Capital markets and the market structure of foreign investments

Contrary to the long-received theory of FDI, interest rates or rates of return can motivate foreign direct investment (FDI) in concert with the benefits of direct ownership. Thus, access to investor capital and capital markets is a vital component of the multinational’s competitive market structure. Moreover, multinationals can use their superior financial capacity as a competitive advantage in exploiting FDI opportunities in dynamic markets. They can also mitigate higher levels of foreign business risks under dynamic conditions by shifting more financial risk to creditors in the host economy. Furthermore, the investor’s expectation of foreign business risk necessarily commands a risk premium for exposing their equity to foreign market risk. Multinationals can modify the profit maximization strategy of their foreign subsidiaries to maximize growth or profits to generate this risk premium. In this context, we investigate how foreign subsidiaries manage their capital funding, business risk, and profit strategies with a diverse sample of 8,000 matched parents and foreign subsidiary accounts from multiple industries in 38 countries.We find that interest rates, asset prices, and expectations in capital markets have a significant effect on the capital movements of foreign subsidiaries. We also find that foreign subsidiaries mitigate their exposure to foreign business risk by modifying their capital structure and debt maturity. Further, we show how the operating strategy of foreign subsidiaries affects their preference for growth or profit maximization. We further show that superior shareholder value, which is a vital link for access to capital for funding foreign expansion in open market economies, is achieved through maintaining stability in the rate of growth and good asset utilization.

Institutions and firm ownership structure:evidence from Central and Eastern Europe

FDI plays a key role in development, particularly in resource-constrained transition economies of Central and Eastern Europe with relatively low savings rates. Gains from technology transfer play a critical role in motivating FDI, yet potential for it may be hampered by a large technology gap between the source and host country. While the extent of this gap has traditionally been attributed to education, skills and capital intensity, recent literature has also emphasized the possible role of institutional environment in this respect. Despite tremendous interest among policy-makers and academics to understand the factors attracting FDI (Bevan and Estrin, 2000; Globerman and Shapiro, 2003) our knowledge about the effects of institutions on the location choice and ownership structure of foreign firms remains limited. This paper attempts to fill this gap in the literature by examining the link between institutions and foreign ownership structures. To the best of our knowledge, Javorcik (2004) is the only papers, which use firm-level data to analyse the role of institutional quality on an outward investor’s entry mode in transition countries. Our paper extends Javorcik (2004) in a number of ways: (a) rather than a cross-section, we use panel data for the period 1997-2006; (b) rather than a binary variable, we use the percentage foreign ownership as continuous variable; (c) we consider multi-dimensional institutional variables, such as corruption, intellectual property rights protection and government stability. We also use factor analysis to generate a composite index of institutional quality and see how stronger institutional environment could affect foreign ownership; (d) we explore how the distance between institutional environment in source and host countries affect foreign ownership in a host country. The firm-level data used includes both domestic and foreign firms for the period 1997-2006 and is drawn from ORBIS, a commercially available dataset provided by Bureau van Dijk. In order to examine the link between institutions and foreign ownership structures, we estimate four log-linear ownership equations/specifications augmented by institutional and other control variables. We find evidence that the decision of a foreign firm to either locate its subsidiary or acquire an existing domestic firm depends not only on factor cost differences but also on differences in institutional environment between the host and source countries.

The role of market orientation in the business success of MNCs' UK subsidiaries

Purpose - The paper aims to explore the role of market orientation in the multinational company's subsidiary's business performance. Design/methodology/approach - The paper is based on a questionnaire survey/analysis of a sample of 252 foreign subsidiaries in the UK. Findings - The paper finds that market orientation is a key driver for business performance at foreign subsidiaries. However, the strength of its impact on performance depends on the subsidiary role. Originality/value - This is the first systematic investigation of the role of market orientation in multinational companies' subsidiaries.

