Financial Distress in Chinese Industry: Microeconomic, Macroeconomic and Institutional Infuences

We study the impact of both microeconomic factors and the macroeconomy on the financial distress of Chinese listed companies over a period of massive economic transition, 1995 to 2006. Based on an economic model of financial distress under the institutional setting of state protection against exit, and using our own firm-level measure of distress, we find important impacts of firm characteristics, macroeconomic instability and institutional factors on the hazard rate of financial distress. The results are robust to unobserved heterogeneity at the firm level, as well as those shared by firms in similar macroeconomic founding conditions. Comparison with related studies for other economies highlights important policy implications.

Post-transaction brand and model line-up integration in the automotive industry: Case studies of European companies as target of acquisitions by Chinese and Indian multinational corporations

Corporations practice company acquisitions in order to create shareholder’s value. During the last few decades, the companies in emerging markets have become active in the acquisition business. During the last decade, large and significant acquisitions have occurred especially in automotive industry. While domestic markets have become too competitive and companies are lacking required capabilities, they seek possibilities to expand into Western markets by attaining valuable assets through acquisitions of developed country corporations. This study discusses the issues and characteristics of these acquisitions through case studies. The purpose of this study was to identify the acquisition motives and strategies for post-transaction brand and product integration as well as analyze the effect of the motives to the integration strategy. The cases chosen for the research were Chinese Geely acquiring Swedish Volvo in 2010 and Indian Tata Motors buying British Jaguar Land Rover in 2008. The main topics were chosen according to their significance for companies in automotive industry as well as those are most visible parts for consumers. The study is based on qualitative case study methods, analyzing secondary data from academic papers and news articles as well as companies’ own announcements e.g. stock exchange and press releases. The study finds that the companies in the cases mainly possessed asset-seeking and market-seeking motives. In addition, the findings refer to rather minimal post-acquisition brand and product integration strategies. Mainly the parent companies left the target company autonomous to make their own business strategies and decisions. The most noticeable integrations were in the product development and production processes. Through restructuring the product architectures, the companies were able to share components and technology between product families and brands, which results in cutting down costs and in increase of profitability and efficiency. In the Geely- Volvo case, the strategy focused more on component sharing and product development know-how, whereas in Tata Motors-Jaguar Land Rover case, the main actions were to cut down costs through component sharing and combine production and distribution networks especially in Asian markets. However, it was evident that in both cases the integration and technology sharing were executed cautiously to prevent on harming the valuable image of the luxury brand. This study has concluded that the asset-seeking motives have significant influence on the posttransaction brand and model line-up integration strategies. By taking a cautious approach in acquiring assets, such as luxury brand, the companies in the cases have implemented a successful post-acquisition strategy and managed to create value for the shareholders at least in short-term. Yritykset harjoittavat yritysostoja luodakseen osakkeenomistajille lisäarvoa. Viimeisten muutamien vuosikymmenien aikana yritykset kehittyvissä maissa ovat myös aktivoituneet yritysostoissa. Viimeisen vuosikymmenen aikana erityisesti autoteollisuudessa on esiintynyt suuria ja merkittäviä yritysostoja. Koska kilpailu kotimaan markkinoilla on kiristynyt ja yritykset ovat vailla vaadittavia valmiuksia, ne etsivät mahdollisuuksiaan laajentaa länsimaisiin markkinoihin hankkimalla arvokkaita etuja kehittyneiden maiden yrityksistä yritysostojen avulla. Tämä tutkimus pohtii näiden yritysostojen olennaisia kysymyksiä ja ominaisuuksia casetutkimuksien kautta. Tutkimuksen tarkoitus oli tunnistaa sekä yritysostojen motiiveja ja brändi- ja mallisto-integraation strategioita että analysoida kyseisten motiivien vaikutusta integraatiostrategiaan. Tapaus-tutkimuksiksi valittiin kiinalaisen Geelyn yritysosto ruotsalaisesta Volvosta vuonna 2010 ja intialaisen Tata Motorsin yritysosto englantilaisesta Jaguar Land Roverista vuonna 2008. Tutkimus on kvalitatiivinen case-tutkimus ja siinä analysoidaan toissijaista tietoa sekä akateemisten ja uutisartikkeleiden että yritysten omien ilmoitusten, kuten pörssi- ja lehdistötiedotteiden, kautta. Tutkimuksen tulokset osoittavat, että tutkittujen yritysten toiminnat perustuivat motiiveihin, joita ajoivat etujen and uusien markkinoiden tarve. Sen lisäksi tutkimustulokset osoittivat, että yritysoston jälkeinen brändi- ja mallisto-integraatio pidettiin minimaalisena. Pääasiallisesti kohdeyrityksille jätettiin autonomia tehdä omat liikkeenjohdolliset päätökset yritysstrategioihin liittyen. Huomattavimmat integraatiot koskivat tuotekehityksellisiä ja tuotannollisia prosesseja. Kehittämällä uudelleen tuotearkkitehtuureja, yritykset pystyivät jakamaan komponentteja ja teknologiaa tuoteperheiden ja brändien välillä. Tämä mahdollisti kustannusleikkauksia sekä kannattavuuden ja tehokkuuden parantamista. Geely-Volvo –tapauksessa integraatiostrategia keskittyi komponenttien jakamiseen yhteisten tuotearkkitehtuurien avulla ja tuotekehityksen ammattitaitoon, kun taas Tata Motors-JLR –tapauksessa päätoiminnat olivat kustannuksien leikkaus sekä tuotannon ja jakeluverkoston yhdistäminen erityisesti Aasian maissa. Yhteistä yrityskaupoissa oli, että brändi- ja mallisto-integraatio sekä teknologian jakaminen suoritettiin varoen ehkäistäkseen arvokkaiden luksus-brändien tuotekuvan vahingoittamista. Tutkimuksen lopputulokset osoittavat, että yrityskaupan motiiveilla on huomattava vaikutus brändija mallisto-integraation strategiaan. Toteuttamalla varovaista lähestymistapaa luksus-brändin hankinnassa ja integraatiossa, yritykset ovat onnistuneet luomaan lisäarvoa osakkeenomistajille vähintään lyhyellä aikavälillä.

