Foreign Corporations Research Articles

VIETNAM: AN ECONOMIC DRAGON AGAINST ALL ODDS

Vietnam is the country that experienced the wars with France, the US and China and suffered a great damage of infrastructure and agriculture as a result. The communist leadership preserved its hold on power even after the collapse of the Soviet Union by introducing far-reaching market reforms with Chinese specifics. Unlike many of its neighbours in the region, Vietnam achieved considerable results in this field by creating a highly diversified economy and becoming the factory of the world for the top multinationals. Our article is trying to explore the main reasons for the dynamic growth of Vietnamese GDP and the most important sectors of national economy that contributed to it. The article notes that modern Vietnam is an agrarian country with a mixed-type industry. Vietnam is actively developing various sectors of its economy thanks to cheap labour and the ability to ensure fast production rates. Due to this, the country acts as one of the key directions for foreign investments and the outpost for the placement of industrial capacities of foreign corporations. By developing various industries, Vietnam is trying to increase its own exports through the maintenance of infrastructure projects and transport potential. Along with its industrial production, the country is actively developing the agricultural sector by exporting exotic fruit, tea, coffee and rice which are in demand not only in the Southeast Asian region, but also in the Western Hemisphere and Europe. Tourism is a significant source of income generation for the country, too. The Vietnamese government is encouraging foreign tourists to visit the country’s cultural monuments and prominent places by improving air connections. Therefore, in the conditions of increased internal and external threats and challenges, the Socialist Republic of Vietnam impresses with consistently high growth rates and strong attention of foreign investors, while combining the market with the principles of late socialism preserved in the state. The analysis of Vietnam’s economic development policy proves the incompleteness of the industrialization process. Nevertheless, technological renewal combined with the attraction of foreign investments and the increase of production is observed in various spheres of the national economy.

The Importance of Corporate Foreign Debt in Managing Exchange Rate Exposure in Non-Financial Companies

The Importance of Corporate Foreign Debt in Managing Exchange Rate Exposure in Non-Financial Companies

Introducing the Business Judgment Rule in Select Countries of the Arabian Gulf

Examining the corporate practices of the Gulf Corporation Council (GCC) member states, this paper demonstrates the imperative that GCC nations implement rational board practice models and improve current laws and regulations that pertain to corporate boards of directors. GCC member countries increasingly need to diversify revenue-generating streams; improved corporate board practices are likely to increase income from foreign corporations and investments. Rational board policies protect board members from frivolous challenges related to legal culpability because they operate on a “good faith” model, augmenting corporate growth. Providing a coherent analysis of the business judgment rule, a significant as pect of rational board practices, this paper examines how the rule has worked in the United States and provides a standard for GCC countries to emulate. Shifting domestic policies to this rational model will promote foreign investments and result in financial stability, benefits that current reform practices initiated by the GCC have not yet accomplished.

Why Tax Planning Without Considering Societal Interests is Unfounded

Abstract The present paper is a commentary on the article “The relationship between Taxation, Accounting and Legal Forms”, which has already been published in AEL: A Convivium. The article deals with Controlled Foreign Corporation rules (CFC rules) from a profit-seeking perspective. It develops tax schemes and assumes them to be adequate means to avoiding the Austrian or German CFC rules. This commentary argues that from the perspective of a critical rationalist methodology, the topic and the findings of the article need to be viewed with some reservation. A substantial objection applies to the article’s statement that the developed tax schemes are adequate to achieve the end of optimising the effective tax rate. However, there is the even more substantial objection that neither the developed tax schemes nor the end of optimising the effective tax rate without taking the interests of society systematically into account are legitimate. However, the article fails to address the major societal issue of how to reduce tax avoidance.

