Western Investors Research Articles

Local competence building and international venture capital in low-income countries

PurposeThe purpose of this paper is to shed light on the changing pattern and characteristics of international financial flows in the emerging entrepreneurial ecosystems of Sub-Saharan Africa (SSA), provide a novel taxonomy to classify and analyze them, and discuss how such investments contribute to competence building and sustainable development.Design/methodology/approachIn an exploratory study, the authors analyze the characteristics of international venture capital investors and the start-ups receiving funding in Kenya and map their interaction. The authors proceed by developing a novel taxonomy, classifying investors according to their main rationales (for-profit-for-impact), and start-ups according to the locus of needs and markets addressed by the start-up (local-global) and the locus of the start-ups capacity and knowledge (local-global).FindingsThe authors observe a new type of mainly western investors who support innovative ideas in SSA by identifying and investing in domestically developed technical innovations with the potential to address global market needs. The authors find such innovations to be mainly developed at the intersect of global and local knowledge.Originality/valueThe authors shed light on the – up to now – under-researched emerging phenomenon of international high-tech investments in SSA, and develop a novel taxonomy of technology investments in low-income countries, guiding further research on the conditions, impact, practical, and policy implications of this new form of finance flows.

REVOLUTION OR COUP: WHAT PUTIN IS REALLY AFRAID OF

REVOLUTION OR COUP: WHAT PUTIN IS REALLY AFRAID OF

Sari suasion: migrant economies of care in Shailja Patel’s Migritude

This essay examines Shailja Patel’s 2010 book, Migritude, and its framing of human value in feminist terms and from the vantage point of nonwestern migrants rather than Western human rights activists and investors. I argue that, through the material and affective legacy of the sari, Patel takes up neoliberal rhetorics of globalization and market-based forms of human value in order to reveal their violence, divest them of meaning and power, and imagine an alternative model of worth based in what she calls “care economies,” the work of repair and regeneration undertaken (often invisibly) by those most affected by violence and abuses of power.

Harmonious Unions and Rebellious Workers

The authors examine enterprise-level antecedents of wildcat strikes in Vietnam using a national representative sample of foreign-invested enterprises over the period 2010 to 2012, coding of factory audits, and field research. They predict that these unauthorized, semi-spontaneous work stoppages are more common among unionized workplaces, because the presence of a union in the workplace signals to workers that by engaging in a wildcat strike, they may be able to activate the representation and protection role of official trade unions. That is, workers can in some cases push unions from below to act on their behalf. In addition, wholly foreign-owned enterprises, investments by Asian-owned firms, and manufacturing operations in industrial zones are associated with more strikes than are joint ventures with state-owned and private enterprises, firms owned by Western investors, and firms in higher-value-added activities. Statistical results and field research provide strong support for these predictions. These findings suggest that the role of trade unions in socialist states may be more nuanced than previously assumed. At the same time, they reinforce the observation in the literature that Vietnamese employment relations institutions are unable, in and of themselves, to address worker grievances.

MARKET ANALYSIS OF HOTEL SERVICES IN UKRAINE

MARKET ANALYSIS OF HOTEL SERVICES IN UKRAINE

The dynamics of market volatility, market return, and equity fund flow: International evidence

We identify and test the structural VAR model for the relations among market volatility, market return, and aggregate equity fund flows in an international context. The major empirical findings are as follows. First, reduced-form and structural VAR analyses demonstrate that the relations among the three variables are most evident in the U.S. Second, the structural VAR model shows that contemporaneous effects are the most relevant factor in these relations. Third, the results of a variance decomposition analysis imply that Western investors are more concerned with market volatility and return than Asian investors when they buy and redeem equity funds. Fourth, the hypothesis tests reveal that the overall effects observed in this study are largely attributable to contemporaneous effects. In conclusion, the empirical evidence from the U.S. might not be directly applicable to other countries, particularly Asian countries.

