Local Subsidiaries Research Articles

Sailing along the global tobacco supply chain: public health insights of innovative database project

Abstract Background Tobacco control commonly focuses on reducing tobacco demand rather than tobacco supply. This paper presents findings from a major four-year project on the tobacco supply chain. Transnational Tobacco and Leaf Companies (TTLCs) and other tobacco supply chain companies argue that provision of livelihoods, exports and corporate social responsibility (CSR) exonerates tobacco. Our objective was to consider these claims. Methods This paper presents the results of three studies: a literature review and two analyses of data from the innovative Tobacco Supply Chain Database (TSCD). Study 1: A scoping review of academic literature (n = 124 papers) reviewing how the tobacco supply chain embeds the tobacco industry as a development actor. Study 2: The statistical association between countries hosting TTLC subsidiaries (TSCD) and TTLC interference in health policy (Global Tobacco Industry Interference Index) was analysed (n = 76 countries). Study 3: Document and website analysis of TSCD non-TTLC tobacco supply chain companies comparing descriptions of CSR and tobacco supply chain involvement (n = 80 companies). Results Study 1: Although there are instances of advantages of involvement in the tobacco supply chain, TTLCs tends to be associated with declines in tobacco workers’ income, equality, quality of life (cultural and health and wellbeing) and nations’ environment and economy. Study 2: Countries that hosted more TTLCs had more policy interference (farming subsidiaries p=.046, tobacco product manufacturing subsidiaries p=.008). Study 3: Non-TTLC companies often lack transparency regarding their connection to tobacco. For example, 68% linked to CSR activity on their homepage whereas only 16% linked to involvement in the tobacco supply chain. Conclusions Tobacco supply chain involvement is detrimental to public health, the environment and governance. Countries and companies should seek to extricate themselves from the tobacco supply chain. Key messages • Tobacco supply chain involvement weakens public health governance despite CSR activities. Lack of transparency on supply chain involvement by companies is thus a concern. • The new Tobacco Supply Chain Database illuminates previously hidden areas of the tobacco supply chain: the location of tobacco industry subsidiaries and presence of independent companies.

International operations and international influences – Investing in UK firms

We provide an alternative perspective on the benefits of investing in Multinational Companies (MNCs) using a unique hand-collected dataset on the location of UK firm's sales and subsidiaries from 1998 to 2015. We find that investors can gain diversification benefits from investing in MNCs, but not necessarily firms with the greatest global reach. We also show that firm's returns tend not to be influenced by the geographical regions where they report sales and subsidiaries. The results suggest a new category of firms that may be beneficial for diversification - firms that are significantly influenced by the stock markets of a geographical region but do not report sales or subsidiaries in that region. This implies that investors should analyse the geographical regions that influence firm returns rather than the location of their sales and subsidiaries. Intuitively, these should be the same, but our results show a difference between the geographical location of a firm's sales and subsidiaries, and the regions that influence the firm returns. We recommend that investors look beyond the location of MNC activities and investigate the geographical regions that influence firms' returns when creating portfolios.

International Expansion of Nigeria Banks: Constructing the Winning Business Model in Sierra Leone-A Case Study of Guaranty Trust Bank

The research study is aimed at examining the degree to which Business Model adopted impact corporate performance particularly in a low-income economy, identify the Business Model variables and suggest the best Business Model to operate in Sierra Leone. Exploratory research was conducted on Guaranty Trust Bank (SL) Ltd with findings compared and contrasted with that of notable competition, United Bank for Africa and Zenith Bank. The aim of the research was to facilitate understanding of the factors responsible for the successes recorded by the subsidiaries of Nigerian banks in one location and how these success factors could be replicated in other subsidiary locations. The research entailed gathering of qualitative data from the senior executives of these banks and quantitative data from the financial performances of the banks over a three-year period. The analyses of the qualitative and quantitative data were used to test the viability of the Business Models adopted by the sampled multinational banks based on identified features inherent in a viable Business Model. The study found that the competitive advantage of case study bank was due to the effectiveness of its Business Model in terms of alignment with the goals of the organization, reinforcement, virtuousness, and robustness. The study also revealed that the characteristics of an organization and inherent resources could be evaluated and assessed from the Business Model features and structured to deliver optimal results. The study demonstrated that a well-crafted Business Model is capable of providing a competitive advantage even in low-income economy and aid the replication of success in one location to another. The research findings provide practical implications to guide businesses in the designing of the most appropriate Business Model for optimal performance. The research study can help business leaders to develop a template for driving performances in their organizations, communicate performance actions and monitor performance objectives.

