Europe, Spain, and the Future of Spanish Multinational Firms

The last fifteen years or so have witnessed a major transformation of Spanish businesses. After decades of protectionism and isolation, virtually all of them are now exposed to the winds of international competition; nearly a thousand have invested abroad in order to exploit the opportunities inherent in operating across borders. As a result, Spain has become one of the ten largest foreign direct investors in the world, with key consequences for the country\u27s economy, financial system, diplomacy, image and society, as well as for Europe

At Last the Internationalization of Retail Banking? The Case of the Spanish Banks in Latin America

Since 1995 two Spanish banks -- Banco Santander Central Hispano and Banco Bilbao Vizcaya -- have become the largest foreign banks in retail banking in Latin America. This recent development merits careful analysis because foreign direct investment is rare in retail banking. We find that the Spanish banks are exhibiting asset-seeking, asset-exploiting, and oligopolistic behaviors, thus posing no serious challenge to established theories of foreign investment. We discuss the implications for research on cross-border banking.

Rapid internationalization and long-term performance: The knowledge link

Drawing on the knowledge-based view and organizational learning theory, we develop and test a set of hypotheses to provide a first attempt at analyzing the effect of speed of internationalization on long-term performance. Using a panel-data sample of Spanish listed firms (1986-2010), we find that there is an inverted U-shaped relationship between speed of internationalization and long-term performance. We also find that whereas technological knowledge steepens this relationship, the diversity of prior international experience flattens it. Our results contribute to the existing IB literature on the performance of FDI, cross-country knowledge transferability, and nonsequential entry

National Corporate Governance Institutions and Post-Acquisition Target Reorganization

We examine the characteristics of national systems of corporate governance to theorize about the nature of the shareholders\u27 and employees\u27 interests when it comes to reorganization, under the assumption that the firm is coalitional in nature. We argue that corporate governance institutions prevalent in both the host and the target country of the merging firms enable or constrain the ability of the acquirer to reorganize the target. Using a cross-national dataset of corporate acquisitions and post-acquisition reorganization, we found support for our predictions that stronger legal protection of shareholder rights in the acquirer country compared to the target country increases the acquirer\u27s ability to restructure the target\u27s assets and leverage the target\u27s resources, while the protection of employee rights in the target country restricts the acquirer\u27s ability to restructure the target\u27s assets and redeploy resources to and from the target. Copyright © 2009 John Wiley & Sons, Ltd

Institutions and the Internationalization of US Venture Capital Firms

In recent years, venture capital firms have increasingly turned to foreign countries in search of investment opportunities. The cross-border expansion of venture capital firms presents an interesting case of internationalization, because they are at variance with both conventional portfolio and direct investment models. Given the specific nature of venture capital investing, a new theoretical perspective is needed to understand foreign venture capital investments. This paper contributes to international business research by examining the features of the institutional environment that influence venture capital firms’ foreign market entry decisions, and how their effect changes as firms acquire experience. We report results on 216 American venture capital firms potentially investing in 95 countries during the 1990–2002 period. We find that venture capital firms invest in host countries characterized by technological, legal, financial, and political institutions that create innovative opportunities, protect investors’ rights, facilitate exit, and guarantee regulatory stability, respectively. We also find that as firms gain more international experience, they are more likely to overcome constraints related to these institutions

Banking on Gambling: Banks and Lottery-Linked Deposit Accounts

Deposit accounts that provide an interest return determined by a lottery have proved to be popular around the world. From the point of view of a bank, these products are especially successful among relatively low-income customers, or in markets in which many people are outside the banking system. Below, we describe numerous examples of such accounts, and analyze their economics

The Global Crisis of 2007–2009: Markets, Politics, and Organizations

In this article, we examine the different causal chains leading to the crisis in the United States and around the world, emphasizing the market developments, political decisions, and organizational factors that led to the financial and economic meltdown. We argue that a series of political, regulatory, and organizational decisions and events prepared the ground for a major breakdown of financial and economic institutions, a “normal accident” that produced systemic reverberations across markets around the world. In the United States, political, regulatory, and organizational decisions made during the 1990s led to a situation of simultaneously high complexity and tight coupling in the financial system. The global economy also became more complex and tightly coupled during the 1990s, contributing to the rapid spread of the crisis across countries. We propose that solutions to the crisis will need to be tailored to the specific ways in which countries experienced the meltdown and the political preferences of interest groups and citizens. For the United States, the best approach would be to allow for a complex and innovative financial system but with a much reduced degree of coupling so as to avoid another financial normal accident

Risk and the Strategy of Foreign Location Choice in Regulated Industries

We argue that firms in regulated industries react to macroeconomic and policy risks in sharply different ways. While they seek to avoid countries with high levels of macroeconomic uncertainty, we predict that they find it more attractive to expand into countries characterized by governments with discretionary policymaking capacities so as to be able to negotiate favorable conditions of entry. We also argue that firms are heterogeneous in their attitudes toward risk. We predict that firms in which the state holds a partial equity stake exhibit a more tolerant attitude. We also expect that as firms accumulate foreign experience, they develop an aversion toward further foreign entries into politically unstable markets. Support for these predictions is provided by an analysis of the Latin American market entries of all listed Spanish firms in regulated industries between 1987 and 2000