No abstract

No abstract

Purpose This paper aims to investigate the extent to which locating primary industry subsidiaries in politically unstable countries impacts their survival. The authors argue that foreign multinational enterprises in less stable political environments can shape policies that are impactful on the costs of operating in primary industries and avoid compliance with more stringent policies at home. Design/methodology/approach Using a sample of 753 primary sector investments of Japanese multinational enterprises during the period 1986 to 2013, the authors conduct a parametric survival analysis of the relationship between political stability and subsidiary survival. Findings Political instability has a slight, curvilinear relationship with subsidiary survival, such that both high and low stability are associated with lower exit hazard, while moderate levels of stability increased exit hazard. This nonlinear relationship is stronger for efficiency-seeking subsidiaries, and weaker for market-seeking subsidiaries. Originality/value This research contributes to the debate around the pros and cons of globalization by examining the extent to which firms benefit by offshoring primary sector investments to avoid more costly legal requirements at home. The results suggest that this non-market strategy should be mitigated through appropriate policy measures and provides evidence that those policies already implemented are effective.

Purpose The purpose of this paper is to investigate the impact of climate risk on the success vs failure of foreign direct investments (FDIs) in private participation infrastructure (PPI) projects. The authors also consider the extent to which project-level characteristics mitigate such risks. Design/methodology/approach The authors study a sample from the World Bank covering 18,846 projects in 111 countries from 2004 to 2013. The authors apply logistic regressions to determine the impact of climate risk and mitigating project characteristics on project failure. Findings The authors find that higher levels of climate risk at the host country level are associated with higher risk of project failure. The authors also find that the disadvantage of higher climate risk is weakened by two project-level characteristics, namely, the inclusion of host government ownership in the project consortium and the size of the project. Originality/value The research contributes to the current debate about the impact of climate risks on international business ventures. The authors demonstrate that climate risk is a locational disadvantage for FDI in PPI projects. The authors establish that the “fittest” projects in locations characterized by higher climate risk tend to be those that involve host government participation in their ownership structure as well as those of larger sizes.

Purpose – The purpose of this paper is to investigates how organizational learning, absorptive capacity, cultural integration, specialization of the acquired firm and characteristics of transferred knowledge impact innovation performance subsequent to overseas acquisitions. Design/methodology/approach – Survey responses from 222 Chinese multinational enterprises engaged in overseas acquisitions. Findings – Differences between acquiring and acquired firms’ capabilities, while having a positive direct influence, suppress the positive impact of organizational learning and absorptive capacity, suggesting that multinationals require some basic level of capabilities to appropriate value from overseas acquisitions. Research limitations/implications – This paper investigates the impact of knowledge-seeking overseas acquisition of Chinese multinationals on innovation performance, as this appears to be the primary motive for making such acquisitions. Practical implications – Knowledge-seeking overseas acquisition should be based upon the absorptive capacity of the acquiring firm and complementarity between both firms. In knowledge-seeking overseas acquisitions, establishing an effective organizational learning mechanism is necessary for improving innovation performance. Originality/value – This paper reports on the behaviour and innovation performance of Chinese multinationals through analysis of primary data.