Foreign Location Research Articles

Imitation of Location Choices for Foreign Investments: The Role of Subnational Foreign Locations' Cultural Tightness

AbstractFirms are known to commonly imitate peers' foreign investment location choices. We shed further light on this phenomenon by exploring the role of foreign locations' cultural tightness, which refers to the prevalence of social norms in a location and the tolerance for deviance from them. Combining institutional theory with insights from research on cultural tightness, we hypothesize that firms are more strongly inclined to imitate peers' choice for a subnational foreign investment location when the location is culturally tighter. Our hypothesis receives consistent support in conditional logit analyses based on 2900 foreign investments in new manufacturing plants in US metropolitan areas over the period 2008–2019. Furthermore, the amplifying effect of a subnational location's cultural tightness on firms' propensity to imitate their peers' choice for the location seems to depend on firms' experience with cultural tightness and their home country's cultural distance from the USA. Our findings enrich international management research on location choice imitation, legitimacy risks, and cultural tightness.

The Central Role of the Global Emerging Infections Surveillance Program in Supporting Force Health Protection.

The Global Emerging Infections Surveillance (GEIS) program is the only Department of Defense (DoD) organization that coordinates global surveillance for emerging infectious diseases that affect US military forces operating in the United States or foreign locations. Since 1997, the GEIS program has focused on surveilling pathogens likely to affect military operations and the health of service members. The foundation of the GEIS program is the long-standing, mutually beneficial relationships between the DoD overseas laboratories and their host-country partners and militaries. Through centralized programmatic support, the GEIS program provides the infrastructure needed for a rapid and scalable response to emerging threats. The GEIS program continues to enhance and evolve its initiatives to provide timely, reliable information to decision-makers in the DoD. The GEIS program has been and will continue to be a vital source of actionable biosurveillance information during infectious disease events of global public health concern.

Does prior success influence risk‐taking in foreign location decisions? A prospect theory perspective

AbstractResearch SummaryResearch suggests that foreign direct investment decisions can be biased and deviate from economic theory. This study deploys prospect theory to analyze the impact of the success of previous investments on risk‐taking in subsequent investment decisions. Our theorizing suggests that prior success influences foreign investors' decisions to take host‐country risk, and that this moderating influence on the risk‐investment relation is specific to the type of risk. The results of an event‐history study of 1259 location decisions support the notion that the success of previous investments encourages investors to enter host countries with high negative or positive risk, whereas it discourages them from entering locations with high mixed risk. The effects are stronger for investment locations that are similar than for those that are dissimilar.Managerial SummaryRegarding the varying risks that investors face in foreign countries, investment decisions may sometimes appear rather confident and sometimes rather cautious. Our study relates these decisions to the success that investors had with similar investments in the past, since research suggests that experiencing gains or losses can influence decision behavior. The results suggest that prior success affects risk‐taking in foreign direct investment decisions and comes in contrary forms, depending on the type of risk: prior success leads to overconfident investment decisions in the case of negative and positive risk, whereas it induces overcautious investment decisions in the case of mixed risk. Being aware of these behavioral tendencies can prevent managers from making biased investment decisions.

Knightian uncertain violence and the challenge of FDI-assisted development: policy recommendations where civilian lives are at risk

In this interdisciplinary paper, reviewing scholarship on both politically motivated and social violence, we use the Knightian distinction between (measurable) risk and (unknowable) uncertainty to examine how international business is affected when violence is directed at civilians, civilians are killed, and violence levels are constantly changing. Using data on 48 African countries (1997–2021), we show the uncertainty of these actions deters inward foreign direct investment (IFDI). As a high-commitment mode of internationalization, IFDI involves deepening knowledge of and exposure to foreign locations. Because uncertainty challenges the feasibility of deepening knowledge and is so hard to mitigate, investors behave differently than under risky conditions—they avoid contexts with Knightian uncertain violence. Our post hoc analysis shows that as IFDI decreases, exporting by local firms increases, suggesting another way to remain globally economically connected. Although our work raises many questions that demand further research, we can already identify useful policy insights. When violence makes a context uncertain to the point of virtual unknowability, IFDI will only assist development if policymakers and MNEs alike work to reduce violence. Multi-sectoral partnerships, increasing educational opportunities, and especially good governance are critical to ensuring IFDI is not appropriated by perpetrators of violence, but instead serves development.

