Showing papers in "International Journal of Emerging Markets in 2013"

"Punching above their weight" The sources of competitive advantage for emerging market multinationals

Abstract: Purpose – The purpose of this paper is to comprehensively review the sources of competitive strength of emerging market multinationals (EMMs). Since most lack firm-specific assets such as internalized knowledge or globally recognized brands, especially in their early international growth, and emanate from less-developed nations, the success of EMMs has to be explained by identifying factors in their home nations and international scope which make these firms internationally competitive. Design/methodology/approach – A comprehensive review of the extant literature and company cases identified several sources of competitive advantage for emerging market firms. Since conclusive evidence is still unavailable, many of these factors are proposed as hypotheses for future empirical research. Where needed, contrary viewpoints are also discussed and cited. Findings – This paper identifies several possible location-specific assets of emerging market companies including the mindset of top management of EMMs (such as ...

Returns and volatility spillover between stock prices and exchange rates

Abstract: Purpose – The purpose of this paper is to analyze the nature of returns and volatility spillovers between exchange rates and stock price in the IBSA nations (India, Brazil, South Africa).Design/methodology/approach – The study uses VAR framework and the recently proposed Spillover measure of Diebold and Yilmaz to examine the returns and volatility spillover between exchange rates and stock prices of IBSA nations. In addition, multivariate GARCH with time varying variance‐covariance BEKK model is used as a benchmark against the spillover methodology proposed by Diebold and Yilmaz.Findings – The results of multivariate GARCH model suggests the integration between stock and foreign exchange markets and indicates the existence of bi‐directional volatility spillover between stock and foreign exchange markets in the IBSA countries. Spillover results using the Diebold Yilmaz model suggest the bi‐directional contribution between stock and foreign exchange market, in terms of both returns and volatility spillovers...

The determinants of foreign direct investment in the Middle East North Africa region

Abstract: Purpose – The purpose of this paper is to test the determinants of foreign direct investment (FDI) into countries of the Middle East North Africa (MENA) region.Design/methodology/approach – The research is based on an econometric model that includes factors that potentially drive FDI flows into countries in the MENA region.Findings – Energy endowments have a negative impact on FDI flows into a country. GDP per capita, openness to trade and oil prices have a positive impact on FDI inflows, while aggregate measures of environmental risk are not a differentiating factor among countries in the region.Originality/value – This paper demonstrates that the “Dutch disease” concept applies to FDI in resource rich countries in the MENA region. Countries with large amounts of oil and gas have are more likely to have policies and institutions that inhibit FDI. Countries that value the spillover effects from FDI need to reconsider legislative and institutional hurdles that remain.

Socio‐demographic factors and network configuration among MENA entrepreneurs

Abstract: Purpose – The field of entrepreneurship has seen a dramatic increase in studies focusing on networks and relations. Research in this area has thus far focused on how the structure and quality of entrepreneurs' existing interpersonal ties shape information access and thereby influence entrepreneurial outcomes. The purpose of this paper is to extend the focus further by examining how the entrepreneur's socio‐demographic profile affects advisory network configuration in the Middle East and North Africa (MENA) context.Design/methodology/approach – In this paper, the authors used Global Entrepreneurship Monitor (GEM) data, at the individual level (total early‐stage entrepreneurial activities) in 14 countries within the MENA region over the course of three years (2009, 2010 and 2011). The sample of networks is obtained from the entrepreneurs identified among the adults interviewed in the adult population survey of GEM participating countries from the MENA region.Findings – Strong evidence was found that socio‐d...

Does successful recovery mitigate failure severity?: A study of the behavioral outcomes in Indian context

Abstract: – The aim of this study is to examine the role of level of failure severity and recovery efforts in customer response behavior. Specifically, the paper investigates how severity of failure influence the relationship between recovery efforts and outcome variables of recovery disconfirmation, satisfaction, loyalty and negative word‐of‐mouth., – A 2×2 between subjects experimental design was carried out. Written scenarios were used to manipulate the level of severity and recovery efforts. Responses were collected from 103 participants on pre‐validated scale measures., – The results of the study yield significant findings of impact of failure severity and recovery effort on dependent variables in the Indian context. The findings indicate significant interaction effects on satisfaction, loyalty and negative word‐of‐mouth., – Prior studies on failure and recovery have mostly kept failure constant even though the magnitude of failure can range from low to high. This study examines the effect of level of failure severity and recovery efforts in customer response behavior. Further, this study extends prior research in recovery by investigating the variables of interest in the eastern cultural context such as India.

