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PurposeThis paper aims to investigate the linkages among foreign direct investment (FDI – greenfield and mergers and acquisitions [M&A]) decisions and equity market returns and volatilities. The main premise is that FDI decisions by multinational enterprises (MNE) are influenced by risk and uncertainty indicated by equity market returns and volatilities in the destination (host) countries. This is so because the events on the stock markets in general and their volatilities in particular signal the vitality of the investment climate of the target market. Understanding volatility in capital markets is important for determining the cost of capital and for evaluating direct investment and asset allocation decisions.Design/methodology/approachSurveys and structured interviews were conducted with senior managers of 11 MNEs based in the USA to collect the data used in this study from November 2017 to October 2018. The paper investigates if FDI decisions of the MNE managers are influenced by risk and uncertainty indicated by equity market returns and volatilities. The paper endeavors to make a contribution to the IB literature in highlighting the role played by equity returns and volatilities in FDI decisions and therewith attempts to integrate finance (capital markets) with international business/strategic decision-making.FindingsCapital market performances (returns and volatilities) were found to influence the country choice for location of production facilities (FDI – both greenfield and M&A decisions) as well as timing of the FDI by a MNE. In other words, the share of production capacity optimally located abroad and M&A activities are affected by capital market returns and volatilities.

Purpose – The purpose of this paper is to investigate the linkages among equity exchange traded funds (ETF) returns and transmission of volatilities of the USA, Europe and key emerging countries’ stock markets. Standard & Poor’s 500 (spy) and iShares Europe are used to represent the USA and European stock markets, the emerging market part of the data set consists of daily returns of equity ETF representing broad equity market indices of the BRIC countries (Brazil, Russia, India and China); the mist countries (Mexico, Indonesia, South Korea and Turkey) and South Africa and covers the period of February 3, 2012-February 28, 2014. Design/methodology/approach – The paper utilizes multi-variate auto-regressive moving-averages (MARMA) methodology to study equity market returns and spillovers. Second, generalized auto-regressive conditional heteroskadasticity (GARCH) modeling is employed to model volatility persistence and transmissions. Findings – The findings include the existence of significant co-movement of returns among all country ETFs; however, despite increasing interdependencies among the global stock markets there are still very good opportunities for diversification. For example, USA and Europe based investors may do well to ignore opportunities in each other’s markets but can realize diversification benefits by investing in ETFs representing China, South Africa and Turkey. As far as volatilities are concerned, the findings indicate that no ETF volatility is transmitted from the sample countries to USA, Brazil, China and South African stock markets. Also, US market volatility is transmitted to India, Russia, Mexico and Turkey while European volatility spills over to Mexico and South Korea. The presence of spillovers among stock markets’ return series and persistence of volatilities are useful to investors interested in diversifying their portfolios and to traders/fund managers who are interested in maximizing returns. Research limitations/implications – The implications include: first, investors should not only rely on current domestic news to guide their investment decisions, but also take into consideration international news for there are substantial spillovers. Second, given that volatilities can proxy for risk, there are lessons for both individual and institutional investors in terms of further examining pricing securities, hedging and other trading strategies as well as framing regulatory policies. Third, investors should be able to ride the financial cycle by following closely monetary policies of the FED and European Central Bank and resulting credit expansion or contraction since research indicates (and as corroborated in this study) equity prices are linked to VIX which is also correlated with capital flows and credit expansion and interest rates. Limitations include: first, the investigation could be expanded to include individual countries in Europe instead of using one Europe-wide ETF. As ETFs for other emerging markets become available it is also possible to include additional countries. Second, ETFs may not be the best vehicles for diversification. Originality/value – Methodology (MARMA and GARCH) is widely used for analyzing financial data. The use of BRIC and MIST countries and the interaction among them may be novel. Spillovers among emerging financial markets is a fairly new area. Typically, the authors see studies of spillovers from the developed countries to the developing ones. The data period is important since it covers both credit expansion and contraction (or the start of it) by the FED and is current.

