Subsidiary Market Research Articles

Predicting the Effect of Sterilization Policy on the Reserved Money in the Iraqi Economy until 2030 Using ARIMA and ANN Models

Abstract
 The Central Bank’s borrowing of a portion of excess liquidity and its accumulation in its balance sheet as liabilities with interest, its frequent raising of the legal reserve ratios, intervening in the exchange market through the purchase of foreign currency, then absorbing the effect of this purchase on local liquidity, providing deposit facilities with interest and offering its Central Bank orders to banks in the subsidiary market all come under the title of sterilization policies. This is quite evident from minimizing local crediting. In an attempt to control excess liquidity, the factors determining monetary sterilization policy and reserved money have been attended to so as to concisely forecast the course of the monetary variables until the year 2030 in order to maintain the stability of the monetary basis from the impact of the changes in oil price. This has been conducted through the adoption of prediction models of autoregression moving averages (ARIMA) model in addition to the artificial neural networks model (ANN) since the growth in government expenditure indicates that the monetization of oil revenues has caused a structural fiscal deficit in the Iraqi economy. Such a deficit should be restricted by the sterilization policy through monetary policy tools. Based on this, the balance of the budget in an economy depending on oil revenue cannot guarantee economic stability unless public spending is managed with a degree of independence from the fluctuations in oil price.

Launching new global products into subsidiary markets: The vital role of sales and marketing collaboration

AbstractWe examine how to encourage collaboration between local sales and marketing teams in multinational enterprise (MNE) subsidiaries in order to successfully commercialize new product launches by creating integrated, locally adapted implementation plans. Empirical research within six subsidiaries of an MNE operating in southern Latin America found that centrally produced processes alone were insufficient for successfully launching new products in these subsidiary markets. However, devolving power, while using cross‐functional teams and formalized processes to encourage communication, led to the development of the types of trust that facilitate effective relationships between sales and marketing teams, which resulted in successfully adapted new product launches for each subsidiary market. We discuss the implications of our findings for theory and practice.

The Drivers of Foreign Bank Lending in Central and Eastern Europe: The Roles of Parent, Subsidiary and Host Market Traits

We analyze the relative roles of subsidiary and parent banking group traits in driving foreign banks’ lending patterns in the Central and Eastern European (CEE) region before and during the crisis. We use a new bank-level dataset on Western European banking groups and their CEE subsidiaries over the 2002-2013 period. We find that a bank’s non-performing loans (NPL) ratio significantly lowered lending growth, while the parent bank’s profitability encouraged subsidiary lending before the crisis. During the crisis, high bank NPLs and lower parent liquidity hindered lending, while better capitalization encouraged lending growth. Results suggest purging banks of NPLs, enhanced regulatory coordination and the inclusion of parent bank traits in countercyclical capital buffer calculations.

The Impact of Stock Market Structure on Volatility: Evidence from a Call Auction Suspension

The purpose of this paper is to investigate the volatility impacts of the suspension of a call auction system by the National Stock Exchange of India (NSE) in June 1999, thus extending prior empirical work relating to this area. The realised volatility on NSE is compared with that of the Bombay Stock Exchange using two volatility proxies: modulus of log returns and scaled intra-day price difference. We also focus on conditional volatility by estimating an AGARCH model on seasonally-adjusted NSE Nifty Index data. Whilst some results yield contrasting inferences, the overall outcomes indicate that volatility was higher during the auction period, and we do not find any evidence that supports the foreseen benefits of auction frameworks. Results reinforce the idea that market designers should think about the possible interactions with subsidiary market microstructure features when formulating auction protocols, since the latter may compromise auction efficacy.

The Drivers of Foreign Bank Lending in Central and Eastern Europe: The Roles of Parent, Subsidiary and Host Market Traits

The Drivers of Foreign Bank Lending in Central and Eastern Europe: The Roles of Parent, Subsidiary and Host Market Traits

