Foreign Penetration Research Articles

Deterrence Without Mutual Destruction

Abstract With openness comes vulnerability. David Sloss's new work, Tyrants on Twitter, elevates the abuse of social media by autocrats to a new war front, reminiscent of the concerns for foreign penetration during the Cold War. His response to this new round of “information warfare” is the mobilization of a transnational alliance of the 40 or so leading democratic countries to register citizens for use of social media and filter out tyrants and their fronts, be they real people or bots. The book begins by chronicling the extent of democratic decline, a well-defended starting point. More complicated is the argument that the correlation between democratic decline and foreign interference establishes the causal role of the latter. Even more difficult is the conclusion that there is need for war-like footing to mobilize against foreign threats. The review ends with a note of caution on the costs associated with democratic societies closing up in the face of foreign challenge.

Privatization in extractive industry under foreign penetration

This paper analyzes optimal privatization policy in exhaustible resource industry where a public domestic firm is less cost efficient than a private multinational firm. It is shown that the impact of foreign penetration on optimal privatization depends on the cost asymmetry between the public and private firm. If the cost efficiency gap is small, then the optimal rate of privatization is a decreasing function of foreign ownership of multinational firm. However, if the cost efficiency gap is large, then, contrasting to existing studies, the result is quite different: full nationalization is optimal if the foreign ownership of multinational firm is low but full privatization becomes optimal if this share is high. Under moderate cost asymmetry foreign penetration does not have any impact on privatization. It is also demonstrated that an increase in foreign penetration results in faster resource extraction by the public firm while an increase in the state share accelerates public firm extraction if it was initially too slow in comparison with the socially efficient path and slows down if it was initially too fast.

When Doves Feed Hawks: Ottoman War Decision and European Powers Towards the Crimean War

When does the war party win in the decision-making process? Why does the peace party lose even if war is too risky? In this article, we show that certain balancing acts of the peace party might increase the confidence of the war party. We examine how the Ottoman Empire’s risky Crimean War decision and its war declaration against Russia on 4 October 1853 were shaped by internal debating through time, foreign penetration, and dynamic interplay between the Ottoman decision makers and a changing European strategic environment. The large literature on the Crimean War does not include a systematic analysis of the Ottoman origins of the Crimean War and the Ottoman war decision. We trace the Ottoman decision-making process in the fateful months of 1853 to establish the origins of the Crimean War. We empirically demonstrate the gradual formation of the Porte’s war decision by showing how the peace front stumbled upon war by inadvertently changing the decision structure in favor of the war party within a year.

Mixed oligopoly, state-owned banks’ shareholding reform and foreign capital penetration

This paper examines the impact of the policy on eliminating the ratio of foreign shareholding in banks in a mixed oligopoly model. Its analytic results show that state-owned banks should encourage privatisation along with an increasing proportion of the domestic share in multinational banks. Furthermore, we argue that the increase in domestic stockholding of multinational banks raises domestic private firms’ profits but decreases their social welfare in the deposit market. The results of numerical simulation show that when the quantity of private banks is fixed, foreign banks tend to enlarge their stake and strengthen their controlling power.

The Role of External Factors in Regime Stability and Resilience-Building in the Multipolar Middle Eastern Region: The Experience of the Hashemite Kingdom of Jordan

ABSTRACT This article aims to bring together the factors of resilience, regime stability, and foreign penetration into one research project based on the example of the Hashemite Kingdom of Jordan, which marked the one-hundredth anniversary of its statehood in 2021. Even though it exists in a neighborhood that is in turmoil, the Jordanian monarchy has managed to survive all the spillover effects from such regional conflicts. This study argues that external influences have played an increasingly significant role in political developments in Jordan since the beginning of the New World Order in 1989. Scholars of international relations often argue that foreign penetration may cause state vacuums like those that have arisen in Syria, Libya, Yemen, and Iraq. Yet, this has not been the case with other states in the Middle East. One important factor behind this resilience and regime stability is related to the behavior of foreign actors. With respect to the Hashemite Kingdom, the United States has historically been the main provider of state security. Nonetheless, at the same time the European Union (EU) has adopted a pragmatic view toward Jordan and its new resilience-building approach also helps to maintain the status quo. Moreover, the regional hegemons and swing states of the Middle East and North Africa (MENA) region do not have an interest in altering the existing order save for a few radical groups. The author argues that the convergence of the national interests of the major regional stakeholders also contributes to regime stability and that outside support has increased the resilience of its political system despite the growing frustrations of many of the country’s citizens.