Public data accessibility and corporate maturity mismatch: Evidence from China

As the importance of public data to the real economy continues to be recognized, this study explores public data accessibility as a determinant of corporate maturity mismatch between investment and financing. Exploiting the staggered establishment of public data open platforms (PDOPs) across different cities in China, we observe a significant reduction in local firms' maturity mismatch following the establishment of PDOPs. The results remain robust even after conducting a battery of robustness tests, including placebo tests, matching analysis, as well as controlling for the influence of other major concurrent reforms and utilizing alternative measures for corporate maturity mismatch. Mechanism analysis indicates that the establishment of PDOPs contributes to an increase in the scale of long-term loans and an extension of the debt maturity structure. This suggests that enhanced public data accessibility effectively strengthens banks' information discernment capabilities. Cross-sectional analysis indicates that the effects are more pronounced in samples of private enterprises, companies with high levels of earnings management, fewer analysts covering, lower collateral values, and a higher proportion of local subsidiaries. Additionally, the economic consequence analysis reveals that the establishment of PDOPs ultimately helps to reduce corporate default risk. Finally, this study finds no evidence of potential spatial spillover effects from the establishment of PDOPs. This study offers a new perspective on understanding changes in corporate maturity mismatch, providing significant policy implications for preventing and mitigating financial risks.

Determinants Influencing Korean Agri- Food Companies’ Modes of Overseas Market Entry

Purpose - Faced with the constraints of a limited domestic market, the Korean agri-food industry necessitates regional diversification through the establishment of offshoring production subsidiaries. This study tests the validity of Root’s model of the determinants of offshoring and sequential entry to overseas markets on Korean agri-food companies’ offshoring of production subsidiaries. Design/Methodology – This study employs the convergent mixed-methods research design, wherein qualitative and quantitative data collection and analysis are conducted, then compared, before interpreting the data affecting Korean agri-food outward direct investment (ODI). Methodologically, based on Korean agri-food manufacturing company ODI data from the KOTRA, a survey was conducted to quantitatively analyze the factors influencing their selection of production subsidiaries for ODI. Findings – Though Korean agri-food companies also consider Root’s external factors when selecting overseas entry methods, the sequential entry route and selection model, factors theorized to influence Root’s overseas market entry method, were not found to be statistically significant. Instead, they tailor their market entry approach based on the type of investment and the operating objectives of the local subsidiary. This is attributed to Korean agri-food companies’ deviation from sequential entry routes when entering markets through ODI, as well as the determination of the form and type of investment of these overseas subsidiaries according to the purpose of their operations. Originality/value - This study distinguishes itself by employing a convergent mixed-methods design, which combines quantitative and qualitative analyses to identify the determinants of ODI market entry by Korean agri-food companies. Furthermore, it evaluates Root’s market entry model from the perspective of Korean agri-food companies.

Securing financial returns in politically uncertain worlds: Finance and urban water politics in Brazil

