Foreign Multinational Companies Research Articles

Enclaved or linked? Examining local linkage development in the Tanzanian off-grid solar market

Foreign direct investments in the off-grid solar sector have been growing in East Africa. By linking up as sub-suppliers with the foreign multinational companies (MNCs) undertaking these investments, local companies can benefit from knowledge spillover, which could contribute to improving their competitiveness and capabilities. This depends crucially on the extent to which linkages are forged between the foreign MNCs and the local companies. However, little research has been done so far analyzing local linkage development in the off-grid solar sector in East Africa. To meet this knowledge gap, we examine the breadth and depth of linkages between the foreign MNCs and the local companies in the off-grid solar sector in Tanzania. The article draws on interviews undertaken with eleven MNCs and eleven local companies. We find that the breadth of the linkages was narrow, as the majority of the components and services were imported from abroad. Those which were procured from local suppliers were low-value components, suggesting that the depth of linkages is also limited and shallow. However, there were more backward linkages in the deployment chain than in the manufacturing chain, while more extensive linkages were observed in larger solar systems compared to smaller systems. In order to increase the depth of backward linkages, we recommend focusing on building up the capacity of local companies to offer auxiliary services in the deployment value chains. Furthermore, although small-sized solar systems are seen as crucial components in facilitating affordable energy access to many off-grid areas, they do not offer many opportunities to develop backward linkages between foreign MNCs and local companies.

The Legal Risks that Local Chinese Companies face when being Acquired by Foreign Multinational Companies and the Measure

With the comprehensive and in-depth development of reform and opening up in the last century, as well as since China's accession to the WTO in 2001, foreign multinational companies have aimed at China, accelerated the pace of entering our market. A large number of mergers and acquisitions of Chinese enterprises have penetrated into many industrial fields in China. International mergers and acquisitions have become one of the important ways for multinational companies to enter our market, and many enterprises in China have encountered or will encounter mergers and acquisitions by multinational companies. Due to the lack of specific and detailed laws and regulations in China, the lack of a systematic regulatory mechanism for foreign companies merging with Chinese companies, and the significant differences and gamesmanship between Chinese and foreign merger and acquisition laws, local Chinese companies are exposed to huge risks in the process of being merged by foreign companies. This paper uses legal analysis to explore the legal risks faced by Chinese enterprises in international M&A. It proposes ways to deal with the risks by improving M&A laws and anti-monopoly laws, creating a national brand protection system and actively implementing anti-malicious takeover measures.

The structure of the Canadian packaged food and non-alcoholic beverage manufacturing and grocery retailing sectors through a public health lens

BackgroundCorporate power has been recognized as an important influence on food environments and population health more broadly. Understanding the structure of national food and beverage markets can provide important insight into the power held by leading corporations. This study aimed to descriptively analyze the structure of the Canadian food and beverage manufacturing and grocery retailing sectors as of 2020/21.MethodsPackaged food manufacturers, non-alcoholic beverage manufacturers and grocery retailers with ≥ 1% market share in 2020/21 in Canada as per Euromonitor International were identified and characterized. Proportion of market share held by public vs private, multinational vs national, and foreign multinational companies was assessed for the 3 sectors. The concentration of 14 packaged food, 8 non-alcoholic beverage and 5 grocery retailing markets was assessed using the Herfindahl–Hirschman Index (HHI) and the four firm concentration ratio (CR4) (HHI > 1800 and CR4 > 60 suggest high market concentration). Company ownership structure was also assessed, including common ownership of public companies by three of the largest global asset managers using data from Refinitiv Eikon, a financial market database.ResultsThe Canadian non-alcoholic beverage manufacturing sector, and, to a lesser extent, the packaged food manufacturing sector were dominated by foreign multinational companies, in contrast with the grocery retailing sector which was dominated by national companies. Market concentration varied across sectors and markets but was substantially greater within the retailing (median CR4 = 84; median HHI = 2405) and non-alcoholic beverage sectors (median CR4 = 72; median HHI = 1995) compared to the packaged food sector (median CR4 = 51; median HHI = 932). There was considerable evidence of common ownership across sectors. Overall, the Vanguard Group Inc owned at least 1% of shares in 95% of publicly listed companies, Blackrock Institutional Trust Company 71%, and State Street Global Advisors (US) 43%.ConclusionsThe Canadian packaged food and non-alcoholic beverage manufacturing and grocery retailing sectors include several consolidated markets, with a high degree of common ownership by major investors. Findings suggest that a small number of large corporations, particularly in the retailing sector, have extensive power to influence Canadian food environments; their policies and practices warrant substantial attention as part of efforts to improve population diets in Canada.

