Contributing Institutions and Authors in International Business Research: A Quality-Based Assessment

We use a quality-based approach to assess contributing institutions and authors in international business (IB) research. Specifically, we use Google Scholar citations of individual articles to weigh the number of IB research articles in core IB and other non-IB elite journals. Our approach mitigates concerns about the quality difference among articles across different journals and within individual journals. We find evidence to suggest that IB research in the European and Asia-Pacific regions exhibits an upward trend over the 1995–2011 period. With respect to institutional research quality, we document that an IB program with faculty members working with their peers in foreign countries and the presence of a doctoral program can enhance an institution’s research quality. Prolific authors are very mobile and typically have global experience.     

Ownership Increase in International Joint Ventures: The Within- and Across-Country Flexibility Perspective

We employ the real options perspective to examine how multinational corporations (MNCs) increase ownership levels in their international joint ventures (IJVs) to exploit (or utilize) both within- and across-country flexibility. This paper utilize a rich dataset of South Korean firms’ foreign affiliates to test hypotheses derived from the real options theory. It examines the roles of growth options that require small equity stakes under uncertainty as well as switching options that require controlling equity stakes to coordinate switching implementation. Specifically, we examine how the ownership of jointly-owned foreign subsidiaries changes under the influence of changing labor cost uncertainty. We utilize a two-stage model to address the sample selection bias associated with a subsidiary’s choice of joint venture under the influence of high labor cost uncertainty. In the first stage, we run a probit model with a dummy variable for JVs and wholly-owned subsidiaries (WOSs) (1: JV, 0: WOS) as the dependent variable. In the second stage, we run a panel logistic regression model (STATA command, “xtlogit”). We found that MNCs engaged in greenfield IJVs increase their initial ownership when labor cost uncertainty within their host countries is favorably resolved. We also found that MNCs’ tendency to increase their IJV ownership intensifies when their subsidiary networks are exposed to negatively correlated labor cost growth rates across countries. Taking within and across country flexibility perspective, this study adds new insights on MNC ownership changes, especially in IJVs. Based upon our findings, we conclude that MNCs make flexible ownership adjustments for their foreign subsidiaries in response to different uncertainty conditions within and across countries.     

The Determinants of Debt and (Private) Equity Financing: The Case of Young, Innovative SMEs from Germany

Financial theory creates a puzzle. Some authors argue that high-risk entrepreneurs choose debt contracts instead of equity contracts since risky but high returns are of relatively more value for a loan-financed firm. Conversely, authors who focus explicitly on start-up finance predict that entrepreneurs are the more likely to seek equity-like venture capital contracts, the more risky their projects are. Our paper is an initial step towards resolving this puzzle empirically. We present microeconometric evidence on the determinants of debt and equity financing in young and innovative SMEs. We pay special attention to the role of risk for the choice of the method of financing. Since risk is not directly observable we use different indicators for financial and project risk. It turns out that our data generally confirms the hypothesis that the probability that a young high-tech firm receives equity financing is an increasing function of the financial risk. With regard to the intrinsic project risk, our results are less conclusive, as some of our indicators of a risky project are found to have a negative effect on the likelihood to be financed by private equity.     

Implicit Industrial Policy: The Triumph of Britain and the Failure of France in Global Pharmaceuticals

This study illustrates a new view of industrial policy, basedon the emerging organizational economics theory of the firm.Organizational economics regards the firm as a collection ofskills/ capabilities embedded in a network of relations withexternal transactors. Industrial policy shapes the local network,thereby defining domestic firms and delimiting their skill accumulation.In the pharmaceutical industry, British regulations of safety,pricing, basic research and foreign direct investment createda demanding local competitive environment for British firms,training British firms in skills that would facilitate globalcompetitiveness. In France, very different regulations enticedFrench ethical drug firms to focus on a protected local marketincreasingly desynchronized from the worldwide industry. Thus,industrial policy laid the ground work for the spectacular riseto global success of UK pharmaceutical firms and the correspondingfailure of French firms.     

Portfolio selection with hyperexponential utility functions

We analyze a single-period portfolio selection problem where the investor maximizes the expected utility of the terminal wealth. The utility function is hyperexponential. This is due to the fact that the risk tolerance of the investor at the end of the period when the terminal wealth is realized depends on the random state of the market at that time. This setting is also applicable in cases where an investment consultant is not sure about the risk profile of a client. It is well-known that an investor is memoryless in wealth for exponential utility functions with some known risk tolerance. In other words, the investment portfolio consisting of risky stocks does not depend on the level of wealth. However, we show that this is no longer true if the utility function is hyperexponential. We also obtain a number of interesting characterizations on the structure of the optimal policy.     

