focalinterest.net

Tag: Management & Organizations

  • Price level, interest rates, and regulation were linked to FDI patterns

    What the study found

    The study found that price level, interest rate spread, and regulatory quality were related to foreign direct investment (FDI) in the BRICS and GCC country groups, but the patterns differed across groups and between the short run and the long run. The authors report positive and negative associations in different cases, depending on the estimator and region.

    Why the authors say this matters

    The authors conclude that the findings improve understanding of how large interest rate spreads and high price levels can shift foreign investment amounts, which they describe as important for balanced economic growth. They also say countries should address institutional conditions and regulatory frameworks before trying to stimulate FDI.

    What the researchers tested

    The researchers carried out a comparative panel-data analysis of four BRICS countries and four GCC countries over 2005 to 2023, using 76 observations in each group. They examined the effects of interest rate spread, regulatory quality, and price level on FDI, and used second-generation panel methods because of cross-sectional dependence, including the CIPS unit root test, Westerlund cointegration with bootstrap, and long-run estimators such as PMG and CCEMG.

    What worked and what didn't

    In BRICS, the PMG estimator showed a significantly positive short-run relationship between price level and FDI. In the GCC, the PMG estimator showed a significantly positive long-run relationship between interest rate spread and FDI, and significantly negative long-run relationships between price level and FDI and between regulatory quality and FDI. As a robustness check, CCEMG also showed a significantly positive long-run relationship between price level and FDI and a significantly negative long-run relationship between regulatory quality and FDI in BRICS, while the GCC CCEMG results were consistent with PMG for regulatory quality, interest rate spread, and price level.

    What to keep in mind

    The abstract does not provide the full country list beyond noting that India, the UAE, and Saudi Arabia were excluded because of unavailable data. It also does not describe the size or direction of effects in numerical detail, only whether relationships were statistically significant and positive or negative.

    • The study examined FDI in four BRICS countries and four GCC countries from 2005 to 2023.
    • Price level was significantly positively related to FDI in the BRICS short run in the PMG results.
    • In the GCC, interest rate spread was significantly positively related to FDI in the long run, while price level and regulatory quality were significantly negatively related to FDI in the PMG results.
    • Robustness checks with CCEMG showed a positive long-run price level–FDI link and a negative long-run regulatory quality–FDI link in BRICS.
    • The authors say countries should address institutional conditions and regulatory frameworks before trying to stimulate FDI.
  • Trumpism politicizes international business and challenges prior assumptions

    Trumpism politicizes international business and challenges prior assumptions

    What the study found

    The paper argues that Trumpism and economic nationalism are reshaping the political context of international business. It says that legitimacy and acceptable forms of cross-border economic activity are increasingly constructed and contested through politicization.

    Why the authors say this matters

    The authors conclude that international business scholarship should treat politicization as central rather than viewing politics only as a background constraint. They also suggest that managers and policymakers need to attend to the symbolic and political dimensions of policy and strategy, not only regulatory and economic ones.

    What the researchers tested

    This is a conceptual viewpoint paper, not an empirical study. It draws on international business, international relations, political economy, and political sociology, and uses illustrative examples from Trump administration policies and related contexts.

    What worked and what didn't

    The paper reports that trade policy, foreign direct investment, and multinational enterprise operations are increasingly linked to narratives of sovereignty, national identity, and geopolitical rivalry. It also says multinational enterprises are not only adapting to these environments but helping shape them through strategic, discursive, and non-market actions.

    What to keep in mind

    The abstract describes the paper as a viewpoint with illustrative examples, so it does not present a single empirical test or dataset. The limitations section says future research is needed on how politicization unfolds across institutional contexts, how firms use discursive and non-market strategies, and how geopolitical narratives affect investment decisions and legitimacy assessments.

    • The paper argues that Trumpism and economic nationalism are changing the political setting of international business.
    • It says legitimacy and acceptable cross-border activity are increasingly shaped by politicization.
    • Multinational enterprises are described as both adapting to and shaping politicized business environments.
    • Trade policy, foreign direct investment, and firm operations are linked to sovereignty, national identity, and geopolitical rivalry.
    • The paper is conceptual and uses examples from Trump administration policies and related contexts.

  • FDI showed mixed links to growth in Poland, Ukraine, and Vietnam

    What the study found

    The study found that foreign direct investment (FDI, investment from businesses or entities in one country into another country) was associated with long-run economic expansion across Poland, Ukraine, and Vietnam. In the short run, the FDI-growth relationship differed by country and was not consistent.

    Why the authors say this matters

    The authors conclude that FDI may support growth through infrastructure development, job creation, and technology transfer, but they also note risks such as economic dependence, regional concentration of investment, and uneven development. They emphasize that stronger institutions, better investment quality, and reduced regional disparities may help make growth more inclusive and resilient.

