Cost of capital in an international context: Institutional distance, quality, and dynamics

Cost of debt is a key cognitive anchor for managerial decisions and an important determinant of firm profitability. We extend international management research by analyzing the effects of institutional distance, institutional quality, and their dynamics on the cost of debt in the context of foreign direct investments (FDI). We test our conceptual model on a sample of companies making 3,764 greenfield foreign direct investments from developed into less developed markets. Using hierarchical linear modelling, we show that the financial consequences of internationalizing into countries with weak institutions depend on both the institutional distance between countries, as well as their institutional quality. Furthermore, we find that recent changes in institutional quality form expectations about future development and ultimately influence post investment financing costs

Finance and the multinational compangy: Building bridges between finance and global strategy research

This paper argues for, and contributes to, a stronger integration of research on finance and international business/global strategy. We perform bibliometric analysis of journal publications between 2010 and 2016 and show that papers published in the two domains relate to very different underlying literatures which, so far, have had a limited overlap. We further argue based on a qualitative review of the literature that both fields offer substantial novel perspectives, models, and theories to each other that have the potential to enrich our theoretical understanding of relevant research questions in both domains. We map various pathways for further integration of international business/global strategy and finance fields and discuss different ways how to better connect the two fields and their different research perspectives and research methodologies. Managerial Summary: In this paper we, first, find that publications from the field of finance and from the area of international business/global strategy relate to very different literatures. Second, we show that both fields would indeed offer substantial and relevant novel perspectives to each other. Third, we develop various pathways for a more intense integration of both literatures. Given the relevance of both international business/global strategy and finance perspectives for business practice, we strongly believe that a more intense integration also bears substantial implications for managers. This is as much of the knowledge developed in international business/global strategy and finance did not fully transfer into the respective other field

Benefitting from immigration: The value of immigrants' country knowledge for firm internationalization

Migrants are able to provide firms with knowledge about their country of origin. This can become a valuable source of knowledge for firms in the process of internationalization. Relating to a Knowledge-Based-View perspective, this paper explains how the resource commitment of firms to foreign countries iscontingent on immigration from those countries: Immigrants' countryknowledge reduces uncertainty and makes the governance of foreignoperations more efficient. Moreover, this paper connects the relevance of knowledge for firm internationalization to institutional characteristics inimmigrants' home and host countries, both of which policymakers canshape. We test predictions on more than 13,000 observations over a 14-year period (2003–2016). The paper identifies economically significant contingencies of a positive effect of immigration, which are robust to changes in model specification, measurement, and sampling. The results indicate how immigration can shape firms' investments abroad and have implications for developing policy as well as international business theory

Location decisions and the liability of foreignness: Spillover effects between factor market and capital market strategies

In this paper we build on the liability of foreignness concept and the institutional perspective to show how an equity listing and subsidiary formations in the host market are interlinked. Using a matched sample of foreign equity-listed and domestic equity-listed European firms on EU-regulated capital markets, we find that (1) the number of prior host-market subsidiary formations increases the probability of a host-market equity listing, and (2) a prior host-market equity listing increases the number of host-market subsidiary formations. Hence, we identify spillover effects between factor market and capital market strategies. However, the extent of these spillover effects depends on institutional characteristics of the host market, where companies on smaller markets gain higher spillover effects. We contribute to international management and finance research by providing factor market strategies as a valuable source to overcome capital market liabilities of foreignness and capital market strategies as a valuable source to overcome factor market liabilities of foreignness

Strictly Limited Choice or Agency? Institutional Duality, Legitimacy, and Subsidiaries' Political Strategies.

This article analyzes political strategies of MNC subsidiaries in emerging markets. We find that institutional pressures from public and private non-market actors in the emerging market lead to increased political activism. Furthermore, we find that these relationships become stronger, when the external pressures are joined by strong firm-internal pressures. Our findings contribute to the scarce literature on firms' political strategies in emerging markets. They also support recent criticism of institutional theory's strong focus on isomorphism as the most important legitimacy-conveying mechanism. We argue that the isomorphism-based either-or logic gives way to stronger agency of the subsidiary and to a logic of active negotiation and social construction of the subsidiary's legitimacy in the emerging market. Our findings show support for this idea as political activism is one such way how the subsidiary's legitimacy can be built and nurtured

In vitro test of external Qigong

BACKGROUND: Practitioners of the alternative medical practice 'external Qigong' generally claim the ability to emit or direct "healing energy" to treat patients. We investigated the ability of experienced Qigong practitioners to enhance the healthy growth of cultured human cells in a series of studies, each following a rigorously designed protocol with randomization, blinding and controls for variability. METHODS: Qigong practitioners directed healing intentionality toward normal brain cell cultures in a basic science laboratory. Qigong treatments were delivered for 20 minutes from a minimum distance of 10 centimeters. Cell proliferation was measured by a standard colony-forming efficiency (CFE) assay and a CFE ratio (CFE for treated samples/CFE for sham samples) was the dependent measure for each experiment. RESULTS: During a pilot study (8 experiments), a trend of increased cell proliferation in Qigong-treated samples (CFE Qigong/sham ratios > 1.0) was observed (P = 0.162). In a formal study (28 experiments), a similar trend was observed, with Qigong-treated samples showing on average more colony formation than sham samples (P = 0.036). In a replication study (60 experiments), no significant difference between Qigong-treated samples and sham samples was observed (P = 0.465). CONCLUSION: We observed an apparent increase in the proliferation of cultured cells following external Qigong treatment by practitioners under strictly controlled conditions, but we did not observe this effect in a replication study. These results suggest the need for more controlled and thorough investigation of external Qigong before scientific validation is claimed

Does It Really Work? Re-Assessing the Impact of Pre-Departure Cross-Cultural Training on Expatriate Adjustment

Cultural adjustment is considered to be a prerequisite for expatriate success abroad. One way to enhance adjustment is to provide employees with knowledge and awareness of appropriate norms and behaviors of the host country through cross-cultural training (CCT). This article analyzes the impact of pre-departure CCT on expatriate adjustment and focuses on variations in participation, length and the comprehensiveness of training. Unlike previous research, the study focuses on the effectiveness of pre-departure CCT for non-US employees expatriated to a broad range of host country settings. Employing data from 339 expatriates from 20 German Multinational Corporations (MNCs) the study finds CCT has little if any effect on general, interactional or work setting expatriate adjustment. However, a significant impact of foreign language competence was found for all three dimensions of expatriate adjustment. We used interviews with 20 expatriates to supplement our discussion and provide further implications for practice

Role Conflict, General Manager Job Satisfaction and Stress and the Performance of IJVs.

This paper analyses the effects of inter-sender role conflicts experienced by managers of International Joint Ventures (IJVs) on their individual job satisfaction and job stress. It then relates the level of IJV managers’ job satisfaction and job stress to the performance of the IJV. We empirically test these relationships using data gathered through a questionnaire survey carried out among general managers of German-Indian joint ventures. The findings show that managers experiencing a high level of role conflict also report lower job satisfaction and higher job stress of IJV managers. High job stress of IJV managers is related low performance of IJVs, while there is no statistically significant relationship between IJV managers’ job satisfaction and IJV performance. Thus, IJV managers’ job stress mediates the relation between intersender role conflict and IJV performance. We discuss the implications of these results for research on, and the management of IJVs