Institutional distance and location choice: an experimental approach to the perception puzzle

PurposeIn this research, we designed and implemented a unique vignette experiment to study the effect of managers' perceptions of institutional distance on foreign location choice, as well as the moderating effect of managerial international experience and preferred entry mode on this relationship.Design/methodology/approachWe employ an experimental vignette methodology (EVM) approach applied in the context of Chinese managers to test the causal relationships depicted in our hypotheses. In this way, we measure the decision-makers' perceptions ex ante, i.e. in conjunction with and prior to a decision about a foreign location choice.FindingsOur findings show that managers' ex-ante perceptions of institutional distance negatively affect decisions on foreign location choice. Also, we find that managerial international experience and preference for high commitment entry modes mitigate the negative effect of managers' perceptions of institutional distance on foreign location choice.Originality/valueThis research study adds to our understanding of the effect of managers' perceptions of institutional distance and managerial contingencies on foreign location decisions. Further, it advances novel experimental design in international business research in general and on foreign location choice in particular.

Navigating multiple institutional environments: institutional quality and the role of Belt and Road Initiative on location choice of Chinese MNEs

PurposeThis study aims to explore the extent to which Chinese multinational enterprises (MNEs) rely on supranational institution – the Belt and Road Initiative (BRI) – versus host country institutional quality to navigate their foreign location choice.Design/methodology/approachThis study uses a conditional logit regression model using a sample of 1,302 greenfield investments by Chinese MNEs in 54 BRI participating countries during the period 2011–2018.FindingsThe results indicate that as a supranational institution, the BRI serves as a substitution mechanism to address the deficiencies in institutional quality in BRI participating countries, thereby attracting Chinese MNEs to invest in those countries. In addition, the BRI’s substitution effect on host country institutional quality is more pronounced for large MNEs, MNEs in the manufacturing industry and MNEs in inland regions.Originality/valueThis study expands the understanding of the BRI as a supranational institution for MNEs from emerging markets and reveals its substitution effect on the host country institutional quality. Furthermore, it highlights that MNEs with diverse characteristics gain varying degrees of benefits from the BRI.

The Role of Inward FDI and Family Firm Heterogeneity on Foreign Location Choice: Evidence from India

The Role of Inward FDI and Family Firm Heterogeneity on Foreign Location Choice: Evidence from India

Cross-Border Regulatory Cooperation and Corporate Social Responsibility Reporting

ABSTRACT This study investigates the impact of the SEC’s regulatory cooperation and enforcement on the corporate social responsibility (CSR) reporting practices of U.S.-listed foreign firms using a country’s Multilateral Memorandum of Understanding (MMoU) signing as a catalyst. The MMoU, a cooperative agreement among global securities regulators, enhances the SEC’s ability to engage in cross-border enforcement actions in collaboration with foreign counterparts. Our findings reveal a significant enhancement in both the quantity and quality of CSR reporting among U.S.-listed foreign firms after their home country signs the MMoU. This improvement sets them apart from their non-U.S.-listed counterparts in the same foreign location. Notably, this positive change is more pronounced among foreign firms from signatory countries with weak country-level institutions. This study contributes to the understanding of how regulatory changes, specifically MMoU adoption, influence CSR reporting, emphasizing the strategic role it plays for firms in the face of heightened regulatory cooperation and enforcement. Data Availability: Data subject to third-party restrictions. JEL Classifications: M41; G18; P48; G32.

Artificial Neural Network (ANN) Method for the Integration of Solar and Wind Hybrid Energy Sources into Telecommunication Systems

In order to sustain monetary growth, the introduction of renewable energy into the electricity grid is crucial especially for many foreign African locations. Thus, in order to reap sustainable strength, these foreign locations may also outfit their airport electrical equipment with advanced synthetic intelligence technologies. For a distributive hybrid solar strength grid, the paper attempts to propose an actual-time energy management algorithm. It continues with the combining of photovoltaic and wind energy for network simulation. As a function of the number of wind aero-mills and photovoltaic solar panels, a multi-goal approach is proposed to optimize the spectral efficiency of the location and the energy performance. For the MATLAB software simulation, radio criteria for Cell Wireless Interoperability Medium Access (WiMAX) technologies are taken into account. The obtained effects are much mitigated however theoretically encouraging for the mixing of green energy integration into the modern telecommunication structures

Location choice and Indian outward foreign direct investment: institutional thresholds and differentiating between institutional quality and institutional distance

Abstract Institutions matter as regards foreign location investment decisions, but how they matter and in what ways, is still unsettled. We differentiate between absolute and relative institutional effects on both location choice and on the size of the FDI and do so by examining India's outward FDI flows between 2008 and 2020. We find that absolute and relative institutional measures have different effects, and these are noticeable at different stages. We show that the quality of institutions affects location choice, but once they have made that decision then the scale of the investment is impacted by institutional threshold effects and institutional distance, and we explain why this could be the case. We provide further nuance to studies on the asymmetrical effects of institutions on outward FDI. We provide empirical evidence that the effects of absolute institutions matter more where host countries lie at the lower end of the institutional profile distribution. Likewise with institutional distance—it might not be the direction of the difference that matters so much as where the host country is located along the institutional profile distribution. This has substantial consequences from both a managerial and a policy perspective.

