Locally-owned Firms Research Articles

Tourism in Thailand

The paper explores and compares the perceptions of workers in the tourism industry in Thailand in foreign-owned and locally-owned firms in order to provide an underrepresented perspective to be used in the debate over whether international trade and tourism primarily exploits workers or provides valuable opportunities. A matched-pairs comparative analysis was used, and it was found that employees in both locally-owned and foreign-owned firms generally expressed high levels of job satisfaction, although employees in foreign-owned firms expressed statistically significant higher levels of job satisfaction than did employees in locally owned firms. In debates over whether exploitation or opportunities are created by international trade, foreign investment, and tourism, the viewpoints and perspectives of the workers are often overlooked. The paper intends to help bring into the debate the perspectives of individuals who are most directly affected by these activities.

Is “being foreign” a liability for mining companies? Locational liabilities and social conflict in Latin America

Do foreign mining firms face additional challenges and incur additional costs in host environments because of their nationality? This paper draws on the business literature on liability of foreignness (LOF), to examine whether foreign mining firms face a performance liability in comparison to locally-owned mining companies. In order to adapt this literature to the particular context of mining in developing countries, characterized by territorially-uneven costs of doing business abroad, and link it with stakeholder perceptions, we introduce the concept of “locational liabilities”. We show that foreign mining firms do experience a liability of foreignness associated with a higher likelihood of social conflict, than locally-owned firms, and that this effect can only be fully identified with the inclusion of locational liabilities that interact differentially with foreign and local firms. Furthermore, we demonstrate that these liabilities are not easily mitigated by corporate social responsibility practices, suggesting that foreign firms may have greater difficulty obtaining social licence to operate. The article uses an original database of 634 mining properties in five countries of Latin America, and a novel empirical methodology based on highly-localized property-level sources of data drawn in part from geographic information system (GIS) analysis.

Supplier relationship management and firm performance in developing economies: A moderated mediation analysis of flexibility capability and ownership structure

Collaborative practices between firms and their suppliers are becoming increasing important in the light of short product life cycles, intense global competition, the need for sustainability, and the ever-increasing demands of customers. Although supplier relationship management (SRM) and its purported benefits have been widely studied in the literature, most of the studies have focused on examining its direct relationship with firm performance. Interestingly, there is scare research on the applicability and effectiveness of such relationships in less developed countries. Thus, we use data collected from firms in Ghana, a less developed country, and apply rigorous, robust, and consistent analytical procedures to examine moderated-mediation relationships between SRM, operational flexibility, ownership structure, and firm performance (FP). We demonstrate that operational flexibility capability mediates the supplier relationship management – firm performance link. Additionally, our moderated mediated analyses show that SRM's influence on firm performance is stronger for locally-owned firms (domestic) than foreign owned firms, indicating that domestic firms stand to gain more from investments in SRM than firms with foreign ownership. This finding is particularly interesting and vital given that locally owned firms might not have the needed resources to invest in SRM practices and thus, the need for these firms to comprehend the benefits and advantages of SRM.

Technology and the Export Behavior of Small, Locally- owned Firms: New Insight

This paper investigates the relationship between technology and the export performance of small, locally-owned firms in the Jamaican economy. The literature argues that technology is an important variable in influencing the export performance of small firms given its technological ability to generate competitive advantage for the firm. However, the results from empirical studies are not always consistent. To investigate this issue, the paper uses survey data collected through face-to-face interviews of 92 exporters and non-exporters to estimate a logistic regression model of the firm’s export behavior. The results revealed that firm size, is the most critical factor that determines export performance. This result resonates with some aspects of existent literature while not finding resonance with others. The context specific nature of this result is what makes it novel.

A Comparative Study on Timber Productivity by Timber Firms in Ghana as Influenced by Ownership

Some of the major problems that confront the timber industry in Ghana are: The industries inability to diversify value-added products for export as well as decline in export volumes, prices, and number of sawmills which are actively engaged in the production and exportation of wood products especially the locally-owned. Furthermore, the capacity of forest sector has also reduced. These developments present a challenge to the local entrepreneurs in the face of globalization; and for that matter, the need to conduct an empirical comparative study into the issues to find solutions to mitigate them is now. The average number of products exported ware 3 and 4 by the locally- and foreign-owned firms respectively. In general, both categories of firms showed declines in eight low export prices of wood products from 2000 to 2008. Air-dried and kiln-dried lumber were the dominant products exported by both categories of firms. The foreign-owned timber firms exported ten high-priced timber products and eight by their counterparts; this makes the foreign-owned firms more diversified than the locally-owned firms. It is also worthy of note that, more than half (59%) of the foreign-owned firms exported between 4 and 6 products while less than one-fourth (23%) of the locally-owned firms exported the same number of products. Only one foreign owned firm exported products of 10 and above. Again the foreign owned - firms concentrated more on value added products while the locally-owned - firms specialized on primary products. This suggests that the foreign-owned firms are more efficient than their local counterparts.Statistical analysis conducted on all the products using (Wilcoxon Signed Ranks Test) indicated that the differences were not statistically significant. Finally, the timber firms in Ghana should take innovative measures to diversify and maximize the recovery rate of volume and value of timber products especially the locally owned–firms so that they can compete globally.