Multisensor Human Resource Data Fusion and Its Application in Industrial Distribution

Over the past 30 years of reform and opening up, China has undergone tremendous changes. With the continuous growth of China’s economy, the core competitiveness of Chinese enterprises is also increasing day by day. After China joined the WTO in 2001, economic globalization hit Chinese enterprises. Under such circumstances, a large number of foreign multinational companies have entered China to establish factories, which has caused huge pressure on Chinese companies. Facing this unprecedented pressure, Chinese enterprises need to fundamentally improve management and operation problems. Companies need to change aggressively to respond to the shock of foreign companies. The development of multisensor technology has brought great changes to enterprise human resource management. The real-time changes in this technology allow the continuous optimization of human resource management. Human resource management technology also needs to adapt to the modern social environment and constantly improve and quickly existing enterprise employee management methods and methods. These technical contents need to be optimized, and the working methods need to be improved. At the current stage, enterprise human resource management has not fully understood multisensor technology. Enterprises have poor adaptability in the application of this technology, and have not carried out comprehensive planning and clear optimization of detailed rules from the macro level. On this basis, the company has also failed to establish a relatively excellent team of professional management talents. There are three issues involved in talent team management. This article firstly analyzes the effect of human resource management in contemporary enterprises based on multisensor technology. Enterprises need to improve their awareness and application of sensor technology. It also needs to establish the overall strategy of human resource management and specific means of implementation. Through the in-depth application of these technologies, enterprises can enhance the comprehensive capabilities of human resource management teams. The application of this technology also provides practical and effective help for modern enterprise human resource management.

Access to Insulin Products in Pakistan: A National Scale Cross-Sectional Survey on Prices, Availability, and Affordability.

Background: Diabetes is among the top ten most prevalent diseases in Pakistan, and the availability of medicines to treat the disease is vital for a great percentage of the country’s population. Insulin was discovered a century ago; however, its access in several parts of the globe remains an issue. This study aims to evaluate prices, availability, and affordability (access components) of insulin and five comparator medicine access in Pakistan. Methods: A nationwide cross-sectional survey was conducted to evaluate the access to insulin and some comparator medicines in eight cities of Pakistan, using a modified WHO/HAI methodology. The survey included 80 medicine outlets, i.e., 40 private pharmacies and 40 public hospitals. Data for every unique insulin product available in the Pakistani market were obtained, including five comparator medicines. Percentage availability, median unit prices (MUPs), and affordability (the number of days’ wages (NDWs) required for a month’s course by the lowest-paid unskilled government worker) of all products were calculated, including originator brands (OBs) and biosimilar (BS) products. Results: Of all insulin products surveyed (n = 320), 87.5% were manufactured by foreign multinational companies (MNCs). None of the insulin products had an ideal availability of 80% in any of the surveyed health facilities. In the public sector, none of the insulin products had an availability of more than 50%. In the public sector, the overall availability of human insulin was 70% (including OB and BS). While in the private sector, the overall availability of human insulin was 90% and that of analog insulin was 62.5%. The analog insulin products were 72.8% costlier than the human insulin products. The median prices of BS insulin were 25.4% lower than the OB products, indicating that almost one-fourth of the cost could be saved by switching to BS human insulin from OB human insulin. All oral anti-diabetic medicines were found to be affordable, whereas none of the insulin was affordable. The NDWs for human and analog insulin were 1.38 and 5.06. Conclusion: In Pakistan, the insulin availability falls short of the WHO’s benchmark of 80%. Insulin continues to be unaffordable in both private and government sectors. To increase insulin access, the government should optimize insulin procurement at all levels, promote local production, enforce biosimilar prescribing, and provide financial subsidies for these products.

