Export intensity of foreign subsidiaries of multinational enterprises: the role of trade finance availability

We examine the relationship between the role of trade finance availability and the export intensity of foreign subsidiaries of multinational enterprises (MNEs). In developing our hypotheses, we draw upon insights derived from “new” internalisation theory (international business literature) and international trade finance (international economics literature). We empirically test these hypotheses using survey data compiled from subsidiary managers in six ASEAN countries, supplemented with host-country level data. We conceptualise, empirically test, and establish that the subsidiary-level capability in combining and utilising internal and external debts is an important subsidiary-specific advantage to support export intensity. We find that subsidiaries employ intra-firm loans from MNE internal capital markets and, to some extent, bank loans from external financial institutions to boost their export intensity. Subsidiaries may have concerns about foreign exchange risks, but the use of appropriate foreign exchange risk management is positively associated with export intensity. We discuss the implications of our findings for theory and practice

Eco-efficient supply chain networks: Development of a design framework and application to a real case study

© 2015 Taylor & Francis. This paper presents a supply chain network design framework that is based on multi-objective mathematical programming and that can identify 'eco-efficient' configuration alternatives that are both efficient and ecologically sound. This work is original in that it encompasses the environmental impact of both transportation and warehousing activities. We apply the proposed framework to a real-life case study (i.e. Lindt & Sprüngli) for the distribution of chocolate products. The results show that cost-driven network optimisation may lead to beneficial effects for the environment and that a minor increase in distribution costs can be offset by a major improvement in environmental performance. This paper contributes to the body of knowledge on eco-efficient supply chain design and closes the missing link between model-based methods and empirical applied research. It also generates insights into the growing debate on the trade-off between the economic and environmental performance of supply chains, supporting organisations in the eco-efficient configuration of their supply chains

Managing the trade-off implications of global supply

The cost versus response trade-off is a growing logistics issue due to many markets being increasingly characterized by demand uncertainty and shorter product life cycles. This is exacerbated further with supply increasingly moving to low cost global sources. However, the poor response implications of global supply are often not addressed or even acknowledged when undertaking such decisions. Consequently, various practical approaches to minimising, postponing or otherwise managing the impact of the demand uncertainty are often only adopted retrospectively. Even though such generic solutions are documented through case examples we lack effective tools and concepts to support the proactive identification and resolution of such trade-offs. This paper reports on case-based theory building research, involving three cases from the UK and USA used in developing a conceptual model with associated tools, in support of such a process

Maritime Commerce in Greater Philadelphia: Assessing Industry Trends and Growth Opportunities for Delaware River Ports

Maritime Commerce in Greater Philadelphia: Assessing Industry Trends and Growth Opportunities for Delaware River Ports is an evaluation of existing port conditions along the Delaware River and market-driven opportunities for expansion. The report includes an economic impact analysis, Delaware River port descriptions, global trends, and recommended strategies for ports growth. Key findings include:Region-wide port activity generates $69 million in tax revenues for state governments across Greater Philadelphia and more than$11 million in Philadelphia Wage Tax revenues.Each on-site port job supports two jobs from port activity and employee spending. Total regional port-related employment is 12,000+ jobs.Delaware River ports import nearly 1/2 of the nation's cocoa beans, almost 1/3 of the bananas, and a 1/4 of all fruit and nuts.Growing maritime commerce in Greater Philadelphia will require collaboration among Delaware River ports to leverage existing strengths and strategically invest in regional infrastructure improvements

Supply Chain Structure, Inventory Turnover, and Financial Performance: Evidence from Manufacturing Companies in China

Using data collected by the World Bank, we empirically investigate the relationship between Chinese manufacturers’ supply chain attributes, raw material and finished goods inventory turnover, and return on sales. Our findings indicate that location proximity, relationship continuity, and the relative power of the manufacturer over suppliers and customers have a significant impact on inventory performance, which in turn drives profitability. We especially focus on characteristics unique to China’s business environment. We find that Chinese manufacturing companies have relatively weak operational performance, and better operational performance is associated with closer distance, longer relationship with suppliers and customers, and relative power over suppliers. Unlike their counter parties in some developed countries, Chinese manufacturers’ profitability relies on both downstream and upstream inventory performance, with downstream inventory performance playing a somewhat more important role

Geography and International Inequalities: the Impact of New Technologies

Some writers have predicted that new technologies mean the 'death of distance', allowing suitably skilled economies to converge with high income countries. This paper evaluates this claim. It argues that geography matters for international income inequalities, and that new technologies will change, but not abolish this dependence. Some activities may become more entrenched in high income countries than they are at present. Others - where information can be readily codified and digitized - will relocate, but typically only to a subset of lower income countries. These countries will benefit, but other countries will continue to experience the costs of remoteness.

Cost of capital in an international context: Institutional distance, quality, and dynamics

Cost of debt is a key cognitive anchor for managerial decisions and an important determinant of firm profitability. We extend international management research by analyzing the effects of institutional distance, institutional quality, and their dynamics on the cost of debt in the context of foreign direct investments (FDI). We test our conceptual model on a sample of companies making 3,764 greenfield foreign direct investments from developed into less developed markets. Using hierarchical linear modelling, we show that the financial consequences of internationalizing into countries with weak institutions depend on both the institutional distance between countries, as well as their institutional quality. Furthermore, we find that recent changes in institutional quality form expectations about future development and ultimately influence post investment financing costs

Regional monopoly and interregional and intraregional competition: the parallel trade in Coca-Cola between Shanghai and Hangzhou in China

This article uses a “principal-agent-subagent” analytical framework and data that were collected from field surveys in China to (1) investigate the nature and causes of the parallel trade in Coca-Cola between Shanghai and Hangzhou and (2) assess the geographic and theoretical implications for the regional monopolies that have been artificially created by Coca-Cola in China. The parallel trade in Coca-Cola is sustained by its intraregional rivalry with Pepsi-Cola in Shanghai, where Coca-Cola (China) (the principal) seeks to maximize its share of the Shanghai soft-drinks market. This goal effectively supersedes the market-division strategy of Coca-Cola (China), since the gap in wholesale prices between the Shanghai and Hangzhou markets is higher than the transaction costs of engaging in parallel trade. The exclusive distributor of Coca-Cola in the Shanghai market (the subagent) makes opportunistic use of a situation in which it does not have to bear the financial consequences of the major residual claimants (the principal and other agents) and has an incentive to enter the nondesignated Coca-Cola market of Hangzhou by crossing the geographic boundary between the two regional monopolies devised by Coca-Cola. The existence of parallel trade in Coca-Cola promotes interregional competition between the Shanghai and Hangzhou bottlers (the agents). This article enhances an understanding of the economic geography of spatial equilibrium, disequilibrium, and quasi-equilibrium of a transnational corporation's distribution system and its artificially created market boundary in China

Foreign Direct Investment in Ireland: Policy Implications for Emerging Economies

The increasingly important role of multinational enterprises (MNEs) in the global economy is linked to questions of how the foreign direct investment (FDI) they control impacts on overall economic activity in the recipient countries. Of specific interest is the policy context in which such FDI flows into the developing country and how a government can influence the impact of those flows. This paper reviews some of the literature in two key contextual areas, namely, when the host country policy regime promotes FDI selectively, and secondly, where it promotes the creation of industrial clusters. It explores the insights of this literature for the development of the strong MNE sector in the Irish economy and draws lessons from the Irish experience for emerging economies.Note: Length: