Host Country Characteristics Research Articles

Where does the future lie? Initial aspirations for return among newly arrived Ukrainian refugees in Norway

ABSTRACT The lives of millions of people, who fled from Ukraine after Russia's full-scale invasion in February 2022, were turned upside down from one day to the next. When faced with such an abrupt escape, what initial thoughts do refugees have about whether to remain in their new host country or to return when the war ends? In this study, we focus on refugees' initial return aspirations soon after their escape. We conduct an in-depth analysis of how individual background factors and circumstances affect refugees' aspirations to remain or return. Based on unique data collected during the months immediately following Russia's invasion of Ukraine, we use survey data on Ukrainian refugees in Norway to examine their return aspirations and what individual factors that affect these aspirations and qualitative interviews with Ukrainian refugees to explore the rationales for their initial aspirations. We find that only one-fourth plan to return to Ukraine as soon as the war ends. Our analysis of how individual factors affect initial return aspirations both support and contradict previous research. Thus, we discuss how our apparently contradictory findings provide theoretical nuances of how host country and refugee group characteristics interplay with individual predictors of initial return aspirations.

Post-migration HIV acquisition: A systematic review and meta-analysis.

Migrants in Europe face a disproportionate burden of HIV infection; however, it remains unclear if this can be prevented through public health interventions in host countries. We undertake a systematic review and meta-analysis to estimate post-migration HIV acquisition (PMHA) as a proportion of all HIV cases in European migrants. MEDLINE, EMBASE, Global Health, HMIC, and Cochrane Library were searched with terms capturing 'HIV', 'migration', and 'Europe'. Data relating to the proportion of HIV acquired following migration were extracted and random-effects model (REM) meta-analysis was undertaken to calculate a pooled estimate for the proportion of PMHA in European countries. Subgroup meta-analysis was undertaken for PMHA by migrant demographic characteristics and host country. Fifteen articles were included for systematic review following retrieval and screening of 2,320 articles. A total of 47,182 migrants in 11 European countries were included in REM meta-analysis, showing an overall PMHA proportion of 0.30 (95% CI: 0.23-0.38). Subgroup analysis showed no significant difference in PMHA between host country and migrant demographic characteristics. This work illustrates that migrants continue to be at high risk of HIV acquisition in Europe. This indicates the need for targeted screening and HIV prevention interventions, ensuring resources are appropriately directed to combat the spread of HIV.

Does Economic Growth Attract FDI Inflows? A Dynamic Panel Analysis

Economic growth is deemed to be a conducive factor in attracting foreign direct investment (FDI) as it often confers location advantage to host countries and fosters business confidence. This paper examines the short-run and the long-run effects of economic growth on FDI inflows. The empirical analysis is conducted through the Generalized Method of Moments (GMM) System estimator for dynamic panel models. The main results show significant positive effects of economic growth on FDI inflows, and they indicate that the magnitudes of these effects are statistically comparable over time and do not diminish with higher economic growth levels. They also reveal important variations in the magnitude of these effects across geo-economic regions and over pertinent economic variables such as economic development level, international trade and foreign investment openness, and endowment in natural resources. These findings underscore the significance of developing growth-enhancing policies that are designed on the basis of the economic and geo-economic characteristics of host countries. Such policies could be coupled with international trade and foreign investment openness directions to stimulate stronger responses of FDI inflows to economic growth and mitigate the implications of unfavorable global and regional political conditions.

Do green foreign direct investments increase the innovative capability of MNE subsidiaries?

Technologies to mitigate climate change may diffuse from lead markets to the rest of the world through several mechanisms and make important contributions to the global green transformation. In this paper, we explore the role played by multinational enterprises (MNEs) in transferring knowledge and innovative capabilities in green technologies to their global subsidiaries. We posit that the degree of green knowledge transfer and innovative capability development in subsidiaries depend on: (i) the host country characteristics, (ii) the specific technology in question, and (iii) the mode of entry. The empirical analysis combines data on foreign direct investments with patent analysis. The results suggest that being a subsidiary of a green MNE has a positive impact on the number and quality of green patents produced locally. This green innovative advantage vis-à-vis domestic companies is larger in less developed countries and in those that are less reliant on oil rents, in particular if they already possess higher levels of relevant domestic innovative capacity. Furthermore, firm and sectoral characteristics also matter. The analysis suggests that green FDIs are more effective when technologies are characterized by low tradability and tacit knowledge. Finally, cross-border acquisitions are more efficient at strengthening green innovative capabilities than subsidiaries established with greenfield investments.