상사무례가 직무열의 및 반생산적 과업행동에 미치는 영향

Incivility in the workplace has become an issue among domestic and foreign corporate members. According to a survey, it is difficult to find members of an organization who have not experienced incivility in the workplace. Among them, in particular, incivility by the supervisor accounts for the highest proportion. This study aims to analyze the effect of commercial practices on job engagement and counterproductive work behavior for employees of Chinese restaurant companies. The counterproductive work behavior was investigated by dividing it into three types: counterproductive work behavior for customers(CWB-C), counterproductive work behavior for organizations(CWB-O), and counterproductive work behavior for organizational employees(CWB-I). The investigation period was conducted from February 1 to March 28, 2022. A total of 400 questionnaires were distributed, and 382 questionnaires were collected, of which 361 were used for the final analysis, excluding 21 were dishonest. The summary of the analysis results are as follows. First, it was found that supervisor’s incivility had a significant negative (-) effect on job engagement. This means that as you experience incivility from your supervisor, your subordinates' enthusiasm for the job decreases. Second, job engagement had a significant negative (-) effect on all three types of counterproductive work behavior. This indicates that the weaker the job engagement, the higher the three types of counterproductive work behavior. Based on these analysis results, a plan to improve the organizational culture of restaurants was proposed by presenting theoretical and practical implications of the study.

Does diversity among directors affect corporate climate change behaviour? Evidence from Japan

ABSTRACT This paper examines how female and foreign corporate directors influence their corporation’s climate change behaviour. This study found that female directors contribute to the formulation of their company’s climate change vision, and foreign directors contribute to the formulation of a climate change mission. Japan has set a long-term goal of reducing greenhouse gas emissions to net zero by 2050, an extremely difficult goal to achieve. Our results suggest that it is important to appoint female and foreign directors to achieve net zero emissions. Our results also suggest that diversity among company directors needs to be further expanded.

From voluntary to mandatory corporate accountability: The politics of the German Supply Chain Due Diligence Act

AbstractFollowing a long‐standing and highly contested policy debate, in June 2021, the German parliament passed the Supply Chain Due Diligence Act requiring mandatory due diligence (MDD) of large companies, holding them accountable for the impacts of their supply chain operations abroad. Applying the discursive agency approach and using evidence from policy documents and 21 interviews with key stakeholders, we analyze the political strategies that paved the way toward MDD in Germany. The decisive strategy was an innovative benchmarking and monitoring mechanism that provided the legitimacy for a law and opened a window of opportunity for MDD supporters. Civil society and supportive politicians used this window of opportunity to build broad political coalitions that included the support of some companies. We discuss the ramifications of these findings for understanding the domestic politics behind the newly emerging norm of foreign corporate accountability.

Article: A Lapse of Grace: Encryption Bans as Potential Expropriation Claims

Regulatory interventions to prevent perceived harms of emerging technologies may likely pave the way for tech-related disputes between a host state and a foreign corporation. One such emerging technology whose harms and widespread use features in recent debates is end-to-end encryption (E2EE). This article examines an outright ban of end-to-end encrypted instant messaging platforms, based on the ‘going dark’ concerns of governments, as a potential expropriation claim. This article attempts to answer whether there has been a substantial deprivation, and whether non-compensation is justified for such a deprivation by carrying out effects-based, purpose-based, and balancing analyses. The findings of this study demonstrate that although the effects of the ban may be tantamount to expropriation, such a finding is not evident in a purpose-based or proportionality analyses.

Adoption of International Financial Reporting Standard: A Literature Review

International Financial Reporting Standard (IFRS) refers to a unique, uniform, simple, and easily understandable accounting standard acceptable and applied across the globe by various firms. It is emerging as a powerful device to bring uniformity to financial reporting by companies at the global level. Due to rapid industrialization and internationalization, the countries opened their avenue to foreign corporations. Therefore, it has been necessitated to have an accounting system that could bring uniformity and acceptability to financial reporting across borders. This review article has explored the present situation of the IFRS in the light of its emergence at the global level. The paper also proposes the model by merging the IFRS constructs with FDI, robust financial information reporting, transparency, and comparability construct by drawing together and developing the scale for measuring quality financial information through International Financial reporting standards based on existing literature. Against this backdrop, the present review paper seeks to highlight different dimensions and the pros and cons of using the International Financial Reporting Standard across borders. The content analysis has been adopted as the methodological framework for the literature review. The result of studies have confirmed that IFRS assimilation will improve transparency, comparability across the spectrum.