Customer interaction in service innovation: evidence from India

Abstract: Purpose – Customer interaction in new service development is a key success factor for new services. However, the knowledge about the process and techniques of customer interaction in any Asian and emerging market is limited. Therefore, the purpose of this article is to investigate the process of customer interaction in new service development in an emerging market – India.Design/methodology/approach – The article is based on longitudinal case research involving 24 service firms, in which 48 managers and 24 customers were interviewed and the paper followed the development process of several new service projects in real time.Findings – The research answers several critical questions involved in customer interaction in new service development that include: What are the modes of customer interaction in NSD? What are the stages of customer interaction? Whom a firm shall interact with? What is the role of employees in customer interaction? And what are the pitfalls in customer interaction process?Research limit...

Antecedents of export performance: the case of an emerging market

Abstract: Purpose – The purpose of this paper is to provide a framework for understanding the relationships between resource commitment, management experience, firm size, internationalization, internal export barriers and export performance in firms. Specifically, this paper empirically investigates the impact of resource commitment, management experience, firm size, and internationalization on export performance, using internal export barriers as an intervening variable. These antecedents of export performance are selected because they are constraints that managers have an opportunity to influence. This study is therefore relevant to the managerial process. Design/methodology/approach – A survey design using firms from Ghana was chosen. This was expected to be an appropriate population from which data could be gathered to investigate the authors' hypotheses. In order to test these hypotheses, questionnaires were designed to collect data from small and medium export firms in an emerging market. Data on resource com...

An analysis of the antecedents of loyalty and the moderating role of customer demographics in an emerging mobile phone industry

Abstract: Purpose – The purpose of this paper is to investigate how various antecedents influence customer loyalty in the mobile phone industry and how customer demographic variables moderate such relationships. A comprehensive model is proposed and tested empirically that features six antecedents identified in recent industry literature – customer satisfaction, perceived service quality, value, switching costs, trust, and corporate image – and common demographic variables. Design/methodology/approach – Data were collected using a field questionnaire survey of mobile phone users in Pakistan. Structural equation modeling (SEM) and multi-group SEM evaluate direct and moderating effects. Findings – Findings suggest that of six antecedents, customer satisfaction, perceived switching costs, service quality, and perceived value have positive and significant relationships with customer loyalty. Among the demographic variables, only income and area of residence moderate the relationships between customer loyalty and the an...

Key determinant factors for retail bank switching in Ghana

Abstract: Purpose – The purpose of this paper is to determine the factors that influence retail bank switching in the Ghanaian banking sector. Design/methodology/approach – A detailed review of the extant literature and focus group discussions was used to identify 31 variables which were used to survey 419 customers of 18 retail banks in Ghana. Descriptive statistics and factor analysis were used to identify the main retail bank switching factors. Findings – The result of the study indicates that service encounter failures, pricing failures, electronic banking failures, service recovery failures and core service failures accounted for retail bank customer's decision to switch banks in Ghana. Research limitations/implications – The focus of the study on Ghana limits the generaliseability of the findings. Moreover, the five factor structure identified in the study could be replicated in other countries, thereby setting the stage for cross-country studies on retail bank switching. Originality/value – The study conclud...

Methods to increase research output: some tips looking at the MENA region

Abstract: Purpose – Business, management and accounting (BMA) papers published from The Middle East and North Africa (MENA) region, account for less than 1 per cent of the total papers published. As nations in MENA try and compete on the national competitive index, there is a tendency to adopt performance appraisal criteria from more established research nations. MENA accounts for 6 per cent of world population, and has one of the world's highest growth rates at 3 per cent. Since over one‐third of the population is under 15, if factors that hider and encourage research are identified, the research output can be increased. As it is clear that research on this region and from researchers in MENA is low, the purpose of this paper is to focus on how to increase research on this region.Design/methodology/approach – Since there is very little information from this region, the research was exploratory in nature. Interviews with academics, officers in charge or research grants, publishers and senior managers from industry ...

