Large International Firms Research Articles

Internationalization of Chinese Manufacturing Firms: A Perspective from the Uppsala Model

Enhancing firm performance in the turbulent international situation has become an important issue in firm evolution. There has been a large amount of research interest in the rapid development of emerging international firms, but the relevant empirical studies are still limited. The purpose of this study is to investigate three factors that impact firm performance, utilizing the Uppsala model as a main theoretical foundation. Based on empirical analysis of 332 medium and large Chinese manufacturing international firms, this study finds that the degree of internationalization, knowledge development, and commitment processes have positively impact firm performance. This finding contributes to the international business literature's understanding of firm development in emerging markets and enhances the generalizability of the Uppsala model.

“Uncomfortable territory”: personal and organisational values in the tax profession

ABSTRACT As professionals, accountants hold a public interest mandate based in part on ethical claims. However, individual professionals, particularly in tax, commonly see their work as more technical than relating to the common good. Rising public concern about tax avoidance focuses attention on how ethical values are brought to bear on tax work. In these contexts, the tension between personal and organisational values merits attention. This study draws on a large international survey and a set of 68 semi-structured interviews to explore the balance between the personal ethical or spiritual values that individuals bring to their tax work and the ethical framing of their organisations. This direct approach captures self-reported moral awareness experienced at the level of the individual tax professional, framed by the concept of ethical awareness as a base level of ethical action (Rest, J., Moral development: Advances in research and theory. Praeger, 1986). We find, inter alia, that spiritual values are understood as personal and are most influential in smaller, more domestic firms and among those still undertaking professional exams, while ethical awareness is lowest among early career professionals in large international firms. The study highlights a disconnect between ethical learning acquired during professional training and its application at the early career stage. Socialisation within the firm adds to the potential for the early-career stage to set the tone for career-long ethical framing. This heightens the responsibility of firms as well as professional bodies to valorise moral judgement.

An analysis of the performance of the agro-food industry in the domestic and international markets of Côte d’Ivoire

Since its independence in 1960, C?te d?Ivoire has opted for an industrial policy that has given rise to two major types of agrofood industry. The first is small-scale units owned by nationals and the second is agro-food industries owned by large international firms that mainly export their products. This strategy has led to commodity specialisation that deteriorates the terms of trade. Thus, despite a significant industrial sector, the country suffers from deteriorating trade terms due to an overly extroverted economy, the corollary of which is over-indebtedness. This paper compares the performance of domestic and international markets of C?te d?Ivoire to identify the type of agro-food industry that should be promoted for development. The ripple effects in domestic and international markets are estimated and compared using the Leontief model and data from the C?te d?Ivoire Input-Output Table of 2018. We show that the cocoa and coffee processing branch of the agro-food industry is commercially outward-oriented, the oilseed industry is commercially mixed or dual-oriented, and the other branches are commercially inward-oriented. The ripple effects of the domestic market are almost four times higher than those of the external market. The high rate of population growth, galloping urbanization and the social nature of food are key determinants of the findings. We conclude that the domestic market better stimulates the development of the agro-food industry. We therefore recommend a strategy of orienting products towards domestic and West African markets, which could lead the country to sustainable economic development more rapidly.

Man(ager Heuristics) vs. Machine (Learning): Automation for Prediction of Customer Value for Brick-and-Mortar Retailers

Technological development has led to rich datasets, fast processing capabilities, and a large body of literature on accurate yet complex models. However, although managers see potential in becoming data-driven, few successfully apply contemporary analytics. In retailing, some of the hurdles are that (a) most applications are for online settings, while most retailing is still conducted in brick-and-mortar settings, (b) predictions of customer lifetime values are less relevant for rapid (automated) actions in real-time, and (c) there is skepticism due to the lack of empirical testing beyond large international firms, tech start-ups, and digital natives. In this study, we attempt to bridge this gap by exploring the potential benefits of automated machine learning compared to manager heuristics in predicting immediate future customer value in real-time, as applied on 338,184 grocery receipts, 179,568 beauty receipts, and 111,289 non-prescription pharmacy receipts. Our results from different retailing industries with various product characteristics in brick-and-mortar contexts show that automated machine learning provides great benefits in predicting immediate future customer value. This suggests that, even with limited know-how, brick-and-mortar retailers can implement contemporary analytics for better customer prioritization in real-time.

Role of Employability Skills and Attributes in Management Education-An Approach

With the speedy advancement of society, the competitions between companies are also growing, what the employers want for the management students are not only focus on the degree or grade but pay more attention to their employability skills and attributes. In order to win their competitors in the fierce competition, employers want management students who have a extensive range of skills and attributes to bring to the work setting and need the employees with multi-skilled to accomplish many different roles. All management students have to study how to drift from their comfort zone and go a long way towards impressing their superior of a new venture or a large international firms. But there is a enormous gap between what industry wants and what is available in terms of skilled students. So management students who coming into the workforce must have the skills and attributes needed by employers. This paper sheds light on employability, employability skills, employability attributes, employers perspectives etc.

