Choosing international linkage strategies in the electronics industry: the role of multinational experience

This paper examines how different aspects of multinational experience affect the choice of international linkage strategy. Integrating transaction cost and dynamic efficiency considerations, we empirically test the determinants of the choice between acquisitions, joint ventures (JV), and strategic alliances (SA) for the world’s largest electronics corporations in 1993–1997. We show that “country specific experience” increases the probability of commitment intensive linkage modes (such as acquisitions and joint ventures), while a positive effect on strategic alliances is caused by “variety experience”, deriving from the heterogeneity of international contexts, and by “internationalisation experience” reflecting overall involvement in international markets.

Interactive learning in UK construction practice: examining the role of BIM process standards

From a construction innovation systems perspective, firms acquire knowledge from suppliers, clients, universities and institutional environment. Building information modelling (BIM) involves these firms using new process standards. To understand the implications on interactive learning using BIM process standards, a case study is conducted with the UK operations of a multinational construction firm. Data is drawn from: a) two workshops involving the firm and a wider industry group, b) observations of practice in the BIM core team and in three ongoing projects, c) 12 semi-structured interviews; and d) secondary publications. The firm uses a set of BIM process standards (IFC, PAS 1192, Uniclass, COBie) in its construction activities. It is also involved in a pilot to implement the COBie standard, supported by technical and management standards for BIM, such as Uniclass and PAS1192. Analyses suggest that such BIM process standards unconsciously shapes the firm's internal and external interactive learning processes. Internally standards allow engineers to learn from each through visualising 3D information and talking around designs with operatives to address problems during construction. Externally, the firm participates in trial and pilot projects involving other construction firms, government agencies, universities and suppliers to learn about the standard and access knowledge to solve its specific design problems. Through its BIM manager, the firm provides feedback to standards developers and information technology suppliers. The research contributes by articulating how BIM process standards unconsciously change interactive learning processes in construction practice. Further research could investigate these findings in the wider UK construction innovation system.

Business life cycle and capital structure: evidence from Chinese manufacturing firms

This paper uses a panel data-fixed effect approach and data collected from Chinese public manufacturing firms between 1999 and 2011 to investigate the impacts of business life cycle stages on capital structure. We find that cash flow patterns capture more information on business life cycle stages than firm age and have a stronger impact on capital structure decision-making. We also find that the adjustment speed of capital structure varies significantly across life cycle stages and that non-sequential transitions over life cycle stages play an important role in the determination of capital structure. Our study indicates that it is important for policy-makers to ensure that products and financial markets are well-balanced.

Action learning: how learning transfers from entrepreneurs to small firms

The paper presents research with small and medium enterprise (SME) owners who have participated in a leadership development programme. The primary focus of the paper is on learning transfer and factors affecting it, arguing that entrepreneurs must engage in ‘action’ in order to ‘learn’ and that under certain conditions they may transfer learning to their firm. The paper draws on data from 19 focus groups undertaken from 2010 to 2012, involving 51 participants in the LEAD Wales programme. It considers the literatures exploring learning transfer and develops a conceptual framework, outlining four areas of focus for entrepreneurial learning. Utilising thematic analysis, it describes and evaluates what (actual facts and information) and how (techniques, styles of learning) participants transfer and what actions they take to improve the business and develop their people. The paper illustrates the complex mechanisms involved in this process and concludes that action learning is a method of facilitating entrepreneurial learning which is able to help address some of the problems of engagement, relevance and value that have been highlighted previously. The paper concludes that the efficacy of an entrepreneurial learning intervention in SMEs may depend on the effectiveness of learning transfer.

A set of motives to unite them all?

