Overcoming financing constraints to corporate expansion: evidence from a company in an emerging Islamic market

The sourcing of low-cost finance to facilitate corporate expansion on competitive terms is a major challenge to firms from emerging markets. There are additional constraints in Islamic markets as financial instruments must adhere to shari’ya law. This paper examines the approach taken by the Sudan Telecommunications Company (Sudatel) to obtain cost effective equity financing using secondary listings on multiple Middle East and North Africa (MENA) stock exchanges. We compare the costs of equity for Sudatel stock on the Sudan and Abu Dhabi Exchanges, and compare these figures with those for Sudatel’s two main regional competitors. Furthermore, we highlight the risk-return trade-off faced by investors in Sudatel stock on both Exchanges, and provide evidence of the potential benefits to investors from the overseas listin

MNE theory and the importance of corporate governance

This paper makes a contribution to the theory of the multinational enterprise (MNE) and, in particular, to why firms undertake foreign direct investment (FDI) rather than alternative strategies. We first argue that it is vital to distinguish between asset-exploiting FDI and assetaugmenting FDI, as the alternative strategies available to the firm differ in each case and hence the rationales for FDI must also differ. Furthermore, given the predominance of controlling shareholders (family, State, institutional) in many firms worldwide, we stress that MNE theory should embrace consideration of the different objectives, risk attitudes and decision-making time horizons of important stakeholders

Corporate ownership and the theory of the multinational enterprise

This paper makes a contribution to the theory of the multinational enterprise (MNE) and, in particular, to why firms undertake foreign direct investment (FDI) rather than alternative strategies. We argue that FDI and its strategic alternatives involve different patterns of costs and returns over time, and hence different levels of risk and uncertainty. Traditional theories of the MNE conceptualize the firm as a risk-neutral decision-making entity with short-term efficiency objectives, and hence do not take these issues into account. This may be reasonable for firms with passive professional managers and widely-dispersed shareholders, operating in countries with the Anglo-American system of corporate governance. But many firms operate under quite different systems of corporate governance where concentrated shareholdings are commonplace and markets for corporate control are weak or non-existent. In these cases, shareholders exert considerable influence on all aspects of firm strategy including FDI. Furthermore, different groups of shareholders (State, family, institutions) are likely to have different objectives, different attitudes towards risk, and different decision-making time horizons. We thus suggest that the traditional theories of the MNE need to be extended to embrace consideration of corporate ownership (and other governance dimensions)

Industry 4.0, global value chains and international business

Purpose: The paper aims to provide an assessment of how the widespread adoption of new digital technologies (i.e. the internet of things, big data and analytics, robotic systems, and additive manufacturing) might affect the location and organisation of activities within global value chains (GVCs). Approach: The approach in this paper is to review various sources about the potential adoption and impact of the new digital technologies (commonly known collectively as Industry 4.0), to contrast these technologies with existing technologies, and to consider how the new technologies might lead to new configurations involving suppliers, firms and customers. Findings: We report that the new digital technologies have considerable potential to disrupt how and where activities are located and organized within GVCs), and who captures the value-added within those chains. We also report that Industry 4.0 is still in its infancy, but that its effects are already having an impact upon the nature of competition and corporate strategies in many industries. Implications: In particular, we draw attention to the potential cyber-risks and implications for the privacy of individuals, and hence the need for regulation. Originality/value: This is the first published paper to consider the likely separate and joint impacts of the new digital technologies on the practice and theory of international business

Location choice, ownership structure and multinational performance

Purpose – This paper seeks to link location choice and ownership structure to the debate on the multinationality-performance relationship. Design/methodology/approach – This paper draws on a panel dataset that covers 1,321 emerging economy multinational enterprises (EMNEs) and includes 4,227 observations from 44 emerging economies between 2004 and 2013. Findings – In our empirical results, we find that multinationality has a positive effect on EMNEs’ performance, and that this positive effect is larger for their investments in developed countries than in developing countries. We also find that this positive effect of foreign operation in developed countries switch to negative at higher levels of multinationality for privately-owned EMNEs than for state-owned EMNEs. Originality/value – This paper provides new empirical evidence to support an institutional perspective of the internationalisation of EMNEs that are investing in developed countries, contributing to the multinationality-performance literature, highlighting the importance of FDI location decision and ownership structure

The multinationality-performance relationship: evidence from emerging economy multinational enterprises

The literature on multinationality-performance relationship has been limited to multinational firms from developed economies, and previous studies generally disregard the effects of location and ownership structure. This paper seeks to explain this relationship in the emerging market context, highlighting the importance of location decisions and ownership structure. We use panel data that include 2258 multinationals from 25 emerging economies over a period of 2004-2013. We find a significant positive relationship between multinationality and performance. In particular, investment in developed countries rather than developing countries has a significant positive impact on firm performance. Private owned enterprise has a better performance in foreign markets than state owned enterprise. These results indicate that emerging markets firms can improve performance by investing abroad and the better location choice is developed countries. In addition, firms with different ownership structure should have different internationalisation strategies

Do we need a theory of externalisation?

Recent years have witnessed the proliferation of factoryless goods producers (FGPs) in the contemporary global economy. In this chapter, we outline a theory of externalization to explain not only the existence of factoryless goods producers, but also their ability to exert effective control over the activities throughout their organizationally-fragmented global value chains (GVCs). We stress the key role played by isolating mechanisms both in providing this control and in conferring upon the FGPs the power to determine the distribution of the value created within their GVCs

全球价值链的未来:关键问题

This Perspective explores the implications for the home countries of large MNEs of the agreement reached by over 140 countries in 2021 to enact a corporate minimum tax of 15%. It argues that the corporate minimum tax complements the trend to reduce the negative impact of unfettered globalization on labor, and it protects the ability of home countries to finance a robust social safety net. Home countries should adopt the corporate minimum tax, and that includes the US, which last year failed to adapt its Global Intangible Low-Taxed Income approach to the corporate minimum tax

The future of global value chains: key issues

The COVID-19 pandemic has heightened concerns about the viability of GVCs. Globalization was already under threat, but the pandemic has exacerbated the effects of underlying trends in the world economy. This Perspective considers whether MNEs should forsake cost-efficiency and reconfigure their GVCs to put more emphasis on robustness and resilience

The export performance of emerging economy firms: the influence of firm capabilities and institutional environments

We advance a two-stage theoretical model which contends that the export performance of emerging economy firms (EEFs) will depend both upon their firm-specific capabilities and their home institutional environments. Specifically, we argue that EEFs will be more likely to export when facing more uncertainty at home from greater political instability, substantial informal competition, and high corruption. Furthermore, we hypothesize that firms’ export intensities will be contingent upon specialized internal capabilities such as a skilled workforce, top managerial experience, and access to external technologies. We test these hypotheses using a dataset of more than 16,000 firms from the four BRIC economies (i.e., Brazil, Russia, China and India). Our results confirm that political instability and informal competition have robust effects on the export propensity of EEFs, whilst export intensity is contingent upon the availability of skilled workers and access to external technologies via licensing