This paper investigates the linkages among Foreign Direct Investment (FDI-greenfield and mergers and acquisitions (M&A)) decisions and equity market returns and volatilities. The central premise is that FDI decisions by Multinational Enterprises (MNE) are influenced, among other factors, by risk and uncertainty indicated by equity market returns and volatilities in the destination (host) countries. This is because of the events on the stock markets in general, and their volatilities, in particular, signal the vitality of the investment climate of the target country. Including capital market variables among the determinants of FDI is important for assessing the cost of capital and for evaluating direct investment and asset allocation decisions. Secondary time-series data (quarterly) were used on incoming US FDI from 1994 to 2018 along with data on independent variables such as exchange rates, inflation, market size, equity market returns, and equity market volatilities. Thus, the paper endeavors to contribute to the International Business literature by highlighting the role played of equity returns and volatilities in FDI decisions and therewith attempts to integrate finance (capital markets) with International Business/Strategic Decision making. Several different regression specifications (OLS, Fixed, and random-effects and VAR) were utilized to analyze the data, and capital market variables (stock returns and volatilities) were found to influence the location of production facilities by a multinational enterprise (MNE). In other words, the share of production capacity optimally located abroad, as well as M&A decisions, are influenced by capital market returns and volatilities.

This paper investigates the linkages among equity market returns before and after the 2007- 08 crisis using exchange traded funds (ETFs) in Germany, France, Italy, UK and the USA. Daily data used from January 2005- September 2007 and July 2009- July 2010 and apply to a Multivariate Autoregressive Moving Average model (MARMA). The data are diveded into two separate periods: before the 2007-08 financial crisis and after the crisis. The results show the existence of significant co-movement of returns in all selected periods although some important differences before and after the financial crisis are noted such as marked increases in the integration of the markets and hence diminishing diversification opportunities for investors over time. Implications for the critical importance of understanding the transmission process between markets for risk management and economic policy are indicated.

This article examines how unethical management styles manifest themselves within the restaurant industry in the United States. We look at (a) individual case histories of violations committed against particular foodservice workers and (b) more general patterns of abuse that have arisen throughout the restaurant industry. The effect of slackening regulations and enforcement of labor laws by the Department of Labor, as well as other methods selected by disgruntled employees in an effort to redress abuse on the part of managers when it comes to wages and working conditions, are also examined. The problems of labor abuse in the foodservice industry are a reflection of negative leadership behavior in U.S. business as a whole. Some recommendations are made as possible considerations for solutions to these problems.

This paper investigates the linkages among equity returns (based on exchange traded funds, ETF) and transmission of volatilities in the following countries: Germany, Austria, Poland, Russia and Turkey. Multivariate Autoregressive Moving Averages (MARMA) and the Generalized Autoregressive Conditional Heteroskedasticity (GARCH) methodologies are utilized. The findings include the existence of significant co-movement of returns among countries in the sample. Also, Turkish and Russian markets were found to be more volatile than Austria, Germany and Poland. However, volatilities in Russia and Turkey do not persist very long. Finally, there is strong evidence of volatility spillovers. All of the countries in the sample, with the exception of Turkey, experience volatility spillovers from other markets. The presence of spillovers among return series and persistence of volatilities are useful to investors interested in diversifying their portfolios and to traders/fund managers who are interested in maximizing returns.

This research-in-progress is about one of the most prevalent forms of countertrade, a phenomenon which has received considerable attention in recent years. The review of the relevant literature is presented in terms of a theoretical framework similar to the one developed by Verzariu (1987). In so doing, the paper attempts to point out clearly the gaps in the literature. Since there are important differences among various forms of countertrade each countertrade deal should be examined individually (Hennart, 1990). This study singles out “international barter” as the form of countertrade to be investigated. Among the motivations for international barter, perhaps the most frequently mentioned is the lack of liquidity: “When the money game is impossible, countertrade remains the only game in town” (Samonis, 1990 p.121).