Studies of financialization have highlighted how politics, particularly through the state, drives the increasing entanglement of financial actors and rationales in the production of urban space. This article shifts the angle to consider the challenges that uncertain politics pose for such entanglement. Looking beyond techno-calculative practices, it explores how finance works politically to sustain value extraction within fragmented regulatory landscapes. It does so through historical and ethnographic analysis of financial investment in urban water and sanitation provision in Brazil, drawing on fieldwork, interviews, and a new dataset on public-private contracts to interrogate how private water companies navigate politico-regulatory relations under financial investors like private equity. It shows that while these providers were quite engaged in local politics under their original owners (construction groups), under financial investors they sought to “escape” it by curbing ties to public officials, reducing the autonomy of local subsidiaries, and successfully lobbying for national standards on regulatory norms. It argues these centralizing efforts constituted forms of centripetal politics meant to enhance asset monitoring, increase regulatory legibility, and reduce political uncertainty. The findings illuminate how financial investors work across political scales to navigate political risk and sustain financial value, thus problematizing the conventional analytical focus on how finance capitalizes on local forms of entrepreneurial politics. Crucially, they reveal the need to treat institutional environments not simply as filters for financial investment but as objects of political contestation by financial actors. This allows for blurring the boundaries between finance and politics, and for politicizing finance.

The effects of shaping employee work engagement and job satisfaction on company performance results: the mediating role of HRM outcomes in Central European MNCs

PurposeThe main goal of the article is to determine the mediating role of human resources management (HRM) outcomes in the relationships between shaping employee work engagement and job satisfaction (SEWE&JS) and company performance results and to establish whether there are any identifiable regularities in this scope in the pre-pandemic and pandemic period in the headquarters (HQs) and foreign subsidiaries of multinational companies (MNCs).Design/methodology/approachThe empirical research included 200 MNCs headquartered in Central Europe. The raw data in the variables were adjusted with the efficiency index (EI) to capture the actual relations between the variables under study. The partial least squares structural equation modeling (PLS-SEM) was used to verify the research hypotheses and assess the mediating effects.FindingsThe research findings show that the HRM outcomes positively mediate the relationships between SEWE&JS and the company performance results. HRM outcomes turned out to be a stronger mediator between SEWE&JS and company performance results in finance and quality in the HQs during the pandemic. By contrast, in the local subsidiaries, they were a stronger mediator of the relationships between the results in innovativeness and quality during the pandemic.Originality/valueIn addition to confirming the results of some other researchers, the research findings also provide new knowledge. They determine the mediating role of HRM outcomes in the relationship between SEWE&JS and the three categories of company performance results, namely finance, innovativeness and quality. In addition, they identify certain regularities in the four studied contexts, which is a novelty in this type of research. A novelty is also the use of employee key performance indicators (KPIs) in the data analysis as the efficiency index in analyzing the effect of the variables under study. The value of the research is also the fact that it covers HRM in MNCs established in Central Europe, which, compared to MNCs from the Western world, is not a frequent subject of research.

다국적 기업 현지 자회사의 ESG 경영이 경영성과에 미치는 영향

다국적 기업 현지 자회사의 ESG 경영이 경영성과에 미치는 영향

ראשיתה של המסורת העיתונאית האנגלו-אמריקנית בארץ ישראל

Throughout the 19th century, a distinctive journalistic tradition emerged simultaneously in Britain and the United States, emphasizing norms and practices such as fact-based reporting, a clear separation between news and opinion, and objectivity. The Anglo-American tradition gradually spread to other locations including Continental Europe and Israel, becoming paradigmatic in the 1970s. However, the earliest manifestations of this were already noticeable in British-ruled Palestine in the 1920s and 1930s, mainly in the two Jerusalem-based media outlets reviewed in this article: the Palestine Telegraphic Agency (PTA), a local subsidiary of the international Jewish Telegraphic Agency (JTA), headquartered in New York; and the Palestine Post newspaper. These two English-language news organizations catered to Palestine’s English readers (predominantly members of the Mandatory administration) and adhered perforce to the Anglo-American journalistic tradition to which their readers had been accustomed. Jacob Landau and Gershon Agronsky, the American founders of the two companies championed Anglo-American journalism on a variety of financial, political, and professional grounds.