Training activities in subsidiaries of foreign multinational companies: Local embeddedness in Germany?

AbstractWhile labour geography notes that subsidiaries of multinational companies (MNCs) exploit workers, studies in vocational education show that the international subsidiaries perform education and training. Often, the latter strand of literature relates to cases of MNCs from countries with ‘dual’ apprenticeships that combine comprehensive vocational education and training (VET) of vocational schools/universities and companies. This is how VET is practiced in Germany, Austria and Switzerland. The VET literature also explores how transfer of ‘dual’ practices from these countries of origin can contribute to skilling employees in the host countries. Starting from these conceptual approaches, this paper takes a different perspective. It asks how training activities of MNCs with headquarters in countries where companies hardly combine their in‐house trainings with vocational schools, perform training activities in Germany where ‘dual’ apprenticeship is the prevalent institutional environment. Besides ‘dual’ VET, the study also includes MNCs’ ‘dually’ coordinated training activities with universities. The topic of MNCs’ training activities in such complex structured institutional environments has hardly been researched until now. Methodologically, the study is based on case studies and uses qualitative research approaches for the evaluation of interviews. The results illustrate a spectrum of different kinds of training by presenting three case studies and show how they relate to the particular institutional context in Germany. The discussion and conclusion integrate the results in further findings of the study and literature.

Impact of Foreign Direct Investment on Economic Growth in Ethiopia

This article analyses the impact of foreign direct investment (FDI) on Ethiopia’s economic growth.
 For this purpose, it uses Vector Autoregressions (VARs) model for the period comprised by years
 1981-2017. It finds that FDI had a significant positive impact on Ethiopia’s economic growth for
 both the short and long-run periods. Adequate human capital and stable macroeconomic
 envirornment have catalysed the contribution of FDI to economic growth. Gross fixed capital
 formation and government consumption exerted a negative and significant effects on economic
 growth during the period of interest. Moreover, the study reveals that there is no causal relationship
 between FDI and economic development. Ethiopia needs to open up the economy and restructure
 the financial sector to attract foreign multinational companies (MNC), especially in the manufacturing
 and agro-industry sectors. Human capital investment should be strength to absorb more foreign
 direct investment and transform the agricultural-based economy to a modern one. Effective
 budgeting system and prioritisation of government consumption will support a more rapidly growing
 economy.

Liability of foreignness or outsider’s advantage? MNCs, diversity signals, and local human capital

This research uses signaling theory as an overarching framework to contribute to the question of whether foreign multinational companies (MNCs) enjoy an advantage when pursuing recruiting in local labor markets that show discriminatory practices towards one group of job seekers. While recent research in the field of international management found that foreign MNCs often leverage their otherness by attracting disadvantaged labor market populations, the details of the underlying mechanisms remain unclear. My research addresses this gap by distinguishing between the effect of signals about a company’s foreignness and signals about its support for diversity and inclusion of women on corporate attractiveness. The experimental data for this research was collected by means of manipulated job advertisement vignettes that were distributed to 1,000 university students in South Korea. The results suggest that foreign companies are generally perceived as more attractive than local companies. However, local companies can offset their initial disadvantage vis-à-vis foreign firms if they invest in measures of diversity and inclusion – at least among the female population. The findings call for a more nuanced view of the debate about the liabilities of foreignness and the role of gender. At the same time it alerts to the competitive possibilities for managers of local and foreign companies who are looking to assemble a high quality workforce.