The tribology of laminated magnetic recording heads

This thesis investigates the mechanisms that lead to pole tip recession (PTR) in laminated magnetic recording heads (also known as "sandwich heads"). These heads provide a platform for the utilisation of advanced soft magnetic thin films in practical recording heads suitable for high frequency helical scan tape recording systems. PTR results from a differential wear of the magnetic pole piece from the tape-bearing surface of the head. It results in a spacing loss of the playback or read signal of 54.6dB per recording wavelength separation of the poles from the tape. PTR depends on the material combination used in the head, on the tape type and the climate - temperature and relative humidity (r.h.). Five head materials were studied: two non-magnetic substrate materials- sintered multi granular CaTi03 and composite CaTi03/ZrTi04/Ti02 and three soft magnetic materials- amorphous CoNbZr, and nanocrystalline FeNbSiN and FeTaN. Single material dummy heads were constructed and their wear rates measured when cycling them in a Hi-8 camcorder against commercially available metal particulate (MP) and metal evaporated (ME) tapes in three different climates: 25°C/20%r.h., 25°C/80%r.h. and 40°C/80%r.h. X-ray photoelectron spectroscopy (XPS) was used to examine changes the head surface chemistry. Atomic force microscopy (AFM) was used to examine changes in head and tape surface topography. PTR versus cycling time of laminated heads of CaTi03/ZrTiO4/Ti02 and FeTaN construction was measured using AFM. The principal wear mechanism observed for all head materials was microabrasion caused by the mating body - the tape surface. The variation in wear rate with climate and tape type was due to a variation in severity in this mechanism, except for tape cycling at 40°C in which gross damage was observed to be occurring to the head surface. Two subsidiary wear mechanisms were found: third body scratching (all materials) and grain pullout (both ceramics and FeNbSiN). No chemical wear was observed, though tribochemical reactions were observed on the metal head surfaces. PTR was found to be caused by two mechanisms - the first differential microabrasion of the metal and substrate materials and which was characterised by a low (~10nm) equilibrium value. The second was by deep ploughing by third body debris particles, thought mainly to be grain pullout particles. This level of PTR caused by this mechanism was often more severe, and of a non-equilibrium nature. It was observed more for ME tape, especially at 40°C/80%r.h. and 25°c/20%r.h. Two other phenomena on the laminated head pole piece were observed and commented upon: staining and ripple texturing.

Interlamellar modification of smectite clays

Clay minerals, both natural and synthetic, have a wide range of applications. Smectite clays are not true insulators, their slight conductivity has been utilized by the paper industry in the development of mildly conducting paper. In particular, the synthetic hectorite clay, laponite, is employed to produce paper which is used in automated drawing offices where electro graphic printing is common. The primary objective of this thesis was to modify smectite clays, particularly laponite, to achieve enhanced conductivity. The primary objective was more readily achieved if the subsidiary objective of understanding the mechanism of conductivity was defined. The cyclic voltammograms of some cobalt complexes were studied in free solution and as clay modified electrodes to investigate the origin of electroactivity in clay modified electrodes. The electroactivity of clay modified electrodes prepared using our method can be attributed to ion pairs sorbed to the surface of the electrode, in excess of the cationic exchange capacity. However, some new observations were made concerning the co-ordination chemistry of the tri-2-pyridylamine complexes used which needed clarification. The a.c. conductivity of pressed discs of laponite RD was studied over the frequency range 12Hz- 100kHz using three electrode systems namely silver-loaded epoxy resin (paste), stainless-steel and aluminium. The a. c. conductivity of laponite consists of two components, reactive (minor) and ionic (major) which can be observed almost independently by utilizing the different electrode systems. When the temperature is increased the conductivity of laponite increases and the activation energy for conductivity can be calculated. Measurement of the conductivity of thin films of laponite RD in two crystal planes shows a degree of anisotropy in the a.c. conductivity. Powder X-ray diffraction and 119Sn Mossbauer spectroscopy studies have shown that attempts to intercalate some phenyltin compounds into laponite RD under ambient conditions result in the formation of tin(IV) oxide pillars. 119Sn Mossbauer data indicate that the order of effectiveness of conversion to pillars is in the order: Ph3SnCl > (Ph3Sn)2O, Ph2SnCl2 The organic product of the pillaring process was identified by 13C m.a.s.n.m.r. spectroscopy as trapped in the pillared lattice. This pillaring reaction is much more rapid when carried out in Teflon containers in a simple domestic microwave oven. These pillared clays are novel materials since the pillaring is achieved via neutral precursors rather than sacrificial reaction of the exchangeable cation. The pillaring reaction depends on electrophilic attack on the aryl tin bond by Brønsted acid sites within the clay. Two methods of interlamellar modification were identified which lead to enhanced conductivity of laponite, namely ion exchange and tin(IV) oxide pillaring. A monoionic potassium exchanged laponite shows a four fold increase in a.c. conductivity compared to sodium exchanged laponite RD. The increased conductivity is due to the appearence of an ionic component. The conductivity is independent of relative humidity and increases with temperature. Tin(IV) oxide pillared laponite RD samples show a significant increase in conductivity. Samples prepared from Ph2SnCl2 show an increase in excess of an order of magnitude. The conductivity of tin(IV) oxide pillared laponite samples is dominated by an ionic component.