Potential carbon mitigation and income in developing countries from changes in use and management of agricultural and forest lands

The many opportunities for mitigating atmospheric carbon emissions in developing countries include reforesting degraded lands, implementing sustainable agricultural practices on existing lands and slowing tropical deforestation. This analysis shows that over the next 10 years, 48 major tropical and subtropical developing countries have the potential to reduce the atmospheric carbon burden by about 2.3 billion tonnes of carbon. Given a central price of $10 per tonne of carbon and a discount rate of 3%, this mitigation would generate a net present value of about $16.8 billion collectively for these countries. Achieving these potentials would require a significant global effort, covering more than 50 million hectares of land, to implement carbon-friendly practices in agriculture, forest and previously forested lands. These estimates of host-country income potentials do not consider that outside financial investment may or may not be available. Our calculations take no account of the additional benefits of carbon sequestration in forest soils undergoing reforestation, increased use of biomass and reduced use of fossil-fuel inputs and reduced agricultural emissions. In all events, realizing these incomes would necessitate substantially greater policy support and investment in sustainable land uses than is currently the case.     

Institutional Distance and Foreign Subsidiary Performance in Emerging Markets: Moderating Effects of Ownership Strategy and Host-Country Experience

Institutional distance has been known to be an important driver of Multinational Enterprises’ strategies and performance in host countries. Based on a large panel dataset of 10,562 firms operating in 17 emerging markets and spanning 80 home countries, we re-examine the relationship described by Gaur and Lu (J Manage 33(1):84–110, 2007) between regulatory institutional distance and subsidiary performance. We extend this research by (1) examining this relationship in the context of emerging markets, (2) examining the moderating effects of ownership strategy and host-country experience within the context of emerging markets and (3) accounting for a greater variety of institutions by including a large number of home and host countries. We find that institutional distance negatively affects subsidiary performance in emerging markets. Our findings also show that the negative effects of institutional distance on subsidiary performance are lesser for subsidiaries with partial ownership (than for subsidiaries with full ownership) and for subsidiaries with greater host-country experience. We discuss our findings with respect to Gaur and Lu’s model, which explores the relationships between these variables in a general context.     

Institutional systems inducing R&D in Amazon- the role of an investor surplus toward stakeholder capitalization

Amazon demonstrated a conspicuous increase in R&D and became the world's top R&D firm in 2017 with a skyrocketing increase in market capitalization, making it close to being the world's biggest company.Such a remarkable accomplishment can be attributed to Amazon's institutional systems, which orchestrate techno-financing systems that fuse a unique R&D transformation system and a sophisticated financing system centered on the cash conversion cycle (CCC). These institutional systems support and endorse aggressive investment in R&D that incorporates the characteristics of uncertainty, a long lead time, and successive inflows of very large amounts of funding without interruption.While some of this investment can be endorsed by Amazon's positive business results in terms of a sustained increase in sales and free cash flow, such a large amount of aggressive investment is beyond endorsement. In addition to actual economic performance, investors have been betting on a high level of risky investment with the expectation of Amazon's future success by trusting its R&D-inducing institutional systems.While the former can be considered to be a general reaction to a producer surplus, the latter can be postulated as an investor surplus in which investors bet on overly optimistic future prospects instead of actual accomplishments. This is similar to a consumer surplus in which consumers pay more than the actual market price for attractive goods and services.By introducing a concept of gross market value consisting of a producer surplus and an investor surplus, this paper attempts to elucidate the institutional systems that enable Amazon to invest a very large amount of financing resources in aggressive R&D.An intensive empirical analysis focusing on the development trajectory of Amazon's techno-financing system over the last two decades was conducted, together with comparative analyses of the performance of the big four online service companies, Google, Apple, Facebook, and Amazon (GAFA).It was identified that among GAFA, Amazon demonstrated the highest dependence on an investor surplus, which suggests that investors are betting on the continuation of Amazon's solid growth by means of its aggressive investment in R&D, supported and endorsed by its institutional systems. This idea is supported by the high elasticity of its investor surplus to R&D investment.Noteworthy is that investors incorporate not only shareholders but also broad stakeholders centered on users, and that they expect not only economic value but also supra-functionality beyond such value.A broadly applicable practical approach for measuring an investor surplus and an insightful suggestion highlighting the significance of an investor surplus toward stakeholder capitalism are thus provided.     