Strike Actions without Consent?Explaining the Role of Unions in Labor Protests in Vietnam

The authors examine enterprise-level antecedents of wildcat strikes in Vietnam based on a national representative sample of foreign-invested enterprises over the period 2010-2012. They predict that these illegal, semi-spontaneous work stoppages are more common among unionized workplaces, because workers in these enterprises use wildcat strikes as a means to activate the representation role of official trade unions. In addition, wholly foreign owned enterprises, investments by Asian-owned firms, and low-cost export-oriented manufacturing operations are associated with more strikes than joint ventures with state-owned and private enterprises, firms owned by Western investors, and firms in higher value-added activities. Statistical results provide strong support for these predictions. These findings suggest that the role of trade unions in socialist states is more significant and nuanced than previously assumed. At the same time, they reinforce the observation that Vietnamese employment relations institutions are unable, in and of themselves, to address worker grievances and that the greatest burden for defending workers’ interests lies with workers who initiate the strikes.

Cultural Dimensions and Modern Russian Business

Human behavior and its result in the business sphere are based on values and norms, which, in turn, have their roots in the national culture. One of the most influential concepts of comprehending national cultures and assessing their impact on business sphere was developed by worldwide famous Dutch scholar G. Hofstede during 1960-1980-ies. The main advantage of the Hofstede’s concept is that he suggested measurable constructs that describe mental programs and thus enables to compare different countries. Therefore, the purpose of this paper is to introduce the findings of a recent measurement of the Russian culture conducted at the end of year 2006 and analyze expression of the cultural dimensions in modern business practices. This article is mainly intended for Western investors, managers and scholars who participate in work in or with present day Russia. It will also be of interest to students studying comparative management.

Can Warm Glow Alleviate Credit Market Failures? Evidence from Online Peer-to-Peer Lenders

AbstractThis article looks at an institutional innovation in which Western investors lend peer-to-peer to poor country enterprises. Using a unique data set from an online lending platform called MYC4, we find that MYC4’s Western lenders grant lower interest rates to pro-poor, socially responsible, and pro-female African projects. Using a novel instrumental variable to account for interest rates’ endogeneity, we find that these lower interest rates substantially improve the repayment performance of borrowers and do not reflect profit-maximizing behavior. This new way to organize finance improves credit market efficiency and the success rate of poor country enterprises.

Turnaround Management in South-East Asia Research Challenges

Research on turnaround management for a Western environment has over the past decades developed meaningful insights into the turnaround process and turnaround strategy content. Many of the Western findings were assumed to be generalizable across business settings and environments.The experiences during the Asian Crisis, however, changed the understanding of the appropriateness of Western turnaround recipes for South-East Asia: In the pre-crisis environment, many Western investors held stakes in South-East Asian companies.As the Asian crisis severly hit the financial basis of many Asian firms and placed them in turnaround situations, the western investors recomended western turnaround concepts. Neither the underlying turnaround process models nor the recomended turnaround strategy content, however, were particularly successful in the South-East Asian environment. The experiences of the Asian crisis, therefore, indicate an inappropriateness of western turnaround concepts in South-East Asia and a substantial gap in the turnaround literature.After contrasting turnaround with related concepts and placing turnaround management in the frame of strategic management, the turnaround literature is reviewed focusing on turnaround process and turnaround strategy content in the Western environment, research on turnaround in South-East Asia is presented highlighting the conceptual and analytical differences.Idiosyncrasies in the South-East Asian turnaround process include the recgnition of decline, the ability to retrench, CEO replacement, speed of turnaround and matching of turnaround cause and response. Turnaround strategy content in the Western environment is retrenchment oriented. Since, however, retrenchment cannot be implemented in South-East Asia as rigorously as in the Western environment, the strategy content in South-East Asia is different from Western strategy content.I argue that due to the differences in the turnaround process and the turnaround strategy content between the Western and the South-East Asian environment, these two research areas are fruitful fields for future research attention.

