Browsing Department of International Economics and Management (INT) by Year Published
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A Dynamic AnalysisHobdari, Bersant; Jones, Derek; Mygind, Niels (København, 2007)[More information][Less information]
Abstract: New and rich panel data for a large and representative sample of firms are used to estimate the sensitivity of access to capital to differing ownership structures. The investment behaviour of firms is examined in a dynamic setting in the presence of adjustment costs, liquidity constraints and imperfect competition. The empirical work is based on the derivation of Euler equations in the presence of symmetric and quadratic adjustment costs and both debt and equity constraints. Whereas the norm is to use ad hoc approaches to model these constraints, our alternative and more consistent leads to the inclusion of financial variables in investment equation in first differences rather than in levels. Our GMM estimates confirm the importance of financial factors in determining investment rates and suggest that firms owned by insiders, especially non-managerial employees, are more prone to be liquidity constrained than are others. Among the other groups, somewhat surprisingly, only domestic outsider owned firms display sensitivity to both measures of the availability of finance, with manager owned firms being sensitive to the availability of external finance, while state owned firms being sensitive to the availability of internal finance. Corporate Investment, Corporate Governance, Adjustment Costs, Liquidity Constraints, GMM Estimates, Transition Economies. URI: http://hdl.handle.net/10398/6585 Files in this item: 1
dynamicinvestmentpaper-2.pdf (381.1Kb) -
Evidence using stochastic frontier approachSinani, Evis; Jones, Derek C.; Mygind, Niels (København, 2007)[More information][Less information]
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Promoting Rule Compliance and Good Governance PracticeGregoric, Aleksandra; Zajc, Katarina; Simoneti, Marko (København, 2007)[More information][Less information]
Abstract: The paper re-examines the concerns on the rule-based governance in poor institutional environment. By relying on the theories and research vehicles of social psychology, we show that under certain conditions, the ‘law on books’ may still play role in governing market transactions, even though no formal enforcement applies. We furthermore expose the potential of the Corporate Governance Code as the ‘signaling device’ and provide arguments as to why this potential may be even stronger in an environment with relatively weak institutions in comparison to the developed market economies. URI: http://hdl.handle.net/10398/6531 Files in this item: 1
wp9-2007.pdf (234.5Kb) -
Hobdari, Bersant; Jones, Derek C.; Mygind, Niels (København, 2007)[More information][Less information]
Abstract: Unlike previous empirical work in analyzing investment behavior and the determinants of liquidity constraints, we use a switching regression framework when sample separation is unknown and endogenous and firms are assumed to operate either in the financially constrained or in the financially unconstrained regime. The actual regime the firm is in is determined by a switching or selection function, which depends on those variables that theoretically determine the wedge between internal and external finance, the severity of information and agency problems and time-varying firm characteristics. By using new panel data for Estonian companies during 1993 through 1999 we find that: (i) separate regimes exist in investment behavior; (ii) the likelihood of being financially constrained is higher in firms that are recently privatized, small and where ownership is concentrated in the hands of insiders and the state; (iii) soft budget constraints lower the probability of a firm being financially constrained; (iv) the actual probabilities of operating in the financially constrained regime are calculated to be quite high and essentially stable during 1993-1999: 0.52-0.57 for state owned firms, 0.40-0.46 for domestic owned firms and 0.53-0.57 for employee owned firms; (v) ownership structure affects investment beyond its indirect effects through financial constraints. Corporate Investment, Liquidity Constraints, Insider Ownership, Switching Regression, Soft Budget Constraint. URI: http://hdl.handle.net/10398/6626 Files in this item: 1
switchingregressionpaper-1.pdf (418.7Kb) -
An Empirical Investigation of the Credit Rationing HypothesisHobdari, Bersant (København, 2007)[More information][Less information]
Abstract: We analyze the impact of corporate governance structures on access to capital using a unique and rich panel data for a large and representative sample of Estonian firms over the period 1993 through 1999. We distinguish among five different governance structures and provide estimates on the impact of each of them on capital constraints. Our results indicate that: (i) separate regimes exist in investment behavior; (ii) the likelihood of being financially constrained is higher in firms that are recently privatized, small and where ownership is concentrated in the hands of insiders; (iii) soft budget constraints lower the probability of a firm being financially constrained; (iv) the actual probabilities of operating in the financially constrained regime are calculated to be quite high and essentially stable during 1993-1999: 0.52-0.57 for state owned firms, 0.40-0.46 for domestic owned firms and 0.53-0.57 for employee owned firms. Corporate Investment, Corporate Governance, Liquidity Constraints, GMM Estimates, Switching Regression. URI: http://hdl.handle.net/10398/6555 Files in this item: 1
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Determinants and MotivationsHobdari, Bersant; Sinani, Evis; Papanastassiou, Marina; Pearce, Robert (København, 2007)[More information][Less information]
