The Forgotten Competitive Arena: Strategy in Natural Resource Industries

Casarín, Ariel A.; Lazzarini, Sérgio G.; Vassolo, Roberto

doi:10.5465/amp.2017.0158

Cited by 14 publications

(14 citation statements)

References 79 publications

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“…We chose to study extractive industries because there are significant opportunities for firms to exploit institutional differences in this sector (Casarin et al, 2020), including locating in pollution havens, and likewise that the large capital investments would benefit greatly from cost reduction through using older technologies, 'dirtier' extraction techniques and reduced investment in workplace safety. In the manufacturing and service sectors, instability is found to curtail investments (Barry, 2016;Delios and Henisz, 2003).…”

Section: Discussionmentioning

confidence: 99%

Taking advantage of institutional weakness? Political stability and foreign subsidiary survival in primary industries

Lupton

Behnam

Jiménez

2021

MBR

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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.

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Section: Discussionmentioning

confidence: 99%

Taking advantage of institutional weakness? Political stability and foreign subsidiary survival in primary industries

Lupton

Behnam

Jiménez

2021

MBR

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“…Strategic management theories usually assume that competitive evolution operates identically for industries with products or services with certain degrees of differentiation and for commodity-based industries. However, recent findings provide evidence that this assumption may not be tenable (Casarin, Lazzarini, & Vassolo, 2019; Cruz, Reyes, & Vassolo, 2019). Second, natural-resource industries are critical for economic development in Latin America.…”

Section: Illustrative Contributions and Future Opportunities For Micrmentioning

confidence: 99%

“…Despite initial studies on competition in natural-resource industries conducted by researchers from Latin America (Casarin et al, 2019; Cruz et al, 2019; Mac Cawley et al, 2019), large-scale empirical studies using data from the region are still needed. Research opportunities include fundamental questions about the determinants of a firm’s creation, survival, and growth in natural-resource industries and about innovation in sectors where the product is a commodity.…”

Section: Illustrative Contributions and Future Opportunities For Micrmentioning

confidence: 99%

“…Latin America is also a unique setting for examining timing advantages in natural-resource industries and for understanding differences in competitive evolution between renewable- and nonrenewable-natural-resource industries. Besides, Latin America provides a fertile context for understanding the competitive consequences of some unique characteristics of these industries, such as the standardized nature of their products, their emphasis on process-based innovations, the presence of dual physical and financial derivative markets, and the importance of nonmarket forces that affect the creation and appropriation of rents from natural resources (Casarin et al, 2019). Finally, Latin America is a particularly relevant context to examine differences between the commoditization process of products subject to differentiation and the competition in commodity products.…”

Section: Illustrative Contributions and Future Opportunities For Micrmentioning

confidence: 99%

See 1 more Smart Citation

Conducting Management Research in Latin America: Why and What’s in It for You?

Aguinis¹,

Villamor

Lazzarini

et al. 2020

Journal of Management

Self Cite

184

137

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We make the case that conditions and timing are right and, despite some challenges, there are many benefits to conducting management research in Latin America. Some of these conditions include an upward trend in the productivity of Latin American researchers, increased collaboration between researchers in Latin America and those in other regions, and societal, cultural, and economic characteristics that make the region an ideal “natural laboratory” to build and test management theories. Demonstrating that our arguments are not just about potential but are founded in reality, we offer a selective summary of recent research conducted in Latin America that made important contributions to micro and macro management domains and theories. These include (a) leadership; (b) small and family businesses; (c) entrepreneurship; (d) social inclusiveness, inequity, and vulnerable populations; (e) strategy and competitive dynamics in natural resource industries; (f) strategy in unstable macroeconomic contexts; (g) public (industrial) policies and business development; (h) hybrid public-private collaborations; and (i) social enterprises and blended social and economic value creation. We also describe opportunities for future research in these domains. Finally, we offer practical and actionable advice on how to address typical challenges encountered when conducting management research in Latin America. Solutions apply to those residing inside and outside of Latin America and include, among others, identifying universities with a research-oriented career path, recognizing credible university rankings and their impact, and capitalizing on local contexts to generate high-quality research. We hope our article will serve as a catalyst for future management research in Latin America.

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“…Third, we contribute to the literature that explores the distinctive issues of strategic management in extractive industries (Casarin, Lazzarini, & Vassolo, 2020). In particular, our paper draws attention to the fact that, while the basic technologies in extractive industries are relatively mature, their nonmarket strategies are dynamic and exhibit substantial interfirm variation in behavior both within the sector and across countries, as predicted by Shapiro et al (2018).…”

Section: Introductionmentioning

confidence: 99%

International diversification, legitimacy, and corporate social performance of extractive industry multinationals

Williamson

Symeou

Zyglidopoulos

2021

Global Strategy Journal

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Research Summary This article examines how different international diversification strategies impact the legitimacy challenges multinationals face and the way they manage their corporate and social responsibilities. Analyzing these questions in a sample of companies in extractive industries, we find that those who pursue resource‐seeking investments that involve locating extraction operations overseas respond with the largest improvement in their corporate‐level social performance (CSP). Those pursuing efficiency‐seeking by establishing processing subsidiaries abroad increase their CSP less, with the smallest increase for those pursuing market‐seeking through marketing and sales operations overseas. For each type of activity established overseas, the increase in CSP becomes greater the more developed the company's home country and the larger its international footprint, but is not dependent on the host country's level of development. These findings suggest that, in today's globalized world, the legitimacy challenges that result from subsidiaries' activities increasingly need to be managed at a global, corporate level. Managerial Summary This article investigates the relationships between different international diversification strategies, the different legitimacy challenges they create, and corporate‐level social performance (CSP) responses. For multinationals operating in the extractive industries, we find important legitimacy spillovers from different types of subsidiary activities on the corporation, but these also vary, leading it to respond with differential increases in global CSP. These increases are greatest for resource‐seeking diversification, involving the location of extractive activities abroad, moderate for efficiency‐seeking diversification, involving the location of processing activities and least for market‐seeking diversification, involving the location of marketing and sales activities. For each type of subsidiary activity, we also find that the increases in CSP are larger the more developed the company's home country and the larger its international footprint, but are not dependent on the host country's level of development. We show how these results extend existing theory and draw implications for management practice.

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The Forgotten Competitive Arena: Strategy in Natural Resource Industries

Cited by 14 publications

References 79 publications

Taking advantage of institutional weakness? Political stability and foreign subsidiary survival in primary industries

Taking advantage of institutional weakness? Political stability and foreign subsidiary survival in primary industries

Conducting Management Research in Latin America: Why and What’s in It for You?

International diversification, legitimacy, and corporate social performance of extractive industry multinationals

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