Understanding acculturation of consumer culture in an emerging market: An analysis of urban, educated, middle‐class Indian consumers

Abstract: Purpose – The purpose of this paper is to study the extent of behavioral acculturation of consumer culture (B‐ACC) and attitudinal acculturation of consumer culture (A‐ACC) among the urban, educated, middle class Indian consumers. It also aims to test if B‐ACC and A‐ACC among various demographic segments of Indian consumers differ on the basis of their ownership/usage of foreign brands vis‐a‐vis Indian brands.Design/methodology/approach – An empirical study has been conducted to address the above mentioned objectives. Data have been collected from urban, educated, middle class Indian consumers using structured questionnaire and following snowball and judgment sampling methods. Data analysis has been done using ANOVA and T‐test.Findings – The results show that highly educated Indian consumers who fall under the age group of 16‐25 years and belong to upper‐middle class show greater levels of B‐ACC as well as A‐ACC vis‐a‐vis other demographic segments of Indian consumers. In the total sample as well as among...

Do emerging multinational enterprises possess South-South FDI advantages?

Abstract: Purpose – The apparent success of emerging market multinational (EMNE) operations in the Global South has led some to launch a claim of competitive advantage in investing in markets with higher institutional risk. However, there has not been sufficient econometric investigation into all the forces driving South-South foreign direct investment (FDI). The purpose of this paper is to investigate the claim of institutional advantage and to further our understanding of South-South FDI. Design/methodology/approach – The paper employs a simple econometric model of FDI flows to investigate the differences between the factors driving FDI from developed country MNEs and EMNEs. The model is tested on a bilateral sample of FDI stock data of 21 developed and 22 emerging source economies and over 80 host countries. Findings – Contrary to the contention of the previous literature, the empirical results find little support for the claim to EMNE institutional advantage. EMNEs are just as sensitive to institutional risk as...

Foreign investor flows and “blue chip” stock returns

Abstract: Purpose – The purpose of this paper is to investigate the direction of causality between the monthly stock returns and the monthly net foreign investor flows, and the existence of feedback trading by foreign investors for the “blue chip” stocks of the Istanbul Stock Exchange (ISE), an emerging stock market.Design/methodology/approach – Monthly net foreign investor flows and stock returns of “blue chip” stocks for the period January 1997‐June 2010 are used. Particularly, taking into account the structural changes in the foreign investor trading activity, the study focuses on the two sub‐periods – before and after the start of European Union (EU) accession negotiations of Turkey. The study uses the bivariate VAR Granger causality approach, impulse response analysis and uses regressions with the vector autoregressive structure and contemporaneous structure (without lag).Findings – Unidirectional Granger causality running from monthly stock returns to monthly net foreign investor flows is detected for the pre...

Indian consumers: are they the same across regions?

Abstract: Purpose – The purposes of this study are to empirically test the differences among three major cities in India by their affluence level, selected factors related to consumer purchase behaviors, and to examine the regional differences in purchase behaviors.Design/methodology/approach – A total of 652 usable data were collected from consumers of age 18 years or older residing in Mumbai, New Delhi, and Bangalore, India via mall intercept surveys.Findings – Overall, the findings confirmed that affluence level in each region explains the variances in region's values, attitudes, lifestyles, and consumption patterns of foreign branded goods. That is, Mumbai (i.e. the highest GDP among the three cities) showed individualistic characteristics (i.e. lower levels of face saving and group conformity). Attitude toward economizing was found to be inversely related to a city's affluence level with Bangalore (least affluent) having the highest attitude toward economizing and Mumbai (most affluent) having the lowest attit...