Abstract: Using a sample of 603 subsidiaries Chinese Multinational Corporations (MNCs) and 174 subsidiaries Indian MNCs, we explore the regional and industrial pattern of their direct investment strategies. Our analysis reveals several important facts. First, most of outward foeign direct investment (FDI) is directed in finance and real estate and services. Second, by far the majority of investment projects are carried out in the home region of Asia-Pacific. Third, outward FDI is highly concentrated geographically and the average investment project is relatively small. Fourth, establishment of subsidiaries is the most preferred way of carrying out FDI. Finally, firm-specific and location-specific characteristics are important drivers of FDI strategies. Last but not least, a large proportion of Chinese and Indian investments is conducted mainly within those countries themselves, revealing a strong multi- domestic character. Outward Foreign Direct Investment, Chinese Multinational Corporations, Indian Multinational Corporations, Market Seeking, Resource Seeking, Efficiency Seeking, Risk Diversification URI: http://hdl.handle.net/10398/6548 Files in this item: 1
chinaindiainvestmentstrategies.pdf (266.2Kb) -
Comparing networks and formal institutionsSinani, Evis; Thomsen, Steen; Staffsud, Anna; Randoy, Trond; Edling, Christofer (København, 2007)[More information][Less information]
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The importance of sunk costs and spilloversSinani, Evis; Hobdari, Bersant (København, 2007)[More information][Less information]
Abstract: This paper investigates the importance of sunk costs, firm characteristics and spillovers from nearby exporters on a firm’s export participation decision. The empirical analysis involves the estimation of a non-structural, discrete choice, dynamic model with firm heterogeneity. The results suggest that both sunk costs and observable firm characteristics are important determinants of export market participation. In addition, previous history matters, in that, if a firm has been exporting the last period or the period before that it significantly increases the likelihood of the firm exporting in the current period. This conclusion is robust across all specifications. Also, larger firms with high capital intensity and foreign owned are more likely be exporters. Finally, while there is no clear evidence on export spillovers, if a firm operates in an export-oriented industry increases the likelihood of exporting. Dynamic Panel, sunk costs, export decision. URI: http://hdl.handle.net/10398/6544 Files in this item: 1
exportmarketparticipation-1.pdf (440.4Kb) -
Gregoric, Aleksandra; Kosak, Marko (København, 2007)[More information][Less information]
Abstract: This paper investigates bank-borrower relationships in an advanced transition country. The empirical analysis is based on a unique dataset of 121 privatized small and medium-sized Slovenian corporations in the first years following the end of the banking sector’s reorganization (1998–2002). The results reveal the strong dominance of bank funding for small and medium-sized enterprises. Despite this, the firms included in the study are characterized by a small number of bank relationships. The specifics of the transition are moreover reflected in the substantial role of fixed assets that can be put up as collateral. However, the number of bank relationships relates to similar factors that have been proven to influence the number of firm-bank relationships in developed countries. We thus expect that the number of bank relationships in Slovenia will increase with the progress of restructuring and privatization of the enterprise sector and with the integration of financial markets following Slovenia’s entry to the European Union. URI: http://hdl.handle.net/10398/6562 Files in this item: 1
wp8-2007.pdf (272.4Kb) -
Gammelgaard, Jens; McDonald, Frank; Tüselmann, Heinz-Josef; Dörrenbächer, Christoph; Stephan, Andreas (København, 2006)[More information][Less information]
Abstract: This paper develops a conceptual framework on the strategic development of subsidiaries and the direct employment of skilled labour. The framework is based on autonomy, and intra and inters organizational relationships. The conceptual model outlines the conditions that are likely to lead to too much, or too little, autonomy and intra and inter organizational relationships. This model is then used to develop propositions on the links between autonomy and intra and inter organizational relationships and direct employment of skilled labour. URI: http://hdl.handle.net/10398/6521 Files in this item: 1
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Ooi, Can-Seng; Gomez, James (København, 2006)[More information][Less information]
URI: http://hdl.handle.net/10398/6623 Files in this item: 1
working paper int_can-seng ooi_2-1.pdf (57.15Kb) -
Ooi, Can-Seng (København, 2006)[More information][Less information]
URI: http://hdl.handle.net/10398/6605 Files in this item: 1
working paper int_can-seng ooi.pdf (93.41Kb) -
Freedom of Expression in a Soft Authoritarian RegimeOoi, Can-Seng (København, 2006)[More information][Less information]
URI: http://hdl.handle.net/10398/6580 Files in this item: 1
working paper int_can-seng ooi_1.pdf (81.37Kb) -
[More information][Less information]
URI: http://hdl.handle.net/10398/6538 Files in this item: 1
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Håkanson, Lars (København, 2005)[More information][Less information]