Helping or hampering banks competition? The Asian experience after the Asian financial crisis

In this paper we revisit the question of the determinants of competition in banking markets and provide a new, in-depth analysis. We use the successful stabilization experience that followed the Asian Financial Crisis and evaluate the effects of a comprehensive set of potential competition determinants on a sample of nine Asian countries observed in the period 2000–2016. Focusing on the loans market we estimate two separate models of competition: a more flexible reformulation of Bolt and Humphrey’s competition efficiency, and a dynamic Lerner index model. Our results are consistent between the two models. Competition overall increases moderately, despite the more prudential policies adopted after the crisis. Lower entry barriers, higher foreign penetration, foreign ownership and competition from the stock market, as well as higher concentration and larger size, all encourage competition among banks. Higher freedom on non-traditional banking markets instead promotes substitution and reduces competition for loans, as banks shift their competitive efforts towards potentially more profitable non-interest activities. These findings lend some support to the current restructuring policies in the region, and to the concomitant liberalization processes that have continued to take place.

Strategic corporate social responsibility and partial privatization policy with foreign penetration

Strategic corporate social responsibility and partial privatization policy with foreign penetration

A case report of cervicothoracic penetrating injury with retention of foreign body

BackgroundCervicothoracic penetrating injury, considered to be relatively rare, has a complicated mechanism that is difficult to treat. In this report, a special case of cervicothoracic injury caused by foreign body penetration was elucidated. In this case, the injury location and the involved foreign body were exceptionally particular, which induced a challenging process of diagnosis and treatment.Case presentationA male patient suffered from a serious injury caused by a thick branch that pierced through his neck in a traffic accident between an electric car and a tricycle carrying wood. There were also local injuries in the left scapular region. After an emergency multidisciplinary consultation, the patient was diagnosed and subsequently treated with vascular exploration and repair (common carotid artery), intrathoracic foreign body extraction, chest exploration, debridement, and suture. After surgery, he was transferred to the emergency intensive care unit for anticoagulation and anti-infection treatment. Finally, after the improvement of his physical condition, the patient was transferred to the general ward for further treatment and was successfully discharged from the hospital. Once discharged, the patient lived a normal life, free from sequelae or complications.ConclusionIt may be an extremely daunting task to cure cervicothoracic penetrating injury due to its rare occurrence in clinical practice. Different from the previous cervicothoracic traumas, the injury location in this case is exceedingly particular. In general, the common cervicothoracic trauma is associated with damage to the trachea, esophagus, throat, and other structures, easily resulting in dyspnea, which, however, does not occur in this case. The insertion position of foreign body is exceptionally particular as it does not pierce the common carotid artery but poses compression on it, which induces ischemia. It is essential for the successful treatment that the treatment plan is formulated via the detailed imaging examination and careful multidisciplinary consultation.

Concentración, extranjerización y el rol de las grandes empresas en el sector externo argentino (1994-2015)

Durante los últimos cincuenta años, las dinámicas productivas y el comercio internacional se han transformado significativamente y ha ganado importancia el papel de las grandes empresas, que crecientemente han incrementado su poder económico y su relevancia en el comercio exterior. El objetivo del presente artículo es analizar para el periodo 1994-2015, el desempeño de la cúpula empresarial en el comercio exterior argentino, las continuidades y rupturas que este actor registra entre la convertibilidad y la posconvertibilidad, la evolución en el nivel de concentración y extranjerización, y las implicancias que estos fenómenos tienen en materia de desarrollo económico para Argentina.