Foreign value-adding of industrial firms

Purpose – There is a lack of research on how the industrial firm's international strategy is associated with basic and advanced value-adding modes of the wholly owned foreign subsidiary. The purpose of this paper is to fill the gap by answering two questions: how are relatedness between the firm and the foreign subsidiary, and the firm's international scope associated with foreign subsidiary's value-adding mode? How does the subsidiary's market experience moderate the relationships? Design/methodology/approach – The study develops a conceptual model that integrates strategy theory and internationalization theory in order to explain basic value-adding modes (promotion, sales, and after-sales services), and advanced modes that also include product development and/or production. Also, the study tests the model using statistical data from subsidiaries of Swedish firms operating in Germany, the USA, and the UK. Findings – It was found that greater relatedness between the core business unit of the parent firm and the foreign subsidiary favors a basic mode. However, the foreign subsidiary's market experience weakens the relationship, and the interaction triggers an advanced mode. Also, greater international scope of the firm favors an advanced mode. Research limitations/implications – The model test shows that research needs to consider both international strategy and market experience in explaining value-adding modes of an industrial firm's wholly owned subsidiary. Practical implications – By using the study contributions the industrial firm's efforts to efficiently implement international strategy would become more efficient as strategy coherence will increase. Originality/value – This paper contributes to literature on international strategy and internationalization by showing that international strategy and market experience of foreign markets mutually impact value-adding modes of wholly owned foreign subsidiaries.

Competition barriers and foreign subsidiary growth: propositions on the contextual role of strategic orientation

A foreign subsidiary's way of breaking through exogenous barriers to competition triggers growth of the subsidiary and the firm as a whole. This article contributes to literature on international business strategy by developing a conceptual framework that underscores the contextual role of subsidiary's strategic orientation in breaking through the barriers. Propositions are developed based on analysis of four high growth subsidiaries of Swedish industrial firms operating in the USA. The propositions distinguish types of exogenous competition barriers encountered by the foreign subsidiary, and types of strategic orientation. First, it is proposed that the more extensive the foreign subsidiary's entrepreneurial orientation the weaker the negative association between a scale barrier and subsidiary's growth. Second, it is proposed that the more extensive the foreign subsidiary's market orientation the weaker the negative association between customer access barriers and subsidiary's growth. Contributions to literature and practical implications are discussed.

Subsidiary use of Foreign Marketing Knowledge

A source of potentially valuable knowledge in multinational enterprises is foreign marketing knowledge—that is, knowledge from one country unit that may offer value and competitive advantage to marketing managers in other country units. This article builds on marketing and management knowledge transfer research to further understand both the conditions under which one subsidiary uses external knowledge from another subsidiary and the outcomes of such use in the subsidiary's market. Using the theory of value creation and appropriation and field interviews with headquarter and subsidiary marketing managers, the authors develop a model and research propositions of the enabling, motivating, and perceiving conditions that affect foreign marketing knowledge use and subsequent effects on marketing program effectiveness and efficiency, organization identification, and intellectual capital in subsidiaries of multinational enterprises.

Vertical Integration and Sabotage in Regulated Industries

An essential facility produces 'access', an essential input used by a competitive downstream industry. The access charge is regulated. The essential facility can vertically integrate into the downstream segment and sabotage rivals increasing their costs. We systematically study the vertical integration decision and the optimal level of sabotage. Contrary to most of the literature, we allow for free entry into the downstream segment, so that prices equal long-run average costs. We find the following: First, sabotage does not pay when diseconomies of scope are large, or the subsidiary's market share is small. Second, when sabotage pays, and the subsidiary coexists with rivals in equilibrium, optimal sabotage increases with the subsidiary's market share and scope economies. On the other hand, when the essential facility optimally sabotages to exclude rivals, the intensity of sabotage falls with economies of scope. Third, unless the subsidiary is implausibly more efficient than independent firms, vertical integration never benefits consumers.

Subsidiary performance in multinational corporations: the importance of technology embeddedness

Subsidiaries have access to different types of resources and therefore perform differently in their market-place and within a multinational corporation (MNC). Yet, even though subsidiaries are the object of intense interest, remarkably little has been written about the assessment of subsidiary performance. In short, the strategic opportunities of subsidiaries seem to generate more attention in the literature than their results. The two distinctive features of this paper are the development of the concept of subsidiary performance and the exploration of the linkage between subsidiary business context and performance. More specifically, by drawing on the literature about organizational learning, absorptive capacity and embeddedness in business relationships, some hypotheses will be formulated about the causal link between subsidiary environment and subsidiary performance. These hypotheses are then tested in a LISREL model based on data concerning 98 subsidiaries belonging to Swedish MNCs. Our empirical results indicate that technology embeddedness has a positive, direct, impact on subsidiary market performance, and a positive, but indirect, impact on subsidiary organizational performance.

