VOLUME 7, NUMBER 1
FDI, GLOBALISATION AND DEVELOPMENT: SOME IMPLICATIONS FOR KOREAN FIRMS AND KOREAN POLICY MAKERS
John H. Dunning
The paper first summarises some of the economic and social characteristics of the evolving world scenario, and their relevance for globalization, economic development and foreign direct investment. It then goes on to identify and discuss the main components of the competitive strengths and weaknesses of the Korean economy and of Korean firms; and finally examines the implications of these findings for outward and inward foreign direct investment policy.
THE IMPACT OF BUSINESS-GOVERNMENT RELATIONSHIP ON LOCATION CHOICE BY KOREAN FIRMS IN CHINA: A COMPARATIVE CASE STUDY
Sung Yue Wang and Chung-Sok Suh
Since China embarked on market-oriented reform in 1979, various kinds of economic zones have been set up to attract foreign direct investment (FDI). These economic zones often compete against each other for investment, offering better policies and creating more incentives. In most local economic zones, red tape is significantly reduced because of the establishment of local zone authorities with consolidated power to oversee FDI-related matters. Foreign invested enterprises (FIEs) need to deal with much less number of government agencies in these zones than outside these zones. But on the other hand, relationship with these zone authorities becomes crucial for FIEs targeting or operating in these zones. Prior research shows FIEs in China often make their location choices based on the preferential policies offered by different regions. But a neglected factor is that how the businessgovernment relationship might affect foreign firms’ location choice between these zones within the same locality. This paper studies the impact of the bilateral FIE-zone authority relationship on FIEs’ location decisions. Drawing upon location literature and using data from case studies, the paper provides evidence on the impact of business-government relationship on two levels of location choice by Korean firms in China and advances propositions for future research.
A STUDY OF RESOURCE COMPETITIVENESS IN HIGH TECHNOLOGY FIRMS
Yanni Yan, Daniel Ding, and Choo Shin Tseng
The link between resource competitiveness and performance in hi-tech firms is examined from the perspective of resource-based theory and strategic management. Departing from previous research, it is argued that the linkage between firm-specific advantages and performance varies according to the underlying control variables of corporate culture, organizational formalization and business targeting. Data obtained from 339 hi-tech firms in China indicate that achieving resource competitiveness requires rapidly adopting technology changes and speedy marketing adaptation. A firm’s performance can to a significant extent be attributed to its configuration of technology and market-based resources and capabilities.
CULTURAL CHANGE IN THE UNITED STATES, CANADA AND MEXICO
Steve Jenner, Brent MacNab, Richard Brislin and Reg Worthley
A great number of studies have been reported based on Hofstede’s seminal work on national culture(1980). Our findings for a very recent sample of people attending executive and MBA programs found no significant differences in Power Distance between the United States (U.S.), Mexico and Canada. Our results suggest that caution should be taken in automatically assuming cultural parity between the U.S. and Canada and that more traditional culture positions between the NAFTA member nations may be more subject to change than stable through phenomena like crossvergence. Our findings suggest that Hofstede’s (1980) study provides one useful framework; however, the relative positions of national culture are not necessarily applicable to present day.
AN EMPIRICAL ASSESSMENT OF CAPM, MARKET MODEL AND APT: EVIDENCE FROM THE GREEK STOCK MARKET
Petros Messis, George Emmanuel Iatridis and George Blanas
This paper uses three models to estimate the financial performance of 33 securities traded on the Athens Stock Exchange (ASE). To estimate the expected returns, this study uses the Capital Asset Pricing Model (CAPM), the Market Model, and the Arbitrage Pricing Theory (APT). There is significant evidence that the APT performs better than the CAPM and the Market Model, while the differences between the CAPM and the Market Model appear not to be significant. The three models are tested for a five-year period from 2000 to 2005. Total risk is significantly negatively related to returns during down markets, while this relationship is positive but not significant in up markets. There is evidence that, apart from the market risk, other risk factors that influence the stock returns are the inflation rate and the exchange rate.
INEQUALITY IN GLOBALIZATION: AN EXTENSION OF THE GINI INDEX FROM THE PERSPECTIVE OF NATIONAL COMPETITIVENESS
This article studies the unequal distribution of the benefits a country enjoys from participating in globalization from the perspective of international business. As globalization is a set of mutually beneficial interactions between countries and MNCs to enhance competitiveness of each participant, benefits countries enjoy from globalization should be understood in terms of national competitiveness. In this light, this article applies the generalized double diamond (GDD) model to the analysis of national competitiveness and introduces the globalization inequality index (GII) as an extension of the Gini index to measure inequality in globalization. Statistical analyses of GIIs show that benefits from globalization are unequally distributed over countries and suggest a need for the strategic interpretation of the role of a location in the era of globalization.