The impact of the language barrier on the management of multinational companies : a case study and survey, based exploration of the impact of the language barrier on the strategies, policies and systems by which multinational companies manage their subsidaries

The thesis begins with a conceptual model of the way that language diversity affects the strategies, organisation and subsidiary control policies of multinational companies. The model is based solely on the researcher'’ personal experience of working in a variety of international management roles, but in Chapter 2 a wide-ranging review of related academic literature finds evidence to support the key ideas. The model is developed as a series of propositions which are tested in a comparative case study, refined and then re-tested in a global survey of multinational subsidiaries. The principal findings of the empirical phases of the thesis endorse the main tenets of the model: - That language difference between parent and subsidiary will impair communication, create mistrust and impede relationship development. - That subsequently the feelings of uncertainty, suspicion and mistrust will influence the decisions taken by the parent company. - They will have heightened sensitivity to language issues and will implement policies to manage language differences. - They will adopt low-risk strategies in host countries where they are concerned about language difference. - They will use organisational and manpower strategies to minimise the consequences and risks of the communications problems with the subsidiary. - As a consequence the level of integration and knowledge flow between parent and subsidiary will be curtailed. - They will adopt styles of control that depend least on their ability to communicate with their subsidiary. Although there is adequate support for all of the above conclusions, on some key points the evidence of the Case Studies and Survey is contradictory. The thesis, therefore, closes with an agenda for further research that would address these inconsistencies.

Management role in employee participation:a comparative study of multi-national enterprises in India and the U.K.

This research is an Anglo-Indian comparative case study. It studies managerial action in the participation arena of two British multi-nationals i.e. Cadbury Limited and ICI plc. The research was carried out in matched pairs of factories of the above named companies, located in the Midlands of the UK and in Bombay in India. The data for this research was collected through semi-structured interviews with managers and non-management actors, study of company documents and non-participant observation of some participation forums. The research conceptualises the idea of a `participation arena' consisting of the structures, processes, purposes and dynamics of participation. This arena is visualised as broadly reflecting the organisation structure and can be divided into corporate, unit and shopfloor level. Managerial action in this arena is examined in terms of interaction between three sets of factors i.e. company business objectives, strategies and policies; managerial values of power and control; and the responses of unions. Similarities and differences between management action in the home and host plants of the two multi-national companies are also examined. The major findings of the research are as follows. There is significant difference between the participation arena of the parent and the subsidiary company. The latter is marked by absence of higher level participation forums and lack of opportunity for employees to discuss, let alone influence, key decisions. This results from parent company control over key activities of the subsidiary. The similarities in management action in the participation arenas of the two companies in both countries can be attributed to the operation of the three sets of factors mentioned above. Nevertheless, the particular circumstances of each company are a greater influence on managerial action than the national context. Finally, future areas of research in this field are explored.

Antecedents and consequences of new product development and international new product rollout timeliness:an examination of mediating and moderating influences