Environmental knowledge spillovers and productivity: A patent analysis for large international firms in the energy, water and land resources fields

Ensuring sustainable transition from more to less polluting technologies has become an area of increasing interest to academics and policymakers alike over the recent years. Environmental innovations play a key role in this transition. Still, to date relatively little empirical research has been undertaken on the topic. This applies particularly to the potential impact of knowledge spillovers stemming from environmental innovation, termed here as environmental knowledge spillovers (ES), on firms' productivity; a research gap explored in this paper. The focus is laid on three economic areas (Europe, Japan and USA), over the period 2002–2017. Additionally, firms' technological diversity, institutional quality, corporate taxes and the stringency of environmental policy are taken into account to estimate their role in facilitating firms' technical efficiency. The findings indicate that ES affect firms' productivity significantly and positively in all the investigated economic areas, whereas technological diversity increases technical efficiency for Japanese and European, but decreases it for American firms. The findings also show how the stringency of environmental policy (positively), institutional quality (positively) and corporate taxes (negatively) affect firms’ technical efficiency.

Accounting and Convergence in Corporate Governance: Doctrinal or Economic Path Dependence?

Convergence in corporate governance has been debated for more than 20 years. This paper seeks to explain convergence – and the lack thereof – in accounting laws and standards, within the context of this debate. One could argue about whether accounting has undergone international convergence. One the one hand, the two major accounting systems, IFRS and US GAAP, share the same goal of providing timely and useful information to investors. On the other hand, differences between the two sets of standards remain, and the SEC still does not permit domestic issuers to use IFRS. Moreover, while EU publicly-traded firms are required to use IFRS for their consolidated financial statements, many Member States, continue to require or permit the use of domestic accounting standards for private firms and for entity-level accounting. This paper seeks to explain this persistent divergence with path dependence. Path dependence is often driven by interest groups. However, there is also the possibility of doctrinal path dependence, which can be explained with the difficulty of making fundamental changes given that legal professionals aim for certain and seek to preserve the value of their specialized human capital. A major factor in accounting reform are the interests of accounting professionals, particularly in large international firms (the “Big 4”). Divergence may in part be because the interests of this key constituency differ between the US and Continental European countries. In Europe, the internationalization of accounting has generally been favored by large firms because of the possibility of increasing their market share at the expense of purely domestic firms. This explains the compromise implemented in the Member state options of the IFRS Regulation. By contrast, the US already had a fully developed set of accounting standards focused on capital markets when IFRS became an option, which means there were no rents to capture for large firms as a result of changes in the audit market. In addition, a key feature of US corporate governance distinguishes it from other systems, including the UK, namely the prevalence of investor litigation. Consequently, a rules-based system serves the interest of the accounting profession better than the arguably more standards-based IFRS.

Waste recycling patents and environmental innovations: An economic analysis of policy instruments in the USA, Japan and Europe

Since natural resources are finite, new policy instruments to sustain the most efficient processes of waste recycling are required in all countries. To this end, it is critical to explore all technology mechanisms underlying solid waste researchers and practitioners’ behaviors. The study focuses on to demonstrate the importance of knowledge diffusion between the source and destination of environmental innovations. This way, policymakers can elaborate opportune strategies to improve the efficiency of innovation activities. By analyzing a sample of 240 large international firms from the USA, Japan, and Europe, this paper discusses the extent to which innovation inputs, research and development, and relative technological spillovers affect environmental innovation—that is measured by the number of waste recycle and land fertilizers patents. The novelty of the study comes from introducing a knowledge production function approach to analyze the role of technological knowledge spillovers on waste recycling and land fertilizers efficiency at the firm level. The technological relatedness between the firms is computed through technological proximity, based on the construction of technological vectors for each firm. The results reveal a significant positive impact of external spillovers on firms’ environmental innovation levels. This finding is important particularly in terms of policy implications concerning industrial strategies; as in order to improve environmental innovation, incentives that favor industrial relatedness and establishing integration between firms are crucial.

Firm Size and Sustainable Innovation: A Theoretical and Empirical Analysis

This paper explores the relationship between firm size and sustainable innovation in large international firms. To this end, we develop a labor demand framework. The contribution to the literature is to explore external knowledge in determining the employment impact of sustainable innovation. Our investigation is based on firms in three economic areas: Europe, Japan, and the United States. In this way, we will appreciate the extent to which the technological spillovers are important from a geographical perspective. The findings provide evidence of the significance of spillover effects on a firm’s size; however, these effects depend on the spillover stock type.