Spatial outward FDI: Evidence from China's multinational firms

AbstractThis paper studies the impacts of geographic proximity and investment connection on the outward foreign direct investment (OFDI) decisions by Chinese multinational firms, including both greenfield investment and cross‐border merger and acquisition. We model firms' OFDI expansion with the lagged spatial structure, and collect outward FDI data of 3479 Chinese multinational firms from 2002 to 2013 whose investment destination covers more than 160 countries. We find that the spatial expansion of firms' existing OFDI play an important role in shaping their future investment decisions. Firstly, firms tends to invest in destinations that are closer to China, and expand further into destinations that are geographically closer to their existing OFDI locations. This is the geographic network effect. Secondly, we also find that firms are more likely to invest in countries with more intense FDI from China, and extend their OFDI networks to destinations with stronger investment connections with their existing subsidiary locations. This is the investment network effect. We show that these two effects are robust to alternative investment and geographic network measures and further controls.

Impact of the three waves of COVID-19 pandemic on the HR practices of Hungarian organizations-Experience from an empirical study.

Over recent decades, the practice of human resource management in the transitional countries of Eastern Europe and in Hungary has changed significantly. Especially in local subsidiaries of foreign-owned companies and in the leading domestic large organizations, HRM has become a strategic function, while in the practice of small and medium-sized enterprises it is less common. COVID-19 hit companies, institutions and individuals unexpectedly, not only in Hungary but also in the more developed regions of the world. This crisis has also highlighted the fact that larger and better prepared organizations and public institutions have found it easier to weather this global human catastrophe. We analyze how the key tasks of HRM have changed during the successive waves, along four hypotheses. Initially, health protection, communication and home-office organization were the focus of the work of human resource professionals. In the second and third waves, securing and retaining staff became more important.

Examining the cultural differences in disseminating green supply chain in global subsidiaries

Multinational corporations (MNCs) are composed of subsidiaries with different cultures, and such culture differences between headquarters and subsidiaries have been conceptually proposed to negatively affect headquarters disseminating green initiatives to their subsidiaries. Despite MNCs vast size and cross-national-border influence on green innovation, very few empirical efforts have been devoted to examine the culture distance challenge. Drawing on Cultural Contingency Theory (CCT) and Natural Resource-Based View (NRBV), this research collected data from 141 senior managers in charge of green initiatives from subsidiaries in 39 countries of an MNC. We empirically investigate how national cultural distance influences subsidiaries’ green supply chain (GSCM) adoption levels, and how headquarters can alleviate such cultural influence. Our results show that, though cultural distance has a negative influence on headquarters-subsidiary green compatibility, we empirically validate that headquarters can overcome this cultural-distance problem by strategically using cultural similarity in response to each distinctive culture embedded in subsidiaries to strengthen a shared vision. Specifically, four cultural characteristics can strengthen the shared vision, including low individualism, low uncertainty avoidance, masculinity, and a long-term orientation. MNCs can eventually benefit from the cross-culture cooperation in disseminating GSCM if headquarters can choose a cultural mechanism that best suits local subsidiary.

The Effects of Employee Performance Appraisal on the Company Performance Results: The Mediating Role of HRM Outcomes With an Innovative Application of the Efficiency Index

Purpose: The main goal of the article, identified with the main research problem, is to determine the mediating role of HRM outcomes in the relationships between employee performance appraisal (EPA) and company performance results and to establish whether there are any identifiable regularities in this scope in four specific contexts, i.e. the pre-pandemic and pandemic periods of COVID-19 in the HQs and foreign subsidiaries of MNCs. Design/methodology/approach: The empirical research included 200 MNCs headquartered in Central Europe. To capture the actual relations between the variables under study, the raw data in the variables were adjusted with the efficiency index (EI), which is a novelty in this type of research. The Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to verify the research hypotheses and assess the mediating effects. Findings: EPA had a positive effect on results in HRM, finance, innovativeness and quality, both in the pre-pandemic and pandemic periods, although this effect was not always statistically significant. Furthermore, the company’s performance results in HRM mediate positively the relationships between EPA and the other three categories of company performance results, regardless of the organizational level (HQs’ or subsidiaries’) and time period under consideration. Additionally, during the pandemic, the company’s performance results in HRM mediate the relationships between EPA and the company’s performance results in innovativeness stronger than in the pre-pandemic time, both at the HQs and local subsidiaries. This suggests that the EPA used such solutions in conjunction with other HRM subfunctions that stimulated entrepreneurial, creative and innovative behavior of employees in such a way that organizations could achieve better innovation results during the crisis than before it. Research limitations/implications: The study has some limitations, including the research sample’s structure, not fully representing the general population. Only HQs respondents were asked about performance results in foreign subsidiaries, excluding local informants. The qualitative benchmarking method used is problematic, relying on comparisons instead of objective measures. Furthermore, the analysis did not consider potential differences in economic, legal, or social conditions among the various countries where foreign subsidiaries were located. Originality/value: In addition to confirming the results of some other studies, the article also provides new knowledge. It determines the mediating role of HRM outcomes in the relationship between EPA and company performance results in finance, innovativeness, and quality. Moreover, it identifies certain regularities in the four studied contexts, which is a novelty in this type of research. It also uses an innovative approach to including employee KPIs as the efficiency index in analyzing the relationships between the variables under study.