Redefining patriotism and belonging in illiberal Russia

This study advances the argument that contemporary Russian illiberalism can be characterised through immense societal polarisation, generating a language of ‘othering’ and equating groups with critical political attitudes as ‘agents of the West’ or ‘foreigners.’ In the name of eradicating ‘amoral Western influence’ and shielding Russia from ‘foreign penetration and propaganda’ that spreads immoral values, political control over ‘foreign’ groups and organisations has intensified. In a similar vein, patriotism is increasingly equated with loyalty to the Russian state. In this article, based on the example of LGBT organisations I show how othered groups strive to (re-)define themselves as part of the Russian nation—as patriotic and socially useful members of society. Employing institutional, political and social strategies, groups such as pro-LGBT organisations try to resist being pushed outside of Russian society, and in the process prove their patriotism and rootedness.

Macroprudential ring-fencing

PurposeThis paper aims to focus on capital-related macroprudential policies in the context of recent policy discussions on the removal of barriers to the mobility of capital and liquidity of cross-border banks in the European Union (EU).Design/methodology/approachThis study first discusses the link between financial stability and internal resource mobility of cross-border banks. Then, it examines past heterogeneity in structural capital buffers as key macroprudential capital instruments applied in the EU and relate them to costs of policy action, degree of foreign penetration and membership in the Banking Union.FindingsObserved phase-in patterns of structural capital buffers in the EU are broadly consistent with costs of policy action, degree of foreign penetration and membership in the Banking Union as potential factors. The process of financial integration could be further enhanced through reduced uncertainty in the application of macroprudential policies that constrain capital mobility of cross-border banks.Originality/valueThis paper anchors macroprudential policies into a wider discussion on the mechanism and implications of ring-fencing in the EU over time. It discusses two policy areas, macroprudential policies and proposals for deeper financial integration, that share the same financial stability objective but tend to emphasize different implications of the mobility of capital and liquidity of cross-border banks in the EU. The study provides a discussion of potential implications of the recent adoption of the CRRII/CRDV legislation for future heterogeneity of macroprudential policies in the EU.

Foreign penetration, competition, and credit risk in banking

This paper reveals that foreign penetration in terms of assets and branches exhibits different impacts on credit risk in banking. In general, a higher share of foreign banks’ total assets exacerbates nonperforming loans, but the increased number of foreign banks diminishes credit risk. Moreover, the role of foreign banks in mitigating credit risk is conditional on the measure of bank competition and country income status. A higher share of foreign bank branches can diminish nonperforming loans after bank concentration, not bank market power, exceeds a certain level. These findings are more pronounced for emerging markets. In addition, higher bank credit risk due to foreign penetration and bank competition can partly be explained by the loss-leader hypothesis coming from higher bank noninterest income. Providing incentives for the banking industry to avoid cross-selling strategies in boosting noninterest income is necessary due to changes in foreign penetration and competition in banking.

Diagnostic and therapeutic role of ultrasound in soft tissue foreign bodies and associated complications: a pictorial essay

Ultrasonography allows detection of a variety of soft tissue foreign bodies, including wood splinters, glass, metal, and plastic. Herein, we present a pictorial essay on diagnostic and therapeutic role of ultrasound in soft tissue foreign bodies with complications. Figure 1: A 45-year-old male with history of accidental metallic foreign body penetration in the right thigh 2 months ago came for ultrasound of the right thigh to know the exact location of the foreign body. Ultrasound with use of the endocavitary probe showed a brightly echogenic foreign body adjacent to the proximal right superficial femoral artery complicated by pseudo-aneurysm formation. CT angiography right lower limb confirmed the ultrasound findings. Figure 2 (A, B, C): Ultrasound of wooden soft tissue foreign bodies according to severity of symptoms at presentation. A. 42-year-old male with asymptomatic foreign body in the left palm at presentation. B. 7-year-old boy with mild to moderate pain and unsuspected foreign body in the calf. C. 22-year-old male with extensive soft tissue oedema in the left hand. Figure 3: Sonography of a broken needle tip. Figure 4: Sonography role for guidance of soft tissue foreign body extraction using hydrodissection. Ultrasound allows accurate and efficient detection of radio-opaque as well as radiolucent soft tissue foreign bodies and aids assessment of their associated complications along with image-guided foreign body removal. Ultrasound has emerged as the study of choice for detection and localization of soft tissue foreign bodies, for assessment of associated complications and for image-guided soft tissue foreign body extraction.