The study examined the relationships between antecedents, timeliness in NPD and INPR, and consequences. A conceptual framework was tested using 232 new products from South Korean firms. The hypothesized relationships among the constructs in the model were evaluated by multiple regression and hierarchal regression analyses using SPSS 12 as well as by structural equation modelling (SEM) using SIMPLIS LISREL. In addition, confirmatory factor analysis (CFA) was carried out using SIMPLIS LISREL. In the direct relationships, cross-functional linkages and marketing synergy exhibited a statistically significant effect on NPD timeliness. The results also supported the influences of the HQ-subsidiary/agent relationship and NPD timeliness on INPR timeliness as well as INPR timeliness on performance. In the mediating effect tests, marketing proficiency significantly accounts for the relationships between cross-functional linkages and NPD timeliness, between marketing synergy and NPD timeliness, and between the HQ-subsidiary/agent relationship and INPR timeliness. Technical proficiency also mediates the effect of the HQ-subsidiary/agent relationship on INPR timeliness. The influence of NPD timeliness on new product performance in target markets is attributed to INPR timeliness. As for the results of the external environmentals and standardization influences, competitive intensity moderates the relationship between NPD timeliness and new product performance. Technology change also moderates the relationship between cross-functional linkages and NPD timeliness and between timeliness in NPD and INPR and performance. Standardization has a moderating role on the relationship between NPD timeliness and INPR timeliness. This study presents the answers to research questions which concern what factors are predictors of criterion variables, how antecedents influence timeliness in NPD and INPR and when the direct relationships in the INPR process are strengthened.

The influence of tool geometry on the performance of drilling tools

The main objective of the work presented in this thesis is to investigate the two sides of the flute, the face and the heel of a twist drill. The flute face was designed to yield straight diametral lips which could be extended to eliminate the chisel edge, and consequently a single cutting edge will be obtained. Since drill rigidity and space for chip conveyance have to be a compromise a theoretical expression is deduced which enables optimum chip disposal capacity to be described in terms of drill parameters. This expression is used to describe the flute heel side. Another main objective is to study the effect on drill performance of changing the conventional drill flute. Drills were manufactured according to the new flute design. Tests were run in order to compare the performance of a conventional flute drill and non conventional design put forward. The results showed that 50% reduction in thrust force and approximately 18% reduction in torque were attained for the new design. The flank wear was measured at the outer corner and found to be less for the new design drill than for the conventional one in the majority of cases. Hole quality, roundness, size and roughness were also considered as a further aspect of drill performance. Improvement in hole quality is shown to arise under certain cutting conditions. Accordingly it might be possible to use a hole which is produced in one pass of the new drill which previously would have required a drilled and reamed hole. A subsidiary objective is to design the form milling cutter that should be employed for milling the foregoing special flute from drill blank allowing for the interference effect. A mathematical analysis in conjunction with computing technique and computers is used. To control the grinding parameter, a prototype drill grinder was designed and built upon the framework of an existing cincinnati cutter grinder. The design and build of the new grinder is based on a computer aided drill point geometry analysis. In addition to the conical grinding concept, the new grinder is also used to produce spherical point utilizing a computer aided drill point geometry analysis.

An evaluation of Home Office extended interviews for police personnel

In this thesis the validity of an Assessment Centre (called 'Extended Interview') operated on behalf of the British police is investigated. This Assessment Centre (AC) is used to select from amongst internal candidates (serving policemen and policewomen) and external candidates (graduates) for places on an accelerated promotion scheme. The literature is reviewed with respect to history, content, structure, reliability, validity, efficiency and usefulness of ACs, and to contextual issues surrounding AC use. The history of, background to and content of police Extended Interviews (Els) is described, and research issues are identified. Internal validation involved regression of overall EI grades on measures from component tests, exercises, interviews and peer nominations. Four samples numbering 126, 73, 86 and 109 were used in this part of the research. External validation involved regression of three types of criteria - training grades, rank attained, and supervisory ratings - on all EI measures. Follow-up periods for job criteria ranged from 7 to 19 years. Three samples, numbering 223, 157 and 86, were used in this part of the research. In subsidiary investigations, supervisory ratings were factor analysed and criteria intercorrelated. For two of the samples involved in the external validition, clinical/judgemental prediction was compared with mechanical (unit-weighted composite) prediction. Main conclusions are that: (1) EI selection decisions were valid, but only for a job performance criterion; relatively low validity overall was interpreted principally in terms of the questionable job relatedness of the EI procedure; (2) Els as a whole had more validity than was reflected in final EI decisions; (3) assessors' use of information was not optimum, tending to over-emphasize subjectively derived information particularly from interviews; and (4) mechanical prediction was superior to clinical/judgemental prediction for five major criteria.