The paper explores the perceptions of different dimensions of quality that employees had at different levels in the organization/ and investigates how these perceptions can be aligned to increase firm's competitive position. A factor final/tic approach is used in the study. The results indicate that considerable differences exist among the employees with respect to the question of what constitutes "quality".

This paper studies the effect of both economic and demographic factors on the international fast food franchising. The study utilizes regression analysis of pooled cross-section (8 countries) and time-series data. It is found that among the economic factors, the market size is the most significant. On the other hand, both the level of urbanization and the ratio of female workers to the total labor force are positively related to the international restaurant franchising.

In this paper, we examine the short-term linkages among five leading stock markets with the objective of evaluating the case for international portfolio diversification as well as the stability of stock market interdependence after an exogenous shock. We utilize daily closing equity price data from U.S., U.K., France, Germany and Japan during the period from January 1999 to February 2002 and investigate the joint impact of any four equity markets on the fifth market. The findings indicate that even though the interdependencies among the markets are significant, there is still room for international portfolio diversification. Also, the study provides mixed results for the hypothesis that the international market correlations change after an exogenous shock. The tests of stability of correlations are based on before-and-after analyses of two events: the introduction by the European Union of the euro as official currency and the September 11, 2001, terrorist events in U.S.

Survey data obtained from both U.S. and Asian firms in the electronics industry were analyzed using factor analytic methodology. The result was development of a “quality inventory” indicated by a set of factors which best represents the quality perceptions. Among the factors, communication among different departments and levels within an organization, managerial commitment to quality, responsiveness to both external and internal customers demands were found to be significant. Next, firms were classified in two groups (U.S. and Asian) using the condensed quality dimensions (factors) as the set of predictor variables to shed light into the importance of these variables in the two groups. Discriminant analysis results indicate that American and Asian managers differ in terms of different dimensions of quality. Again, such variables as commitment to quality, communication, control and responsiveness are found to be important in discriminating between the two groups.

This paper introduces generalizability theory as a means of assessing and improving the dependability (reliability) of the refereeing process used in journal article publication decisions. Concepts and computational procedures are presented and the power and flexibility of generalizability analysis are illustrated. It is shown that the refereeing process may be "optimized" by trading off costs and desired levels of generalizability.

This study utilized weekly closing prices data from three Exchange-Traded Funds representing American, Japanese and European equity markets. The purpose was to examine the joint impact of any two on the third market. Ishares Russell 3000 (IWV), Ishares MSCI Japan (EWJ) and Ishares S&P Europe 350 (IEV) were used to represent the U.S., Japan, the European stock markets, respectively. While the findings indicate that the interdependences among the three markets are significant, there is still room for international portfolio diversification: for example, Japanese investors can realize diversification benefits by investing both in Europe and in the U.S. European and American investors, on the other hand, can diversify portfolios by investing in Japan. The application of multivariate- autoregressive-moving-aver-ages (MARIMA) to the data confirmed the above findings. Finally, the study supported the hypothesis that the international market correlations increase during times of volatility.

The rationalist school posits that as globalization gains momentum, management systems will converge, implying that culture plays a limited role. In contrast, the culturalist school suggests that managerial practices are an extension of a given country's traditions and are unique to that country. While the empirical evidence is mixed, the results of this article provide additional evidence for the importance of cultural variables in the context of a cross-national study of managerial perceptions of quality, utilizing data from the USA, Japan, Hong Kong and Taiwan. The study includes the societal context in the analysis of organizations in cross-national research, and investigates whether cultural variables and company size could explain the differences in managerial perceptions of quality. Model coefficients are estimated by multinomial logistic regression analysis. The findings indicate that both organizational and cultural variables are important in explaining the differences in managerial perceptions of quality.