Abstract: All knowledge is context dependent. The relevant context is the social community where it resides, i.e. the ‘epistemic community’ formed as groups of people define and legitimize the knowledge they possess. In the mutual engagement in a common enterprise, epistemic communities develop, maintain and nurture the codes, tools and theories that provide the basis of their practice. Commonalities of code, tools and theory facilitate both voluntary transfer and involuntary imitation of knowledge within communities, also ones spanning organizational boundaries. Conversely, knowledge transfer between different epistemic communities, whether desired or unintended, is often cumbersome and fraught with difficulties. In order to achieve effective integration and cooperation between its various professional communities and subcultures, firms must therefore undertake investments in boundary-spanning mechanisms. Since these investments are specific to the context in which they take place and to the transactions that they enable, they cannot easily be organized through arm’s length contracts. Firms exist because they have a relative advantage over markets in the integration of diverse knowledge. However, the associated capabilities need not translate into a relative advantage also in the transfer of knowledge, i.e. knowledge exchanged between members of the same epistemic community. Within communities, knowledge disseminates with relative ease both intentionally and through emulation. Knowledge thus acquired can generally be applied also outside the context of the exchange and the effort or investment expended in its acquisition is not transaction specific. The governance mode applied in such exchanges is therefore determined by strategic and contextual factors, including those of traditional transaction cost logic. URI: http://hdl.handle.net/10398/6581 Files in this item: 1
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A Meta AnalysisMeyer, Klaus E.; Sinani, Evis (København, 2005)[More information][Less information]
Abstract: The extensive empirical literature analyzing productivity spillovers from foreign direct investment to local firms provides inconclusive results. Some studies find that foreign presence has a positive impact on the productivity of domestic firms, while others find no evidence or a negative effect. Differences in the results may be attributable to contexts, such as the structural differences between developed, developing and transition economies. However, results may also vary due to different empirical methodologies, notably the use of aggregate versus firm-level data and cross-section versus panel data analysis. We conduct a meta-analysis to investigate reasons for these conflicting results, and provide a revised interpretation of earlier research and its policy implications, and new priorities for future research. Our analysis suggests that the hypothesized spillovers are not confirmed for industrialized countries in the 1990s. Transition economies may experience spillovers, but these have been declining in recent years. Keywords: developing countries, transition economies, spillovers, foreign direct investment, technology transfer, meta-analysis URI: http://hdl.handle.net/10398/6540 Files in this item: 1
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Håkanson, Lars (København, 2004)[More information][Less information]
Abstract: All knowledge is context dependent. The relevant context is the social community where it resides, i.e. the ‘epistemic community’ formed as groups of people define and legitimize the knowledge they possess. In the mutual engagement in a common enterprise, epistemic communities develop, maintain and nurture the codes, tools and theories that provide the basis of their practice. Commonalities of code, tools and theory facilitate both voluntary transfer and involuntary imitation of knowledge within communities, also ones spanning organizational boundaries. Conversely, knowledge transfer between different epistemic communities, whether desired or unintended, is often cumbersome and fraught with difficulties. In order to achieve effective integration and cooperation between its various professional communities and subcultures, firms must therefore undertake investments in boundary-spanning mechanisms. Since these investments are specific to the context in which they take place and to the transactions that they enable, they cannot easily be organized through arm’s length contracts. Firms exist because they have a relative advantage over markets in the integration of diverse knowledge. However, the associated capabilities need not translate into a relative advantage also in the transfer of knowledge, i.e. knowledge exchanged between members of the same epistemic community. Within communities, knowledge disseminates with relative ease both intentionally and through emulation. Knowledge thus acquired can generally be applied also outside the context of the exchange and the effort or investment expended in its acquisition is not transaction specific. The governance mode applied in such exchanges is therefore determined by strategic and contextual factors, including those of traditional transaction cost logic. URI: http://hdl.handle.net/10398/6594 Files in this item: 1
governance and knowledge exchange 2.pdf (168.6Kb) -
Consequences for Economic and Employment GrowthNarula, Rajneesh (København, 2004)[More information][Less information]
Abstract: This paper seeks to broaden our understanding of the concept underlying absorptive capacity at the macro –level, paying particular attention to the growth and development perspectives. We provide definitions of absorptive and technological capacity, external technology flows, productivity growth, employment creation and their interrelations. We then analyse the elements of absorptive capability, focusing on the nature of the relationship within a systems view of an economy, focusing primarily on the role of firm and non-firm actors and the institutions that connect them, both within and across borders. We also undertake to explain how the nature of absorptive capacity changes with stages of economic development, and the importance of the different aspects of absorptive capability at different stages. The relationship is not a linear one: the benefits that accrue from marginal increases in absorptive capability change over time. Finally, we provide a tentative and preliminary conceptual argument of how the different stages of absorptive capacity are related to productivity growth, economic growth and employment creation. Key words: New economy, absorptive capacity, knowledge URI: http://hdl.handle.net/10398/6559 Files in this item: 1