Constructive career development of Japanese local employees and the human resource employment strategies of Japanese overseas subsidiaries in Asia

Global human resources and overseas local hiring is a concept unique to Japan. Professor Kyomi Koizumi, Sagami Women's University, Japan, is conducting a study on constructive career development of Japanese local employee and human resource (HR) employment strategies of Japanese overseas subsidiaries in Asia. In this study, she is working closely with Associate Professor Akira Sugiyama, Tokyo University of Social Welfare. Key factors that led the researchers to this project are the anxiety and dissatisfaction experienced by local hires who are neither Japanese expatriates nor local staff but intermediaries between the two and a lack of understanding of a local subsidiary on the part of the Japanese HQ, which could lead to human resource management issues that could affect performance. Sugiyama and Koizumi are exploring whether establishing an effective strategy of hiring locally based Japanese nationals could enhance the competitiveness of Japanese companies in overseas markets. The project's focus on Japanese nationals who are already present in a variety of overseas regions and who may offer the best solution to the HR management needs of Japanese companies expanding overseas makes it truly unique. The researchers want to identify the elements and conditions necessary for Japan to once again become a leading country in Asia and the world. Their intention is that their research will lead to corporate activities and individual career design.

TURNING PLATFORM WORKERS INTO OWNERS: ESOP-TYPE BUYOUTS OF LABOUR-BASED PLATFORMS

Platform work is often characterised by economic insecurity, dehumanising control procedures, isolation, deepening racial, economic and gender inequalities, and other socio-economic problems. There are lively debates underway concerned with how to regulate or limit the negative effects of platform capitalism. This article reviews two of the most common calls for action – regulation and platform co-operatives. We argue that there is also an unexplored, complementary option, which uses the network effects of platforms to provide greater benefits for platform workers. To understand this alternative, we introduce the American Employee Stock Ownership Plan (ESOP) mechanism for employee buyouts, redefine the model according to the main cooperative values, and apply it to the platform economy. We conclude that there is a third option is available to governments and municipalities, namely to require an Employee Stock Ownership Plan (ESOP) in the local subsidiary of the platform company. Keywords: Platform economy, platform co-operativism, employee buyouts, platform ESOP

Relationship between Cultural Origin of Multinational Companies and Employing Expatriates in Foreign Subsidiaries in Central and Eastern Europe

Abstract In the present study, we examine the question of whether the cultural characteristics of the country of the parent company are related to the posting practices of the parent company. According to our hypothesis, the management culture of the sending (parent) company influences the employment of foreign expats in local subsidiaries. In this research we use interviews and multivariate statistical analysis of survey data from five CEE countries, an important but relatively less examined region for global HR mobility. We found a significant relationship between cultural differences and expatriate assignment practices of MNCs. However, based on the strength of the relationship, we can conclude that in addition to management culture, other influencing factors typically influence posting decisions. Our results support Hofstede’s suggestion about the cultural dependence of management methods from a specific, management of expatriates, perspective.

