Corporate strategic responses to foreign entry: insights from prospect theory

Purpose – The purpose of this paper is to address how firms adapt their product and geographic diversification as a response to foreign rivals penetrating their domestic market by adopting a behavioral perspective to understand firm-level strategic responses to foreign entry. Design/methodology/approach – The study proposes that strategic responses to foreign entry selected by domestic incumbents have both a framing component and a related, strategic choice component, with the latter including changes in product and geographic market diversification (though other more business strategy-related responses are also possible, e.g. in product pricing and marketing). This study tests a set of hypotheses building on panel data of large US firms. Findings – The study finds, in accordance with our predictions, that domestic incumbents reduce their product and geographic diversification when facing an increase in import penetration. However, when increased market penetration by foreign firms takes the form of FDI rather than imports, the corporate response appears to be an increase in product and geographic diversification, again in line with our predictions. Originality/value – The study develops a new conceptual framework that is grounded in prospect theory, but builds on recent insights from mainstream international strategic management studies (Bowen and Wiersema, 2005; Wiersema and Bowen, 2008).

Learning CSR for sustainable corporate advantage

Corporate Social Responsibility (CSR) has become a strategic and operational reality of the business and academic world. Not that the principles of CSR are always respected or that its practice is consistently applied. Bearing in mind the multi-faceted nature of both CSR and the corporate environment, as well as the paradox of what is taught in Higher Education and what is practised within its own walls, this paper provides a learning cyclical pathway to sustainable CSR implementation and progress review. As well as highlighting the role that Higher Education has to play, the paper emphasises that in order to embed CSR within the corporate environment, questions need to be raised concerning on-going CSR improvement in order to both protect and engage a wide range of stakeholders towards sustainable corporate advantage.

Spirit of corporate social responsibility transforming from corporatism to socialized capitalism

This paper offers a critique of current corporate social responsibility (CSR) practices in context of global trends. The legitimate modelling of CSR has yet to engage firm and political decision making with wider Society stakeholders. There is urgent need to transform towards socialized capitalism in which separate CSR board may focus on social and environmental concerns and offer more collaborative solutions to global/local CSR issues. This is underpinned with a need for returning to original moral purpose of CSR that has become eroded by narrower short term rational justifications.

The effects of corporate and country sustainability characteristics on the cost of debt: an international investigation

We investigate the relationship between corporate and country sustainability on the cost of bank loans. We look into 470 loan agreements signed between 2005 and 2012 with borrowers based in 28 different countries across the world and operating in all major industries. Our principal findings reveal that country sustainability, relating to both social and environmental frameworks, has a statistically and economically impactful effect on direct financing of economic activity. An increase of one unit in a country's sustainability score is associated with an average decrease in the cost of debt by 64 basis points. Our international analysis shows that the environmental dimension of a country's institutional framework is approximately twice as impactful as the social dimension, when it comes to determining the cost of corporate loans. On the other hand, we find no conclusive evidence that firm-level sustainability influences the interest rates charged to borrowing firms by banks. Our main findings survive a battery of robustness tests and additional analyses concerning subsamples, alternative sustainability metrics and the effects of financial crisis.

Do investors care about corporate tax?

This paper conducts a comprehensive examination of the link between corporation tax payment and financial performance in the UK. We find no discernible link between tax rates and stock returns for the UK, no matter how tax payment is measured. This is true throughout the sample period and for both customer-facing and non-customer-facing companies. However, allowing for industry norms and a host of firm characteristics, companies with lower effective tax rates have significantly higher levels of stock market risk. Firms that are reported in the newspapers in a negative way in relation to their level of corporation tax payment experience small negative stock returns, which are partially reversed within a month. However, the initial negative effects and subsequent rebound are both more pronounced for smaller companies. News announcements of the potential involvement of a firm in a corporate inversion (expatriation) result in steeper and much longer-lasting falls in share prices, whereas news stories of a more general nature relating to a firm's tax avoidance or tax payments have little noticeable effect.

Does stakeholder pressure influence corporate GHG emissions reporting? Empirical evidence from Europe

Purpose – The purpose of this paper is to seek to shed light on the practice of incomplete corporate disclosure of quantitative Greenhouse gas (GHG) emissions and investigates whether external stakeholder pressure influences the existence, and separately, the completeness of voluntary GHG emissions disclosures by 431 European companies. Design/methodology/approach – A classification of reporting completeness is developed with respect to the scope, type and reporting boundary of GHG emissions based on the guidelines of the GHG Protocol, Global Reporting Initiative and the Carbon Disclosure Project. Logistic regression analysis is applied to examine whether proxies for exposure to climate change concerns from different stakeholder groups influence the existence and/or completeness of quantitative GHG emissions disclosure. Findings – From 2005 to 2009, on average only 15 percent of companies that disclose GHG emissions report them in a manner that the authors consider complete. Results of regression analyses suggest that external stakeholder pressure is a determinant of the existence but not the completeness of emissions disclosure. Findings are consistent with stakeholder theory arguments that companies respond to external stakeholder pressure to report GHG emissions, but also with legitimacy theory claims that firms can use carbon disclosure, in this case the incomplete reporting of emissions, as a symbolic act to address legitimacy exposures. Practical implications – Bringing corporate GHG emissions disclosure in line with recommended guidelines will require either more direct stakeholder pressure or, perhaps, a mandated disclosure regime. In the meantime, users of the data will need to carefully consider the relevance of the reported data and develop the necessary competencies to detect and control for its incompleteness. A more troubling concern is that stakeholders may instead grow to accept less than complete disclosure. Originality/value – The paper represents the first large-scale empirical study into the completeness of companies’ disclosure of quantitative GHG emissions and is the first to analyze these disclosures in the context of stakeholder pressure and its relation to legitimation.