EXPORT INITIATION IN SMALL LOCALLY-OWNED FIRMS FROM EMERGING ECONOMIES: THE ROLE OF PERSONAL FACTORS

This paper examines the impact of personal factors in the decision of small, locally-owned firms from an emerging economy to enter into exporting. It drew on the logistic regression model to analyze the probability of a firm entering into exporting given its founder/owner possesses certain personal attributes. The results reveal personal attributes such as international job experience and foreign travel experience are the most critical in determining whether or not the firm exports. These results demonstrate demographic factors such as age and education level of the owner are less important and behavioral factors are more significant. Public policymakers interested in getting more firms to export can use these results as a guide to develop training centers that will encourage specific entrepreneurial behaviors germane to export initiation in small firms.

Moving on: From Enterprise policy to Innovation Policy in the Western Balkans

AbstractSignificant progress has been made in recent years in the development of enterprise policy in the Western Balkans. Issues remain, however, in the support provided for innovative enterprises. In this paper we use data from the 2005 Business Environment and Enterprise Performance Survey to identify the determinants of innovation in locally-owned firms in the Western Balkans and compare these to the other CEEE countries and the CIS. Based on an econometric examination of the innovation production function in each area we observe marked differences in the determinants of innovation. First, in the Western Balkan countries (WBCs) R&D and higher-level skills have little impact on firms' innovation outputs, a result which contrasts strongly with results for the CEEE, CIS and other more developed economies. Second, we find no evidence of innovation benefits from urban locations in innovation in the WBCs or that public support is having any positive effect on innovation outcomes. Again, this experience is at odds with evidence from other regions. Third, innovation outputs in the WBCs are being negatively influenced by aspects of the business environment. These results suggest a need for an active and rather interventionist innovation policy in the WBCs to address these system failures. A range of policy options are developed.

Does local business ownership insulate cities from economic shocks?

We assess a prominent argument for local economic policies that favor locally-owned businesses – namely, that locally-owned firms are more likely to internalize the costs to the community of decisions to reduce employment and hence help to insulate cities from adverse economic shocks. We test this argument by examining how establishment-level employment responses to economic shocks are affected by establishment ownership. We find evidence that some types of local ownership do insulate regions from economic shocks, although the clearest benefits do not come from small, independent businesses, but instead from corporate headquarters and, to a lesser extent, from small, locally-owned chains.

Does Local Business Ownership Insulate Cities from Economic Shocks?

We assess a prominent argument for local economic policies that favor locally-owned businesses ﾖ namely, that locally-owned firms are more likely to internalize the costs to the community of decisions to reduce employment and hence help to insulate cities from adverse economic shocks. We test this argument by examining how establishment-level employment responses to economic shocks are affected by establishment ownership. We find evidence hat some types of local ownership do insulate regions from economic shocks, although the clearest benefits do not come from small, independent businesses, but instead from corporate headquarters and, to a lesser extent, from small, locally-owned chains.

Productivity spillovers from foreign direct investment in Poland

Using firm level data from the Polish manufacturing sector, we examine the effect of foreign direct investment on the scope of productivity growth of locally-owned firms. The results suggest that a higher foreign presence within an industry affects local firms negatively. However, the effects differ between groups of firms and gorups of industries. FDI has a negative impact on the performance of the most productive local firms in high competition industries. By contrast, the effect on the least productive state firms in low competition industries is positive. For the domestic industry as a whole (local and foreign firms together), a higher foreign presence has a positive impact on performance as foreign firms are on average more productive than local ones.

Conflicts between Host Countries and the Multinational Enterprise

Direct foreign investment is desired for its technology and ability to bring about intertemporal reallocation of resources. However, it also redistributes income from nationals to foreigners. Where this redistribution is considered to exceed the benefits of direct foreign investment, foreign-owned firms will be treated different from locally-owned firms.