druid 04-02.pdf (446.8Kb) -
The Absorptive Capacities of South African Automotive Component SuppliersLorentzen, Jochen (København, 2004)[More information][Less information]
Abstract: Innovative firms in developing countries have the odds stacked against them in more than one way. They must contend with the objective difficulties of all sorts of capital shortages and deficient infrastructures. Highly-trained scientists, well-endowed labs, seed funding, and institutions that test and certify prototypes and protect the resulting intellectual property are few and far between in the South. They must also come to terms with global value chains in which for different reasons both multinational corporations and smaller, knowledge-intensive firms typically keep R&D close to home. And finally, they are up against the broad brush of academic thought on industrial development which essentially holds that because of the technology gap between developed and developing countries, innovation proper can only really happen in the North. Thus if innovative firms appear on the radar screen at all, they are likely to register but an errant blip, the exception to the rule, that do not warrant systematic analysis. This paper analyses the absorptive capacities of automotive component suppliers in South Africa. It shows that some firms design and manufacture innovative products, while others upgrade their technological capability or merely strive to attain execution competence. It suggests that the reason for the differential performance lies in the strategic use of advanced technical skills and the kind of learning about frontier technology engendered by R&D. It further discusses the ways in which foreign-owned technology is internalised more or less easily depending on whether or not it is controlled by multinational firms or by passive investors. Section 2 reviews the literature on absorptive capacities in developing countries. Section 3 discusses innovation and the technology frontier in the automotive industry, and Section 4 briefly outlines why this is relevant to firms in South Africa. Section 5 presents data and methodology. Section 6 discusses the findings. Section 7 concludes with suggestions for further research. URI: http://hdl.handle.net/10398/6622 Files in this item: 1
itsr&dstupidapril2004.pdf (358.6Kb) -
Theory and Evidence from the BalticsJones, Derek C.; Mygind, Niels (København, 2004)[More information][Less information]
Abstract: We begin by identifying a typical governance life-cycle, defined as changes in ownership structure, and including both the identity of the major owner and ownership concentration. The cycle is marked by key events and phases including start-up, initial growth, mature growth, and possibly a crisis and restructuring stage or exit stage. The governance cycle for transitional countries reflects some specific characteristics –e.g. often privatization produces specific initial ownership structures, with an unusually high proportion of insider, especially, employee ownership. Subsequently pres-sures for restructuring produce strong impulses for ownership changes. There is limited possibility for external finance because of the embryonic development of the banking system and the capital markets during early transition. The governance cycle is also influenced by specific features of the institutional, cultural and economic environment in a country. The varying importance of these fac-tors is expected to produce differences in key features of ownership cycles such as the speed at which particular ownership changes occur. To provide simple hypothesis tests, we use new and rich enterprise panel data sets for the three Bal-tic countries. The data enable various measures of ownership to be constructed (including the iden-tity of major owners and ownership concentration). The empirical analysis covers the ownership cycle with emphasis on initial ownership and subsequent changes. Our key method is to assemble a series of transition matrices showing both starting and final ownership configurations for sample enterprises and to simultaneously provide information on changes in concentration for the largest single owner. For Estonia this is supplemented with an analysis of the frequencies of different own-ership-cycles including intermediary stages of ownership. In spite of important differences in insti-tutional development, especially concerning the privatization process, we find that governance cy-cles are broadly similar in all countries. Employee ownership is rapidly fading and mainly being succeeded by managerial ownership. There are changes back and forth between manager and do-mestic external ownership, while foreign ownership is quite stable. Ownership concentration is mostly increasing after privatization, which included diversification both to employees and external owners. Since ownership diversification did not sit well with the slow development of the institu-tional framework, as expected we see a subsequent concentration of ownership on both managers, external domestic and foreign owners. However, variation in institutions, there are also important differences across countries. The adjustment of ownership structures is faster in Estonia and this can be explained by the relatively fast pace of institutional change and evolution of important gov-ernance institutions, including tough bankruptcy legislation and advances in the financial system. JEL-codes: G3, J5, P2, P3 Keywords: corporate governance, life-cycle, privatization, ownership change, transition econo-mies, Estonia, Latvia, Lithuania . URI: http://hdl.handle.net/10398/6611 Files in this item: 1