Growing global brands in foreign markets: A brand equity perspective. Impact of national culture on trademark registrations in emerging economy: Evidence from Russia. ACES Working Papers, August 2010

In this study we explore how firms deploy intellectual property assets (trademarks) in international context and the impact of cultural characteristics on such activities. Trademarks capture important elements of firm's brand-building efforts. Using growth model, a special case of hierarchical linear model, we demonstrate that that stock of trademarks in foreign market increase future trademark activity. Also, we explore the moderating roles of two cultural dimensions, individualism and masculinity, on such relationships. The findings indicated that firms from countries closer to host market (Russia) on individualism dimension tend to register more trademarks in host market. The opposite result is observed for masculinity dimension.

Does Mandatory IFRS Adoption in the EU Level the International Playing Field Between Foreign and Domestic Analysts? ACES Working Papers, October 2011

International Financial Reporting Standards (IFRS) have been promoted as a global set of financial reporting standards that will help integrate global capital markets. We examine whether the mandatory European-wide adoption of IFRS in 2005 improved the forecast accuracy for foreign analysts relative to that of domestic analysts. We find that, on average, foreign analysts experience no incremental improvement in forecast accuracy relative to domestic analysts. However, we find that those foreign analysts who are familiar with IFRS do experience an incremental improvement in forecast accuracy relative to domestic analysts. We also find that this incremental improvement in forecast accuracy relative to domestic analysts is concentrated among firms domiciled in countries with both strong enforcement regimes and domestic accounting standards that differ significantly from IFRS. Our results highlight that both familiarity with IFRS and the quality of countries' enforcement environments play key roles in determining the extent to which IFRS adoption can reduce information asymmetry between foreign and domestic analysts.

Export marketing for smaller firms.

Cover title.

Africa, guide to business finance for U.S. firms.

Mode of access: Internet.

Exchange rate exposure : do size and foreign operations matter?

Purpose – The purpose of this paper is to examine the effect of firm size and foreign operations on the exchange rate exposure of UK non-financial companies from January 1981 to December 2001. Design/methodology/approach – The impact of the unexpected changes in exchange rates on firms’ stock returns is examined. In addition, the movements in bilateral, equally weighted (EQW) and trade-weighted and exchange rate indices are considered. The sample is classified according to firm size and the extent of firms’ foreign operations. In addition, structural changes on the relationship between exchange rate changes and individual firms’ stock returns are examined over three sub-periods: before joining the exchange rate mechanism (pre-ERM), during joining the ERM (in-ERM), and after departure from the ERM (post-ERM). Findings – The findings indicate that a higher percentage of UK firms are exposed to contemporaneous exchange rate changes than those reported in previous studies. UK firms’ stock returns are more affected by changes in the EQW, and US$ European currency unit exchange rate, and respond less significantly to the basket of 20 countries’ currencies relative to the UK pound exchange rate. It is found that exchange rate exposure has a more significant impact on stock returns of the large firms compared with the small and medium-sized companies. The evidence is consistent across all specifications using different exchange rate. The results provide evidence that the proportion of significant foreign exchange rate exposure is higher for firms which generate a higher percentage of revenues from abroad. The sensitivities of firms’ stock returns to exchange rate fluctuations are most evident in the pre-ERM and post-ERM periods. Practical implications – This study provides important implications for public policymakers, financial managers and investors on how common stock returns of various sectors react to exchange rate fluctuations. Originality/value – The empirical evidence supports the view that UK firms’ stock returns are affected by foreign exchange rate exposure.

Human resource management in foreign-owned subsidiaries:China versus India

This study examines the HRM practices and the role played by the HR department in foreign-owned units located in China and India. The study of 170 Western-owned subsidiaries analyses the extent to which the HRM practices associated with the local professionals and managerial-level employees resemble those of local firms versus those of the (main) Western parent organization, and investigates the degree to which the unit's HR department was perceived to play a strategic role. The results indicate clear differences between HRM characteristics in Western-owned units in China and India, and suggest that the use of expatriates and the background of the HR managers are important determinants of subsidiary HRM.

The importance of clusters for spillovers from foreign direct investment and technology sourcing

This paper examines the link between cluster development and inward foreign direct investment. The conventional policy approach has been to assume that inward foreign direct investment (FDI) can stimulate significant clustering activity, thus generating significant spillovers. This paper, however, questions this and shows that, while clusters can generate significant productivity spillovers from FDI, this only occurs in pre-existing clusters. Further, the paper demonstrates that foreign-owned firms that enter clusters also appropriate spillovers when domestic firms undertake investment, raising the possibility that clusters are important locations for so called technology, or knowledge sourcing activities by MNEs. © 2006 Oxford University Press.

Foreign direct investment, transactions linkages, and the performance of the domestic sector

Using data from the UK Census of Production, including foreign ownership data, and information from UK industry input-output tables, this paper examines whether the intensity of transactions linkages between foreign and domestic firms affects productivity growth in domestic manufacturing industries. The implications of the findings for policies promoting linkages between multinational and domestic firms in the UK economy are outlined.

