Home Country Factors Research Articles

Home country influence in cross-border mergers and acquisitions by emerging market firms: a systematic review

PurposeEmerging market firms (EMFs) are increasingly expanding their global presence through cross-border mergers and acquisitions (CBMAs). While such deals are distinct from those by advanced market firms, there is a need for a comprehensive understanding of how emerging home markets form this distinctiveness. This study aims to remedy this gap.Design/methodology/approachThe authors conduct a systematic literature review of 84 empirical papers. Through a broad search string and seven exclusion criteria, the authors carefully select studies on country-level home factors of CBMAs by EMFs.FindingsAfter summarizing paper volumes, journals and context factors of home/host countries and industries, the authors highlight different strands of institutional theory as the prevailing perspective and pre-M&A issues as the foremost theme. CBMAs by EMFs are influenced by distinct home-exclusive factors, and the mechanisms linking home-country factors to CBMAs by EMFs show significant inconsistencies across studies.Originality/valueThis review focuses on home country influence and thus goes beyond general characteristics of CBMAs by EMFs. The authors highlight more diverse types of home country factors and CBMA outcomes and, more importantly, take a closer look at involved mechanisms. Doing so, the authors identify gaps and disparities that have limited the understanding of home country influence in CBMAs by EMFs. To correct this, the authors offer a comprehensive roadmap for future research, contributing to EMF studies in particular and CBMA and international business research in general.

The internationalization of state-owned enterprises in liberalized markets: the role of home-country pro-market reforms

We study how home-country factors can alter the impact of host-country conditions on the location decisions of state-owned enterprises (SOEs). Specifically, we examine the role of home-country pro-market reforms in facilitating SOEs’ entry into host countries with a free-market logic. We consider two types of home-country pro-market reforms: market liberalization and privatization. We propose that home market liberalization mainly mitigates SOEs’ market legitimacy deficit and facilitates their entry into host countries with a prominent free-market logic. In such contexts, businesses perceive SOEs from more liberalized home markets as more accustomed to market competition and thus are less likely to exert pressure on the host government against them. We also argue that furthering SOEs’ privatization mitigates SOEs’ political legitimacy deficit in host countries with a free-market logic, thus facilitating entry. In these contexts, host governments perceive more privatized SOEs as more independent from their home state due to reduced political connections. We find support for our arguments in a dataset of 97 telecom SOEs from 97 countries over the period 1990–2010. Our study advances research on SOEs’ internationalization and research on pro-market reforms and has relevant implications for managers and policymakers.

Home country uncertainty and cash holdings: Evidence from multinational subsidiaries in South Korea

Using data on South Korean subsidiaries with 18 different countries of origin and a newspaper-based economic policy uncertainty (EPU) index, we investigate the effect of uncertainty transmission on multinationals’ key decisions. Subsidiaries of multinational corporations face host and home country uncertainty. We document that Korean subsidiaries significantly increase their cash holdings when EPU increases in their home countries, indicating that national uncertainty shocks are transmitted to other countries through multinational networks. We further show a more pronounced home EPU effect when parent companies hold a greater share of subsidiary equity. The home EPU effect is robust to the inclusion of additional home country factors and alternative definitions of home EPU and cash holdings. Additionally, we find that subsidiaries reduce their capital expenditures when their home EPU increases.

The Role, Nature and Contribution of Indian Emerging Market Multinational Companies in African Countries

This article examines factors pertaining to the development of Indian emerging market multinational companies (EMNCs) in African countries. India is a member of the BRICS grouping of developing countries, the others being Brazil, China, Russia and South Africa. Therefore, understanding its role, scale and dynamics of internationalising in the African context is particularly important. The following key areas are examined: the historical and socio-economic context, internationalisation strategies of Indian MNCs in African countries, home and host country factors, labour markets in host countries and human resource management (HRM) approaches of selected Indian EMNCs in particular African countries. Most work on international business and international HRM in Africa focuses on the Sino-Africa nexus. Both China and India are members of the BRICS grouping but have followed different trajectories in internationalising in the African context. This analysis helps fill a gap by evaluating the Afro-Indian relationship in business, particularly EMNCs from India. The analysis finds the following abiding themes in the historical connections and relationships of Indian EMNCs: the role of family-owned businesses, human resource development and long-term host country commitment.