Innovation and international business

Abstract

While classical economic theories of growth emphasised international capital accumulation, and finance-based theories of foreign investment stressed international interest rate differentials and risk reduction, the technological accumulation approach examines international knowledge building by multinational enterprises and their international business (IB) networks. The two processes of innovation and internationalisation have become ever more interconnected as central drivers of development since the first industrial revolution, through to today’s information age. The increasing significance of the knowledge-seeking motive for IB networks and of competence-creating subsidiary activities at a local level have linked localised innovation systems to IB and to international knowledge exchange. From a locational perspective, international knowledge connectivity has become critical for sustained innovation and growth. The shift of techno-socio-economic paradigm in the information age is associated with a shift in the character of IB and innovation, with critical implications for IB theory and concepts.     

Determination of the Financing Scale, Time Limit and Returns from the Investment in BOT Projects

The key aspect to the successful implementation of BOT concept is the raising of finance by project sponsor, so financial engineering techniques and capital structuring skills are required to find the proper mix of debt and equity. The capital structure and present a model to determine the equity level from the aspects of financing scale, construction time and return on investment are analyzed. The resulting model can help the sponsor to avoid the capital risk, and offer the government a criterion to evaluate management ability of the sponsor. To show the application and availability of this model, a case study is conducted. Thus, this paper is concern with the determination of financing scale, construction time, and return on investment which would assist the sponsor to ensure that the equity level for optimal capital structure is available prior to the implementation stage in BOT project operation.     

The effectiveness of investment in lead time reduction for a make-to-stock product

This paper focuses on a firm selling a make-to-stock product with a constant customer demand rate. The firm follows an exact (Q, r) policy for raw material inventory control and faces a random replenishment lead time. Through this research, we wish to gain a better understanding of the impact of investing in reducing supply lead time when the investment costs have to be borne, partly or fully, by the firm. This work is motivated by the recognition that lead time reduction is now of strategic importance in the successful operation of a firm. We examine different types of investment schemes in replenishment lead time reduction and the different cost models they generate. We present analytical and numerical results and insights for each type of model, compute the optimal (Q, r) policy and the associated investment levels. The work presents new results, and sheds light on some apparently counter-intuitive observations.     

考虑强势下游企业持股弱势上游企业的供应链决策与协调

在随机需求环境下,考虑由一个上游企业和一个下游企业构成的分散化供应链,其中下游企业较上游企业强势,并持有上游企业的股份。首先,通过构建并求解由下游企业的采购价格决策和上游企业的产量决策构成的博弈模型,得到了供应链的最优决策。分析发现,分散化供应链中的最优产量随着下游企业对上游企业的持股比例增加而增加,但总是低于集中化供应链中的最优产量。然后,通过引入由价格补贴策略和收益分享策略构成的组合策略设计了协调机制,并指出所设计协调机制可使上下游企业实现双赢。最后,对下游企业的持股策略进行了讨论。     

供应不可靠时下游企业投资上游企业的供应链协调

考虑由一个上游企业和一个下游企业构成的供应链,其中上游企业的供货是不可靠的。假定下游企业可以通过向上游企业投资提高其供货的可靠性。首先给出了批发价格契约下各节点企业的最优策略。分析发现:下游企业的投资虽然可以降低双重边际效应,但由于投资所导致的供应链系统利润增加的部分不能完全被下游企业拥有,下游企业投资的积极性可能会受影响;随后,通过引入由收益分享策略和成本分担策略构成的组合策略设计了协调机制,并指出该协调机制能使上下游企业实现双赢。     

A comparision of regulated chemicals versus emitted PICs and PICs for risk analysis

In general, toxic combustion byproducts (TCBs) are the unwanted residues remaining in flue gases, combustion ashes, and wastewaters from the operation of an incineration or combustion facility. If a combustor is not well designed and operated, it may emit too high a level of TCBs. Categories of TCBs and some example constituents are as follows:

1. 1. Acid gas: HCl, NO_x and SO₂;

2. 2. Organics: Hydrocarbons such as dioxins and furans (PCDDs and PCDFs);

3. 3. Particulates: Trace metals (conventional metals and radioactive metals) and soots;

4. 4. Contaminants in ash; and

5. 5. Contaminants in spent wastewater.