The study investigates the impact of societal-level factors and organizational attributes on managerial perceptions of quality. The results are based on a cross-national study of managerial perceptions of quality utilizing data from the United States, Japan, Taiwan, Hong Kong, Singapore, and Turkey. The study draws on Cheng (1994) by including the societal context into the analysis of organizations. It has been shown that the application of such an inclusive approach improves cross-national research by focusing on society-level variables in addition to the organizational-level variables. Models' coefficients are estimated using an Ordered Logit estimation method. The findings suggest that cultural factors are significant predictors of overall perceptions towards quality exhibited by managers. Specifically, the results indicate that managers from cultures with high levels of individualism and hierarchy tend to perceive quality processes differently than do their counterparts in other cultures.

This paper investigates linkages between equity returns and transmission and persistence of volatilities between US and selected key emerging countries during 2012. The data set consists of daily returns of exchange traded funds (ETF) of Brazil, India, Indonesia, Mexico, Russia, S. Korea, Turkey and US. The results of the analysis indicate the existence of significant co-movement of returns among all ETFs, as well as transmission and persistence of volatilities of most emerging markets, with the exception of Turkey and Russia, where the volatilities were unaffected by volatilities of other markets. Turkey¡¯s volatility was only transmitted to Indonesia. The findings also indicate that the US market volatility was only transmitted to Indonesia and not to any other market, and the only market whose volatility was transmitted to the US was that of Mexico. The presence of spillovers among stock markets¡¯ return series and persistence of volatilities is indicative of efficiency (or inefficiency) in stock markets, and therefore, is useful to investors interested in diversifying their portfolios.

Countertrade is a generic term for parallel business transactions linking sales contracts with agreements to purchase goods or services. Countertrade has been viewed as an inefficient way of doing business primarily because of problems associated with such things as quality variations and increases in transaction costs. A review of the international trade literature suggests that market imperfections (shortage of convertible currency, information asymmetry that may create the so-called lemon problem and moral hazard) may provide motivations for countertrade. This article focuses on one motivation: liquidity constraint. The liquidity constraint is introduced in both goods and the factor markets in addition to the production constraint. The article compares and contrasts two strategies facing the management team of a profit-maximizing firm. The model developed shows that countertrade strategy could be superior to standard money-mediated trade strategy when the liquidity constraint is binding. Therefore, cou...

A review of the International Trade literature suggests that uncertainty caused by the lack of perfect information and/or asymmetric information provides a motivation for countertrade (Hennart, 1990; Mirus & Yeung, 1986; Yavas & Vardiabasis, 1988). After presenting the most prevalent forms and examples of countertrade, this study shows how uncertainty can lead to some of the most common forms of countertrade; counterpurchase, buyback and offset. The paper compares and contrasts two strategies facing the management team of a profit-maximizing firm. The standard neoclassical mathematical model developed and presented shows that countertrade strategy may be superior to standard money-mediated trade strategy when there is uncertainty. Therefore, countertrade (particularly, buyback, counterpurchase and offset) may be a rational response to conditions that restrict standard trade. As such, countertrade can supplement standard money-mediated trade and contribute to the growth of international business.

This article empirically investigated the invariance and discriminant validity of a six-factor leadership model across two very divergent cultures: the United States and Turkey. In conjunction with the rationalist approach to international management, it was hypothesized that the same range of six leadership styles would appear in both cultures. However, coinciding with the culturalist approach to international management, it was also hypothesized that managers would emphasize different styles in each culture. Turkish and US managers each completed the Leadership Effectiveness Questionnaire measuring degree of emphasis placed on six leadership styles. Results of the test of model invariance indicated that the six styles existed in both cultures; however, discriminant analysis demonstrated that the Autocratic and Consensus styles differentiated managers best. Turkish managers emphasized the Autocratic style to a greater extent and the Consensus style to a lesser extent than did US managers. Implications for international management are discussed. ©1998 John Wiley & Sons, Inc.