    What the researchers tested

    The researchers used a mixed-method approach that combined quantitative and qualitative comparative analysis. They analyzed country-level annual time series from 2004 to 2024 for Poland, Ukraine, and Vietnam, examining how FDI was associated with GDP growth and related growth channels.

    What worked and what didn't

    The quantitative results indicated that FDI co-moved with long-run economic expansion in all three cases. However, the short-run relationship varied: Poland and Vietnam showed mixed correlations between FDI inflows and GDP growth, and Ukraine’s pattern was destabilized by conflict conditions, though a positive association appeared in non-outlier periods.

    What to keep in mind

    The abstract notes that the short-run relationship was sensitive to shocks and model specification. It also indicates that the findings are based on three country cases over 2004 to 2024, and that qualitative evidence was used alongside the quantitative analysis.

    • FDI was associated with long-run economic expansion in Poland, Ukraine, and Vietnam.
    • Short-run FDI-growth links differed by country and were sensitive to shocks and model choice.
    • Poland and Vietnam showed mixed correlations between FDI inflows and GDP growth.
    • Ukraine’s FDI-growth relationship was destabilized by conflict conditions.
    • The authors highlight institutions, sectoral composition, and absorptive capacity as relevant to whether FDI supports growth.

  • Government effectiveness is linked to stronger logistics performance

    What the study found

    The study found that government effectiveness is a strong positive correlate of national logistics performance. The authors also report that this relationship remains stable across several statistical approaches.

    Why the authors say this matters

    The authors conclude that strengthening state capability may produce meaningful gains in logistics performance beyond income and trade levels. They also state that state capability is a critical enabler of supply chain reliability and resilience in international trade.

    What the researchers tested

    The researchers analyzed a biennial panel of 138 countries from 2007 to 2018. They linked the World Bank’s Logistics Performance Index (LPI, a measure of how well a country’s logistics system works) to macroeconomic, financial, and institutional factors, and tested the data with generalized estimating equations, fixed-effects models with Driscoll–Kraay errors, and an equally spaced AR(1) robustness subset.

    What worked and what didn't

    Government effectiveness was reported as strongly and consistently positive across the main models, including generalized estimating equations with year effects. Trade openness, control of corruption, human capital, employment, remittances, and domestic credit were included as controls and retained expected signs. The abstract does not report any predictors that clearly failed or any negative main findings.

    What to keep in mind

    The summary does not describe detailed effect sizes, model coefficients, or country-specific exceptions. Limitations are not described in the available abstract.

    • Government effectiveness was the key predictor of higher logistics performance.
    • The analysis covered 138 countries over 2007–2018.
    • The relationship remained positive across generalized estimating equations, fixed-effects models, and a robustness subset.
    • Control variables such as trade openness and human capital were included and had expected signs.
    • The authors state that state capability may support supply chain reliability and resilience in international trade.

  • Firm characteristics linked to divestment from Russia

    What the study found

    The study found that several firm characteristics were associated with a higher likelihood of divesting from Russia. These included larger firm size, higher sales in Russia, higher cash reserves, higher leverage, high Environmental, Social, and Governance (ESG, a score reflecting environmental, social, and governance performance) scores, and, for U.S. firms only, substantial advertising expenditures.

    Why the authors say this matters

    The authors conclude that their causal evidence is economically important. They suggest that the observed elasticities show meaningful changes in these firm characteristics are linked to changes in the probability of exiting the Russian market.

    What the researchers tested

    The researchers examined determinants of corporate divestment from Russia using a unique dataset of divestment decisions from firms operating in Russia. They analyzed firm size, Russian sales, cash, leverage, ESG score, and advertising expenditures.

    What worked and what didn't

    The study reports that larger firms, firms with higher Russian sales, higher cash reserves, and higher leverage were more likely to divest. Firms with high ESG scores were also more likely to exit, and advertising expenditures were associated with divestment for U.S. firms only. The abstract reports elasticities of 2.413 for firm size, 0.468 for Russian sales, 0.352 for cash, 0.477 for leverage, and 0.962 for Social ESG score.

    What to keep in mind

    The abstract does not describe the full study design, sample size, or specific limitations. The advertising result is stated only for U.S. firms, so it is not presented as a general finding for all firms.

    • Larger firms were more likely to divest from Russia.
    • Higher sales in Russia were linked to a greater chance of exiting.
    • Higher cash reserves and higher leverage were associated with divestment.
    • High ESG scores were associated with a greater propensity to exit the Russian market.
    • Advertising expenditures were associated with divestment only for U.S. firms.