An Empirical Study on FDI Entry Mode Choice in Myanmar: Evidence from Korean Multinational Companies

Myanmar, one of the poorest countries in Asia, had not actively promoted foreign investment until the recent decade due to political issues. While it is meaningful and necessary to study FDI in terms of the promotion of FDI and economic growth in Myanmar, research on FDI in Myanmar is limited to date. This study aims to analyze how foreign multinational companies make FDI entry mode choices between the wholly-owned subsidiary and joint venture in Myanmar. Drawing upon the OLI framework and industrial organization theory, we investigate the firm’s decision of entry mode choice based on its internal and external factors, i.e., firm size, resource, international experience, host country experience, set-up costs, and industry competition. Using survey data collected from 91 Korean multinational companies that made foreign investments in Myanmar during the period from 1988 to 2014, this study shows that Korean multinational companies tend to adopt a wholly-owned subsidiary mode to enter Myanmar’s local market when the firm is larger in size and has more intangible resources and international experiences. However, Korean multinationals are more likely to adopt a joint venture mode when the set-up costs and industry competition are higher in Myanmar. No empirical support is found for the relationship between the firm's experiences in the host country and FDI entry mode choice. The findings provide valuable implications for MNEs that consider entering into Myanmar.

Impact of motives of inward FDI on benefits perceived by foreign multinational enterprises investing in India

The study aims to determine the principal motives of inward foreign direct investment by foreign multinational companies in India. The study undertakes to find out the impact of motives of inward foreign investment of multinational firms on benefits as perceived by the managers. The paper uses a survey approach to collect data about motives and its impact on benefits. Statistical tools, namely confirmatory factor analysis, structural equation modeling have been used. The study found that principal motive for foreign multinational firms to undertake investment is market-seeking followed by resource-seeking and efficiency-seeking motive. The strategic-asset seeking motive does not significantly influence foreign direct investment in India. The study found a positive impact between perceived benefits and motives of inward foreign direct investment in India.

Analysis of completeness of information in package inserts of Indian and foreign multinational pharmaceutical companies: an Indian perspective

Background: A package insert (PI) should contain all the information required for safe and effective use of the medicine. The present study evaluated and compared the completeness of information in package inserts of Indian and foreign multinational pharmaceutical companies based in India.Methods: A total 150 PI’s consisting of 75 package inserts of Indian and foreign multinational pharmaceutical companies in India were collected and analyzed based on the criteria of Indian drugs and cosmetics rules, 1945 under section 6.2, 6.3 of schedule D, which consists of 25 parameters. Each criteria was scored for presence of information as ‘1’, absence as ‘0’. Total score was 25, score >20 was graded as ‘A’, 10-20 as ‘B’ and <10 as ‘C’. Data was expressed as numbers and percentage.Results: Total 150 PI evaluated included antimicrobials, antipsychotics etc. Out of all the PIs 26% belonged to grade A, 70% belonged to grade B and 4% belonged to grade C. Lack of information was found in both the categories of PIs. Foreign PIs performed better in comparison to Indian PIs as in grade A, 27 out of 41 PIs were foreign whereas 56 PI’s in grade B were Indian and 47 were foreign. Both categories of PI showed good information about active ingredient, dosage form, warnings, contraindications and lacked information about retail price and references etc.Conclusions: Both categories of PIs were deficient in completeness of information. The pharmaceutical companies, both national and foreign, must provide the information as per regulatory norms.

Industry drivers of multinational companies’ externalization choice: a conceptual framework and application to Korea–China film co-productions

Purpose This conceptual paper aims to explore under what conditions multinational companies (MNCs) are more likely to internationalize through externalization modes. Design/methodology/approach This paper complements previous studies by proposing three industry-specific factors that affect MNCs’ decision for externalization. It then applies this framework to the case of Korean MNCs’ strategic choice when entering the Chinese film market which is highly regulated by the government, to illustrate how such a framework works in practice. Findings This paper suggests that MNCs are more likely to choose externalization entry modes under the three industry conditions: when the business grows fast, when there are best practices of industry standard and when the business requires multi-competence. It also shows that the three conditions explain well the growing Korea–China co-productions in the Chinese film market. Practical implications This paper provides useful implications for the government’s regulatory effectiveness. The protectionist policies of the host government are valid only in an industry where the three conditions are met, as they increase the possibility of domestic firms’ participation by encouraging foreign MNCs to shift their entry mode from sole venture toward alliances with domestic firms. Originality/value This paper enriches the entry-mode research by indicating that MNCs’ externalization decisions need to consider these industry-specific factors. In addition, it also contributes to the understanding on why some countries maintain their high attractiveness for foreign MNCs, whereas other countries do not, given the similar level of restrictive government regulations.