Petrology of weathered lower lias clays

In weak argillaceous rocks the unweathered strength may be barely sufficient to meet civil engineering reguirements and any reductjon due to weathering will be critical. This study investigates the weathering of the Lower Lias clays with particular reference to their petrography and engineering properties. Investigations revealed the Midland Basin of deposition to contain reasonable thicknesses of clay, relatively uniform in nature with a well developed weathered zone, From the available exposures, the weathering zone of the Blockley Clay pit was selected and sampled for laboratory investigations of; Structure, Mineralogy and Chemistry and Engineering Properties. The nature and orientation of the fissures in the unweathered clay were analysed. A close relationship was found to exist between the major joint set and the ground surface, with stress release due to excavation being almost negligible. Thin sections of the clay, examined for structural data, suggested that there exist layers or areas that have been disturbed as a result of density differences. Shear planes were found in both the unweathered and weathered clay, in the latter case often associated with remoulding of the material. A direct measure of remoulding was obtained from the birefringence ratio. The fabric was examined in closer detail using the scanning electron microscope. Mineralogy, as revealed by X-ray and optical techniques indicated illite as the dominant clay mineral, with kaolinite subsidiary; quartz, calcite, pyrite, chlorite/vermiculite are present as accessory minerals. Weathering changes this relationship, calcite and pyrite being removed early in the process, with illite being degraded. The cementing action of calcite and iron oxides was investigated however, this was shown to be negligible. Quantitative measurements of both fixed (with minerals) and free (oxide coatings) iron were obtained by atomic absorption, with the Fe 3+/ Fe2+ ratio obtained by Mossbauer spectroscopy, Evidence indicates that free iron oxide coatings only become important as a result of weathering with the maximum concentration in the very highly weathered material. Engineering index properties and shear strength values were taken throughout the profile, Relationships between moisture content and strength, liquid limit and iron (Fe) were obtained and a correlation between the weathering zomes and the shear strength/depth curve has been established.

Safety culture during major organisational change

This research examines the effect of major changes, in the external context, on the safety culture of a UK generating company. It was focused on an organisation which was originally part of the state owned Central Electricity Generating Board and which, by the end of the research period, was a self-contained generating company, operating in a competitive market and a wholly owned subsidiary of a US utility. The research represents an attempt to identify the nature and culture of the original organisation and to identify, analyse and explain the effects of the forces of change in moulding the final organisation. The research framework employed a qualitative methodology to investigate the effects of change, supported by a safety culture questionnaire, based on factors identified in the third report of the ACSNI Human Factors Study Group; Organising for Safety, as being indicators of safety culture. An additional research objective was to assess the usefulness of the ACSNI factors as indicators of safety culture. Findings were that the original organisation was an engineering dominated technocracy with a technocentric safety culture. Values and beliefs were very strongly held and resistant to change and much of the original safety culture survived unchanged into the new organisation. The effects of very long periods of uncertainty about the future were damaging to management/worker relationships but several factors were identified which effectively insulated the organisation from any of the effects of change. The forces of change had introduced a beneficial appreciation of the crucial relationship between safety risk assessment and commercial risk assessment.Although the technical strength of the original safety culture survived, so did the essential weakness of a low level of appreciation of the human behavioural aspects of safety. This led to a limited, functionalist world view of safety culture, which assumed that cultural change was simpler to achieve than was the case and an inability to make progress in certain areas which were essentially behavioural problems.The factors identified by ACSNI provided a useful basis for the site research methodology and for identifying areas of relative strength and weakness in the site safety arrangements.