Regional structure of capital market of foreign direct investment in China’s mainland

Since China’s reform and open-door, the countries and regions of direct investment in China’s mainland have been increasing. In 1995, the amount of foreign direct investment (FDI) in China was US$ 37.81 billion that was from more than 170 countries and regions. The regional structure of capital market of FDI in China has three characteristics: (1) The most of FDI was from the near countries or regions, Hong Kong-Macao, Taiwan, Japan, South Korea, Thailand and Malaysia provided 80.3% of the amount of FDI in 1995. (2) Only several countries and regions provided most of FDI in China. (3) According to the contributory rate, the main capital market of FDI in China could be divided into four classes, including the guiding market, subsidiary market, new and development market, opportunity market. Most of FDI in China was from the developing countries and regions, which had a negative effect on the size and technical level of foreign capital enterprises. The author puts forward the countermeasures to improve the regional structure of capital market: (1) to keep the guiding market stable, (2) to open up chiefly the subsidiary market, (3) to guide actively the new and developing market, (4) to try hard to start the opportunity market.

The Effect of Inter‐company Lets on the Valuation of Property Assets under the Red Book

In the last few years a number of large operational companies in the United Kingdom have chosen to segregate the management of their property holdings from the day‐to‐day running of their core business. This has either been achieved by forming property sections within the main company structure, or in some cases the hierarchy has been more clearly defined by the formation of subsidiary companies feeding into the parent company. The operational arm would then pay the property subsidiary an open market rental for each property that they occupy. The advantage of separating the property function from the core business is twofold. First, it allows the performance of each operational outlet to be measured on the same basis; and second, the investment performance of the properties themselves can now be measured. However, for the latter to occur, the properties need to be valued as investments and not as owner occupied. Under current RICS regulations this is not allowed and any property subject to an inter‐company let must be valued as if the lease agreement did not exist. Investigates the effect of the RICS guidelines on the valuation of properties let to related companies and highlights the problems of measuring the performance of the company′s property assets against a suitable benchmark.

Pricing policies of multinational enterprises: Host country regulation and welfare

This paper examines host country price-regulation policies towards a foreign subsidiary. The analysis considers two prices, namely the transfer prices charged to the subsidiary, and the market price of the subsidiary's products. It is shown that host countries should regulate both of these prices. Regulation of the transfer price alone may induce an increase in the subsidiary's market price and cause a loss of host country welfare. Regulation of both prices is more efficient for it enables the host country to attain a higher level of welfare and allows the foreign firm to earn the same level of profits as would regulation of only one of those prices.

U. S. multinational investment in Canadian manufacturing industries

The primary objective of this study is to test the applicability of marketing to the explanation of U.S. multinational corporate market share of selected Canadian manufacturing industries. A secondary objective is to evaluate the use of a variable approach whereby data from both the host and donor countries are considered in a relative context. Results indicate that U.S. advertising spillover, marketing management expertise and comparative advertising/sales ratios act as determinants of U.S. subsidiary market share in Canadian industries. Performance of the variables in regression, while not as robust as the marketing specifications, is also encouraging.

U.S. Multinational Investment in Canadian Manufacturing Industries

The primary objective of this study is to test the applicability of marketing variables to the explanation of U.S. multinational corporate market share of selected Canadian manufacturing industries. A secondary objective is to evaluate the use of a "comparative variable" approach whereby data from both the host and donor countries are considered in a relative context. Results indicate that U.S. advertising spillover, marketing management expertise and comparative advertising/sales ratios act as determinants of U.S. subsidiary market share in Canadian industries. Performance of the "comparative variables" in regression, while not as robust as the marketing specifications, is also encouraging.

Odd-Lot Trading on the New York Stock Exchange and Financial Decentralization

Trading in nationally known corporate shares is largely concentrated on the New York Stock Exchange. Such trading falls into two main classifications, round-lots (Ioo shares or multiples thereof) and odd-lots (less than ioo shares). A serious threat to the continued existence of the concentrated market for odd-lot trading has arisen, however, as a result of certain policies being pursued by the Securities and Exchange Commission at the present time. It is proposed here to examine the issues involved in these policies in the light of the peculiar characteristics of odd-lot trading. In order to understand the nature and implications of the commission's policies, it is necessary first of all to secure a clear comprehension of the mechanics of odd-lot trading. Trading in oddlots, though conducted on the floor of the exchange, is not carried on directly between the agents of the buyer and the seller as is the case in round-lot transactions, and requires therefore what constitutes practically a subsidiary market.' Odd-lot transactions because of certain technical difficulties necessitate the intervention of an intermediary between brokers. These intermediaries, known as odd-lot dealers, have no direct contact with the public. They deal only with brokers, executing the orders turned over to them by the latter. For the performance of this function, the odd-lot dealer charges no commission but instead imposes a differential charge of I point or iz ? cents per share traded. Thus the