Does Country Context Distance Determine Subsidiary Decision-making Autonomy? Theory and Evidence from European Transition Economies
Gjalt de Jong, Vo. van Dut, Björn Jindra, Philipp Marek
International Business Review,
No. 5,
2015
Abstract
We studied an underrepresented area in the international business (IB) literature: the effect of country context distance on the distribution of decision-making autonomy across headquarters and foreign affiliates. Foreign affiliates directly contribute to the competitive advantages of multinational enterprises, highlighting the importance of such intra-firm collaboration. The division of decision-making autonomy is a core issue in the management of headquarters–subsidiary relationships. The main contribution of our paper is that we confront two valid theoretical frameworks – business network theory and agency theory – that offer contradictory hypotheses with respect to the division of decision-making autonomy. Our study is among the first to examine this dilemma with a unique dataset from five Central and Eastern European transition countries. The empirical results provide convincing support for our approach to the study of subsidiary decision-making autonomy.
Read article
Assessing European Competitiveness: the Contribution of CompNet Research
Filippo di Mauro, Maddalena Ronchi
CompNet Report,
June
2015
Abstract
Restoring competitiveness is broadly acknowledged as the critical building block for achieving sustainable growth, but defining competitiveness, both in terms of tools as well as objectives, is a matter of debate. The Competitiveness Research Network (CompNet) adopts a pragmatic approach, defining “a competitive economy [as] one in which institutional and macroeconomic conditions allow productive firms to thrive… [thus supporting] the expansion of employment, investment and trade” (Draghi, 2012). This approach requires handling (i) firm-level features, most notably productivity, (ii) macroeconomic factors, and (iii) cross-border aspects related to the operation of global value chains (GVCs). While at first concentrating solely on the original mandate of explaining export competitiveness, the Network has extended the scope of its research to broader aspects related to productivity drivers.
Read article
Does Country Context Distance Determine Subsidiary Decision-making Autonomy? Theory and Evidence from European Transition Economies
Gjalt de Jong, Vo. van Dut, Björn Jindra, Philipp Marek
International Business Review,
2015
Abstract
We studied an underrepresented area in the international business (IB) literature: the effect of country context distance on the distribution of decision-making autonomy across headquarters and foreign affiliates. Foreign affiliates directly contribute to the competitive advantages of multinational enterprises, highlighting the importance of such intra-firm collaboration. The division of decision-making autonomy is a core issue in the management of headquarters–subsidiary relationships. The main contribution of our paper is that we confront two valid theoretical frameworks – business network theory and agency theory – that offer contradictory hypotheses with respect to the division of decision-making autonomy. Our study is among the first to examine this dilemma with a unique dataset from five Central and Eastern European transition countries. The empirical results provide convincing support for our approach to the study of subsidiary decision-making autonomy.
Read article
Coordination between Municipalities and Local Non-Municipal Public Units (NMPUs) for Supporting Urban Economic Development: Theoretical Analysis and Empirical Evidence for the Example of Universities in Germany
Martin T. W. Rosenfeld, J. Hinz
Koordination raumwirksamer Politik: Mehr Effizienz und Wirksamkeit von Politik durch abgestimmte Arbeitsteilung,
2015
Abstract
In zahlreichen europäischen Städten gibt es Versuche, der lokalen Wirtschaftsentwicklung eine neue Richtung zu geben, u.a. durch die Ansiedlung von Nicht-Kommunalen Öffentlichen Einrichtungen (NKOE), z.B. Bundesagenturen, Gerichte, Rechnungshöfe, Landesmuseen oder Universitäten. Allerdings liegen die Kompetenzen für solche NKOE nicht bei den Kommunen, sondern zumeist bei den höheren staatlichen Ebenen. Deshalb haben die Kommunen keinen unmittelbaren Einfluss auf die Ansiedlung von NKOE. Sobald aber eine entsprechende Entscheidung gefallen ist, können die Kommunen die weitere Entwicklung von NKOE begünstigen. Im Beitrag wird zunächst eine Kategorisierung von NKOE durchgeführt, und zwar sowohl gemäß der Bedeutung von NKOE für die lokale Wirtschaftsentwicklung als auch hinsichtlich des Einflusses lokaler Maßnahmen auf die Leistungsfähigkeit von NKOE. Es wird gezeigt, dass Universitäten zu jener Kategorie von NKOE zählen, für die eine Koordination der eigenen Aktivitäten mit jenen der Kommunen besonders wichtig sein dürfte. Die Effekte von Universitäten für die lokale Wirtschaftsentwicklung wurden bereits vielfach diskutiert. Die Fähigkeit der Universitäten, das für ihre Effektivität erforderliche Humankapital zu attrahieren, hängt von verschiedenen lokalen Faktoren ab. Folglich gibt es eine reziproke Beziehung zwischen Kommunen und Universitäten. Eine Koordinierung der jeweiligen Aktivitäten wäre deshalb für beide Seiten von Vorteil. Dies gilt z.B. für den Bereich der Informationspolitik. Eine Kommune sollte nach innen wie nach außen die Vorzüge der örtlichen Universitäten kommunizieren; umgekehrt sollte auch eine Universität die Stärken des lokalen Umfelds deutlich machen. Da für den Bereich der Informationspolitik empirische Daten leicht zugänglich sind, konzentriert sich der empirische Teil des Beitrags auf eine empirische Untersuchung der Internetpräsentationen ausgewählter Städte und Universitäten. Es zeigt sich, dass in den meisten betrachteten Städten die Koordinierung zwischen Kommunen und Universitäten zu wünschen übrig lässt. Eine Verbesserung dieser Situation ließe sich z.B. durch die Einführung
finanzieller Anreizmechanismen erreichen.
