We study the impact of ‘foreignness’ on survival in interbank currency trading worldwide over the period 1974–93. In particular, we develop hypotheses on the behavior of the liability of foreignness over time, and on the consequences of evolving sources of firm-level competitive advantage on this liability. We test these hypotheses on the population of 2667 market-making trading rooms located in 47 countries worldwide that either existed in 1974 or entered the industry between 1974 and 1993. The results show that there is a liability of foreignness, and that it changes over time. Further, strategic and organizational factors such as the adoption of technology by these firms and their mode of internal control significantly influenced survival, as did location-related factors such as the intensity of local and foreign competition. © 1997 by John Wiley & Sons, Ltd.

The dynamics of the liability of foreignness: a global study of survival in financial services

This paper attempts to test the theory developed by Gray [1988] linking accounting values and systems with Hofstede's [1980] cultural constructs. Based on data from twenty-nine countries, it finds that while Gray's [1988] model has statistically significant explanatory power, it is best at explaining actual financial reporting practices and is relatively weak in explaining extant professional and regulatory structures from a cultural base. This paper further finds that both the development of financial markets and levels of taxation enhance the explanations offered by Gray [1988].

Cultural Influence on the Development of Accounting Systems Internationally: A Test of Gray's [1988] Theory

Numerous histories of the early days of individual academic fields have been written, but scholars generally have stopped short of proposing generalizable frameworks or testable propositions for why these focal fields survived and prospered. We integrate logics from social movement theory and the sociology of science to model the rise of an aspiring academic community as an admittance-seeking social movement consisting of three major elements: differentiation, mobilization, and legitimacy building. We offer propositions based on in-depth analysis of the rise of a specific field—strategic management—within the administrative sciences.

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New Academic Fields as Admittance-Seeking Social Movements: The Case of Strategic Management

The globalization of business causes major changes in the business environment and in business practices. Forecasting such changes is crucial for the preparation of responses to them. This article reports on a Delphi study conducted with a global set of experts drawn from the policy, business and academic communities. Over three rounds of mailings, these experts analyzed and debated the likelihood of changes in the international business environment over the next decade and the impact of these changes on corporate practices. The findings identify key geographic areas of business growth, major sectoral transformations, shifts in the trade framework and its institution, and strategies for corporate adjustment.

https://link.springer.com/content/pdf/10.1057%2Fpalgrave.jibs.8490121.pdf

International business and trade in the next decade: Report from a delphi study

Combining foreign direct investment theory with data on 32 countries from the Federal Reserve Board, we examined U.S. banks' patterns of foreign operations, including their levels of banking services and choice of organizational forms in host countries. Results generally supported predictions, but only in developed countries. The lack of support in rapidly growing markets of Asia and Latin America raises serious theoretical concerns, and presents fresh research opportunities into the global banking industry.

Patterns in the Expansion of U.S. Banks' Foreign Operations

This article presents the major findings of the fifth global curriculum survey of the Academy of International Business (AIB)—an examination of the status and trends in international business education around the world as of the early 1990s. The survey's findings, based on responses from more than 500 business schools, encompass different goals and methods of internationalization, international linkages and experiential activities, organizational issues, amounts of internationalization progress achieved, and degrees of administrative satisfaction with progress achieved. The overall conclusion is that considerable progress has been made, but much more remains to be accomplished.

https://link.springer.com/content/pdf/10.1057%2Fpalgrave.jibs.8490214.pdf

A Global Survey of International Business Education in the 1990s

Global Competition in Financial Services

Corporate use of innovative foreign exchange risk management products

This paper presents the results of an exploratory survey of the applicability of discriminant analysis to the determination of the medium-term (two-year) exchange rate changes. Using a discriminant function developed on observations drawn from 1961–1964 and 1965–1968, the authors have correctly predicted the devaluation or nondevaluation of 86 percent of the countries tested for the period 1971–1972. These results indicate predictive power at the .001 level of significance. A reduction of 36 percent in classification error is achieved by the method.

https://link.springer.com/content/pdf/10.1057%2Fpalgrave.jibs.8490766.pdf

The Use of Discriminant Analysis in Forecasting Exchange Rate Movements

This study examines the pricing of assets under differential ownership restrictions. A model is developed which yields a coefficient of integration that is dimension free and is directly related to the strength of all barriers to international investment. These characteristics enable an intertemporal comparison of the level of capital market integration. The model is then used to test the hypothesis of increased capital market integration over time. Using data from Morgan Stanley Capital International and analyzing them with the non-parametric Page test, support is found for this hypothesis. The results are robust to the currency numeraire used.

William R. Folks

Papers

A Global Survey of International Business Education in the 1990s

Global Competition in Financial Services

Corporate use of innovative foreign exchange risk management products

The Use of Discriminant Analysis in Forecasting Exchange Rate Movements

A test for increased capital market integration