Explores the perceptions of different dimensions of quality which employees at different levels in the organization have, and investigates how these perceptions can be aligned to increase firms’ competitive position. Uses a factor analytic approach. “Communication”, “managerial involvement”, “process improvement”, “reward and recognition” and “responsiveness to both external and internal customers’ demands” are found to be significant among the quality attributes. Indicates that considerable differences exist among the employees with regard to the question of what constitutes “quality”. Also, education and teams are found to be effective in aligning these differences.

The global financial crisis is changing the landscape for mergers and acquisitions (M&A) and identifying new M&A targets that indicate a shift with significant impact to our global business practices. Even more now than ever before, companies are implementing strategies that include gaining access to new geographies. They are responding to the crisis by focusing on growth outside their home country regions, expanding their geographic diversification and investment in secondary markets. Previous M&A activity was focused in the triad of US, Europe and Japan, the world’s largest consumer markets. However, as the triad’s share of the global consumer market declines companies are looking to new consumer markets that are expanding and open for opportunity. Our research examines the increased complexity and challenges that cross-border acquisitions need to address in their effort to succeed globally in an environment of instability fueled by ongoing financial turmoil. New development in formulating innovative deal structures and defining creative terms is apparent. Looking deeper into the supply chain to identify acquisition targets is becoming attractive particularly in cross-border M&A to diversify risk, and maximize control, efficiencies and productivity. Increasing the influence of shareholders, maximizing legal arrangements and giving consideration to international political implications are all finding their way into the acquirer’s deal structure. M&A advancement in growth markets augments global business innovation and vitality in challenging economic conditions. Cross-border M&A is contributing to the change into our macro global political, social and economic integration.

This article explores the perceptions of U.S. and Asian managers with respect to different dimensions of product quality, and investigates some of the implications of these differences. Survey data obtained from both U.S. and Asian firms in the electron..

This paper demonstrates the application of generalizability theory, a statistical technique which explicitly recognizes multiple sources of measurement error, to the identification of error or inconsistency in commercial bank loan ratings. The approach allows decision makers to assess the reliability of the credit analysis process used in either international or domestic lending. A sample obtained from a large commercial bank is analyzed to determine whether. the credit analysts' evaluative skills or the rating criteria utilized contribute to variability in the score for each loan. The results indicate that differences in credit analysts' loan evaluations are an important source of error, suggesting a possible tradeoff between increased analysis costs and improved rating consistency.

The purpose of the present investigation is to examine the perceptions of managerial practices regarding issues surrounding strategic sourcing (SS) across different industries. The two industries examined in this study are the manufacturing and the service industries. Although arguably these industries are different in terms of industry practices and culture there has been a trend toward convergence of managerial practices. Major items such as VMI, education, risk assessment, and social responsibility appear to have the same importance in both the manufacturing and service industry. The findings also indicate some support for the divergence view. Issues such as diversity, collaboration in reducing costs, and communication with upper management, exhibit some differences in opinion among manufacturing executives and service oriented executives. These differences may be attributed to the services industry still being in its infancy stage in the sourcing arena. This can have implications for both industries as they are becoming more hybrid in nature and at times becomes challenging to distinguish between a good or a service.

This study explores the perceptions of American and Turkish managers with respect to different dimensions of product quality. Survey data on perceptions of product quality were obtained from managers in both countries. Analyses using structural equation modeling and mean comparison tests were performed to evaluate five research hypotheses. Results provided partial support for the hypothesized differences in quality perceptions. The data indicated that although the conceptualization of quality did not differ across the two samples, there were some differences in terms of importance assigned to various aspects of quality. In particular, Turkish managers rated aspects pertaining to communication and shared definition, quality execution, and quality control higher than American managers. Implications for the rationalist and culturalist approaches to international management are discussed.

This paper studies the effect of both economic and demographic factors on restaurant franchising (RF) in the Western United States. The study utilizes regression analysis of pooled cross-section (6 states) and time series (10 years) data. It is found that among the economic factors, the market size, measured by per capita gross domestic product, is the most significant. Also found important is the cost of raising capital, which is measured by the real rate of interest. On the demographic side, the level of urbanization is found to be positively related to restaurant franchising.