Purpose – The purpose of this paper is to introduce the debate forum on internationalization motives of this special issue of Multinational Business Review. Design/methodology/approach – The authors reflect on the background and evolution of the internationalization motives over the past few decades, and then provide suggestions for how to use the motives for future analyses. The authors also reflect on the contributions to the debate of the accompanying articles of the forum. Findings – There continue to be new developments in the way in which firms organize themselves as multinational enterprises (MNEs), and this implies that the “classic” motives originally introduced by Dunning in 1993 need to be revisited. Dunning’s motives and arguments were deductive and atheoretical, and these were intended to be used as a toolkit, used in conjunction with other theories and frameworks. They are not an alternative to a classification of possible MNE strategies. Originality/value – This paper and the ones that accompany it, provide a deeper and nuanced understanding on internationalization motives for future research to build on.

The financial and environmental performance of firms exposed to the EU Emissions Trading Scheme

This thesis is an empirical-based study of the European Union’s Emissions Trading Scheme (EU ETS) and its implications in terms of corporate environmental and financial performance. The novelty of this study includes the extended scope of the data coverage, as most previous studies have examined only the power sector. The use of verified emissions data of ETS-regulated firms as the environmental compliance measure and as the potential differentiating criteria that concern the valuation of EU ETS-exposed firms in the stock market is also an original aspect of this study. The study begins in Chapter 2 by introducing the background information on the emission trading system (ETS), which focuses on (i) the adoption of ETS as an environmental management instrument and (ii) the adoption of ETS by the European Union as one of its central climate policies. Chapter 3 surveys four databases that provide carbon emissions data in order to determine the most suitable source of the data to be used in the later empirical chapters. The first empirical chapter, which is also Chapter 4 of this thesis, investigates the determinants of the emissions compliance performance of the EU ETS-exposed firms through constructing the best possible performance ratio from verified emissions data and self-configuring models for a panel regression analysis. Chapter 5 examines the impacts on the EU ETS-exposed firms in terms of their equity valuation with customised portfolios and multi-factor market models. The research design takes into account the emissions allowance (EUA) price as an additional factor, as it has the most direct association with the EU ETS to control for the exposure. The final empirical Chapter 6 takes the investigation one step further, by specifically testing the degree of ETS exposure facing different sectors with sector-based portfolios and an extended multi-factor market model. The findings from the emissions performance ratio analysis show that the business model of firms significantly influences emissions compliance, as the capital intensity has a positive association with the increasing emissions-to-emissions cap ratio. Furthermore, different sectors show different degrees of sensitivity towards the determining factors. The production factor influences the performance ratio of the Utilities sector, but not the Energy or Materials sectors. The results show that the capital intensity has a more profound influence on the utilities sector than on the materials sector. With regard to the financial performance impact, ETS-exposed firms as aggregate portfolios experienced a substantial underperformance during the 2001–2004 period, but not in the operating period of 2005–2011. The results of the sector-based portfolios show again the differentiating effect of the EU ETS on sectors, as one sector is priced indifferently against its benchmark, three sectors see a constant underperformance, and three sectors have altered outcomes.

Earnings management in firms seeking to be acquired

Empirical evidence regarding accrual-based earnings management around mergers and acquisitions has been setting-specific as far as target firms are concerned. This might be due to the fact that target firms cannot always anticipate an acquisition proposal, and thus lack the motive and the time necessary to manage their earnings in order to facilitate or impede the deal. In this paper, we provide clear evidence of downward earnings management by a sample of target firms that have both time and motive to engage in such actions. These are firms that publicly announce their intention to be acquired. Publicly ‘seeking a buyer’ represents a rather unusual corporate event, and we find that these firms engage in downward earnings management in the years surrounding the ‘announcement year’. To some extent, this result is explained by overrepresentation of low performance and growth among these firms, and it can be interpreted under alternative explanations. Furthermore, we show that such downward earnings management negatively affects the probability for a ‘seeking buyer’ firm to secure an acquisition within a reasonable amount of time, a possible indication of efficient diligence by prospective buyers having a preference for firms ‘seeking buyer’ with no informationally obscure earnings.