Motives of foreign multinational firms investing in India: A comparison between manufacturing and services sector

The study aims to determine the principal motives of inward foreign direct investment, by foreign multinational companies, in India. The study also seeks to ascertain if the motives of inward foreign investment of multinational firms differed between the manufacturing sector and the services sector. The paper employed a survey approach, to collect data about the motives and benefits of inward foreign direct investment, in India. Statistical tools, like confirmatory factor analysis, independent sample t-test, were used. The study identified that the market-seeking, resource-seeking, and efficiency-seeking motives differed significantly between the manufacturing sector and service sector firms. However, the study concluded that the strategic asset-seeking motive of foreign direct investment, in India, was not significant.

The role of nation brand in attracting foreign direct investments: a case study of Korea

PurposeDrawing on the six-dimensional framework of the Anholt-GfK Nation Brands Index (NBI), the purpose of this paper takes a government-to-business (G2B) perspective of international marketing by shedding light on how governments (as sellers) can harness their nations’ brand image to attract businesses (as buyers) to invest in the country.Design/methodology/approachUsing Korea as context, this study interviewed Korea-based foreign multinational companies (MNCs) to elucidate how nation brand had influenced their FDI decisions to establish R&D centres in Korea. Purposive sampling identified 36 MNCs from diverse countries and industries that had set up R&D centres within the last decade. Individual in-depth interviews probed the MNCs’ views of Korea’s nation brand in regards to their FDI decisions. Recorded interviews were transcribed and analysed for common themes.FindingsFive key thematic attributes of Korea’s nation brand emerged: rigid labour market, pro-FDI government, Chaebols’ dominance, strong nationalism and rapid industrialisation. These attributes relate to NBI’s dimensions of people, governance, investment/immigration, culture/heritage and exports, respectively. The dimensions impacted Korea’s nation brand differently.Originality/valueThis study contributes to nation branding research by applying the Anholt-GfK NBI to empirically investigate nation brand’s influence on attracting business investments at a macro-G2B level. The findings are particularly useful in guiding government policy-makers and trade organisations on running nation-brand promotions and marketing campaigns for FDIs. The findings will also benefit foreign businesses who are considering injecting capital investments into a country.

Digital technologies for launching innovative medications to the pharmaceutical market

In modern conditions, the methods of bringing drugs to the pharmaceutical market has significant differences from other segments of the economy due to the following factors: the social significance of drugs that directly affect the quality of life and health of the population, the inability to refuse the use of drugs, the presence on the market of three groups of consumers - patients, doctors and the state represented by hospitals and the Ministry of health, legislative restrictions in the methods of marketing activity, a greater share of the presence of foreign multinational pharmaceutical companies, the specifics of the methods of bringing innovative drugs to the market. In order to quickly adapt to the ever-changing environment and achieve the objectives, pharmaceutical companies use different methods for launching new products, which demonstrate different degrees of efficiency, levels of implementation, and speed of obtaining the desired result. Increasing competition on the pharmaceutical market between medication manufacturers and the battle for the consumer should be based on the active introduction of digital technologies and a rational combination of methods of bringing innovative drugs.

Is the fourth industrial revolution relevant to sub-Sahara Africa?