Exploring the link between home country attributes and firms' internationalisation: evidence from GEDI and WEF data

PurposeThis study aims to examine the degree to which a selection of home country factors affects the proclivity of firms to internationalise. The study also proposes and tests a conceptual model that fuses institutional and resource-based theories to improve our understanding of firm internationalisation.Design/methodology/approachThe study uses cross-sectional, national-level secondary data from the 2018 Global Entrepreneurship Development Institute and World Economic Forum data sets on global entrepreneurship and competitiveness indices for 137 countries. The data is analysed using correlation and hierarchical regression analysis to test the hypotheses.FindingsThe results indicate that national income, institutions, trade openness and availability of risk capital positively influenced firm internationalisation, while home-country networking had an inverse effect. However, home country infrastructure had no statistically significant effect on firm internationalisation.Research limitations/implicationsThe findings highlight the importance of considering home country attributes in understanding the internationalisation of firms.Originality/valueThis study contributes to the body of knowledge by providing empirical evidence of the role of local factors on the internationalisation of entrepreneurial ventures. It also tests a novel conceptual model that integrates institutional and resource-based theories to explain the nuances of the internationalisation of business ventures globally.

Breast cancer screening and immigrant women-A scoping review of attendance, knowledge, barriers and facilitators.

The aim of this study was to summarize the latest research reports about immigrant women and attendance in breast cancer screening. Scoping review. Literature searches were made in CINAHL, PubMed, Web of Science, Google Scholar, Oatd and Oalster. Twenty-three articles were included in the study. Data were analysed with inductive content analysis. Out of data four main categories were formed: attendance rates, incidence, barriers and facilitators, and knowledge and perception. The results show that attendance rates, barriers and facilitators for attendance, knowledge and experience of breast cancer and breast cancer screening differ between several factors such as the woman's migrant background, country of origin, religion, length of stay in the new home country and sociodemographic factors.

Transnational sensemaking narratives of highly skilled Canadian immigrants' career change

PurposeThe authors answer calls for research on the experiences of international professionals' career transitions by investigating how highly skilled immigrants make sense of their career changes in the host country's labor market.Design/methodology/approachThe authors report on a qualitative, inductive and elaborative study, drawing on sensemaking theories and career transitions literature and nine semi-structured reflective interviews with highly skilled Canadian immigrants.FindingsThe authors identified four career change narratives: mourning the past, accepting the present, recreating the past and starting fresh. These narratives are made sense of in a transnational context: participants contended with tensions between past, present and future careers and between relevant home and host country factors affecting their career decisions. Participants who were mourning the past or recreating the past identified more strongly with their home country professions and struggled to find resources in Canada. In accepting the present and starting fresh, participants leveraged host country networks to find career opportunities and establish themselves and their families in the new environment.Originality/valueA transnational ontology emphasizes that immigrants' lives are multifaceted and span multiple national contexts. The authors highlight how the tensions between the home and host country career contexts shape immigrants' sensemaking narratives of their international career change. The authors encourage scholars and practitioners to take a transnational contextual approach (spatial and temporal) to guide immigrants' career transitions and integration into the new social environment.

The Determinants of Outward Foreign Direct Investment from Latin America and the Caribbean: An Integrated Entropy-Based TOPSIS Multiple Regression Analysis Framework

Given that home country factors play a major role in the internationalization of emerging market firms, there is an ever-growing debate on how they influence the intensity of outward foreign direct investment (OFDI) from these regions. This study investigates how home country factors affect the OFDI intensity in Latin America and Caribbean (LAC) countries. We use the entropy weight method, which uses the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) method and a balanced panel data consisting of 19 countries from 2007 to 2016. The results show a positive association between macroeconomic performance, formal institutions, infrastructure, technology and the OFDI intensity. Furthermore, we find that robust formal institutions, along with the quality of infrastructure and technology, positively moderate the relationship between macroeconomic performance and the OFDI intensity. These findings show that the internationalization of LAC firms is highly dependent on the contextual conditions in their markets.