Determinants of entry and exit in the foreign owned sector of UK manufacturing

This paper examines the extent to which foreign entry and exit in the UK is related to domestic industry characteristics. The units of analysis are firm numbers, and thus entry and exit at the industry level are treated as being generated by Poisson processes. This therefore uses quasimaximum likelihood estimation, to estimate entry and exit functions simultaneously. The results demonstrate that foreign entry is attracted by industry level profitability and performance, but that firm specific 'ownership' advantages are also important. The results also demonstrate that inward investors that are motivated by the desire to exploit firm-specific assets, are unlikely to be more transient than domestic firms. This however, cannot be said of those foreign entrants who are attracted to the UK by location advantage or investment incentives.

Indirect employment effects of Foreign Direct Investment into the UK

This paper examines some of the employment consequences, broadly defined, associated with foreign inward investment. A foreign firm entering an industry in the UK will have a degree of firm-specific advantage oover the incumbent firms. This advantage is assumed to manifest itself in terms of a productivity differential over the domestic sector. As such, foreign entry will create factor market disequlibrium in the domestic sector. It is shown that such investment generates 'employment substitution' away from UK firms, equivalent to approximately one-fifth of all the jobs created by inward investment.

Multinational enterprises and technological effort by local firms:a case study of the Malaysian electronics and electrical industry

It is often assumed that foreign MNEs are the driving force behind technological development in developing economies but it has become evident in recent years that the actions of MNEs in isolation from the domestic economy. The study, therefore, examines the determinants of local firms' decisions to undertake technological effort, not only in isolation, but also in the context of linkages between domestic firms and MNEs. There is evidence that linkages between MNEs and local firms are important in explaining technological effort by local firms but direct technological assistance from MNEs does not seem to play a major role in fostering increased technological effort by local firms.

Foreign direct investment and local input linkages in Malaysia

This article examines variations in local input linkages in foreign transnational corporations in Malaysia. The extent to which transnational corporations foster such linkages, particularly in a developing host economy, has become an important issue for policy makers and others concerned with the long-term benefits associated with foreign direct investment. This article employs a unique data set, covering inward investors in the electrical and electronics industry, and analyzes in detail the determinants of variations in local input uses. The article develops a model of local input linkages, based on a transaction-cost framework using firm-specific factors, such as nationality of ownership, the age of the plant and its technology, and the extent to which firms employ locally recruited managers and engineers. In addition, the impacts of various policy measures on local input levels are discussed, and also the importance of the original motivation for investing in Malaysia. The article demonstrates that policy initiatives that target particular outcomes, such as stimulating exports or technology transfer, will result in a greater beneficial impact on the host country economy than more generic subsidies.

Employment effects of privatisation and foreign acquisition of Chinese state-owned enterprises

This paper investigates the effects of domestic privatisation or foreign acquisition of Chinese State Owned Enterprises (SOEs) on employment growth, using firm level data for China and a combination of propensity score matching and difference-in-differences in order to identify the causal effect. Our results suggest that, controlling for output growth there is some evidence that domestic privatisation leads to contemporaneous reductions in employment growth compared to firms that did not undergo an ownership change. By contrast, there is some evidence that foreign acquisitions show higher employment growth in the post acquisition period than non-acquired SOEs.

Foreign direct investment, access to finance, and innovation activity in Chinese enterprises

A recent, comprehensive database is used to investigate the link between inward foreign direct investment (FDI) and innovation activity in China. The results of the analysis suggest that private and collectively owned firms with foreign capital participation and those with good access to domestic bank loans innovate more than other firms do. Among enterprises not owned by the state, inward FDI at the sectoral level is positively associated with domestic innovative activity only among firms that engage in their own research and development or that have good access to domestic finance. At the sector level the effect of inward FDI into technology transfer is distinguished from the effect on domestic credit opportunities. FDI affecting credit is of little significance for state-owned enterprises and is independent of their access to finance. In contrast, better access to credit is an important channel through which FDI affects the innovation of domestic private and collectively owned enterprises.

Evaluating the additionality of public sector assistance to Irish firms: a question of ownership?

This article presents an innovative approach to estimating the additionality of financial assistance awarded to firms by an Irish regional development agency. The 'self assessment approach' is used to derive estimates of deadweight and displacement for firms in the Shannon region of Ireland. Irish studies have derived high estimates of deadweight by international standards. In light of this, and the fact that successive Irish governments have placed emphasis on Foreign Direct Investment as an engine for growth, the primary objective here is to address the question of whether the type of firm ownership matters with respect to resulting deadweight and/or displacement estimates. The latter question is addressed using logistic regression analysis to test whether, ceteris paribus, firm ownership is a key-determining factor for estimates of deadweight and/or displacement. The results show that ownership does not matter in the case of deadweight, but regarding displacement there are differences between indigenous and foreign-owned firms albeit at very low levels. More precisely, as expected, indigenously owned firms are more likely to lead to higher estimates of displacement.