ABSTRACTWhile the 4IR has the potential to impact on all industries and all nations, regardless of their location or state of development, many of the discussions of the 4IR and its impact are focused on advanced economies. What are the prospects and constraints of the 4IR to emerging economies in sub-Sahara Africa? To what extent is the 4IR relevant to sub-Sahara Africa where there is a large informal economy, limited public infrastructure, where technical skills levels are low, and advanced technology can be found in only a few sectors that are dominated by foreign multinational companies and staffed by expatriate workers? What is the relevance of policy development towards the 4IR in the region given its young population profile, and emerging skill shortages in key sectors? The paper draws on secondary literature to highlight the challenges and to identify the policy developments that have been developed in the region.

LOCAL BRANDING STRATEGIES IN SOUTHEAST ASIAN ISLAMIC CULTURES

In the beauty industry, local companies lose and the foreign companies win in nearly all places around the world. However, it is believed that in Islamic and traditional cultures, local companies have a competitive edge over foreign multinational companies, an edge that impacts consumer choices. What contributes to this edge combines the concepts of Warisan (traditional and cultural) and halal (an Islamic concept of purity and cleanliness) that are applied by local companies in Malaysia, Indonesia and Thailand to compete against multinational companies and win battles for profits. In the beauty industry, the literature lacks an explanation of why consumers choose certain beauty product brands and the reasons for their choices in Malaysia, Indonesia and Thailand. To understand the impacts on consumers’ choices between local and international brands and to evaluate the effectiveness of branding strategies in the beauty industry, a survey was conducted in Indonesia (Jakarta), Malaysia (Kuala Lumpur) and Thailand (Bangkok). In total, 361 questionnaire surveys were conducted with female respondents at various locations in the three countries. The study found that despite the fact that local companies leveraged their competitive advantages, beauty product users in Indonesia, Malaysia and Thailand preferred product qualities such as suitability, quality and indigenous ingredients to local or foreign brands. International brands had a significant impact on consumers in each of the three countries. However, global brands did not use a halal logo demonstrating that consumers preferred foreign over local brands despite the high level of awareness for halal products and ingredients (including indigenous herbs), that international brands did not offer. Indigenous branding strategies that emphasized halalness and indigenous knowledge of herbs were less impactful on brand choice. The quality, suitability, and ingredients took precedence over the halal factor.Keywords: Southeast Asian Islamic cultures, halal, indigenous knowledge, indigenous ingredients, tayyibah

Cultural values matter

As the economic footprint of developing countries increases, talent management grows in importance for foreign multinational companies in emerging markets. Multinational companies, however, face fierce competition for local talent, and competitive recruiting calls for practical knowledge about the personal traits of job applicants. The present study applies a cross-cultural perspective to this issue, exploring how individually held cultural values influence the attractiveness of Japanese companies in Malaysia. Drawing on similarity-attraction theory and person–organization fit theory, the study quantitatively analyses data from a paper-based survey of 245 prospective jobseekers. The findings indicate that an individual cultural value fit with the foreign company’s country of origin is significant predictors of employer attractiveness. Specifically, the study finds that potential Malaysian jobseekers who are lower in power distance and higher in risk aversion and long-term orientation view Japanese companies as attractive future employers and have higher job-pursuit behavior. Based on this finding, the study discusses theoretical and practical contributions to corporate employment strategies.

Key contextual success factors for employee innovative behavior: A study in a foreign manufacturing subsidiary in China

Employee innovative behavior has been recognized as a key enabler for competitiveness in China. As more and more foreign multinational companies (MNCs) are setting up innovation activities in China...

Influence of Macroeconomic Factors in the Capital Structure of Foreign Subsidiarie

This article examines the influence of macroeconomic factors in the capital structure of subsidiaries of foreign multinational companies (SFM) in Brazil by comparing them with local Brazilian companies (LBC) during the period from 1998–2008. Panel data econometrics was used to analyze the data and test the hypotheses. During this period, exchange rate variation was positively associated with local leverage, which supported the hypothesis of income hedging in the context of foreign currency exposure of the head office. We also found less local leverage for foreign multinational companies when the macroeconomics scenario became more stable. Finally, contrary to the initial hypothesis, differences in financing rates between Brazil and the SFMs’ head office country were positively related to local leverage.