Overseas Investment, Corporate Social Responsibility and Market Value: Based on the Host Country Heterogeneity Perspective

ABSTRACT Based on the quasi-experimental method of Difference in Difference with Propensity Score Matching (PSM-DID), this paper analyzed the relationship between overseas investment, host country characteristics, and corporate social responsibility (CSR) with the sample of Chinese A-share listed companies. We find that: (1) overseas investment strategies can improve the CSR performance. (2) the effect of corporate overseas investment on CSR is more pronounced for the host country located in Asia, or with more complete legal and economic systems and closer cultural backgrounds. (3) overseas investment can reduce the negative impact of the disadvantages of outsiders on the enterprise value by better fulfilling their employees and social responsibilities, thus helping enterprises to enhance the market value. The findings suggest that overseas investment enterprises implement differentiated CSR strategies to unleash development vitality and create market value.

Understanding the Relationship Between Foreign Direct Investment and Economic Growth in BRICS: Panel ARDL Approach

Foreign direct investment (FDI) has gained prominence in international economics over the past three decades. Primarily, the belief that FDI influences economic growth of the host country, set the stage for the empirical research focused on the FDI–growth nexus. The growth literature, however, reveals mixed evidence regarding the role of FDI in promoting growth. Despite the conflicting evidence, developed and developing economies have attached immense economic and political importance to FDI. It is noteworthy that BRICS (Brazil, Russia, India, China and South Africa) economies are representative developing economies and have emerged as significant FDI destinations, having witnessed an immense surge in inward FDI over the past few decades. It is against this backdrop that the present study attempts to assess the impact of FDI inflows and select macroeconomic variables, namely macroeconomic stability, human capital, financial development and trade openness (TO), on the economic growth of developing BRICS economies. The study examines both short-run and long-run relationships between FDI inflows, select macroeconomic variables and economic growth by employing the dynamic panel autoregressive distributed lag (ARDL) model, unlike most of the previous studies. For this study, secondary data covering a reference period of 32 years (1987–2018) were used. The data on GDP growth (GDPG), FDI inflows, inflation (INF), human capital, private sector bank credit (proxy for financial development) and TO have been collected from the World Investment Reports published annually by United Nations Conference on Trade and Development (UNCTAD) and World Bank (World Development Indicators). The findings revealed a long-run cointegration among FDI, host country characteristics (TO, human capital, financial development and macroeconomic stability) and economic growth in BRICS.

Drivers of R&D greenfield investment projects in the communications, software and IT service industries in developing countries

Globalization has led to the decentralization of research and development (R&D) activities by multinational enterprises (MNEs). Investment in these activities is affected by both the host-country environment and the investment strategies of the entrant MNEs. Using data on greenfield R&D investment projects for a sample of digital MNEs in the communications, software and IT service industries during the period 2003–2019, we investigate the importance of host-country characteristics on MNEs’ R&D investment and examine the moderating role of the host country’s innovation capabilities as well as two strategies – exploitation versus exploration – on the part of MNEs. We find that the size of investment projects is larger in developing countries than in developed ones, especially when host countries have stronger innovation capabilities and when MNEs pursue strategies of exploitation rather than exploration. Our findings contribute to the extant research in this area and furnish related policy implications for developing countries.

The Nexus between Capital Flight and Economic Growth. A Panel Data Investigation of the Mediating Role of Inflation (Kenya: 1986-2021)

