from logistic regression using data on 131 countries point toward the significant role played by international organizations in engineering change in this policy area in developing countries. The qualitative analysis consisting of three country case studies illuminate the channels of influence of the explanatory variables and highlight the role of domestic-level factors in these three carefully selected countries. After integrating the findings from the quantitative and qualitative analyses, I conclude that a mix of international- and domestic-level variables explains the divergence in domestic competition policy actions among developing countries. My findings also confirm the argument of the second-image-reversed framework that, given an international development or situation, the policy choices that states make can differ from each other and are mediated by domestic-level factors. ^

The survival and stock performance of emerging country firms in the United States

Many firms from emerging markets flocked to developed countries at high cost with hopes of acquiring strategic assets that are difficult to obtain in home countries. Adequate research has focused on the motivations and strategies of emerging country firms' (ECFs') internationalization, while limited studies have explored their survival in advanced economies years after their venturing abroad. Due to the imprinting effect of home country institutions that inhibit their development outside their home market, ECFs are inclined to hire executives with international background and affiliate to world-wide organizations for the purpose of linking up with the global market, embracing multiple perspectives for strategic decisions, and absorbing the knowledge of foreign markets. However, the effects of such orientation on survival are under limited exploration. Motivated by the discussion above, I explore ECFs' survival and stock performance in a developed country (U.S.). Applying population ecology, signaling theory and institutional theory, the dissertation investigates the characteristics of ECFs that survived in the developed country (U.S.), tests the impacts of global orientation on their survival, and examines how global-oriented activities (i.e. joining United Nations Global Compact) affect their stock performance. The dissertation is structured in the form of three empirical essays. The first essay explores and compares different characteristics of ECFs and developed country firms (DCFs) that managed to survive in the U.S. The second essay proposes the concept of global orientation, and tests its influences on ECFs' survival. Employing signaling theory and institutional theory, the third essay investigates stock market reactions to announcements of United Nation Global Compact (UNGC) participation. The dissertation serves to explore the survival of ECFs in the developed country (U.S.) by comparison with DCFs, enriching traditional theories by testing non-traditional arguments in the context of ECFs' foreign operation, and better informing practitioners operating ECFs about ways of surviving in developed countries and improving stockholders' confidence in their future growth.

The Survival and Stock Performance of Emerging Country Firms in the United States

Many firms from emerging markets flocked to developed countries at high cost with hopes of acquiring strategic assets that are difficult to obtain in home countries. Adequate research has focused on the motivations and strategies of emerging country firms' (ECFs') internationalization, while limited studies have explored their survival in advanced economies years after their venturing abroad. Due to the imprinting effect of home country institutions that inhibit their development outside their home market, ECFs are inclined to hire executives with international background and affiliate to world-wide organizations for the purpose of linking up with the global market, embracing multiple perspectives for strategic decisions, and absorbing the knowledge of foreign markets. However, the effects of such orientation on survival are under limited exploration. Motivated by the discussion above, I explore ECFs’ survival and stock performance in a developed country (U.S.). Applying population ecology, signaling theory and institutional theory, the dissertation investigates the characteristics of ECFs that survived in the developed country (U.S.), tests the impacts of global orientation on their survival, and examines how global-oriented activities (i.e. joining United Nations Global Compact) affect their stock performance. The dissertation is structured in the form of three empirical essays. The first essay explores and compares different characteristics of ECFs and developed country firms (DCFs) that managed to survive in the U.S. The second essay proposes the concept of global orientation, and tests its influences on ECFs’ survival. Employing signaling theory and institutional theory, the third essay investigates stock market reactions to announcements of United Nation Global Compact (UNGC) participation. The dissertation serves to explore the survival of ECFs in the developed country (U.S.) by comparison with DCFs, enriching traditional theories by testing non-traditional arguments in the context of ECFs’ foreign operation, and better informing practitioners operating ECFs about ways of surviving in developed countries and improving stockholders’ confidence in their future growth.