Declination affects geomagnetic field‐modulated geotaxis in fruit flies

AbstractDecades of research have established that the Earth’s magnetic field (geomagnetic field, GMF) is broadly used as a sensory cue for magnetic orientation in various animal taxa, including insects. In contrast to the investigation of the total intensity or inclination of the GMF, the effect of declination on horizontal magnetic movement has been explored in a few species, including flies, cockroaches, and dogs. However, the potential role of declination in the vertical movement in magnetosensitive organisms is yet to be reported. In this study, we provide the first evidence that declination within a natural range of change can affect static geotaxis in fruit flies, as assessed using the tube‐positioning assay. In open‐field measurements conducted at 22 domestic and foreign locations, the variation in declination was notably dependent upon the specific location, regardless of altitude, with similar variation in total intensity. Flies subjected to a geographic range of declination under the same total intensity and inclination exhibited remarkably different geotactic positioning scores, irrespective of GMF polarity. Notably, we observed a significant negative correlation between the geotactic score and the absolute value of declination, indicating that declination can induce negative geotaxis effects in flies. These results reveal that flies have evolved to incorporate a declination compass into their multimodal sensorimotor system and suggest that declination may be complementary to gravity in terms of environmental factor‐driven negative geotaxis in flies.

Drivers of cross‐border bank claims: The role of foreign‐owned banks in emerging countries

AbstractStudies of the determinants of cross‐border bank claims are based on the economic situations of the lending and borrowing countries—the traditional push/pull factors—but fail to take into account the situation of the international lending banks and the presence of their subsidiaries in emerging countries. They also fail to explain the huge decrease in cross‐border bank flows after the 2008 global financial crisis. In this paper, we analyse the determinants of cross‐border bank claims on a panel of 28 emerging countries and explicitly integrate banking determinants. Thus, we account for the financial situation of international lender banks and the existence of foreign locations in emerging countries as a potential pull stabilising factor. We show that the presence of foreign banks in emerging countries is clearly a factor of attraction for cross‐border bank claims. It remains when we explicitly take into account the 2008 crisis but to a lower extent and in favour of interbank loans. This may be proof of support from the international parent banks to their affiliates. Last, the financial situation of international banks, notably their liquidity and ability to respect prudential rules, also plays a role in their financing strategies in emerging countries.

Can Friend at Home Help Me Go Abroad? Effects of Hometown Network on Firms’ Foreign Location Choice

Can Friend at Home Help Me Go Abroad? Effects of Hometown Network on Firms’ Foreign Location Choice

Foreign languages in advertising: Theoretical implications for language-related IB research

AbstractGiven the multilingual nature of global business, language influences international business (IB) in almost all areas. IB scholars have studied the complex influence of language with manifold theoretical lenses, but have not systematically integrated linguistic theories. Aiming to broaden IB’s theoretical repertoire, we draw on a field that has integrated a rich array of linguistic theories with business perspectives: research on foreign languages in advertising. We review the theories linguists and advertising scholars have applied to their joint topic and apply content analysis to organize them in three theory clusters: ‘language as a symbol’, ‘language in the mind’, and ‘language as means of accommodation’. These theoretical lenses provide novel insights into the meanings and mechanisms of language, which open new avenues to scrutinize the role of language in IB. For example, theories on language as a symbol may add new perspectives to research on foreignness in IB or to emerging markets research. Theories on language in the mind can explain hurdles to the strategic use of language in foreign locations and support a more sophisticated view of translation in IB. Theories on language as a means of accommodation can advance research on cross-border legitimacy and on countercultural practices in IB.

The Relationship between Cultural Intelligence and Cross-cultural Adjustment

The paper advances knowledge in the field of international human resource management (HRM) by elaborating on the relationship between cultural intelligence and cross-cultural adjustment, which has important implications for the productivity of an organisation whose employees form multicultural teams or operate in foreign locations and thus its international competitiveness. The basic axis of the relationship is extended into a complex model in which three categories of factors are reflected in parallel: the mental adjustment of the individual (expressed by the variables of life satisfaction and ethnocentrism), the contextual influence of the environment (operationalised as a cultural novelty), and time (in the form of culture shock). The indirect effects of these three mediators and the direct effect of ethnocentrism on these mediators are simultaneously examined. Using the PLS-SEM statistical technique on a sample of 120 foreigners working in the Czech Republic, a robust relationship was confirmed between cultural intelligence and cross-cultural adjustment, best explained by the mediator of life satisfaction. A significant specific indirect effect was also found of the mediator of culture shock on the relationship between cultural intelligence and cross-cultural adjustment. However, our data did not support the variable of cultural novelty as a mediator of the relationship.