Purpose: This paper investigates whether inflation moderated the relationship between capital flight and economic growth in Kenya. The study attempts to answer one question. Has the effect of capital flight on economic growth been influenced significantly by the inflation rate in Kenya?
 Design/methodology/approach – The panel data for the variables under study, collected from World Investment Reports published by World Bank, are analyzed using feasible generalized least squares method to examine the relationship between the dependent and explanatory variables over the period 1987–2018. The interaction effect has been studied to examine the growth impact of FDI in presence of host country characteristics.
 Findings – The study found out that foreign portfolio investment outflows, profit repatriations, and inflation rates had no significant effects on economic growth when the interaction variable for inflation was included in the model. Outward foreign direct investment had a significant effect on economic growth when inflation is included in the model as an interaction variable with a positive coefficient indicating they had a positive significant relationship. The interaction variable had a negative but insignificant coefficient indicating that inflation rate did not moderate the relationship between capital flight and economic growth. From the empirical findings, we can infer that capital flight did not constrain resources and subsequently did not affect economic growth negatively. We also find that inflation rate cannot be used to control or moderate the effect of capital flight on the economy and Kenya should not pursue policies geared towards using inflation to moderate this relationship.
 Originality/value – The present study provides for the first time comprehensive empirical evidence on the relationship between inflation, economic growth, and the increased rate of capital outflows in Kenya. Therefore, this study would be of prime importance for policymakers.
 Originality/value – Very few studies have been conducted to examine the nexus between inflation, capital flight and economic growth in Kenyans financial markets. Assessing the interaction of these variables in Kenya and their impact on economic growth by use of panel data methodology is an original contribution of this paper toward the existing body of knowledge.

Herding in foreign direct investment

This paper, to our knowledge, is the first to examine herding in foreign direct investment (FDI). We investigate it from two perspectives, first the number of countries investing in the host country and then the dollar volumes of those investments. Our results provide strong evidence of herding in FDI. We also show herding in the divestures of these investors. We show that herding in FDI is related to host country characteristics and governance parameters.

Corporate Social Irresponsibility in Host Countries: The Interplay of Home and Host Institutions

Corporate social irresponsibility (CSI) by multinational enterprises (MNEs) has been attracting increasing attention by policy makers as well as scholars. Building on institutional perspectives and the ‘distance’ research in the international business (IB) field, our study examines how the institutional characteristics of home and host countries, their interplay, as well as cross-national institutional distances affect MNEs’ CSI in host countries. We test our hypotheses using panel data of 1,087 listed firms based in 48 countries, with CSI incidents occurring in 150 host countries during 2007-2018. We find that both stronger home and host institutions are negatively associated with CSI occurring in the host markets, but the mitigating effect of host (home) institutions on CSI will be weaker when home (host) institutions are stronger. We further find that as institutional distance between home and host countries increases, MNEs’ involvement in CSI incidents in the host countries grows. We contribute to CSI research and ‘distance’ literatures by offering theoretical mechanisms and empirical evidence on whether and when MNEs respond to varied stakeholder and institutional pressures in their CSI engagements.

The Impact of State Visits and Prior Investments on the Investment Location of Chinese Firms

We analyze the impact of state visits and prior investments on the investment location of Chinese firms. We argue that these government and business networks should have a positive effect on investment decisions. Prospective entrants decide about investment locations not only on the basis of economic and institutional characteristics of host countries but also learn about the attractiveness of alternative locations through state visits and previous investors. We analyze greenfield investments by Chinese firms between 2003 and 2019 and find broad support for our conceptualization in an analysis of more than 8000 investments. State visits are thereby shown to have a shorter term effect than prior investments by compatriot firms. Our results also show that state visits are comparatively more important in institutionally weaker countries whereas prior investment is relatively more important in institutionally stronger countries.

Whether China's overseas energy infrastructure projects dirtier or cleaner after the belt and road initiative?

We evaluated whether China's overseas investments in energy infrastructure were dirtier or cleaner after the Belt and Road Initiative than those of other countries with similar project and host country characteristics. We used the energy infrastructure project data from the World Bank's private participation in infrastructure database, which allows comparison among countries of investment and controls for the influences of host countries' demand. Our main findings are as follows. First, during our sample period from 2006 to 2019, the average investment volume of projects funded by China was significantly higher overall including in conventional energy projects, compared to those with other financial sources and similar features. Second, after the Belt and Road Initiative (BRI), the volume of projects invested in by China was comparatively smaller in conventional energy projects but larger in renewable energy projects. Third, the choice of technology type in energy projects reflected path dependency effects on both the investment and host countries' sides. Nevertheless, after the Belt and Road Initiative, China had actively begun to break away from these effects, investing more in clean energy overseas.