Gender and Transnational Dynamics in Immigrant Entrepreneurship

Abstract Immigrant enterprises, especially those in the service sector of the urban economy, are largely gendered and seemingly localized. However, the intersection of gender and transnationalism is often overlooked in the research literature. To fill this gap, we draw on the literature of mixed embeddedness and transnationalism to advance an analytical framework of simultaneous embeddedness to explain the gendered pattern of immigrant entrepreneurship. We do so by taking an in-depth look at a female-dominant industry – Chinese-owned nail salons in New York City. Using data collected from face-to-face interviews and on-site observations in New York City, as well as archival records and media reports about labor-market dynamics in both the United States and China, we find that the development of Chinese-owned nail salons is shaped by contextual factors in both home and host countries beyond socioeconomic characteristics of individual entrepreneurs. Home-country factors in China include labor-force demographics, access to economic opportunities, and the gap between education and career aspiration among young women. These home-country factors are intertwined with changes in US immigration policy, local labor-market reception, and gender discrimination, which function to exacerbate the problem of labor shortage for Chinese-owned nail salons in New York City. We discuss the significance of simultaneous embeddedness and gender in understanding contemporary immigrant entrepreneurship.

A Few Implications of the COVID‐19 Pandemic for International Business Strategy Research

A Few Implications of the COVID‐19 Pandemic for International Business Strategy Research

Chinese Multinational Enterprises Operating in Western Economies: Huawei in the US and the UK

ABSTRACT Huawei serves as a vehicle for presenting the multiple barriers faced by Multinational Enterprises (MNEs) that happen to be born in China, a non-democratic and non-Western country who now challenges the world’s No.1 superpower, thus requires a multi-disciplinary analytical framework by taking much broader contexts into considerations. This comparative case study of its operations in the US and UK aims to develop the old model of examining Chinese MNEs that is heavily economic factor focused by including more variables, such as ‘bilateral relations’, ‘law’, ‘media influence’ and ‘cultural proximity’ under host country factors, and ‘governance structure’ under home country factors. The new model will show the increasing complexity in the global competitive landscape and inspire more research to further advance understanding of this new international business phenomenon.

The efficacy of multilateral anti-bribery convention with national government enforcement

Purpose The purpose of this paper is to investigate the role of multinational enterprises’ (MNEs) home country corruption in their decision to bribe officials in foreign host countries. Design/methodology/approach A model that predicts MNE bribing by controlling for a multitude of foreign host country factors is used. The information contained in the orthogonal residuals from this model is exploited to see whether MNE’s home country factors, particularly the level of public corruption, work to amplify illegal behavior by respective MNE in abroad. Findings MNEs pay more in bribes when the foreign officials they face are more corrupt. This behavior worsens when MNE’s home country has more corruption. Social implications All UN member countries are signatories to the UN Convention against Corruption that proscribes the bribing of foreign public officials by respective MNEs. The Convention’s reliance on home country enforcement of stipulations against the bribing of foreign officials by respective MNEs exposes its efficacy of the malfeasance of home country public officials. Originality/value This paper extends the literature to an examination of MNE’s use of bribes in a world with a global anti-corruption regime. Additionally, it ties MNE behavior in foreign countries to corruption in MNE’s home country.

Exploring the influence of home country factors on rapid internationalisation of emerging multinational companies

This research explores home country influence on successful internationalisation of emerging multinational companies. We considered Qatar Airways and Emirates Airways as two companies from different countries with similar economic structures. Interviews of five experts in the airline industry revealed that four home country factors have produced significant competitive advantages, allowing both carriers to rapidly internationalise their activities and become key players in the global aviation industry. These home country factors are the location of the country, rapid economic development, government support, and influence of related industries.

Exploring the influence of home country factors on rapid internationalisation of emerging multinational companies

This research explores home country influence on successful internationalisation of emerging multinational companies. We considered Qatar Airways and Emirates Airways as two companies from different countries with similar economic structures. Interviews of five experts in the airline industry revealed that four home country factors have produced significant competitive advantages, allowing both carriers to rapidly internationalise their activities and become key players in the global aviation industry. These home country factors are the location of the country, rapid economic development, government support, and influence of related industries.

Using embeddedness theory to explain self-initiated expatriation intention of entry-level job applicants

PurposeThe purpose of this paper is to explain why entry-level job applicants intend to leave their home country to work abroad by adopting the framework of country embeddedness (i.e. career and community embeddedness).Design/methodology/approachHypotheses are tested using survey data of a sample of prospective healthcare entry-level job applicants (i.e. last year medical students) using hierarchical regression analyses and bootstrapping procedures.FindingsResults show that, first, home country career and community embeddedness are negatively associated with self-initiated expatriation intention (SIE-intention). Second, developmental feedback reduces SIE-intention. This relationship is at least partly due to increased home country career embeddedness. Third, national identity reduces SIE-intention. The relationship is at least partly due to increased home country community embeddedness.Originality/valueThis paper advances the understanding of SIE by focusing on home country factors associated with the decision to work abroad, whereas the majority of current research mainly considers host country variables.