Corporate Governance, Neoliberalism and Transition Economies

Transition on a neoliberal model facilitated the misappropriation of the accumulated wealth of ex-command economies by the politically well placed and by western investors. This model caused a massive reduction in the productive capacity of these countries. The subsequent introduction of more nuanced approaches to transition, in scholarly thought and in the initiatives of global institutions have facilitated the emergence a new form neoliberalism – already current in developed economies. This new form emerges from a dialectical relationship between the ideal (neo-liberal shareholder primacy) and the compromise (individual countries’ cultural context) which is expressed in corporate governance Codes. The absence of progressive alternative models of governance has enabled global institutions and corporations to define the purpose of corporate governance.

How relevant is corporate governance and corporate social responsibility in emerging markets?

PurposeThe principal aim of this research is to provide an in‐depth analysis of existing practices of corporate governance in mature markets and to compare and contrast these approaches with CG and CSR practices in emerging markets, given the growing influence of EMs on the global economy.Design/methodology/approachThe methodology employed in the study is to survey the main theoretical approaches for understanding and CG in relation to mature markets and EMs.FindingsThe paper makes a small but important contribution to theory building by modifying and expanding the conceptual framework put forward by Weimer, Pape, Gedjlovic, and Shapiro to make a distinction between systems of corporate governance and particularly the “taxonomy of systems of corporate governance”. This is achieved by identifying an additional set of key variables specifically relevant to EMs as a group of countries. The main finding of the paper is that there is no comprehensive, “one size fits all” global corporate governance or CSR system, based on western codes and regulations that can be implemented in emerging markets.Originality/valueIt is proposed that alternative corporate governance systems that reflect the institutional realities of emerging economy settings must be taken into account. The recognition of such alternative standards and codes in the way businesses are organized is original and valuable in practical as well as in social terms for both western investors and EMs. The paper is heretic in that it questions conventional wisdom, which views the OECD‐prescribed best governance practices as applicable to EMs.

The G-Factor: Evidence of the Visable Hand in the Chinese Property Market, and the Implications for Managers

The aim of this research is to consider the effects of government intervention in the Chinese property market. We use data on the market performance of the real estate industry in the period 2000-2010, and find that models which exclude government intervention – a variable which we refer to as the G-Factor – explain as little as 1% of the variance in property sales. Including the G-Factor, however, raises the predictive power of our model to 87%, and in these models the significance of the price system disintegrates. Including the effects of the Chinese government’s ”visible hand” shows that it is government supply, rather than price, which is a significant determinant of sales. In the process, we illustrate that China remains a controlled economy, and a market in which Western investors should remain cautious. Furthermore, and because intervention in a functioning market can cause inefficiencies, and the limiting of supply drives up prices, intervention may fail to ”protect the people,” and as such may not be fit for purpose.

Against the Asian tide: the Sudan divestment campaign

ABSTRACTThe efforts of American activists to pressure Asian corporations in Sudan have to date resembled a struggle to find the light switch in the dark, or swimming against a strong current. While the impact of the divestment campaign in the United States has been increasingly evident, its effectiveness in producing actual results in Sudan remains suspect. Thanks to China and a trio of Asian national oil companies, oil still flows in Sudan. The campaign's activities have failed to incorporate Sudan's wider international political and economic relations into its strategy. It has rather paradoxically sought to pressure state-owned corporations through financial market divestment. The nature of its Asian targets, reluctant Western investors and a distracted American government have obstructed the campaign from having a resounding impact in Sudan.

Ideal Homes and the Gender Politics of Consumerism in Postcolonial Ghana, 1960-70

This article uses the 1967 Ideal Home Exhibition in Accra as a window onto understanding connections between gender and consumerism in postcolonial Ghana. Drawing upon newspapers, comics and novels, it argues that the home was placed at the centre of national debates about economic recovery and political stability. Major goals of attracting Western investors and building Ghana's private sector simultaneously promoted conservative gender roles and restrictions on consumer behaviour. Cultural stereotypes targeting the consumption habits of women and youth intensified in the postcolonial period, masking larger issues like unstable wages, increasing foreign debts, high costs of living and government corruption.