Read article
Drivers of the Spatial Emergence and Clustering of the Photovoltaic Industry in Germany
M. Breul, T. Broekel, Matthias Brachert
Zeitschrift für Wirtschaftsgeographie,
No. 3,
2015
Abstract
The drivers of the spatial emergence and clustering of the photovoltaic industry in Germany. Following the relatedness literature, we explore to what extent related industries influenced the regional emergence of the photovoltaic (PV) industry. In addition, we shed light on factors explaining selective processes of clustering. We particularly argue that generic resources and resources of related activities have been crucial for the regional concentration in early phases of the industry life cycle. With increasing maturity, industry-specific resources became more important. Based on a unique dataset containing population dynamics of the German PV industry, the hypotheses are tested empirically. Our results partially confirm the assumed beneficial effects of related industries for the emergence of the PV industry. Moreover, we observe changes in the relative importance of factors supporting regional concentration, with industry-specific resources becoming dominant as the industry matures.
Read article
The Dynamics of Bank Spreads and Financial Structure
Reint E. Gropp, Christoffer Kok, J.-D. Lichtenberger
Quarterly Journal of Finance,
No. 4,
2014
Abstract
This paper investigates the effect of within banking sector competition and competition from financial markets on the dynamics of the transmission from monetary policy rates to retail bank interest rates in the euro area. We use a new dataset that permits analysis for disaggregated bank products. Using a difference-in-difference approach, we test whether development of financial markets and financial innovation speed up the pass through. We find that more developed markets for equity and corporate bonds result in a faster pass-through for those retail bank products directly competing with these markets. More developed markets for securitized assets and for interest rate derivatives also speed up the transmission. Further, we find relatively strong effects of competition within the banking sector across two different measures of competition. Overall, the evidence supports the idea that developed financial markets and competitive banking systems increase the effectiveness of monetary policy.
Read article
Executive Compensation Structure and Credit Spreads
Stefano Colonnello, Giuliano Curatola, Ngoc Giang Hoang
Abstract
We develop a model of managerial compensation structure and asset risk choice. The model provides predictions about how inside debt features affect the relation between credit spreads and compensation components. First, inside debt reduces credit spreads only if it is unsecured. Second, inside debt exerts important indirect effects on the role of equity incentives: When inside debt is large and unsecured, equity incentives increase credit spreads; When inside debt is small or secured, this effect is weakened or reversed. We test our model on a sample of U.S. public firms with traded CDS contracts, finding evidence supportive of our predictions. To alleviate endogeneity concerns, we also show that our results are robust to using an instrumental variable approach.
Read article
The Impact of Local Factors on the Scope of Benefits from Public Investment: The Case of Tourism Infrastructure in Saxon Municipalities
Martin T. W. Rosenfeld, Albrecht Kauffmann
Urban Research & Practice,
No. 3,
2014
Abstract
Following the transition from socialist central planning economies to market economies in all of the former socialist countries, many regions have had to cope with severe structural changes and economic development problems. To overcome these problems, local governments have tried to invest in new public infrastructure to support the development of new industries. This paper looks at infrastructure that supports tourist activities and argues that the impact of infrastructure generally depends on certain local factors which differ between municipalities. One important factor is whether the local population possesses the relevant complementary factors, in particular the right ‘soft skills’.
Read article
