Country effect on firm performance: A multilevel approach

Goldszmidt, Rafael; Brito, Luiz Artur Ledur; Vasconcelos, Flávio Carvalho de

doi:10.1016/j.jbusres.2009.11.012

Cited by 76 publications

(68 citation statements)

References 48 publications

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“…For instance, firms' international experience may lead to different levels of learning about foreign markets (Delios & Henisz, 2003), therefore it is important to move beyond the aggregate measure of international experience (Delios & Henisz, 2003;Gao, et al, 2008). Furthermore, the extent to The literature has emphasized that firm performance may be positively or negatively affected by home country's institutional environment (Goldszmidt, et al, 2011; 29 McGahan & Victer, 2010). Our findings indicate that a home country's institutional support has a negative impact on firm performance.…”

Section: Discussionmentioning

confidence: 99%

“…The institutional environment has a profound effect on firm strategies and performance (Goldszmidt, et al, 2011). As firms are "deeply embedded in institutional environments, their practices are often either a direct reflection of, or response to, rules and beliefs built into their larger context" (Deng, 2009, p.74).…”

Section: Institutional Theorymentioning

confidence: 99%

“…As firms are "deeply embedded in institutional environments, their practices are often either a direct reflection of, or response to, rules and beliefs built into their larger context" (Deng, 2009, p.74). Firm performance may be enhanced or diminished depending on the nature of a home country's institutional environment (Goldszmidt, et al, 2011;McGahan & Victer, 2010). Below we will differentiate home and host country institutions.…”

Section: Institutional Theorymentioning

confidence: 99%

“…It is recognized that institutional environments play an important role in supporting the effective functioning of market mechanisms and help firms and individuals engage in market transactions (Meyer, et al, 2009). A country's institutions form the conditions for doing business there and determine the transaction costs of business activities.The institutional environment has a profound effect on firm strategies and performance (Goldszmidt, et al, 2011). As firms are "deeply embedded in institutional environments, their practices are often either a direct reflection of, or response to, rules and beliefs built into their larger context" (Deng, 2009, p.74).…”

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What explains the performance of Chinese exporting firms?

Zheng

2015

Journal of Chinese Economic and Business Studies

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Drawing on the entry mode literature and the strategic tripod framework, we examine whether firm performance is influenced by its outward foreign direct investment (OFDI) mode, controlling other firm-, industry-and institution-specific factors. It is found that employing OFDI does not improve an exporting firm's performance. This is not surprising as anecdotal evidence shows that many Chinese firms with OFDI have been making loss in the host country. This may indicate exporting firms employ OFDI to seek complementary and strategic resources/assets, not to improve immediate firm performance. Furthermore, firm performance is influenced by strategic assets, including technology-based capabilities (TBCs) and brands, at the firm level, industry entry barriers at the industry level and the home and host country institutional support at the country level.Keywords: Performance, Exporting Firm, OFDI, Strategic Tripod Framework 2 IntroductionEntry mode is considered as an important determinant of firm performance (Brouthers, 2002; Brouthers, et al., 2003 Brouthers, et al., , 2008Brouthers & Nakos, 2004;Chen & Hu, 2002;Shaver, 1988;Woodcock, et al., 1994). The rationale is that "firms will select the mode that provides the best return on investment" (Brouthers, 2002, p.207). The existing literature has investigated whether some investment modes provide better performance than others (e.g. Brouthers, 2002;Woodcock, et al., 1994). The entry modes under consideration in these studies are often joint ventures (JVs) and wholly-owned subsidiaries (WOSs). Few research considers the performance impact of exporting only versus a hybrid mode of exporting and outward foreign direct investment (OFDI). Given the increasing trend in OFDI, a question arises: Does an entry mode transformation by exporting firms to include OFDI lead to better firm performance? This research aims to fill this research gap. As part of this investigation, other factors influencing firm performance are accounted for by taking an integrative perspective at the firm, industry and country-level.Exporting is often the first stage of internationalization in emerging market firms (EMFs). However, the continuous marketization and liberation in emerging markets motivate firms to undertake OFDI. Exporting helps firms to gain international experiences and to establish linkages in the international market (Mathews, 2006). Yiu et al., (2007) reveal that exporting firms can benefit from learning in foreign markets, 3 accumulating local knowledge, gaining legitimacy and developing local networks.Furthermore, given the home country specific resources (CSRs) such as low labor costs and low production costs, EMFs may benefit from economies of scale by concentrating production at home and then exporting their products to foreign markets.The learning-curve cost advantages suggest that the costs of production fall with the cumulative volume of production, therefore firms moving along the learning-curve can obtain cost advantages over rivals (Wei, et al., 2014). However,...

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Section: Discussionmentioning

confidence: 99%

Section: Institutional Theorymentioning

confidence: 99%

Section: Institutional Theorymentioning

confidence: 99%

mentioning

confidence: 99%

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What explains the performance of Chinese exporting firms?

Zheng

2015

Journal of Chinese Economic and Business Studies

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“…The existence of institutional voids in the context of emerging economies exerts strong influence over business strategy and firm performance (Carney, Gedajlovic, Heugens, Van Essen, & Van Oosterhout, 2011;Goldszmidt, Brito, & Vasconcelos, 2011). One of the characteristics of institutional voids is that they provide a context of low embeddedness and weak enforcement of rules (Rodrigues, 2013).…”

Section: Emerging Economy Contextmentioning

confidence: 99%

Drivers of environmental management in the Brazilian context

Berardi

Brito²

2015

BAR, Braz. Adm. Rev.

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The demand for improved environmental practices inside firms has increased around the world. However, in the process of implementation of environmental management, policy may be decoupled from practice, generating doubts about its effectiveness. This study investigates an overlooked middle step in the environmental management process, analyzing the strength of the main environmental drivers in improving environmental practices inside firms. We developed a set of hypotheses about the influence regulation, voluntary norms and stakeholder pressure have upon environmental management practices, considering the institutional context and different enforcement of these drivers. We use a cross-sectional survey of 150 Brazilian firms to gather information about environmental management and test our hypotheses in a Structural Equation Model. The findings confirm the importance of command and control instruments as well as stakeholder pressure in promoting better environmental practices inside firms. Yet, the results demonstrate that voluntary norms did not influence management practices even though they were perceived as a market opportunity.

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Revisiting the firm, industry, and country effects on profitability under recessionary and expansion periods: A multilevel analysis

Bamiatzi

Bozos

Çavuşgil

et al. 2015

Strategic Management Journal

122

112

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Despite voluminous research over the past several decades, we have yet to clearly establish the relevance of firm, industry and country effects in accounting for variations in firm profitability, particularly in adverse contexts. Based on a synthesis of the resource-based view, industrial organization economics and institutional theory, we consider the role of the 2008 global economic crisis and its impact on the firm, industry, country effects -performance relationship. Using a 3-Level random coefficient model, we examine 15,008 firms within 10 emerging and 10 developed countries, accounting for variations among countries of different economic development. We find that firm effects become stronger under adverse economic conditions; industry effects become weaker during recessions, as well as country main and interaction effects, particularly among the emerging markets.

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Country effect on firm performance: A multilevel approach

Cited by 76 publications

References 48 publications

What explains the performance of Chinese exporting firms?

What explains the performance of Chinese exporting firms?

Drivers of environmental management in the Brazilian context

Revisiting the firm, industry, and country effects on profitability under recessionary and expansion periods: A multilevel analysis

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