Influence of Private Equity Penetration on Capital Market Development in Sub-Sahara Countries

Any country that recognises the importance of private equity investments may be forced to have a developed capital market as private equity investors use capital markets for Merger and Acquisition transactions and exit routes from portfolio companies after the holding period. Therefore, this paper seeks to assess the extent to which private equity penetration influences capital market development in Cameroon, Nigeria, Ghana, Kenya and South Africa. Secondary data was collected from private equity and venture capital data bases, World Bank development indicators, regional private equity venture capital associations and on country specific stock market websites. The Two-Stage Least Squares Instrumental Variables, Panel Corrected Standard Errors and Feasible Generalised Least Squares estimation techniques were used due to the potential problems of endogeneity and spherical errors of serial correlation, heteroskedasticity, cross sectional dependence and multicollinearity. The results show that the signs of the variables from the Panel Corrected Standard Errors and Feasible Generalised Least Squares estimation techniques are consistent with those of the Two-Stage Least Squares Instrumental Variables, though the magnitudes of the coefficients are different. In terms of the variables that are significant, the same set of variables (stock market liquidity, banking sector development and GDP per capita) is significant in all the specifications while foreign direct investment and private equity penetration (variable of interest) are insignificant in all the specifications. Based on the findings, we recommend the governments of these countries to set listing requirements based on businesses sizes, continue to improve macroeconomic environments and improve on the regulations on microcredit banks.

Foreign penetration and domestic competition

We consider an oligopolistic model comprised of domestic and foreign firms. The two sets of firms produce differentiated goods and serve the domestic market. We consider different market structures depending on the existence of free entry and exit of either set of firms. In this context, we examine the structure of optimal lump-sum taxes, and the effect of an increase in the number of foreign firms (foreign penetration) on, inter alia: (1) the free-entry number of domestic firms, (2) the optimal number of domestic firms, and (3) domestic welfare. The main finding is that foreign penetration unambiguously reduces excessive competition among domestic firms.

Foreign penetration, competition, and financial freedom: Evidence from the banking industries in emerging markets

Traditional theories suggest that foreign entry intensifies competition and improves efficiency in a banking sector. However, the positive impacts may be offset by several factors, such as foreign banks’ “cherry-picking” lending practice, mergers & acquisitions, and the “crowd-out” effect. Based on a sample of commercial and savings banks collected from Bankscope, this paper investigates the effects of foreign penetration on bank competition in the host countries. Using the two-step Arellano-Bond system GMM method, we show that the entry of foreign banks enhances competition in the banking systems among the sampled developing countries between 2000 and 2014. The positive relationship between foreign penetration and banking competition is more conspicuous after the 2008–2009 global recession. Latin American countries appear to benefit more from foreign bank penetration during the sample period than emerging markets in Asia. Also, the level of a host country’s financial freedom has a moderation effect on the “foreign penetration—competition” nexus.

The Roots of the United States’ Cyber (In)Security*

Three months after Hillary Clinton’s surprise defeat in the 2016 election, the Office of the Director of National Intelligence released a report concluding Russia’s President Putin had ordered the theft of data from the Democratic National Committee and Clinton campaign to mount an online influence campaign aimed at harming her electability and potential presidency. In response to this foreign intervention in the U.S. electoral process, members of Congress called for the formation of a bipartisan select committee to devise solutions to deter and defend against further cyberattacks. But this was not the first time a call had been raised to improve the security of America’s computer networks, and based upon the nation’s poor grasp of its own cyber history, will not the be the last. This paper explores the debates that surrounded the introduction of NSDD 145, the United States’ first cyber security directive, in 1984. The order, which sought to place the NSA at the heart of protecting America’s burgeoning computer networks in both the government and private sector from foreign penetration, became a lightning rod for dissent among Congress, private sector businesses, academics, and privacy campaigners alike. By exploring the motives of the directive’s architect, the cases put forward by its opponents, and the reasons for its eventual repudiation, this paper provides a better understanding of the enduring reasons behind America’s cyber insecurity. In doing so, it ensures historians are better informed in their efforts to place the current sense of vulnerability into a wider context, and that contemporary policymakers are better placed to approach the issue.