Can Warm Glow Alleviate Credit Market Failure? Evidence from Online Peer-to-Peer Lenders

This paper looks at an institutional innovation in which Western investors lend peer-to-peer to poor country enterprises. Using a unique dataset from an online lending platform called MyC4, we find that MyC4’s Western lenders grant lower interest rates to pro-poor, socially responsible (SR), and pro-female African projects, thus internalizing positive externalities. Using novel instrumental variables to account for interest rates’ endogeneity, we find that these lower interest rates substantially improve the repayment performance of borrowers, and do not reflect profit-maximizing behavior. This new way to organize finance improves credit market efficiency and the success rate of poor country enterprises.

Going East: How Media Companies Successfully Enter the Eastern European Radio Market: A Case of Hungary

Expansion into Eastern European and Central European markets has begun in the media sector. Above all, US, English, French, and German companies are active in the radio sector in the East. Nevertheless, the Hungarian example shows that market entry does not always run smoothly and that economic success is by no means a given. This study investigates the factors for a successful entry into the Hungarian radio market for western investors. Findings include the selection of a low capital and low risk market entry strategy with a local partner, exact research into and incorporation of the peculiarities of the Hungarian radio market, clear content positioning in order to be clearly noticed in the highly competitive Budapest radio market, localization of the product, entry into partnerships to consolidate the market as well as finding a suitable strategy for dealing with the media regulatory body Országos Rádío És Televízió Testület [ORTT].

Sukuk sebagai Instrument Pendanaan Negara

The financial and economic crisis in America has affected emerging market (such as Indonesia). Indonesia now is lacking liquidity funds to finance its economic development. US Federal Government has bailed out and helped most multinational corporations to avoid bankruptcy and to stimlat economic growth. To fulfill the need for development financing, Indonesia may consider Islamic products financing that has been known in International financial market such as SUKUK. Fortunately, Indonesia has ratified SUKUK Act therefore, Indonesia may issue an Islamic financial scheme. The funds owned by a number of Middle Eeast investors as well as western investors have invested in Islamic scheme finance. So SUKUK can be another alternative that can be offered by Indonesian government as a source of public funds to finance economic development. Keywords: Sukuk, Islamic Finance, SBSN, Public Finance.

Venture capital in China: a culture shock for Western investors

PurposeThis study seeks to examine the peculiarities of the venture capital market in China and seeks to compare it with Western markets.Design/methodology/approachThe paper provides insights based on both the practitioner and academic literature in the field.FindingsIt is noted that different cultural norms, corporate governance structures, a lack of appropriate exit strategies, and governmental intervention are important factors that set the markets apart and should be taken into consideration when making venture capital investments in China.Practical implicationsThe paper should be of interest to practitioners considering investing in China and to academics doing research in this area.Originality/valueThe paper is to the best of the authors' knowledge the first to provide a detailed and comprehensive review of the Chinese venture capital market.

Sukuk and the bonding of Islamic finance

Before Muhammad (peace be upon him) began to spread the message of Islam in 610 CE, Arabia was in the midst of Ayyam al-Jahilliyah, the Age of Ignorance.Within this setting, Muhammad, the last Prophet of Islam, taught the divine revelations of God to those willing to listen, advocating not only tawheed (monotheism) and submission to God, but also ethical responsibilities towards each like the prohibition of riba (interest/usury) which was seen as a wicked financial entrapment to the needy. O ye who believe! Fear Allah, and give up what remains of your demand for usury, if ye are indeed believers. (2:278, Quran, Yusuf Ali translation). With the coming of the 20th century, however, this edict began to punish 20th century Muslims who set about finding innovative ways to conduct financial transactions within shariah law. Most successful among these, and of increasing interest to western investors, is sukuk, the Islamic bond. Copyright 2007 Ishaq Bhatti. No part of this article may be reproduced by any means without the written consent of the publisher.