Organizational Identification in Local Subsidiaries of Foreign Multinational Enterprises

We investigate organizational identification in small and medium-sized local subsidiaries of foreign multinational enterprises (MNEs). Organizational identification – a sense of oneness with their organization - is a strong predictor of positive employee attitudes and behaviors. However, due to the ‘foreignness’ and ‘smallness’ associated with small and medium-sized local subsidiaries of foreign MNEs, low-level host country nationals (HCNs) working for the small and medium-sized local subsidiaries exhibit low levels of organizational identification. In this study, we consider the role of HCN CEOs in overcoming the low organizational identification of low-level HCNs. Unlike low-level HCNs, HCN CEOs closely work with the headquarters, developing a good understanding of MNEs’ business strategies, activities, and policies, and the strategic importance of local subsidiaries for MNEs. To approach the issue, we develop and test a model on organizational identification in local subsidiaries based on multi-sourced data from small and medium-sized subsidiaries of MNEs in South Korea, using a sequential mixed methods design. First, we reviewed archival data on organizational identification from exit interviews of low-level HCNs, and also conducted interviews with HCN CEOs. As a result, we identify key antecedents and outcomes of organizational identification. Second, from a survey of both HCN CEOs and low-level HCNs, we test our hypotheses and validate our model. Implications are discussed in the paper.

Institutional Voids and Developed Multinationals’ R&D Resource Commitments in Emerging Economies

Institutional voids influence the resource commitments to technology transfer that multinationals make to their local subsidiaries. Extant research primarily adopts a deterministic view of the institutional environment and gives contradictory findings in this relationship with little attention given to contingent factors. Using an institution-based perspective and the lens of institutional voids as opportunities, this conceptual paper examines the mediating mechanism of government R&D support between institutional voids and technology transfer, and the moderating role of digital readiness. I argue that (1) developed multinationals use government research and development (R&D) support to exploit opportunities from institutionally voided emerging economies, and (2) digital readiness of emerging economies positively moderates the relationship between government R&D support and technology transfer. The discussion contributes to a greater understanding of the interplay between institutions and firm’s investment decisions across different international environments.

How stickiness to low-end markets leads to innovation: Co-evolution between Brother Industry Ltd. and Brother International Corp. USA, 1908–2000

This article analyses the history of Brother Industry Ltd. (BIL) to propose a new take on the conventional wisdom surrounding the internationalisation of Japanese companies – a common understanding that the key factor behind Japanese firms’ successes in establishing an international competitive edge was how the companies’ headquarters in Japan implemented a powerful combination of control and integration over their international distributors and moved up from low-end markets to high-end markets through unyielding technological development. By exploring the case of BIL, we locate a different path to growth where highly autonomous local subsidiaries sought to remain in low-end markets and thereby assisted their companies to develop into innovative global companies.

Temporal boundaries and expatriate staffing: Effects of parent–subsidiary work-time overlap

By integrating the boundary-spanning perspective with the expatriate staffing literature, we explore why and how temporal boundaries between multinational enterprise (MNE) parent and subsidiary locations affect MNEs’ deployment of expatriates in foreign subsidiaries. Temporal boundaries, defined as local work-time schedule differences, delimit the degree of work-time overlap between two locations. A lack of work-time overlap between MNE parent and subsidiary locations creates significant barriers in day-to-day, remote real-time communication, resulting in increased deployment of expatriates as intermediaries by parents to overcome these barriers. Conversely, greater parent–subsidiary work-time overlap enables more remote real-time communication via digital technologies, altering the cost–benefit analysis of deploying expatriates over local nationals, consequently reducing parents’ reliance on expatriates as intermediaries. Therefore, we posit a negative relationship between parent–subsidiary work-time overlap and the expatriate ratio in a subsidiary. Further, we posit that the negative relationship is weakened by home – host country distance in terms of information and communication technology development and linguistics because technological and semantic boundaries can reduce the effectiveness of parent–subsidiary real-time communication. Empirical analyses of 22,556 subsidiaries established by 5,912 Japanese MNEs operating in 31 host countries between 1990 and 2018 support our theorizing.