Corporate diversification and R&D intensity dynamics

We study the dynamic bidirectional relationship between firm R&D intensity and corporate diversification, using longitudinal data of Spanish manufacturing companies. Our empirical approach takes into account the censored nature of the dependent variables and the existence of firm-specific unobserved heterogeneity. Whereas we find a positive linear effect of R&D intensity on related diversification, the evidence about the effect of related diversification on R&D intensity takes the form of an inverted U. Hence, the effect of related diversification on R&D intensity is positive but marginally decreasing for moderate levels of related diversification, but such effect can turn out negative for high levels of related diversification. Additionally, the consequences of the dynamic relation are that the effects are substantially larger in the long-run than in the short-run

Corporate diversification and R&D intensity dynamics

We study the dynamic bidirectional relationship between firm R&D intensity and corporate diversification, using longitudinal data of Spanish manufacturing companies. Our empirical approach takes into account the censored nature of the dependent variables and the existence of firm-specific unobserved heterogeneity. Whereas we find a positive linear effect of R&D intensity on related diversification, the evidence about the effect of related diversification on R&D intensity takes the form of an inverted U. Hence, the effect of related diversification on R&D intensity is positive but marginally decreasing for moderate levels of related diversification, but such effect can turn out negative for high levels of related diversification. Additionally, the consequences of the dynamic relation are that the effects are substantially larger in the long-run than in the short-run.

La orientación emprendedora del fundador y el éxito en la internacionalización de la empresa

This paper analyses the role that individual entrepreneurial orientation (IEO) plays in the success of international entrepreneurship moves. Additionally, we argue that entrepreneurial experience constitutes one of the primary sources of IEO. The hypotheses are empirically analysed using a 22-year panel of family SMEs. Our results confirm the hypotheses and provide a better understanding of the role of IEO in the success of corporate strategies such as internationalisation. Specifically, IEO indirectly improves firm performance by increasing internationalisation speed.Este artículo analiza el papel que juega la orientación emprendedora individual (OEI) en el éxito de las iniciativas empresariales internacionales. Además, argumentamos que la experiencia emprendedora constituye una de las principales fuentes de OEI. Las hipótesis se analizan empíricamente utilizando un panel de 22 años de pymes familiares. Nuestros resultados confirman las hipótesis y proporcionan una mejor comprensión del papel de la OEI en el éxito de estrategias corporativas como la internacionalización. Específicamente, la OEI mejora indirectamente el desempeño de la empresa al aumentar la velocidad de internacionalización

Related diversification and R&D intensity dynamics

Using longitudinal data of Spanish manufacturing companies, we study the dynamic, bidirectional relationship between firm research and development (R&D) intensity and corporate diversification in an organic growth setting. Our empirical approach accounts for the different sources of endogeneity. Although we find a positive linear effect of R&D intensity on related diversification, the effect of related diversification on R&D intensity assumes the form of an inverted U. Thus, the effect of related diversification on R&D intensity is positive, but marginally decreases for moderate levels of related diversification. Such an effect can become negative, however, for high levels of related diversification. Additionally, as a consequence of dynamics, the effects after one year are substantially lower than the overall effects that occur over several years.Both authors acknowledge financial support from the Spanish Ministry of Science and Innovation, Grants No. ECO2009-11165 and ECO2009-10358Publicad

Sustainable banking and trust in the global South

Trust in banking plays a significant role in promoting financial inclusion. Multinational banks (MNBs) have the potential to enhance trust by adopting sustainable banking practices. We investigate the impact of MNBs' adoption of ESG (Environmental, Social and Governance) practices on trust in banking in 38 developing countries. Using an instrumental variable approach and control function estimation, our findings indicate that sustainable practices by commercial MNBs are positively and significantly associated with increased trust in banking. The results remain consistent across different samples, lending robustness to our findings. By demonstrating the importance of sustainable banking in fostering trust, this study contributes to the limited literature on trust in banking in the global South

The firm under the spotlight: How stakeholder scrutiny shapes corporate social responsibility and its influence on performance

Since stakeholders cannot directly observe corporate social responsibility (CSR) efforts, companies attempt to back up their increasing sustainability claims by sending CSR signals. The environment in which signaling takes place influences the credibility of the signals. Among the factors that make up the signaling environment, the overall exposure of the company to different stakeholders (i.e., stakeholder scrutiny) has been neglected by the literature. Using signaling and stakeholder theories, we argue how stakeholder scrutiny shapes CSR signals' credibility. We empirically analyze a sample of 5762 firms across several sectors from 23 developed countries from 2013 to 2017. Stakeholder scrutiny exercises a positive effect on the credibility of CSR signals through a mediated-moderated impact of CSR (across environmental, social, and governance dimensions) on firm performance

The sustainable practices of multinational banks as drivers of financial inclusion in developing countries

Lack of access to banking is a major problem that contributes to inequality in the developing world. For this reason, financial inclusion is a crucial objective of the Sustainable Development Goals (SDGs). In this study, we investigate the impact of the sustainable practices of multinational banks (MNBs) on financial inclusion. Drawing from a sample of 24 developing countries and 28,089 individuals, we obtain robust evidence about the positive effect of sustainable practices on financial inclusion. We find that MNBs increase the use of mobile bank accounts in the developing world. We also find that when these MNBs follow sustainable practices, the use of mobile bank accounts positively intensifies. These findings are consequential because mobile banking is one of the most powerful means to achieve financial inclusion in the developing world

Russia–Ukraine crisis: China’s Belt Road Initiative at the crossroads

China’s Belt Road Initiative (BRI) is an ambitious programme to connect Asia with Europe, Africa, and Latin America via transport networks on land and sea in hopes of advancing economic integration, increasing trade, and stimulating growth. Ukraine occupies a strategic location in the BRI, near the intersection of Europe and Asia, rendering it a potential “gateway to Europe.” Russia’s invasion of Ukraine is having a disruptive effect and poses numerous challenges for the Initiative, as it has affected some of the pillars and overall goals of the BRI. As it stands, however, infrastructure connectivity is being set back by three developments: fewer funding options, less international cooperation, and geopolitical shocks. Second, unimpeded trade via the BRI is being affected as the war causes disruptions to global value chains, weakens free trade, and sharpens food and energy insecurity. But where there are risks, there are also potential favourable circumstances for the BRI, including opportunities for China to get involved in the reconstruction of a war-ravaged Ukraine

Sustainability and trust: financial inclusion in the Global South

Lack of access to banking and financial services appreciably hinders development, particularly in the global South. For this reason, financial inclusion is a crucial objective of the Sustainable Development Goals. One main barrier to financial inclusion is the lack of trust in banking. From a sample of 40 developing countries and 82,724 individuals, we verify that multinational banks can increase trust in banking by incorporating sustainability criteria into their business model

How sustainable banking fosters the SDG 10 in weak institutional environments

The role of the financial sector is central in reducing income inequality – the goal of SDG 10 – by facilitating economic opportunities. However, institutional weaknesses may also undermine this effect. We argue that sustainable banking generates bidirectional trust to overcome institutional weaknesses, particularly the weak rule of law. Empirical evidence from 46 countries aggregating data of 1060 banks over 2010–2017 shows that sustainable banking lessens income inequality in weak rule of law settings. The results are robust after including the effects of bank digitalisation. This study has important implications for sustainable banking expansion into weak institutional environments and demonstrates banks’ efforts in their commitment to reducing inequality