Artificial intelligence and relocation of production activities: An empirical cross-national study

Artificial intelligence (AI) is considered the next strategic technological imperative as it allows firms to manage complex tasks and to solve problems in many industries. In the manufacturing context, the use of AI is affecting the configuration of production processes with possible effects on the location of production activities. Despite the increasing relevance of this technology, there is a lack of empirical evidence that assesses the linkage with the firm's production relocation strategies. To fill this gap, this study aims at exploring the relationship between the use of AI and companies' offshoring and backshoring decisions, taking into account the moderating role of digital competences and the intended internationalisation strategies. Based on a cross-national survey with answers from 676 manufacturing companies from 16 industrialized countries, a hierarchical regression analysis was deployed that shows a positive effect of AI on companies' offshoring and backshoring decisions. Moreover, the results show that digital competences and international ambidexterity (simultaneous expansion of business and supply chain activities in domestic and foreign locations) only have a moderation effect on the relationship between AI and backshoring. International concentration (locating business activities in only a few local or global locations) does not moderate the relationship between AI and production relocation strategies (offshoring or backshoring). To advance the theoretical debate on the use of AI and its impact on production relocation strategies, three research propositions are proposed. Finally, some practical implications and the study's limitations are highlighted.

Captive Offshoring, Innovation and Market Diffusion: Evidence from the Swedish Community Innovation Survey

AbstractAlthough the effects of captive offshoring on firm innovation have increasingly become a subject of study, the literature did so far not distinguish between the effects on introducing innovation as opposed to the effects their market diffusion. This distinction is important. By integrating insights from the innovation diffusion literature, we argue that the effects of captive offshoring on home base innovation are likely to differ between the generation and the diffusion phases. Using a matched employer-employee panel dataset drawn from consecutive waves of the Swedish Community Innovation Survey (CIS) between 2009 and 2015, it is shown that captive offshoring, as measured by the share of employees at foreign locations, has an inverted u-shape effect on innovation propensity (with positive effects for the average firm). In contrast, employment offshoring does not, on average, affect the rate of diffusion as measured by the share of turnover from new products. For firms with more novel product innovations, the effects are even negative.

Disneyland in Hong Kong: American image, glocally renowned

Disney is one of the world’s largest global companies and a symbol of American image and consumerism. Disneyland is a well-known attraction with locations found around the world in the United States, Europe, and Asia. Disneyland’s Hong Kong location opened to the public in 2005 with some difficulties. As a Western attraction and entertainment enterprise operating in a foreign location, many were skeptical of how this would work given different perspectives when it comes to operating a business and satisfying consumer appeal in the local market. This viewpoint paper focuses on image and glocalization and challenges us to consider the role and significance of entertainment and event attractions. These will create and leverage diverse impacts, but we need to consider the impact of these attractions locally and culturally, as this will play an integral role in the competitiveness of the site or attraction.

Cultural institutes: Networks and determinants

This paper documents the spread of national cultural institutes (CI's). We first build a data set of 32 cultural institutes that have foreign offices abroad. Using multiple primary sources, we compile data of the foreign locations of each CI from 1985 to the present. We next use network analysis to visualise and describe connections within the CI network. We then use a gravity model to estimate the formation of one or more CI's in a bilateral country pair. We find that factors such as population, real GDP per capita, distance, a former coloniser-colony link, a common legal system, free trading agreement and a reciprocal relationship are significant factors in the formation of a CI foreign location.

Frequency of transnational trends and Pakistani commercial cinema: A Study on Foreign Talent, Foreign Locations and Obscenity in Pakistani Movies

With an increase in focus on globalization, the cinema industry is also facing pressure from its audience to bring in transnationalism in their contents. Transnationalism in cinema gives diversity of experience resulting in better quality movies and increased viewership. Movies around the globe are adopting transnationalism while in Pakistan it is considered a comparatively new idea. This study has tried to make sense of the presence of transnational trends in Pakistani cinema with an emphasis on three variables, (namely, foreign talent, foreign location, and obscenity). Talent from different nationalities can bring in diverse experience on the screen and behind the lens. Similarly, the selection of multination locations also brings in more interest of viewers and obscenity, though it is a very abstract idea, also attracts viewers with different social and cultural backgrounds. A total of 12 Pakistani movies were selected and content analysis was conducted to look for the presence of foreign talent, location and obscenity resulting in transnationalism. A monitored and controlled data analysis of conveniently sampled movies has been provided along with possible reasons of the existence of these transnational trends. The conclusion of our findings and possible recommendations are also added which emphasize that cultural whitewash should be avoided in the name of transnational trends.