External networks and geographic clustering as sources of MNE advantages: Foreign and indigenous professional service firms in Central London

This study combines the theories of international business and management with network theory in order to examines the networking activities of foreign affiliates. It focuses on a specific kind of network, which is taking place between firms based in geographic proximity. A comparative analysis between foreign and indigenous firms in selected professional service industries located in Central London is used as the analytical tool to isolate the networking attributes of firms in general from those that are unique to foreign affiliates and emerge as a result of their specific characteristics. The findings suggest considerable differences between foreign and indigenous firms in terms of their network behaviour. MNE internal networks appear partially to replace the advantages provided by external networks, acting both to diminish the MNE's need for external linkages and channel it into somewhat different directions.networking, Multinational Enterprises, geographic clustering, Professional service firms, London

MNEs in the Digital Economy

Technological advances are changing many aspects of business activity and in particular the meaning of distance and geography. Such changes are likely to have profound impact on firms whose activities take place over distance, namely MNEs. Using the motivations for FDI identified in the literature as a theoretical framework, this study examines the motivations of firms producing and selling products that can be transferred electronically in real time and at little or no cost, to establish operations outside their home countries. The paper advances a set of hypotheses regarding the likely motivations for foreign activity under such circumstances and provides some statistical testing for their prevalence in US inward and outward FDI. The findings suggest that the investment motivations of firms operating in the digital economy differ from those of firms in the traditional world. The most important motivations for FDI in the digital economy appear to be efficiency and the quest for intangible assets, especially those embedded in human capital, while market seeking and the search for low cost export platforms appear to be the dominant motivations for FDI in the traditional economy.digital economy, FDI motivations, US FDI

Neo-Marshallian Nodes, Global Networks and Firm Competitiveness: The Media Cluster of Central London

The recent emphasis by some business scholars on processes taking place within locally-embedded production systems seems to undervalue the dynamics of global competition and the role played by TNCs in mobilising tangible and intangible assets across localised clusters. Using the external linkages of firms as the theoretical framework, this paper examines the interplay between global and local influences on the competitiveness of the cluster of media firms in Central London. The main findings are that the locality indeed plays a vital role in influencing the capabilities of these firms, but it is by no means the only relevant geographic area. This localised cluster is bound tightly into world-wide webs of interdependence, with TNCs playing a major role in mediating between local and global linkages. The latter are vital for the ability of the firms studied to compete successfully in international markets.

Foreign and Indigenous Firms in the Media Cluster of Central London

This study uses the comparison between foreign and indigenous firms in localised clusters to gain insights into the behaviour of the former in clusters. In-depth study of 49 foreign and indigenous media firms in the soho district of central london suggests a combination of differences and similarities between them in terms of their cluster behaviour and the benefits they draw from their cluster participation. The major factor determining these differences and similarities is the extent to which internal linkages within tncs substitute for cluster linkages.tncs, clusters, media industries

Why Do Business Service Firms Cluster? Small Consultancies, Clustering and Decentralisation in London and Southern England

Notwithstanding their remarkable recent growth, surprisingly little research has hitherto been conducted on the evolving geography of professional and business services in Britain. This paper analyses the results of a detailed survey of 300 small and medium-sized management and engineering consultancies, in investigating the forces underpinning both the striking clustering of such firms in central London and their growth in decentralised locations of East Anglia and South West England. Particular attention is paid to the role of demand-side influences, localised 'collective learning' processes, and increasing globalisation in clustering, and to so called 'enterprising behaviour theory' in explaining decentralisation.business services, clustering London, globalisation, SMEs, collective learning

Liability of Foreignness in Global Competition? Financial Service MNEs in the City of London

This study was inspired by the observation that foreign financial service firms operating in the City of London do not suffer the liability of foreignness to the extent suggested by theory. To examine the reasons for this departure from theory, the study advances a theoretical framework that distinguishes between three types of advantages that together account for the competitive performance of MNEs relative to that of indigenous firms. Empirical analyses of a sample of 296 foreign financial service firms in the City of London shows that in this particular context major sources of competitive performance are the firm-specific advantages and the advantages of multinationality, where British firms may not necessarily possess an advantage over foreign firms. An examination of the validity of the findings, in order to assess the extent to which this situation is unique to the City of London or rather signifies a more general trend that requires theoretical modifications and extensions, is emphasised as a major task for future research.Financial services; City of London; Liability of foreignness; Global competition

International Business in a World of Increasing Returns

This study examines the factors affecting the propensity of firms to engage in cross border activities in a world of increasing returns. A model connecting outward FDI from the US with a set of firm-specific advantages is estimated on samples of industries dominated by increasing and diminishing return processes.MNE advantages, Increasing returns, US FDI Acknowledgements

FDI, the Location Advantages of Countries and the Competitiveness of TNCs: US FDI in Professional Service Industries

This paper seeks to examine the impact of the foreign activities of firms on their international competitiveness. It addresses questions such as: to what extent and under what conditions can firms compensate for deteriorating location advantages of their home country and maintain their lead in an industry through investment in foreign countries? Under what conditions can firms reap the benefits of a locationally advantageous foreign country? These questions are examined with reference to selected US professional service industries. The findings show that FDI weakens the link between the location advantages of home countries and the ownership advantages of firms, as it enables firms to develop advantages which are not directly related to the location advantages of their home countries. However, this impact is very moderate, and is exercised through the indirect impact of FDI on the advantages of firms and countries. The ownership advantages which firms develop in their home countries are the most critical determinant of their competitiveness.

Measuring the Productivity of Professional Services: A Case Study of Swedish Management Consulting Firms

Existing measures of productivity were designed to measure productivity in industries in which both inputs and outputs are tangible standardised quantities. They are inadequate for productivity measurement of professional services, where intangible and specialised factors of production are in use. This paper seeks to address the difficulties associated with the measurement of the productivity of professional service firms and to propose a more adequate measure of productivity in these industries. This measure is tested on a sample of Swedish management consulting firms, and is assessed in relation to several performance indicators of these firms. The findings illustrate the inadequacy of the manufacturing-based measurement procedures and demonstrate that a measure which acknowledges the unique characteristics of professional services correlates better with firms' performance. As this field of research is in its infancy, these findings are only suggested as indications for directions in which future research is needed.

Does having women on boards create value? The impact of societal perceptions and corporate governance in emerging markets

Many governments seek to impose gender equality on boards, but the consequences of doing so are not clear and could harm firms and economies.We shed light on this topic by conceptualizing the relationships as firm- and board-specific and embedded within specific contexts. The theory is developed with reference to emerging markets, and tested on Malaysian firms.We find that female directors create value for some firms and decrease it for others.The impact varies across different performance indicators, firms’ ownership, and boards’ structure.The findings call for nuanced responses in relation to women’s nominations from both governments and firms