The development of chemical exposure limits for the workplace

The thesis examines and explains the development of occupational exposure limits (OELs) as a means of preventing work related disease and ill health. The research focuses on the USA and UK and sets the work within a certain historical and social context. A subsidiary aim of the thesis is to identify any short comings in OELs and the methods by which they are set and suggest alternatives. The research framework uses Thomas Kuhn's idea of science progressing by means of paradigms which he describes at one point, `lq ... universally recognised scientific achievements that for a time provide model problems and solutions to a community of practitioners. KUHN (1970). Once learned individuals in the community, `lq ... are committed to the same rules and standards for scientific practice. Ibid. Kuhn's ideas are adapted by combining them with a view of industrial hygiene as an applied science-based profession having many of the qualities of non-scientific professions. The great advantage of this approach to OELs is that it keeps the analysis grounded in the behaviour and priorities of the groups which have forged, propounded, used, benefited from, and defended, them. The development and use of OELs on a larger scale is shown to be connected to the growth of a new profession in the USA; industrial hygiene, with the assistance of another new profession; industrial toxicology. The origins of these professions, particularly industrial hygiene, are traced. By examining the growth of the professions and the writings of key individuals it is possible to show how technical, economic and social factors became embedded in the OEL paradigm which industrial hygienists and toxicologists forged. The origin, mission and needs of these professions and their clients made such influences almost inevitable. The use of the OEL paradigm in practice is examined by an analysis of the process of the American Conference of Governmental Industrial Hygienists, Threshold Limit Value (ACGIH, TLV) Committee via the Minutes from 1962-1984. A similar approach is taken with the development of OELs in the UK. Although the form and definition of TLVs has encouraged the belief that they are health-based OELs the conclusion is that they, and most other OELs, are, and always have been, reasonably practicable limits: the degree of risk posed by a substance is weighed against the feasibility and cost of controlling exposure to that substance. The confusion over the status of TLVs and other OELs is seen to be a confusion at the heart of the OEL paradigm and the historical perspective explains why this should be. The paradigm has prevented the creation of truly health-based and, conversely, truly reasonably practicable OELs. In the final part of the thesis the analysis of the development of OELs is set in a contemporary context and a proposal for a two-stage, two-committee procedure for producing sets of OELs is put forward. This approach is set within an alternative OEL paradigm. The advantages, benefits and likely obstacles to these proposals are discussed.

The role of audiometry in the prevention of occupational deafness

The research set out to test three main hypotheses derived from a summary of literature relevant to the use of audiometry in industry. These hypotheses were: (1) performing audiometry increases the probability that hearing protectors, once issued, will be worn; (2) audiometry is considered by workers to be evidence of their employer's concern for their welfare; (3) audiometry is associated with common law claims by workers against employers for alleged occupational deafness. Six subsidiary hypotheses were also developed. Four methods of data collection were used: (1) attitude questionnaires were administered to samples of workers drawn from an industrial company performing audiometry and two industrial companies not performing audiometry; (2) a postal questionnaire was sent out to industrial medical officers; (3) surveys were undertaken to assess the proportion of the workforce in each of eight industrial companies that was wearing personal hearing protectors that had been provided; (4) structured interviews were carried out with relevant management level personnel in each of five industrial companies. Factor analysis was the main statistical analytic technique used. The data supported all three main hypotheses. Audiometry was also examined as an example of medical screening procedure. It was argued that the validation of medical screening procedures requires the satisfaction of attitudinal or motivational validation criteria in addition to the biological and economic criteria currently used. It was concluded that industrial audiometry failed to satisfy such attitudinal or motivational criteria and so should not be part of a programme of screening for occupational deafness. It was also concluded that industrial audiometry may be useful in creating awareness, amongst workers, of occupational deafness. It was argued that the only profitable approach to investigating the role of audiometry in preventing occupational deafness is to study the attitudes and perceptions of everyone involved.

Challenges and limitations of intercultural training for inpatriates in German multinationals:a case study

Despite the increasing popularity of research on intercultural preparation and its effectiveness, research on training for inpatriates has not been developed with the same level of rigour as research on training for expatriates. Furthermore, research on intercultural training hardly ever includes the aspect of preparing for the corporate culture of a company. For expatriates coming from headquarters’ national culture and equipped with a good knowledge of headquarters’ corporate culture, it might be sufficient to address only the national culture of the location abroad. But can the same be said for inpatriates coming from a foreign subsidiary? Therefore the qualitative research of my thesis was aimed at finding out if intercultural training programmes that address only the national culture of the host country are sufficient to prepare inpatriates for working at headquarters. A case study using a German multinational company has been conducted in order to find out what kind of problems and irritations inpatriates at the company’s headquarters perceive at work. In order to determine whether the findings are related to the national or the corporate culture, Hall’s and Hofstede’s approaches to culture were used. The interview analysis produced the following conclusion: Although the researched company promotes standardised worldwide corporate guidelines, there are many differences between headquarters and subsidiaries regarding the interpretation and realisation of these guidelines. These differences cause irritation, confusion and problems for the inpatriates. Therefore an effective intercultural preparation for inpatriates should be tailor-made and take into account the aspect of corporate culture, as well as the specific roles and functions of inpatriates.