Entry mode choice of Finnish startups entering Chinese market in tablet industry

Since the implement of opening policy, the overall economy of China has maintained rapid and stable development, which has now makes China become the world's second largest economy. China, it is to become the largest overseas market for many large global enterprises from various industries, this naturally also includes the Tablet PC industry that raised in recent years. The purpose of this thesis is to analyze different internal and external factors that influence the entry mode choices of Finnish SMEs in tablet industry entering Chinese market. The goal is to find out the suitable entry modes for the Finnish tablet or other relevant SMEs entering Chinese market. Qualitative analysis is the main research method in empirical part of this study. The interviews were carried out with the case company and other two Finnish business organizations in China. The result of the study indicated that the internal resource and external business environment affect the entry modes choices much more than other factors for SMES. The exporting mode and sales subsidiary could be a better choice for SMEs entering Chinese market. Furthermore, firms should fully learn the Chinese market combine with its own background before making decisions.

Analysis of the restructuring of the Russian defence industry (by the example of aviation industry and knaapo) and the creation of United Aviation Construction Corporation

The present study is focused on the analysis of the three main governmental measures occurred in 2000-2006 in Russian defense industry: the creation of the holding structures, the establishing of the state monopoly in arms export, and creation of the United Aviation Construction Corporation (Ob¿edinennaya Aviastroitel¿naya Corporatziya), which was initiated by the President and Government of Russian Federation in 2006. The last project assumes the consolidation and joining of all producers of civil and military aviation into one united corporation in order to save the technological and productive potential of the sector after serious crisis in 1990-s. On the other hand, this project can be considered as one of the measures to establish state control and hierarchy in the defense industry. The current project tries to analyze the necessity and the possible impacts of restructuring processes. In order to perform such analysis, I need to observe the evolution of the sector, which involves the description of the restructuring and reforming of the industry since the disintegration of the Soviet Union. The current situation in aviation sector was shaped by number of reforms performed by Government of Russian Federation, which I describe in phases: conversion, privatization, decentralization, followed by evident desire of the state to establish control over some companies. Later on, I am trying to understand the reasons lying behind all reforms of 2000-2006 and the integration of the industry. I also try to predict which impacts on the companies it will have. The last part presents the main conclusions of the paper.

Panels Produced from Thermoplastic Composites Reinforced with Peach Palm Fibers for Use in the Civil Construction and Furniture Industry

In order to cooperate in minimizing the problems of the current and growing volume of waste, this work aim at the production of panels made from industrial waste -thermoplastic (polypropylene; polyethylene and acrylonitrile butadiene styrene) reinforced with agro-industrial waste - peach palm waste (shells and sheaths). The properties of the panels like density, thickness swelling, water absorption and moisture content were evaluated using the ASTM D1037; EN 317; and ANSI A208.1 standards regarding particle boards. Good results were obtained with formulations of 100% plastic waste; 70% waste plastics and 30% peach palm waste; and 60% waste plastics and 40% peach palm waste.

Alternatives Panels from Waste Plastics Reinforced With Fibers of Pupunha Palm for Use in Civil Construction and Furniture Industry

In order to cooperate in minimizing the problems of the current and growing volume of waste, this work aims at the production of panels made from industrial waste -thermoplastic (Polypropylene - PP; Polyethylene - PE and Acrylonitrile Butadiene Styrene - ABS) reinforced with agro-industrial waste - pupunha palm waste (shells and sheaths). The properties of the panels were evaluated: density, thickness swelling, water absorption and moisture content. It was used the ASTM D1037; EN 317; and ANSI A208.1 standards regarding particle boards. The best results in physical tests were treatments 1 (100% waste plastic), 6 (60% plastic waste and 40% waste of pupunha) and 7 (70% waste plastic and 30% waste of pupunha). The best results in the mechanical tests were treatments 3 (30% de residuos plasticos e 70% de residuos da pupunha), 4 (40% de residuos plasticos c 60% de residuos da pupunha) and 5 (50% de residuos plasticos e 50% de residuos da pupunha). For mechanical tests it was concluded that the results of modulus of rupture and of modulus of elasticity the best treatments were those with more fibers. In the tensile tests perpendicular to the surface, it is clear that using more waste plastics leads to the best results. It was concluded that the waste can be used as raw material for the production of alternative materials mainly in civil construction and furniture industries, and it can be employed in urban or rural environment, given the concept of eco-efficient products.

Interdisciplinary project applied to engineering education: construction of a miniature ceramic industry

The greatest challenge of undergraduate engineering courses is to encourage creativity, cooperation with other students, teamwork, and motivation in the first years of their courses. While students have little or no contact with advanced disciplines, it is very difficult to attract their interests and encourage them to develop the skills in their undergraduate courses. This work aims to achieve these objectives through a mini-factory project involving the construction of a production line of ceramic tiles on a laboratory scale, from the ceramic processing using raw materials to the shipping of the final product. Having been given an established monthly demand for ceramic tiles, the students determined the construction requirements of the mini-factory, as they have created the layout, including the processing equipment, the dimensioning of equipment, and its operational structure. This article intends to describe the successful creation of the ceramic tile mini-factory, including the objectives, benefits, and inherent difficulties of the process and the receptivity of the exercise by the students involved.