Genoese Trade and Migration in the Spanish Atlantic, 1700–1830, by Catia Brilli

It is a commonplace that trade within the transatlantic empire of the Spanish Habsburgs and Bourbons was penetrated by foreigners, making a mockery of the supposed Spanish monopoly. In this monograph, however, Catia Brilli explores a rather unusual aspect of that foreign penetration. Instead of considering the role of the Dutch, English and French, she discusses that of the Genoese. The Genoese republic (in the Middle Ages the doyen of the Italian commercial republics) had early on established a niche for itself within the nascent Spanish empire, and, in the later sixteenth and early seventeenth centuries, Genoese finance oiled the wheels of Spanish imperialism. The Spanish bankruptcy of 1627 brought to a close what has often been thought of as a golden age of Genoese finance, although the republic’s loans continued to keep many a state afloat in Europe down to the French revolution. However, it is Genoese trade (or rather the commercial activity of Genoese, subjects of the republic, down to its disappearance in 1804, a rather different thing) and migration which is Brilli’s concern, rather than finance. After 1627, Genoese merchants continued to play an important role in trade between Genoa and Spain, that is Cadiz, and in that between Cadiz and Spanish America before and after the liberalisation of the latter by Charles III from the 1760s onward. (In 1771, first-generation Genoese merchants represented the second largest group of non-Spanish wholesalers in Cadiz after the French.) The Genoese participated in various ways, including exporting paper (one of Genoa’s chief exports to Spain, and beyond to Spanish America) and participating in abortive Spanish efforts in the eighteenth century to develop a Spanish paper industry to supply its own needs. The Genoese were able to establish themselves in Cadiz but—and this is a crucial element of Brilli’s argument—they did not do so with the help of a republic which was not a major power and which preferred neutrality to intervention. For their part, Genoese merchants in Cadiz were reluctant to fund the republic’s official agent there, the consul. Nor, although they were happy on occasion, and when necessary, to take advantage of Genoese links, did they see themselves as outriders or agents of the republic. (Some, however, built on their commercial success in Spain to enter the Genoese ruling oligarchy.) Instead, they sought to embed themselves in, and to integrate into, local society. This preferred route to success abroad contributed to the ‘invisibility’ of the Genoese which, says Brilli, explains why they have hitherto largely escaped the attention of historians. The movement of men and goods was facilitated by networks of informal and flexible co-operation which helped overcome the lack of support in and from Genoa.

U.S. corporate investment and foreign penetration: Imports and inward foreign direct investment

This paper examines the joint effect of imports and inward foreign direct investment (iFDI), the two primary entry forms of foreign companies to the U.S. product market, on domestic firms’ capital investment decisions. We develop novel firm-level measures to gauge the impact of imports and iFDI. We show that increased import competition significantly reduces U.S. firms’ investment; in contrast, the effect of iFDI on investment is largely nonsignificant. Further analysis suggests that the negative effect of imports on investment is due to competition-induced decline in cash flows. And the nonsignificant result for iFDI can be partly attributed to technology spillovers generated by foreign multinational’s U.S. productions, which promote U.S. local firms’ innovation capacity and consequently offset the negative effect of foreign competition on investment. Overall, our results indicate that foreign competition plays a key role in shaping corporate investment policy and highlight the distinct implications of imports and iFDI on firm investment.

Foreign Ownership and Market Power: The Special Case of European Banks

The paper examines the nexus of foreign ownership and market power in 26 European banking sectors, for the period 1997-2013. The sample comprises 11,761 bank-year estimates of marginal cost and market power, which are then matched with data on the foreign ownership status and presence across all host countries. The analysis reports strong evidence over the significant effect of well-capitalised foreign-owned banks on their monopolistic conduct. There is also a weaker indication that foreign presence leads to higher margins in large-sized foreign banks in fast-growing economies and markets of stricter regulation on capital, in which foreign penetration lies above 14% of the host banking industry.