 |
Foreign and Home Country Innovation by MNCs: Hollowing Out or Strengthening of the Home Base?
|
Author: Heather Berry, George Washington U.
|
|
IM Division Georgetown Best Paper in International Business and Policy Finalist
|
|
|
|
|
|
Although many studies have analyzed how the foreign employment and manufacturing activities of firms impact their domestic operations, one value chain activity that is noticeably absent in these studies is innovation. In this paper, we explore how the foreign knowledge activities of firms impact their domestic innovativeness. We instrument for changes in foreign activities using foreign GDP and technology growth rates interacted with lagged firm-specific distributions of assets and patents across foreign countries. The empirical results from a comprehensive panel of US MNCs and their worldwide operations that has been merged with USPTO patent data from 1989-2009 reveal that on average, higher value-added activities in foreign markets positively impact the domestic innovativeness of US firms. Estimations suggest that increasing foreign R&D activities by 10% is associated with a 2.8% increase in domestic innovation while increasing foreign patenting activities by 10% is associated with an 8.1% increase in domestic innovation by US firms. These results remain after controlling for industry fixed effects, firm fixed effects, the exports of firms and the impact of foreign imports into the home market. The results also show significant increases in domestic innovation for firms when their home country industry technologies are leading or lagging in the global industry.
|
|
|
|
Paper is No Longer Available Online: Please contact the author(s).
|
|
|
|
|
|
Corporate Renewal through Resource Exploitation and Augmentation: Evidence from US Multinationals, 1999-2014
|
Author: Heather Berry, George Washington U.
Author: Aseem Kaul, U. of Minnesota
|
|
IM Division Georgetown Best Paper in International Business and Policy Finalist
|
|
|
|
|
|
This study explores corporate renewal in diversified firms. We distinguish between two approaches to corporate renewal: resource exploitation in response to changes in output markets, and resource augmentation in response to changes in input markets. Although both types of renewal take advantage of a diversified firms’ access to a wider range of markets, they represent fundamentally different mechanisms, making it important to distinguish between them. We illustrate the importance of these two types of renewal by examining the home and foreign activities of US MNCs from 1999 to 2014, wherein we highlight increasing resource augmentation activities by US MNCs reflected in a shift of both employment and R&D activities abroad relative to sales. We find that this trend partially reversed during the period of the 2007-08 financial crisis, suggesting that US MNCs may have helped to dampen the effects of the financial crisis in their home country.
|
|
|
|
Paper is No Longer Available Online: Please contact the author(s).
|
|
|
|
|
Do Institutions Matter for the Relationship between Diversification and Performance? A Meta-Analysis
|
Author: Todor Stefan Lohwasser, WWU Münster
Author: Dominik Wagner, Independent Scholar
Author: Marc Van Essen, U. of South Carolina
Author: Michel William Lander, HEC Paris
Author: Valentina Marano, Northeastern U.
|
|
IM Division Georgetown Best Paper in International Business and Policy Finalist
|
|
|
|
|
|
This paper offers a multilevel meta-analytic study of the relationship between business diversification and firm performance, encompassing 462 primary studies which cover 40 different countries. Whereas our work confirms the generally negative relationship of prior meta-analyses, this study further reveals considerable variability between the type of diversification (related vs. unrelated) and the countries considered. In particular, we find that related diversification has a positive effect on performance. We also encounter, that some institutional voids variables moderate the diversification-firm performance in the predicted relationship. Legal voids deteriorate the performance of diversified firms. Educational voids, however, lead to a positive focal relationship. We further find for legal voids the opposite for related diversification, namely that the effectiveness of a formal institution enhances the focal relationship. Our study shows a nuanced view about importance of type and institutional voids on the diversification-performance relationship.
|
|
|
|
Paper is No Longer Available Online: Please contact the author(s).
|
|
|
|
|
|
Overseas Operation, Regulatory Lobbying, and Integrated Strategy of US Firms
|
Author: Yilang Feng, Michigan/Harvard
|
|
IM Division Georgetown Best Paper in International Business and Policy Finalist
|
|
|
|
|
|
How does a firm’s global expansion affect its political participation to shape its home-country regulatory policies? This question lies at the intersection of production globalization and corporate political action, and it is a form of integrated strategy (Baron,1995) that is becoming increasingly relevant today with the rise of populist discontent challenging the international business order. I address this under-researched question with a firm-level theory of regulatory arbitrage: in response to unfavorable regulatory outcomes at home, it is easier for firms with overseas operations to offshore more of their domestic operations abroad, resulting in an outflow of capital and jobs from the home country. This locational flexibility across multiple jurisdictions serves as an advantageous bargaining position for internationalized US firms to lobby often and invest heavily in influencing the US business environment. To test this theory, I first extract large-scale text evidence from a novel repository of firm public statements to show that regulatory arbitrage claims in media are indeed made by offshoring firms. Then I construct an offshoring panel from 2007 to 2016 to show that US firms with overseas operation in the same sector are substantially more active in lobbying on taxation, labor, and other regulations. This paper contributes to both nonmarket strategy and international business literature by showing that firms’ global market expansion can give strength to their domestic political strategy.
|
|
|
|
Paper is No Longer Available Online: Please contact the author(s).
|
|
|
|
|