Bridging the gap? Corruption, knowledge and foreign ownership

We argue that in addition to host corruption per se, as accounted for by the existing literature, an explanation of inter-country variation in FDI needs to account for the distance between the host and home corruption, which we call relative corruption. We use a large matched home-host firm-level panel data-set for 1998-2006 from CEE transition countries. Year-specific selectivity corrected estimates suggest that, ceteris paribus, higher relative ‘grand’ corruption lowers foreign ownership as the returns to investment tends to be lower in more corrupt environment. However, after controlling for the selectivity bias, knowledge-intensive parent firms are found to hold controlling ownership, as the difficulty of successful joint venture looms large in more corrupt environment. Results are robust to alternative specifications.Financial support from the ESRC under RES-062-23-0986 is acknowledge

Exploring the role and importance of human capital in resilient high performing organisations- evidence from business clusters

This paper investigates and explores the link between the resilience of organisations, its human capital and firm performance. We base our analysis on the resource based view of the firm, cluster strategy and conservation of resources theories. Our contribution is contextualized by comparing the performance of business clusters across two observational periods, namely pre-recession (2005-2007) and recession (2008-2009) period. We identify six relevant indicators from the extant literature that capture economic dynamism, human capital and financial viability of firms in order to capture the performance across clusters and capture resilience to the global financial crisis. We contribute by identifying organisations in business clusters that perform better due to being more resilient, particularly during challenging times. Through triangulation we find overwhelming evidence of the overarching role and importance of human capital (people) in driving more successful organisations in business clusters as they possess greater resilience during challenging times such as the recent global financial crises. We show that strong clusters not only improve regional employment and turnover growth over time, but improve resilience of regional economies to downturns through resource gain and crossover processes. We further illustrate that understanding the impact of resource reservoirs, resource passageways and crossover provides a framework for further research and intervention to promote resilience in organisations

Should I Stay or Should I Go? Firm Heterogeneity in the Post-crisis Period

Existing microeconomic research on exporting firms is dominated by empirical findings across time and countries based on two theories of why firms choose to export. One requires firms to be better performers before entry, the other requires there to be improvements in performance as a result of entry. In this paper, we disentangle entry to, and exit from, the overseas market for UK manufacturing firms to better understand the motivations and characteristics underlying both decisions. We explore the extent to which changes in the macroeconomic environment may influence behaviour, following a time of global financial turbulence

FDI in hot labour markets: The implications of the war for talent

This paper highlights an inherent contradiction that exists within investment promotion activities in rich countries. Since the financial crisis, many inward investment agencies have shifted their activities from job creation per se to seeking to attract investment in high-tech activities. Such knowledge-intensive sectors are engaged in what has become referred to as “the war for talent”, so locations need to understand their value proposition to firms, especially where labour is tight. This paper explores the implications of this, in terms of the impact on employment and earnings of high skilled labour. We show that, because skill shortages already exist in many of these sectors, seeking to attract inward investment in these sectors simply causes the earnings of such workers to be bid up, and employment in the incumbent sector to fall. We highlight the over-riding importance that firms place on the availability of skilled labour when determining locations, and how policies which promote labour market flexibility, particularly through investment in skills to address skill shortages, can significantly mitigate the adverse effects, which tend to be more keenly felt in poorer regions of Europe where skilled labour is in even shorter supply

International business research and scholarship in the Middle East: developments and future directions

In this introduction we review the extant literatures that highlight the importance of the Middle Eastern institutional and cultural context in shaping business's (IB) strategies and practices across several countries Drawing on the literature, as well as the six articles included in this special issue, we are able to (1) outline the state of socio-cultural, historical and economic forces that shape international business in several Middle Eastern nations; (2) utilize institutional theory to evaluate the constraints of international business practices in the Middle East; and (3) highlight the key challenges and gaps faced by IB practices in the Middle East. Based on this, we subsequently propose an agenda for future research in order to lay the foundation for international business scholars to advance the theorizing and application of IB practices in the Middle East context

FDI and Ownership in Czech Firms: Pre- and Post-crisis Efficiency

We analyze how efficiency of firms in the Czech Republic is affected by their size, age, competition, capital structure, ownership types, and global financial crisis. We employ the stochastic frontier approach, use a large and detailed dataset, and cover time span 2001-2012. We show that larger firms cannot be associated with better efficiency in general. Effect of their age has only negligible impact. Impact of the capital structure is shown to be strong in large and more leveraged firms. Higher competition is not contributive to efficiency neither on individual nor aggregate levels. While effects of firm characteristics are small, the effects of ownership are economically substantial. We show that majority owners are most contributive with respect to firm's efficiency when compared to other categories we analyze. Minority owners with legally grounded power are able to impose significant efficiency improvement. The effect of the foreign ownership is strongest when foreign owners control firms with less than majority of voting power. Minority owners sharing the control do not seem to contribute to efficiency. The impact of crisis is not balanced but can be regarded as negative in general. The firms' characteristics change only a little. In contrast, worsening impact of the crisis is evidenced for controlling ownership categories. Minority owners exhibit a limited disciplining effect to improve efficiency after the crisis