The unseen job creators : Growth potential among non-growing firms

Among 104,231 limited liability fi…rms in Sweden with at least two employees during 1997-2010, almost 10 % did not hire new employees in any given 3-year period despite having high profi…ts. Nearly half of these …firms continued to have high or medium pro…fits in the next three-year period, but still no growth. Regression analysis indicates that these fi…rms were not randomly distributed; rather they were small and young, did not belong to an enterprise group, and operated in local markets with high profi…t-opportunities. We conclude that it might be more benefi…cial to focus policy towards these …firms instead of towards a few high-growth fi…rms that, having just grown exponentially, may not be best positioned to grow further.

High-growth firms : Not so vital after all?

High-growth firms have received considerable interest recently since they create most of the new jobs in the economy. The purpose of our paper is to investigate the characteristics of high-growth firms prior to their growth period, and whether these characteristics differ across industries. Using data on a large sample of limited liability firms in Sweden for the period 2007-2010, we find that high-growth firms do not have the characteristics that we typically associate with successful firms. On the contrary, our results indicate that high-growth firms have low profits and a weak financial position. This might explain why studies have found that high-growth firms are seldom capable of sustaining their high growth rates in subsequent periods, and thus question policies that are targeted towards these companies.

Predicting entry of Swedish wholesale firms into local markets

Applying microeconomic theory, we develop a forecasting model for firm entry into local markets and test this model using data from the Swedish wholesale industry. The empirical analysis is based on directly estimating the profit function of wholesale firms. As in previous entry studies, profits are assumed to depend on firm- and location-specific factors,and the profit equation is estimated using panel data econometric techniques. Using the residuals from the profit equation estimations, we identify local markets in Sweden where firm profits are abnormally high given the level of all independent variables included in the profit function. From microeconomic theory, we then know that these local markets should have higher net entry than other markets, all else being equal, and we investigate this in a second step,also using a panel data econometric model. The results of estimating the net-entry equation indicate that four of five estimated models have more net entry in high-return municipalities, but the estimated parameter is only statistically significant at conventional levels in one of our estimated models.

Does Gibrat’s Law hold for Swedish energy firms?

Gibrat's law predicts that firm growth is purely random and should be independent of firm size. We use a random effects-random coefficient model to test whether Gibrat's law holds on average in the studied sample as well as at the individual firm level in the Swedish energy market. No study has yet investigated whether Gibrat's law holds for individual firms, previous studies having instead estimated whether the law holds on average in the samples studied. The present results support the claim that Gibrat's law is more likely to be rejected ex ante when an entire firm population is considered, but more likely to be confirmed ex post after market selection has "cleaned" the original population of firms or when the analysis treats more disaggregated data. From a theoretical perspective, the results are consistent with models based on passive and active learning, indicating a steady state in the firm expansion process and that Gibrat's law is violated in the short term but holds in the long term once firms have reached a steady state. These results indicate that approximately 70 % of firms in the Swedish energy sector are in steady state, with only random fluctuations in size around that level over the 15 studied years.

Of Law, Lawlessness, and Sovereignty : Multinational Peacekeeping and International Law

Laws of war have been carefully defined by individual nations’ own codes of law as well as by supranational bodies. Yet the international scene has seen an increasing movement away from traditionally declared war toward multinational peacekeeping missions geared at containing local conflicts when perceived as potential threats to their respective regions’ political stability. While individual nations’ laws governing warfare presuppose national sovereignty, the multinational nature of peacekeeping scenarios can blur the lines of command structures, soldiers’ national loyalties, occupational jurisdiction, and raise profound questions as to which countries’ moral sense/governmental system is to be the one upheld. Historically increasingly complex international relations have driven increasingly detailed internationally drafted guidelines for countries’ interactions while at war, yet there are operational, legislative, and moral issues arising in multinational peacekeeping situations which these laws do not address at all. The author analyzes three unique peacekeeping operations in light of these legislative voids and suggests systematic points to consider to the end of protecting the peacekeepers, the national interests of the countries involved, operational matters, and clearly delineating both the objective and logical boundaries of a given multinational peacekeeping mission.