Green Economy and Sustainable Development: The Economic Impact of Innovation on Employment

The purpose of this paper is to analyze the role of the knowledge diffusion process in employment effects of sustainable development investments for large international firms. We present an empirical analysis based upon a dataset composed of worldwide Research and Development (R&D) -intensive firms over the period 2002–2010. In order to identify the technological relatedness measure between the firms, we use the friendly environmental patents’ distribution. The drivers of labor innovation effects are identified as a complex combination of job displacement and compensation forces of innovation. Two research questions are investigated: first, we wonder whether green economy investments stimulate firm-level jobs within three different environmental contexts: water, waste and energy; second, we would like to learn the extent to which the knowledge diffusion is an important channel supporting labor in the environmental context, by analysing the impact of intra-industry externalities. From the empirical results, we can observe that environmental spillovers have a negative impact, by confirming the prevalence of the displacement effect. This finding is extremely important for policy implications. Indeed, not only economic incentives to allow the transition to cleaner technologies are required, but also stronger actions to favor job creation relative to environmental activities are needed for a full sustainable achievement of firms.

Knowledge Technology Transfer: A Spatial Analysis within the Triad

The aim of this study is that of further exploring the knowledge spillover effects of Large International firms. In particular, we implement a spatial analysis in United States, Japan and Europe. We use technological vectors of firms to compute Jaffe proximity measure in such a way that we get knowledge externalities relative to different countries. To our end, we estimate the spatial-autoregressive model where we consider also additional endogenous variables. The findings demonstrate the significant positive effect predicted by the core literature about this topic.

Book review: Edith T. Penrose, The Large International Firm in Developing Countries: The International Petroleum Industry, First Edition (Routledge, Abingdon, UK and New York, NY, USA 1968 [2013]) 311 pp.*

"Book review: Edith T. Penrose, The Large International Firm in Developing Countries: The International Petroleum Industry, First Edition (Routledge, Abingdon, UK and New York, NY, USA 1968 [2013]) 311 pp.*" published on Jul 2018 by Edward Elgar Publishing Ltd.

International entrepreneurial marketing strategies of MNCs: Bricolage as practiced by marketing managers

The extant research lacks information on entrepreneurial marketing in large international firms. This study explores the international entrepreneurial marketing strategies of multinational corporations (MNCs), and its results reveal that MNC marketing managers use bricolage to develop international entrepreneurial marketing. A novel finding of the study is that the international entrepreneurial marketing strategies of MNCs include co-innovation, accelerating customer value, and international expansion based on regional market leadership. Marketing managers use both parallel and selective bricolage in their international entrepreneurial marketing. Environmental uncertainty and entrepreneurship culture are important drivers of the implementation of bricolage to develop international entrepreneurial marketing. The research findings can inform MNC management of the options available to utilize corporate venturing to facilitate bricolage and in turn to realize international entrepreneurial marketing strategies.

The Impact of Audit Firm Office Acquisition on Subsequent Audit Effectiveness and Efficiency

This study investigates accounting firm office mergers and acquisitions (M&A). It explores whether office M&A affect post-acquisition office audit quality, particularly whether there is a spillover effect on the existing client base of the acquiring office. We capitalize on a unique circumstance: the 2002 acquisition of Arthur Andersen (Andersen) office practices by other audit firm offices. This setting involves a set of offices in each of the remaining large international audit firms that acquired entire Andersen local practices (treatment group) and a set of offices that did not acquire Andersen practices (control group). Using a within-audit firm matched sample and difference-in-difference research design, we find robust evidence of higher audit quality post-acquisition among the audits of existing clients of the acquiring offices. These findings extend the literature on office audit quality and provide initial evidence of the impact of audit firm office M&A on the existing client base. The findings also suggest that practitioner and scholarly literature on audit practice mergers should consider the impact of audit firm M&A on the existing client base as well as the acquired clients.

R&D Spillover Effects on the Strategic Behavior of Large International Firms during the World Financial Crisis

The aim of this study is to investigate the relationship between competition and innovation through the knowledge spillover effect. In particular, we investigate whether R&D competition is sensitive to economic shock. To this end, we consider a period of time related also to the 2008 financial crisis. We implement an empirical analysis of 879 worldwide R&D-intensive firms. In order to measure technological proximity, we use two approaches: one based on Jaffe industry weight matrix, relative to patents distributed across technology classes; one based on trade intensity between sectors using input–output matrix data. The empirical results show a positive effect of R&D externalities on competitive interactions before the beginning of crisis and a negative one after it. These findings are robust with respect to the procedure employed in the estimation method.