The interaction between FDI, host country characteristics and economic growth? A new panel evidence from BRICS

PurposeThis study aims to assess the impact of foreign direct investment (FDI) on growth in presence of host country characteristics, namely, economic stability, human capital, financial development and trade openness, in the fastest emerging Brazil, Russia, India, China, South Africa (BRICS) economies, considered to be significant FDI destinations.Design/methodology/approachThe panel data for the variables under study, collected from World Investment Reports published by World Bank, are analyzed using feasible generalized least squares method to examine the relationship between the dependent and explanatory variables over the period 1987–2018. The interaction effect has been studied to examine the growth impact of FDI in presence of host country characteristics.FindingsThe findings revealed that FDI does not exert a significant impact on the economic growth of BRICS individually but has a significant growth impact only in presence of host country characteristics. FDI on interacting with financial development, trade openness and human capital exerts a positive impact on the economic growth of BRICS economies, and on interacting with economic instability (inflation), FDI has a negative impact on growth.Practical implicationsThe study has implications for policy makers of BRICS countries who are suggested to work toward the development of financial markets, trade liberalization and human capital development to realize the positive growth impact of FDI.Originality/valueVery few studies have been conducted to examine the growth effect of FDI in BRICS economies, which are considered to be the fastest-growing economies and dominant players in the global investment landscape. Assessing the interaction of FDI with absorptive capacities/host country characteristics to study its growth impact in BRICS using long data and robust panel data methodology is an original contribution of this paper toward the existing body of knowledge.

Problems and Issues Concerning Social Integration of Elderly Refugees in Turkey

Abstract Elderly refugees reflect a vulnerable group within the refugee communities. When the difficulties of the old age and the migration process come together, difficulties and problems tend to increase. Considering the rise in the elderly and refugee population, the social integration of elderly refugees were discussed in this study. Elderly refugees had health problems, language problems, isolation and formal problems mostly. Women refugees seemed to be more disadvantaged in terms of education, language, income and employment. Language, poverty and being in a different country were the factors that made the social integration of elderly refugees difficult, while facilitating factors were evaluated as common religion, host country characteristics and social networks. Specific services and gerontological social work practices should be created that eliminate the challenging factors and emphasize the facilitating factors of the social integration for elderly refugees.

Store Format Diversification, Customer Orientation and the Performance of Foreign Retailers

Foreign retailers contend with unrelenting challenges to discover and resolve issues affecting their performance in different host country markets. These retailers bear some wealth of international experience and also some liabil-ity of foreignness. Accordingly, managers of foreign retailers must enact strategic decisions that will position their businesses in order to be competitive and profitable. In this study, the authors examine two generally overlooked fac-tors —degree of store format diversification and customer orientation— relating to improved foreign retailer per-formance. The authors also investigate the potential moderating effects of three host country characteristics —retail modernization, collectivism, and uncertainty avoidance— on this relationship. Based on the 2001-2015 panel data for 24 international retailers, results for main effects indicate that foreign retailer performance is influenced nega-tively by store format diversification and positively by customer orientation. These effects are moderated by host country retail modernization, collectivism, and uncertainty avoidance. In particular, host country retail modernization reverses, from negative to positive, the influence of store format diversification on foreign retailer performance. Fur-thermore, both collectivism and uncertainty avoidance strengthen the positive influence of customer orientation on foreign retailer performance. Finally, uncertainty avoidance strengthens the negative influence of store format diver-sification on foreign retailer performance.

Varieties of Capitalism, Environmental Risk and Readiness, and MNCs’ Environmental Performance

The environmental impacts of large multinational companies (MNCs) are attracting increasing scrutiny as the climate crisis intensifies. In this study, we extend prior research that has examined the role of country-level institutions on MNCs’ corporate environmental performance (CEP) by exploring interdependencies between home- and host-country conditions and between institutional and ecological country characteristics. Specifically, we theorize that multinational companies’ home-country Variety of Capitalism (VoC) affects their CEP by shaping firms’ comparative advantages in environmental performance, and by acting as an interpretive schema by which host-country conditions are evaluated and responded to. We test our theoretical propositions using a large sample of 3,994 MNCs headquartered in 72 countries over the time period 2009 to 2018 Findings show that MNCs’ environmental performance is shaped significantly by host-country characteristics, and that MNCs’ home-country VoC also significantly moderates the impacts of host-country influences on MNCs’ CEP. We find that firms’ home country variety of capitalism asymmetrically affects how home- and host-country institutional conditions influence CEP: for CME MNCs, home country institutional readiness complements firm CEP, but host-country institutional readiness substitutes for firm CEP, with the opposite being true for LME MNCs. Thus, add to debates regarding how varieties of capitalism influence forms of pro-social firm behavior by highlighting their asymmetric importance for home and host-country conditions.