Bringing corporate governance into internalization theory: State ownership and foreign entry strategies

We use internalization theory to analyze the establishment and entry mode decisions of state-owned (SOE) and privately owned (POE) enterprises. We enrich internalization theory by building on insights from economic theory of corporate governance and taking into account particular characteristics of SOEs such as non-economic motivations, long-term orientation, and different risk preferences. We examine foreign entries over a 10-year period in the Canadian oil and gas industry. This single-country and single-industry context features foreign SOEs and POEs from a wide range of home countries, allowing a focused study of the combined influence of state ownership and home-country factors. Compared to POEs, SOEs tend to prefer acquiring stand-alone assets rather than firms, and to take lower ownership shares. We also find that differences between SOEs and POEs diminish when home countries are characterized by high government quality and market orientation and identify differences between types of SOEs, with partially owned SOEs exhibiting behaviors more similar to POEs than fully owned SOEs. We demonstrate how our enrichment of internalization theory strengthens its predictive and explanatory capacity. Our results also show that SOEs from strong and market-oriented institutional environments are similar to POEs and can be studied using the traditional internalization theory.

India's outward foreign direct investment: the home-country economic perspective

The paper examines the impact of home-country macroeconomic factors such as gross domestic product (GDP), money supply and inflation on the growth of outward foreign direct investment (OFDI) from India. Vector error correction model is employed to explore the long-run dynamics and short-run causality between the macroeconomic factors and OFDI for the period 1980-2014. The study finds that GDP has positive and significant impact on OFDI whereas money supply and inflation have significant but negative impact on it in the long-run. However, in the short-run, no causality is witnessed between OFDI and macroeconomic factors specified in the model.

Internationalisation of firms from Central and Eastern Europe

PurposeThe purpose of this paper is to provide a systematic review of the literature addressing internationalisation of firms from Central and Eastern Europe (CEE).Design/methodology/approachThis paper presents an inter-disciplinary systematic review of literature about the internationalisation of firms from CEE.FindingsThree different clusters of research were identified. In the “Internationalisation Processes” cluster, containing many comparative studies, the focus is on specific approaches adopted by local firms in the process of internationalisation. One of the leitmotivs is the dichotomy between hostile home-country factors that create the need for internationalisation and market-seeking motives that guide the search for international expansion. The “Internationalisation Variables” cluster aims to explain the reasons of success or failure of internationalisation processes and strategies; this cluster focuses on possible facilitating or hindering aspects experienced by CEE firms and one often-cited element is the firm’s network. Finally, the “Internationalisation Outcomes” cluster assumes a reverse approach when compared to the other two clusters. Indeed, the internationalisation phenomenon can also be studied in terms of its effect on the firm; the elements sought in these types of studies are both potential benefits and risks associated with internationalisation in CEE countries. The latter category in particular gives rise to interesting questions for future research.Originality/valueGiven that large, developed economies tend to receive much academic interest and that smaller transitional economies are not always adequately represented in the scientific discussion, this paper contributes to the literature on internationalisation.

Why do countries matter so much in corporate social performance?

Why do levels of corporate social performance (CSP) differ so much across countries? We answer this question in an examination of CSP ratings of more than 2600 companies from 36 countries. We find that firm characteristics explain very little of the variations in CSP ratings. In contrast, variations in country factors such as stages of economic development, culture, and institutions account for a significant proportion of variations in CSP ratings across countries. In particular, we find that CSP ratings are high in countries with high income-per-capita, strong civil liberties and political rights, and cultures oriented toward harmony and autonomy. Furthermore, we find that home country factors explain a smaller portion of the overall variations in CSP for multinationals and cross-listed firms than for non-multinationals and pure domestic firms, respectively.

The Influence of Contextual Factors on the Multinationality-Performance Relationship: A Conceptual Model

Our general objective is to present an extension of the established theories of the multinationality-performance relationship. In methodological terms, it is an in-depth study based on an extensive review of the literature. The proposed conceptual model includes the contextual factors, like Firm, Industry and Home-Country Factors. Through the contextual factors, the model gives a broader insight and a detailed explanation of the influencing factors of the multinationality-performance relationship. This study explains by the conceptual model the current status quo of literature in the field of multinationality-performance relationship and analyzes its shape and behavior.