  • Equity concentration reduced firm value in China’s high-tech manufacturing sector

    What the study found

    The study found that higher equity concentration was associated with lower enterprise value in China’s high-tech manufacturing sector. The negative relationship was weaker during the COVID-19 pandemic period, and it was strongest in capital-intensive subsectors such as aerospace and electronic equipment manufacturing.

    Why the authors say this matters

    The authors conclude that governance mechanisms and innovation dynamics can interact differently under major external shocks such as COVID-19. They also state that policymakers and corporate leaders should account for industry-specific attributes and macroeconomic conditions when designing ownership structures.

    What the researchers tested

    The researchers examined listed high-tech manufacturing firms in China from 2019 to 2023 using a balanced panel of 642 firms. They used fixed-effects regression models and instrumental variable (IV) estimation to address endogeneity, and they also tested whether research and development (R&D) investment mediated the relationship between equity concentration and firm value.

    What worked and what didn't

    After correcting for endogeneity, equity concentration had a significantly larger negative effect on firm value than ordinary least squares (OLS) estimates suggested, with an IV estimate of β = −13.105 (p < 0.01). Traditional mediation analysis suggested that R&D investment partially explained 18–23% of the total effect, but IV-based mediation tests found statistically insignificant indirect effects.

    What to keep in mind

    The abstract says the mediation results are sensitive to endogeneity correction. It also notes that the negative association varies by industry segment and was attenuated during the pandemic; other limitations are not described in the available summary.

    • Higher equity concentration was linked to lower firm value in China’s high-tech manufacturing sector.
    • The negative effect was weaker during the COVID-19 period.
    • The effect was strongest in capital-intensive subsectors, including aerospace and electronic equipment manufacturing.
    • R&D investment appeared to mediate 18–23% of the total effect in traditional mediation analysis.
    • IV-based mediation tests found no statistically significant indirect effect.
    • OLS estimates were described as downward biased compared with IV estimates.

  • ECT dosing practices vary, but efficacy remains strong

    What the study found

    The authors describe substantial variability in seizure adequacy and later charge adjustments during electroconvulsive therapy, or ECT, across five Danish adult psychiatric departments. They also state that current dosing practices likely help prevent inadequate dosing and are associated with the reported 50% to 70% reductions in Hamilton Depression Rating Scale scores, a standard measure of depression severity.

    Why the authors say this matters

    The authors suggest that efforts to reduce cognitive side effects should not weaken ECT’s effectiveness. They also argue that more technical and physiological rigor, including modeling of electric fields, individualized dosing, and improved targeting, is justified rather than being treated as misplaced perfectionism.

    What the researchers tested

    The article discusses Jorgensen et al.’s assessment of technical and clinical ECT variables using electronic health records from five Danish adult psychiatric departments. The departments followed national guidelines using a Thymatron System IV, bitemporal electrode placement at initiation, age-based dosing, and dose escalation when seizure adequacy was insufficient.

    What worked and what didn't

    The authors say bitemporal electrode placement, 900 mA current, brief pulse width, and the '2X dose' program likely contributed to the observed depression-score reductions and helped avoid underdosing. They also say these parameters do not protect against excessive dosing, and that the investigation lacked reliably recorded cognitive data.

    What to keep in mind

    The abstract says cognitive outcomes were not reliably recorded, so the study cannot address cognitive side effects well. It also notes that current practice still relies on qualitative seizure judgments, that the field lacks definitive seizure metrics and a precise anatomic or network target for optimal electrode placement, and that some newer approaches are promising but not yet ready for widespread clinical adoption.

    • Five Danish adult psychiatric departments were reviewed using electronic health records.
    • The departments followed national ECT guidelines with bitemporal initiation and age-based dosing.
    • The authors report variability in seizure adequacy and charge adjustments across the ECT course.
    • They say the dosing approach likely contributed to 50% to 70% reductions in Hamilton Depression Rating Scale scores.
    • The abstract notes that cognitive data were not reliably recorded.
    • The authors describe newer individualized and model-based ECT approaches as promising but not yet ready for widespread use.

  • Colonial ties and African cultural proximity shape outward investment patterns

    What the study found

    The study found that colonial ties and African cultural proximity are positively associated with both greenfield investment and cross-border mergers and acquisitions in outward foreign direct investment from Arab Maghreb Union countries. It also found that Arab cultural proximity and host-country market size are associated only with greenfield investments.

    Why the authors say this matters

    The authors conclude that the findings integrate cultural proximity and historical ties into international business theories and provide new insights into outward investment behavior of emerging-market multinationals. They also suggest that shared history and cultural ties may be relevant for attracting investment from Arab Maghreb Union countries, with different strategies needed for greenfield investments and cross-border mergers and acquisitions.