Pollutants in Category (2) above are generally considered to be the products of incomplete combustion (PICs) in the field of hazardous waste incineration.

TCBs has been one of the major technical and sociological issues surrounding the use of incineration as a waste treatment alternative. Because of the complexity and controversy, the U.S. EPA issued a draft “Combustion Strategy” on May 18, 1993. The objective of the “Combustion Strategy” was to address the needs of and to outline the approaches for upgrading the existing incineration standards to better control TCB emissions.

This article lists those chemicals and metals which are regulated by two major U.S. environmental laws, namely, the Clean Air Act Amendments (CAAA) of 1990 and the Resource Conservation and Recovery Act (RCRA) of 1976. The CAAA is to regulate the air emissions from major sources, and the RCRA is to protect human health and the environment from the management of solid wastes, particularly from waste incineration. This paper also lists the PIC chemicals that were studied under U.S. EPA incineration research programs in the 1980s and the PIC chemicals that EPA permit writers are considering be the subject of risk analyses during the process of industry's applying for an incinerator operating permit.     

PPP高速公路项目合作双方投资比例与特许经营期决策

为了确定PPP高速公路公私合作双方的合理投资比例以及私营投资者的特许经营期,通过比较PPP高速公路项目交通量饱和期和特许经营期两个时点大小,构建了两组公私合作双方投资比例与特许经营期的决策模型。运用此决策模型获得了合作双方的最佳投资比例与特许经营期,实现了政府部门的社会效益最大化和私人投资者的个人收益最大化。并引入算例对构建的决策模型进行了实际应用,充分验证了模型的有效性。     

矿产勘查产业投资趋势分析

分析了国内外投资人在我国矿产勘查业的投资现状、趋势,总结出矿产勘查产业投资趋势及个人对矿产勘查投资趋向的选择观。     

Energy R&D: investment challenge

Despite dependence on foreign oil that keeps countries like the US embroiled in the Middle East, and amid fears of global warming, research and development (R&D) funding for energy technologies has declined significantly during the last two decades throughout the industrial world. Investments in energy technology R&D, and in associated human and institutional capacity, are fundamental to our ability to respond to changing economic, energy, and environmental needs.Although there has been a recent wave of interest in R&D policy in general, and energy R&D in particular, this has not been translated into the needed increases in funding. In most OECD (Organization for Economic Co-operation and Development) member countries, government energy technology R&D budgets have been declining significantly in real terms since the early 1980s. The trends are particularly troubling given the pressing need to develop and utilize the clean energy and low carbon fossil-fuel energy technologies that will be critical in meeting our future energy needs, while addressing the local and global environmental problems we are facing.     

Stock market reaction to foreign direct investments: Interaction between entry mode and FDI attributes

Abstract and Key Results

• What is the expected reaction regarding the stock price of companies which carry out FDIs (Foreign Direct Investments)? Results from previous research focusing on specific entry modes are inconclusive.
• The aim of this paper is to test whether the stock market reaction to FDIs is dependent not only on the entry mode that the investing firm may have chosen, but also on the interaction between the entry mode and the other FDIs’ attributes.
• By focusing on the recent international expansion by means of FDIs of listed Spanish firms, we have found that stock market reaction to FDIs depends upon the interaction between the entry mode and the location of the investment, the identity of the investor and the latter’s international experience.

     

Underestimating or overestimating the distribution inequality of research funding? The influence of funding sources and subdivision

Research funding is a significant support for the development of scientific research. The inequality of research funding is an intrinsic feature of science, and policy makers have realized the over-concentration of funding allocation. Previous studies have tried to use the Gini coefficient to measure this inequality; however, the phenomena of multiple funding sources and funding subdivision have not been deeply discussed and empirically studied due to limitations on data availability. This paper provides a more accurate analysis of the distribution inequality of research funding, and it considers all of the funding sources in the funding system and the subdivision of funding to junior researchers within research teams. We aim to determine the influence of these two aspects of the Gini results at the individual level. A dataset with 68,697 project records and 80,380 subproject records from the Chinese Academy of Sciences during the period from 2011 to 2015 is collected to validate the problem. The empirical results show that (1) the Gini coefficient for a single funding source is biased and may be overestimated or underestimated, and the most common data source, which is the National Natural Science Foundation of China (NSFC), causes the Gini coefficient to be underestimated; and (2) considering the subdivision of research funding lowers the inequality of research funding, with a smaller Gini coefficient, although the decrease is moderate.