The Determinants of Foreign Subsidiary CEO Selection: Effects of Internal and External Network Embeddedness of Foreign Subsidiaries and Market Characteristics of Host Country

The Determinants of Foreign Subsidiary CEO Selection: Effects of Internal and External Network Embeddedness of Foreign Subsidiaries and Market Characteristics of Host Country

Subsidiary banks in emerging markets: how strong is the coordination on a group-wide basis?

PurposeThe parent-subsidiary nexus has been explored since the mid-1990s, but the extent to which subsidiaries resemble their parents remains unclear. Therefore, this study examines the performance drivers for subsidiary banks in emerging markets and their parents to determine the similarities between these groups. The findings could help identify key financial performance measures that should be included in global strategies for multinational banks operating in emerging markets.Design/methodology/approachThe study uses data on subsidiaries from 32 countries, including 20 European transitioning countries and 49 parent companies operating internationally from 1996 to 2015. It considers several models that distinguish between units using individual bank effects and the stochastic structure. In a robustness analysis, EU- and non-EU-based institutions are distinguished and long-term historical links between parents' and subsidiaries' countries are considered.FindingsCost control, capital adequacy and asset quality policies have similar importance for parent banks and subsidiaries and are strictly coordinated, whereas the remaining policies allow more flexibility. Subsidiaries in the EU and in countries that were politically and/or militarily influenced by parent countries do not “fall far from the tree”, which signals their strong group-wide integration and coordination.Research limitations/implicationsThis study covers a limited number of emerging market countries due to the limited availability of long-term series data. Future studies should include more countries.Originality/valueThis study identifies key financial measures used on a group-wide basis for performance management while accounting for long-term relations between host and home countries and the geopolitical characteristics of host countries.

Differences in returns to cross-border M&A in the short and long run: Evidence from Chinese listed firms

Using the cross-border mergers and acquisitions (M&A) events of Chinese listed firms between 2009 and 2018, this paper studies the impact of cross-border M&A on the short- and long-term performance of firms through the event study method and the propensity score matching–difference-in-differences regression method. The results indicate that in the short run, Chinese firm cross-border M&A acquire significant, positive cumulative abnormal returns (CARs) within a 21-day event window. In the long run, cross-border M&A fail to improve firm returns on assets (ROA). Furthermore, the paper uncovers that the impact of M&A on ROA varies with the characteristics of acquirers and host countries, and the impact on CAR varies with the characteristics of deals and are not sensitive to characteristics of acquirers or host countries. The paper identifies the differing impacts of China’s “going out” strategy on firm performance in the short and long run and provides explanations for a deeper understanding of the cross-border M&A of Chinese listed firms.

Determinants of Equity Ownership Stake in Foreign Entry Decisions: A Systematic Review and Research Agenda

AbstractIn international business (IB), the level of equity ownership adopted by a firm is an important decision. In this study, we review and synthesize the findings of 105 empirical studies published in prominent IB and management journals on the determinants of equity ownership stake in foreign investment decisions, published between 1991 and 2020. Three primary theoretical lenses ‒ organizational learning perspective, transaction cost economics and institutional perspective – are adopted to catalogue and synthesize the existing literature. We find that, despite the proliferation of IB studies on antecedents of level of equity ownership decisions, many unanswered questions remain. We also find that theoretical fault lines impede progress in this research stream. Based on the literature review, we suggest a research programme that includes accounting for the behavioural view of decision‐making in the organization, shifting from an atomistic perspective to a network perspective of the firm, having a better understanding of the process of internationalization and considering industry heterogeneity as well as the host country's characteristics.