    What the researchers tested

    The researchers examined the impact of colonial ties, cultural proximity, and host-country market size on outward foreign direct investment from Arab Maghreb Union countries. They used a Generalized Method of Moments analysis on a panel dataset of 556 transactions from 2004 to 2022, measured by the number of deals, and compared greenfield investments with cross-border mergers and acquisitions.

    What worked and what didn't

    Colonial ties and African cultural proximity were positively associated with both types of investment. Arab cultural proximity and host-country market size were associated only with greenfield investments, not with cross-border mergers and acquisitions. The estimated coefficients were larger for greenfield investments than for cross-border mergers and acquisitions, and this pattern held across baseline estimations and robustness checks.

    What to keep in mind

    The summary does not describe limits beyond the study's focus on Arab Maghreb Union outward foreign direct investment and the 2004 to 2022 period. It also reports associations from a transaction-based panel analysis, so the abstract does not state causal conclusions.

    • Colonial ties were the strongest factor reported in the abstract.
    • African cultural proximity was positively associated with both greenfield investments and cross-border mergers and acquisitions.
    • Arab cultural proximity and host-country market size were linked only to greenfield investments.
    • The reported effects were larger for greenfield investments than for cross-border mergers and acquisitions.
    • The pattern was consistent across baseline estimations and robustness checks.

  • Review discusses ending shareholder primacy in corporate policy

    What the study found

    The article reviews Lenore Palladino’s book "Good Company: Economic Policy after Shareholder Primacy." The abstract says the book explores how ending shareholder primacy, meaning the idea that companies should prioritize shareholders above other groups, and reorienting corporate decision-making toward productivity would work in practice.

    Why the authors say this matters

    The study suggests that understanding how corporate decision-making would change could help clarify the rights and responsibilities of board members, employees, managers, shareholders, customers, and the broader public. The findings indicate that the book focuses on how these groups would operate together in pursuit of economic innovation.

    What the researchers tested

    Ryan Bubb, of the University of Southern California, reviews Lenore Palladino’s book. The abstract does not describe an original empirical test; it summarizes the book’s argument as presented in the Econlit abstract.

    What worked and what didn't

    The available abstract states that the book explores how ending shareholder primacy and shifting corporate decision-making toward productivity would work in practice. It does not report specific outcomes, comparisons, or evidence of what worked better or worse.

    What to keep in mind

    This summary is based only on the title and the provided abstract, which are brief. The abstract does not describe methods, data, results, or limitations in detail.

    • The article reviews Lenore Palladino’s book "Good Company: Economic Policy after Shareholder Primacy."
    • The book examines ending shareholder primacy and shifting corporate decisions toward productivity.
    • It focuses on how board members, employees, managers, shareholders, customers, and the broader public would understand their roles.
    • The abstract says the book considers how this arrangement would work in practice.
    • No empirical results or detailed limitations are given in the provided abstract.

  • Higher-quality disclosure is linked to more contract wins in competitive tenders

    What the study found

    The study found that firms with more extensive and higher-quality financial reporting were more likely to win government contracts in competitive Japanese tenders. It also found no such relationship in non-competitive tenders, and political connections appeared to weaken the disclosure–procurement link.

    Why the authors say this matters

    The authors conclude that formal transparency can matter for public procurement under institutional constraints. They suggest that improving financial reporting transparency may help fairness and efficiency in procurement by reducing agency costs, and that political influence creates risks that may call for regulatory reform.

    What the researchers tested

    The researchers examined how financial reporting quantity and quality related to government procurement outcomes in Japan. Using procurement data from 2020 and 2021, they analyzed 4,955 firm-years of listed companies winning 6,870 central government tenders and used probit, ordinary least squares, and tobit regressions, with instrumental variables and propensity score matching as robustness checks.

    What worked and what didn't

    Greater reporting quantity and higher-quality reporting were associated with a higher likelihood of winning contracts in competitive tenders. The study did not find this effect in non-competitive tenders. Political connections weakened the disclosure–procurement relationship, which the authors describe as a substitution effect.

    What to keep in mind

    The summary provided does not describe detailed limitations beyond the study's focus on Japanese central government tenders in 2020 and 2021. The results are specific to the data, methods, and institutional setting described in the abstract.

    • Firms with greater and higher-quality financial reporting were more likely to win competitive government tenders.
    • No disclosure effect was found for non-competitive tenders.
    • Political connections weakened the link between disclosure and procurement success.
    • The study used Japanese central government tender data from 2020 and 2021.
    • Robustness checks included instrumental variables and propensity score matching.