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This study explores the intricate relationship between Foreign Direct Investment (FDI) and spatial knowledge within the European Union (EU) subnational regions. While existing research has examined this relationship, it often oversimplifies the complexities involved. This study aims to fill this gap by dissecting various types of inward FDI based on sectors, investor origins, and spatial knowledge forms. Using extensive data spanning over 13 years, the study employs negative binomial regression analysis to investigate 223 EU subnational regions. The findings reveal that localized specialization, urbanization, and population density play significant roles in attracting FDI, particularly in manufacturing and logistics. Conversely, capital cities tend to deter manufacturing-related FDI due to resource constraints. Moreover, the study identifies the importance of agglomeration economies, measured by urbanization, in driving FDI across different models given the knowledge spillovers and technological externalities found in densely populated areas. In light of these findings, tailored policies that account for diverse factors – such as regional agglomeration economies and strategic value chain activities – are essential. Recognizing the complexity of multinational business activities is crucial for designing effective policies aimed at reducing regional disparities within the EU. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to explore the importance of host country networks and organisation of production in the context of international technology transfer that accompanies foreign direct investment (FDI). Design/methodology/approach – The empirical analysis is based on unbalanced panel data covering Japanese firms active in two-digit manufacturing sectors over a seven-year period. Given the self-selection problem affecting past sectoral-level studies, using firm-level panel data is a prerequisite to provide robust empirical evidence. Findings – While Japan is thought of as being a technologically advanced country, the results show that vertical productivity spillovers from FDI occur in Japan, but they are sensitive to technological differences between domestic firms and the idiosyncratic Japanese institutional network. FDI in vertically organised keiretsu sectors generates inter-industry spillovers through backward and forward linkages, while FDI within sectors linked to vertical keiretsu activities adversely affects domestic productivity. Overall, our results suggest that the role of vertical keiretsu is more prevalent than that of horizontal keiretsu. Originality/value – Japan’s industrial landscape has been dominated by institutional clusters or networks of inter-firm organisations through reciprocated, direct and indirect ties. However, interactions between inward investors and such institutionalised networks in the host economy are seldom explored. The role and characteristics of local business groups, in the form of keiretsu networks, have been investigated to determine the scale and scope of spillovers from inward FDI to Japanese establishments. This conceptualisation depends on the institutional mechanism and the market structure through which host economies absorb and exploit FDI. [ABSTRACT FROM AUTHOR]

ABSTRACT Manuscript Type: Empirical Research Question/Issue: To what extent can group faultlines and their potential value-destroying effects be detected on corporate boards? Task-related attributes of the type of directorship, education, board tenure, and financial background of board members are considered as directors' characteristics that give rise to the faultline phenomenon. The impact of task-related faultlines on firm performance as well as the moderating effects of busy boards, Chief Executive Officer (CEO) tenure, executive directors' (EDs) compensation structure, and the average non-executive directors' (NEDs) involvement in board committees are examined. Research Findings/Insights: Using a panel of FTSE 350 companies from 1999 to 2008, we find a strong negative effect of task-related faultlines on firm performance. Further exploration of the moderating effects demonstrates that the condition of a busy board and CEO tenure exacerbate the negative effects of faultlines. At the same time, the executive pay contingency is found to have a remedying effect on boardroom cohesiveness, whereas the involvement of NEDs in board committee work is not likely to make the adverse effects of board faultlines less pronounced. Theoretical/Academic Implications: Based on the arguments of social identity theory, this study shows that task-related faultlines on corporate boards have strong negative value-creating implications. The positive moderating impact of the executive compensation structure renders support to agency theory predictions about executive incentive alignment. This work also underlines the usefulness of the concept of faultlines in the corporate governance literature, because unitary boards, where NEDs and EDs share board responsibility, exhibit pre-existing factions, similar to top management teams of family-controlled firms and teams managing international joint-ventures. Practitioner/Policy Implications: This research points to the importance of a careful selection process of directors by nomination committees. It also underlines the role for active leadership on boards, who should be aware of available strategies to ameliorate the negative consequences of board schisms, such as accentuating superordinate board identity and/ or informal meetings. [ABSTRACT FROM AUTHOR]