State ownership, bank loans, and corporate investment

We study the effect of bank loans on Chinese publicly listed firms' investment decisions based on the underinvestment and overinvestment theories of leverage. Evidence from China is of particular importance because China is the world's largest emerging and transitional economy. At first we show that there is a negative relationship between bank loan ratios and investment for Chinese publicly listed firms. And this negative relationship is much stronger for firms with low growth than firms with high growth. Secondly, we find that both short-term and long-term loan ratios are negatively correlated with investment. However, the higher the long-term loan ratios are, the weaker the negative relationship between long-term loan ratios and investment is. Thirdly, firm ownership only matters to the effect of short-term bank loans on investment in our sample. That is, the negative relationship between short-term loan ratios and investment is weaker for SOEs than for non-SOEs. Lastly, we show that the reform of China's banking system in 2003 has not strengthened the negative relationship between bank loans and investment. Our findings suggest that although Chinese state-owned banks are severely intervened by government policies, they still have a disciplining role on firms' investment, especially in firms with low growth.

Doing well by talking good? A topic modelling-assisted discourse study of corporate social responsibility

Using the novel technique of topic modelling, this paper examines thematic patterns and their changes over time in a large corpus of corporate social responsibility (CSR) reports produced in the oil sector. Whereas previous research on corporate communications has been small-scale or interested in selected lexical aspects and thematic categories identified ex ante, our approach allows for thematic patterns to emerge from the data. The analysis reveals a number of major trends and topic shifts pointing to changing practices of CSR. Nowadays ‘people’, ‘communities’ and ‘rights’ seem to be given more prominence, whereas ‘environmental protection’ appears to be less relevant. Using more established corpus-based methods, we subsequently explore two top phrases - ‘human rights’ and ‘climate change’ that were identified as representative of the shifting thematic patterns. Our approach strikes a balance between the purely quantitative and qualitative methodologies and offers applied linguists new ways of exploring discourse in large collections of texts.

Farmer attitudes and livestock disease: exploring citizenship behaviour and peer monitoring across two BVD control schemes in the UK

The eradication of BVD in the UK is technically possible but appears to be socially untenable. The following study explored farmer attitudes to BVD control schemes in relation to advice networks and information sharing, shared aims and goals, motivation and benefits of membership, notions of BVD as a priority disease and attitudes toward regulation. Two concepts from the organisational management literature framed the study: citizenship behaviour where actions of individuals support the collective good (but are not explicitly recognised as such) and peer to peer monitoring (where individuals evaluate other’s behaviour). Farmers from two BVD control schemes in the UK participated in the study: Orkney Livestock Association BVD Eradication Scheme and Norfolk and Suffolk Cattle Breeders Association BVD Eradication Scheme. In total 162 farmers participated in the research (109 in-scheme and 53 out of scheme). The findings revealed that group helping and information sharing among scheme members was low with a positive BVD status subject to social censure. Peer monitoring in the form of gossip with regard to the animal health status of other farms was high. Interestingly, farmers across both schemes supported greater regulation with regard to animal health, largely due to the mistrust of fellow farmers following voluntary disease control measures. While group cohesiveness varied across the two schemes, without continued financial inducements, longer-term sustainability is questionable

Fatigue and workability in Brazilian textile companies in different corporate social responsibility score groups

The aim of this study was to evaluate working conditions in the textile industry for different stages of Corporate Social Responsibility (CSR) development, and workers` perception of fatigue and workability. A cross-sectional study was undertaken with 126 workers in the production areas of five Brazilian textile plants. The corporate executive officers and managers of each company provided their personal evaluations of CSR. Companies were divided into 2 groups (higher and lower) of CSR scores. Workers completed questionnaires on fatigue, workability and working conditions. Ergonomic job analysis showed similar results for working conditions, independent of their CSR score. Multivariate analysis models were developed for fatigue and workability, indicating that they are both associated to factors related to working conditions and individual workers` characteristics and life styles. Work organization, (what, how, when, where and for how long the work is done), is also an associated factor for fatigue. This study suggests that workers` opinions should be taken into greater consideration when companies develop their CSR programs, in particular for those relating to working conditions. Relevance to industry: This paper underlines the importance of considering working conditions and workers` opinions of them, work organization and individual workers` characteristics and life styles in order to restore or to maintain workability and to reduce fatigue, independently of how developed a company may be in the field of Corporate Social Responsibility. (C) 2010 Elsevier B.V. All rights reserved.

Corporate identity through graphic design

The degree project has been implemented abroad in Brisbane, Australia. A literature study has beenperformed parallel to the practical work within the subject »Corporate identity through graphicaldesign«. In this study deeper research has been made concerning the establishment and manifestationof a corporate identity and its program. The knowledge given from this study has been put into practicethrough two larger projects.The first project was carried out at De Pasquale, advertising agency in Brisbane, where a corporateidentity program was designed for a new company. The company is a fitness centre, called KnockoutFitness, which specializes in different types of boxing training sessions such as Boxing, Thai Bow andBoxercise but also Aqua aerobics. They needed a full corporate identity program including a logotype,business card, letter paper-paper and address labels.The second project was carried out at Queensland University of Technology in Brisbane. A promotioncampaign was designed for the Department of Visual Arts, which included two information folders andone advertisement. The purpose of the campaign was to promote both the undergraduate and postgraduatecourses offered within the department.