Abstract"Distance" between organisational contexts has been a prime concern of scholarly research into international business strategies. We extend this research by exploring the complementary roles of institutional and human resource distances on foreign investors' entry strategies. Combining institutional and resource-based theories suggests that (a) human resource differences complement institutional differences, (b) the effects of some aspects of distance are curvilinear, and (c) the impact of distance differs between first and subsequent entries. We find empirical support for these arguments on a unique dataset of foreign direct investment in six emerging economies that incorporates multiple host as well as multiple home countries.3

This study empirically investigates if competition's impact on firm performance depends on the ownership structure. Our results show that an increase in import competition has a positive effect on firms with concentrated ownership and a negative effect on firms with dispersed ownership, regardless of the level of domestic competition. Given that the optimal level of ownership concentration with respect to firm productivity is high (low) if tariffs are low (high) in the case when import competition is high these results are consistent with theoretical findings that competition has positive effects in companies that are a priori efficient but not in unproductive firms. If tariffs are high, however, they support inferences based on the x-inefficiency literature. Contrary to what has been suggested by some theoretical results, the riskiness of a firm's environment does not seem to influence our results. JEL: D24, F10

Theoretical research shows that competition has positive effects on productivity, for companies that are initially efficient, but not for unproductive firms. Our empirical analysis on a panel data of Czech companies, years 1995–2004, confirms this result. In addition, our analysis shows that when economic reforms affect both domestic and foreign competition, controlling for domestic competition is crucial when assessing the impact of trade liberalization. Otherwise, the effect of trade liberalization on firm productivity is upward biased

The economic impact of Genetically Modified Organisms (GMOs) depends heavily on the product line supplied by the seed companies. In this paper, we analyze the interlinking between seed product line and license contract signed between the seed company and the upstream agbiotech firm which owns the Genetically Modified (GM) trait. We show that if the farmers are sufficiently heterogeneous, the seed company prefers to price discriminate by supplying both GM and conventional seeds. In those circumstances, despite higher efficiency of the GM seed, the price increase is such that the farmer’s surplus decreases. This loss may even outweigh the aggregate gains of the seed and the agbiotech companies, thereby leading to a total welfare loss.

We analyse a simple 'tariffs cum foreign competition' policy targeted at enhancing the competitive position of a domestic, developing country firm that competes with its developed country counterpart on the domestic market and that carries out an innovative (or imitative) effort. We evaluate this policy with respect to social welfare, type of oligopoly conduct, information requirement, time consistency and possibility of manipulative behaviour and conclude that the most robust policy setup is one in which the domestic government is unable to pre-commit to the level of its policy. We also study how the unit cost heterogeneity of the domestic firm affects trade protection. Copyright (c) 2010 The Authors. Journal compilation (c) 2010 The European Bank for Reconstruction and Development.