Corporate anti-corruption disclosure

PurposeThe purpose of this paper is to investigate whether differences in media exposure regarding corporate corruption appear to influence companies’ anti-corruption disclosures. The authors also examine whether the level of press freedom in firms’ home countries affects disclosure and the impact of media exposure in different ways.Design/methodology/approachThe authors use Transparency International’s 2012 ratings of anti-corruption disclosure by the 105 largest multinational firms in the world, press freedom assessments from the non-governmental organization Reporters Without Borders, and media exposure measures based on a search using the Dow Jones Factiva database. The authors assess relations using regression analysis controlling for other firm-specific factors potentially impacting disclosure choices. Finally, the authors consider the potential effect of other country-level factors.FindingsThe results indicate that media exposure, using either an existence or an extensiveness measure, is positively related to differences in sample companies’ anti-corruption disclosures. The authors also find that disclosure is more (less) extensive where home country press freedom is less (more) restricted and that reduced press freedom appears to reduce the impact of media exposure on the disclosure. The authors further document that press freedom levels explain more difference in anti-corruption disclosures than other country-level factors potentially influencing the practice.Research limitations/implicationsBecause the investigation is limited to very large international firms for a single year, the degree to which the findings apply to other companies and time periods cannot be assessed. Further, the authors cannot determine how the findings would hold using an alternative disclosure rating scheme. Finally, the authors do not assess whether differences in the source of media exposure impact the findings.Social implicationsThe findings suggest that, to the extent that improved anti-corruption disclosure reflects greater corporate attention to corruption issues, the media may be a powerful player in addressing this social ill. Unfortunately, the results also indicate that media efforts may not be sufficient to bring about change in locations where the freedom of the press is limited. Further, the results suggest that disclosure appears to be a function of exposure to social and political exposures, and the authors therefore question whether it will actually lead to improved corruption performance.Originality/valueThe study is the first to consider the impacts of media exposure and press freedom on corporate social disclosures.

Innovation, Productivity and Environmental Performance of Technology Spillovers Effects: Evidence from European Patents within the Triad

The aim of this paper is that of investigating whether the integration process between environmental activities is important in the Spillovers flows analysis. For this reason, we explore the role of knowledge externalities for large international firms engaged both in environmental and in non-environmental activities. In particular, we develop a theoretical framework and an empirical analysis of the United States, Japan and Europe based upon a dataset composed of worldwide R&D-intensive firms. In order to deal with the firms’ unobserved heterogeneity and the weak exogeneity of the regressors, we implement the Generalized Method of Moments (GMM) method. The results show a differentiated impact of environmental spillovers on firms’ productivity and green performance, by suggesting some interesting policy implications in terms of actions to favor full sustainability of firms’ production.

Innovation effects on employment in high-tech and low-tech industries: evidence from large international firms within the triad

In this paper we investigate the role of financial shocks, such as the economic crisis since 2006, in the reallocation process of employment flows in high-tech and low-tech industries. The contributions of the paper to the literature are threefold. First, a general framework of employment growth is estimated by using a dataset made of 879 large international firms observed for the period 2002–2010 and localized in three economic areas: USA, Japan and Europe. Second, we develop a database merging the firms’ data with EPO patents data. In particular, the innovation variable is proxied by the R&D capital stock. Third contribution to the literature is to analyze the extent to which the economic crisis may affect the sensitivity of employment with respect to own innovation but also with respect to outside innovation, the R&D spillovers, in high-tech and low-tech industries. The empirical results suggest some important and significant results. This comparative finding could be the source of relevant industrial policy implications.

The Role of Technology Spillovers in the Process of Water Pollution Abatement for Large International Firms

The objective of this paper is to analyze the effects of technology externalities stemming from different technological sectors for international firms engaged both in water pollution abatement and in dirty activities. We present a theoretical framework and an empirical analysis based upon a dataset composed of worldwide R&D-intensive firms. In order to identify the technological proximity between the firms, we construct an original Mahalanobis environmental industry weight matrix, based on the construction of technological vectors for each firm, with European ecological patents distributed across more technology classes. Opportune econometric techniques that deal with the firms’ unobserved heterogeneity and the weak exogeneity of the explanatory variables are implemented. The findings show significant spillover effects on the productivity and environmental performance of the firms.

Top management team faultlines and firm performance: Examining the CEO-TMT interface

Prior research indicates that the relationship between top management team (TMT) faultlines and firm performance is equivocal. We shed new light on this topic by highlighting the moderating role of the CEO–TMT interface. Analyzing data from large international firms over the period 2005–2009 (347 firm-year combinations), we find that the performance effect of knowledge-based TMT faultlines is significantly altered when the leader of the TMT (i.e., the CEO): (a) socio-demographically resembles incumbent executives, (b) possesses a diverse career background, and (c) shares common socialization experience with other TMT members. Overall, our research reveals that different dimensions of the CEO-TMT interface play a pivotal role in determining the performance effects of knowledge-based TMT subgroups. Implications for upper echelons theory, team diversity, and strategic leadership research are discussed.