Foreign corporate accountability: The contested institutionalization of mandatory due diligence in France and Germany

AbstractIn the recent past, European states have adopted mandatory due diligence (MDD) laws for holding companies accountable for the environmental and human rights impacts of their supply chains. The institutionalization of the international due diligence norm into domestic legislation has, however, been highly contested. Our contribution analyzes the discursive struggles about the meaning of due diligence that have accompanied the institutionalization of MDD in Germany and France. Based on document analysis and legal analysis of laws and law proposals, we identify a state‐centric, a market‐based, and a polycentric‐governance discourse. These discourses are based on fundamentally different understandings of how the United Nations Guiding Principles on Business and Human Rights should be translated into hard law. By outlining these discourses and comparing the related policy preferences, we contribute with a better understanding of different ways in which MDD is institutionalized, with important consequences for the possibilities to enhance corporate accountability in global supply chains.

International Standards on Auditing (ISAs) Adoption: An Institutional Perspective

This study seeks to examine the factors that influence the adoption of ISAs, intending to stimulate establishing a responsible and efficient auditing regime in Libyan auditing practice, shedding light on challenges in auditing practices in the North African region. This study conducted semi-structured interviews with 43 participants that represented 5 key actors from within the auditing field in Libya, including preparers and users of annual reports. Regarding ISAs adoption, the study focused on those institutional isomorphism drivers that are found to produce a greater impact on the experience of auditing practice in Libya. The identified factors are (a) foreign corporations, such as accountancy firms, (b) economic systems and the stock market, (c) international financial institutions (IFIs), and (d) the legal system. The research demonstrated that these drivers systematically and consistently predict the level of ISAs adoption commitment and associated harmonisation. Given the growing interest in harmonising auditing practice not only by scholars but also by policy and decision-makers, the relevance of this research cannot be questioned since it addresses significant concerns and contributes to the development of an under-researched topic in Africa. This paper expands the literature on the importance of harmonising auditing practices and provides fresh insights into auditing practices in a politically unstable country. Awareness is also raised about the most relevant drivers of adopting ISAs and several implications for policymakers and regulators in pursuing international harmonisation of auditing standards.

POTENTIAL AND POSSIBLE EFFECT OF THE DEVELOPMENT OF GEORGIAN FINANCIAL MARKETS

POTENTIAL AND POSSIBLE EFFECT OF THE DEVELOPMENT OF GEORGIAN FINANCIAL MARKETS

Economic Distance, Legitimacy (in)Consistency, and MNEs’ Disclosure of Foreign CSR at Home

Little is known about how the economic distance influences multinational enterprises’ (MNEs) disclosure of foreign corporate social responsibility (CSR) at home. We provide a new mechanism of legitimacy (in)consistency to examine this neglected question. We argue that when home country is more developed than the host country, there is legitimacy consistency of MNEs’ foreign CSR between home and host country, so that MNEs are more likely to disclose their CSR conducted in those host countries at home, and the opposite applies. We further propose that the MNEs’ domestic CSR and Buddhist atmosphere around their headquarters may moderate the relationship between economic distance and the MNEs’ disclosure of foreign CSR at home, because these two contingent factors may influence the (in)consistency of home country- and host country-stakeholders’ perception on the legitimacy of MNEs’ foreign CSR. Data on Chinese MNEs’ foreign CSR disclosures from 2008 to 2018 largely supported our hypotheses. Our study contributes to the global strategy literature by developing a new framework of legitimacy (in)consistency to explain MNEs’ disclosure of foreign CSR at home.

Socio-economic factors of changes in consumer behavior and strategies of trading companies in Japan

