Corporate governance in emerging markets: A survey

This paper revisits and extends our earlier work (in 2005) in the pages of this journal. We argue that there is a need for more fine-grained understanding of the country context along two dimensions: (1) institutional development and (2) infrastructure and factor market development. Specifically, we propose an enriched typology of emerging economies with a focus on mid-range emerging economies, which are positioned between traditional emerging economies and newly developed economies. Then we examine new multinationals from these mid-range emerging economies that have internationalized both regionally and globally. We outline directions for further research based on this typology in terms of (1) government influence, (2) resource orchestration, (3) market entry, and (4) corporate governance regarding the internationalization strategy of these emerging multinationals from mid-range economies.

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Emerging multinationals from mid-range economies: the influence of institutions and factor markets

We use agency theory to examine the influence of ownership structure on the relationship between financial slack and R&D investments, highlighting how that relationship might differ depending on the identity of the owners, and their potentially different interests. In doing so, we extend the scope of agency theory by examining the principal-principal conflicts of interests that may exist among different types of owners. Using a sample of Korean manufacturing firms in R&D-intensive industries between 1998 and 2003, we find that financial slack has an inverted U-shaped relationship with R&D investments. Furthermore, that relationship varies depending on the presence of different types of owners. Family ownership positively moderates the relationship between financial slack and R&D investments, whereas domestic institutional investors and foreign investors negatively moderate that relationship. Our results show that distinguishing among different types of owners is instrumental in enhancing our understanding of the nature of the relationship between financial slack and R&D investments.

Ownership Structure and the Relationship Between Financial Slack and R&D Investments: Evidence from Korean Firms

Ownership and firm innovation in a transition economy: evidence from China

We review and integrate a wide range of literature that has examined the strategies by which organizations navigate institutionally diverse settings and capture rents outside of the marketplace. We synthesize this body of research under the umbrella term institutional strategies, which we define as the comprehensive set of plans and actions directed at leveraging and shaping socio-political and cultural institutions to obtain or retain competitive advantage. Our review of institutional strategies is focused on emerging market contexts, settings that are characterized by weak capital market and regulatory infrastructures and fast-paced turbulent change. Under such challenging conditions, strategies aimed at shaping the institutional environment may be especially critical to an organization's performance and long-term survival. Our review reveals that organizations engage in three specific and identifiable sets of institutional strategies, which we term relational, infrastructure-building, and socio...

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Institutional Strategies in Emerging Markets

We adopt a multi-theoretic approach to investigate a previously unexplored phenomenon in extant literature, namely the differential impact of foreign institutional and foreign corporate shareholders on the performance of emerging market firms. We show that the previously documented positive effect of foreign ownership on firm performance is substantially attributable to foreign corporations that have, on average, larger shareholding, higher commitment and longer-term involvement. We document the positive influence of corporations vis a vis financial institutions with respect to domestic shareholdings as well. We also find an interesting dichotomy in the impact of these shareholders depending on the business group affiliation of firms.

Foreign and Domestic Ownership, Business Groups and Firm Performance: Evidence from a Large Emerging Market

We adopt a multi-theoretic approach to investigate a previously unexplored phenomenon in extant literature, namely the differential impact of foreign institutional and foreign corporate shareholders on the performance of emerging market firms. We show that the previously documented positive effect of foreign ownership on firm performance is substantially attributable to foreign corporations that have, on average, larger shareholding, higher commitment, and longer-term involvement. We document the positive influence of corporations vis-a-vis financial institutions with respect to domestic shareholdings as well. We also find an interesting dichotomy in the impact of these shareholders depending on the business group affiliation of firms

https://www.jstor.org/stable/pdfplus/20142364.pdf

Foreign and domestic ownership, business groups, and firm performance: evidence from a large emerging market.

This study investigates how profit redistribution affects the performance of firms affiliated to business groups.It shows that inefficient profit redistribution causes group-affiliated firms to perform poorly relative to independent firms.This underperformance persists even after controlling for other explanations such as diversification and resource transfers to unlisted firms.The study also shows that profit redistribution is more pronounced for groups of larger size and greater corporate control.The results of the study lend support for the inefficient profit redistribution explanation of the 'business group discount'.

S.W. Douma

Papers

Foreign and Domestic Ownership, Business Groups and Firm Performance: Evidence from a Large Emerging Market

Foreign and domestic ownership, business groups, and firm performance: evidence from a large emerging market.

Business Groups and Profit Redistribution : A Boon or Bane for Firms