The article analyzes the structure and features of the retail trade sector in Japan, the current trends in the consumer behavior of the Japanese, which became noticeable at the end of the 20th century and especially after the global financial and economic crisis of 2008–2010 and during the COVID-19 pandemic. Based on empirical material, the author identifies the main directions of transformation of strategies of Japanese trade corporations under the conditions of economic instability and the formation of a new consumption model.Trade as a sphere of entrepreneurial activity is represented in Japan by various types of trading enterprises and companies and corporate groups of very different sizes and organizational and legal status. The market leaders are universal trading companies (sogo shosha) and large network companies (Seven & I Holdings, Aeon, Fast Retailing, etc.), which finance and organize not only the circulation, but also the production of products (from the development and purchase of raw materials to production and processing, logistics, sales, and services). The groups include numerous affiliated companies-retail operators.The characteristic features of the Japanese consumer have traditionally been the willingness to pay for quality, convenience, and service, a relatively low level of interest in cheaper goods, preference for the format of «physical» purchases, as well as the desire to buy expensive, exclusive things of luxury brands, which for many has become a sign of financial success and social status.Among the most important modern factors affecting the scale and structure of consumer demand in Japan are the desire to reduce one’s expenses in the face of slowing economic growth and stagnating incomes, increase in the level of environmental awareness, changing lifestyle and leisure patterns. The most important factor determining the image of the modern Japanese consumer was the entry into the labor and consumption market of generations Y and Z, who increasingly rely not on owning, but on using things, which acts as a factor in reducing the scale of the consumer market.In these conditions, trading companies modernize their strategies, including by entering into partnerships with national and foreign corporations in order to adapt to changing conditions and maintain competitiveness through modernization, diversification, and digitalization of business, reducing transaction costs based on the synergetic effect.

Strategies for Digital Development of Key States of the Global South in the Context of U.S.-Chinese Technological Rivalry

The article examines the strategies of the states of the Global South in the field of digital development in the context of technological rivalry between the United States of America and China. The main peculiarities of the U.S.-Chinese technological rivalry at the present stage are characterized. The U.S.-Chinese technological rivalry is considered as a factor influencing the development and implementation of national digital development strategies by the states of the Global South, which provide for the intensification of international cooperation in priority areas. The international political aspects of the implementation of digital development strategies of the most significant dynamically developing states of the Global South located in important international regions (Southeast Asia, South Asia, the Middle East and North Africa, Sub-Saharan Africa, Latin America) are studied. Attention is paid primarily to such strategic areas of digital development of the considered states of the Global South, as digital data processing and storage systems, digital data transmission systems, new generation mobile communication technologies, space programs, digital commerce, integrated “smart city” technologies, technologies cybersecurity. The paper explores the strategic approaches of the considered countries of the Global South in relation to digital cooperation with the United States and China. The interaction of the considered states in the digital sphere with technologically advanced countries acting as alternative technological partners (Japan, leading European countries, the Republic of Korea, Israel, Russia) is analyzed. The study identifies and characterizes the most significant digital projects of foreign corporations implemented jointly with the countries under consideration. The features of international cooperation in the digital sphere between the key countries of the Global South within the international regions defined in the study, as well as at the transregional level are analyzed. Particular attention is paid to promising regional international technological projects in the digital sphere. As a result of the study, the main priority areas of foreign policy activities of the key states of the Global South are determined from the point of view of more effective implementation by these states of their digital development strategies. The specific features inherent in the strategies of digital development of the considered states of the Global South are revealed. The author comes to the conclusion that these states, in the context of the U.S.-Chinese technological rivalry, seek to diversify their international ties in the digital sphere, strengthen the technological potential of national digital companies, strengthen national “digital sovereignty,” use their competitive advantages to attract foreign investment in the digital segment of national economies, activate their transport and logistics potential through the introduction of technologies of the Fourth Industrial Revolution, expand digital cooperation with other countries in their international regions, as well as at the transregional level.

Personal Tax Planning: What Is at Stake for US Beneficiaries of Canadian Estates

This article provides an overview of US tax issues that foreign estates with US individual beneficiaries may face. While families may implement planning strategies to effectively manage the transfer of wealth from a domestic perspective, US tax laws can create complex problems and at times adverse consequences for the unwary. The main goal of this article is to identify the general US tax considerations for a foreign estate, including the potential application of the anti-tax-deferral rules governing passive foreign investment companies (PFICs) and controlled foreign corporations (CFCs). A case study is included to illustrate how these rules may apply to US beneficiaries of a Canadian estate if the estate holds shares of a PFIC or a CFC. The article also offers a few guidelines and strategies to reduce potentially adverse US consequences and to mitigate some of the tax risks.

An Investigation into the Interaction of CFC Rules and the OECD Pillar Two Global Minimum Tax

This article investigates the interaction between the controlled foreign corporation regimes of countries and the OECD Pillar Two Model Rules for a global 15% minimum tax. The author considers the interaction between the two sets of rules in depth, illustrating his findings by way of worked examples.

“The Light That Shineth in the Darkness”: Anglo-American Rural Missionaries and the Cuban Revolution

Though rural Protestant missionaries stationed in Cuba routinely reproduced Anglo-American epistemologies and values, often in the service of US corporations, they also worked alongside their parishioners to challenge state and economic violence, as well as break the cyclical nature of Cuban poverty. Shared struggle with Cubans against Fulgencio Batista’s dictatorship proved transformative for many rural missionaries who, in the late 1950s, developed a revolutionary consciousness born through transnational solidarity. Missionaries challenged the dominant narrative coming from the US government and foreign corporations, as the Revolution pursued an increasingly anti-imperial and anti-capitalist agenda after Batista entered exile. While corporate executives and government officials from North America and Europe feared the new government, rural missionaries, often funded by these same corporations, defended the structural changes taking place after 1959. Through oral history and archival research, this article exposes how Cuban Protestants proved particularly influential in shaping the lens by which foreign missionaries came to understand, appreciate, and ultimately support the Cuban Revolution.

U.S. Federal Income Taxation of U.S. Branches of Foreign Banks: Selected Issues and Perspectives

An earlier version of this article was presented to the Tax Club in New York in December 1993.The title of this article notwithstanding, the United States does not in fact tax the U.S. branches of foreign banks; branches are not regarded as distinct entities for most federal income tax purposes. Rather, the United States taxes foreign corporations (including banks) that are engaged in a trade or business within the United States on taxable income that is effectively connected with the conduct of that U.S. trade or business.But the story is not so simple. Various provisions of the Code and Regulations-including especially Regulations section 1.882-5, providing for the determination of the deductible interest expense of a foreign bank attributable to its U.S. trade or business, the branch profits tax, and the branch level interest tax-treat U.S. branches of foreign banks as separate entities, to one degree or another. Also, most income tax treaties provide that there should be attributed to a U.S. branch (a permanent establishment) the business profits that it might be expected to earn if it were a distinct and separate entity.Moreover, in recent years, the nature of international banking has evolved considerably. Many banks now actively trade and deal in foreign currencies; in interest rate and foreign currency forward and futures contracts, options, and swaps; and in various equity- and commodity-derivative products, as well as in securities. These activities have resulted in a tremendous expansion of the volume and type of transactions involving multiple branches of these banks, both in providing financial products to customers and in hedging the risks assumed by the banks. The involvement of multiple branches in these transactions takes a variety of forms, including transactions between branches (such as swaps, sales of property, loans, and forward contracts) and joint efforts to provide products to customers. These developments have placed considerable pressure on the concepts that traditionally have been applied in determining the amount of a foreign bank's taxable income for U.S. federal income tax purposes, including the extent to which a branch should be disregarded as a separate entity.

Taxation of Electronic Commerce: Federal Income Tax Issues in the Establishment of a Software Operation in a Tax Haven

The advent of the Internet and other electronic means of conducting commercial transactions has created a new galaxy of ways to structure business operations and a concomitant range of novel tax issues. It is commonly said that, because of the diminished need for a vendor to have a physical presence in the country of the customer, one of the likely effects of electronic commerce will be to shift revenues away from source jurisdictions and towards residence jurisdictions. In fact, this may be only partially true. Income may be shifted away from the customers' countries all right, but into a tax haven jurisdiction rather than into the enterprise's home jurisdiction. A major issue for enterprises that use the Internet and their residence tax jurisdictions, therefore, will be whether controlled foreign corporation or similar legislation will operate to impose tax on any revenues that are shifted in this manner.The purpose of this paper is to consider how a hypothetical business operation structured to operate in a tax haven might be treated under United States federal income tax law, both under provisions taxing income at the source and under provisions taxing U.S. persons on tax haven income of foreign corporations, and then to reflect on what, if anything, this tells us about the need for change. Because the Internal Revenue Service has issued a regulation discussed below, specifically characterizing income derived from transactions in computer software (and not other types of transactions in electronic commerce), the paper will focus on a company delivering software over the Internet; but many of the issues presented will arise in the case of other Internet providers.