Investigating ethical perceptions of short‐term earnings management practices

Abstract: Purpose – The failure of an entity is not necessarily an accounting and financial problem. It may include factors such as earnings management and personal values. The problem with managing earnings is it becomes an ethical practice, regardless of who is or may be affected by the practice or the information that flows from it. Therefore, the purpose of this paper is to survey students and business managers to measure their perceptions about the morality of earnings management actions. Accounting educators should aim to assist students to understand how they may react once confronted with an ethical conflict when in practice.Design/methodology/approach – This paper conducts a survey of undergraduate accounting students and business managers (MBA students) at a reputed international university. Undergraduate students, majoring in accounting and business managers were surveyed to measure their perception of specific earnings‐management actions. The questionnaire includes 20 items relating to ten earnings‐mana...

Evidence on Changes in Time Varying Volatility around Bonus and Rights Issue Announcements

Abstract: Purpose – The purpose of this paper is to examine the short‐term and long‐term stock price volatility changes around bonus and rights issue announcements, using historical volatility estimation and time varying volatility approach.Design/methodology/approach – Changes in volatility around bonus and rights issues have been examined using the following methodologies. First, to capture historical volatility, change in standard deviation for 20 days and 100 days before and after announcement have been examined. Second, change in time varying volatility and unconditional volatility is examined using GARCH (1, 1) model.Findings – The results indicate that the historical volatility has increased after bonus and rights issue announcement. The volatility persistence and unconditional variance have increased after the bonus and rights issue announcements. This evidence, extendable to any other type of issue announcement, is consistent with theories stating that volatility increases after the seasoned capital issue ...

No longer sick: what does it convey? An empirical analysis of post‐bankruptcy performance

Abstract: Purpose – The purpose of this paper is to empirically investigate the stock return and operating performance of the firms which emerged from bankruptcy during 1992‐2006 in India.Design/methodology/approach – The paper uses single factor model and matching firm approach to assess the stock return performance. It employs the level as well as change expectation models to examine the operating performance.Findings – The paper shows that the sample firms, after emerging from bankruptcy, report declining stock return as well as operating performance.Practical implications – Findings of the study raise doubts over the efficiency of Indian corporate bankruptcy reorganizing mechanism.Originality/value – Apparently, no previous study examined the post‐bankruptcy performance of the firms, particularly in the context of emerging markets, which are plagued with the principal agent problems aggravated by owner managers. Given the potential vulnerability of the bankruptcy process for the inefficient wealth transfers amo...

A replacement method in evaluating the performance of international mutual funds

Abstract: Purpose – The purpose of this paper is to appraise the risk‐adjusted performance of international mutual funds using measures generated by the optimized variance (OV), and to promote ability of portfolio managers and investors in making logical decisions.Design/methodology/approach – This study appraises the performance of 65 international mutual funds via the optimized risk‐adjusted measures during monthly period of 2001‐2010. Using 65 linear programming models, the OV is calculated to optimize the standard deviation of any funds. Then, another model is run to get the OV of market index. Consequently, seven optimized performance measures namely Treynor, Sharpe, Jensen's alpha, M‐squared, information ratio (IR), MSR, and FPI along with the optimized leverage factor are proposed to evaluate the performance of these mutual funds. Finally, the optimized measures are used to evaluate the funds during pre and post‐crisis periods in order to compare the funds' performance over the crisis periods.Findings – The ...

An empirical analysis of resources in the Indian pharmaceutical industry

Abstract: Purpose – The purpose of this study is to utilize the concept of resource based approach to ascertain the resources and the interactions that exist among these resources leading to differential performance in the Indian pharmaceutical industry. Based on review of the literature, the study also highlights differences among companies operating in economically developed economies and in an emerging economy in the pharmaceutical industry, in terms of resources that matter.Design/methodology/approach – Panel data ranging from 2005‐2010 comprising of the listed companies from the Indian pharmaceutical industry is analyzed using random effects regression technique.Findings – The analysis reveals company age and the interaction of R&D expenditure with MD experience are significantly related to performance. Further, the analysis reveals a negative relationship of R&D expenditure with performance in two out of the four models and marketing expenditure is found to have no significant impact on performance.Practical ...

Determinants of international telecommunications alliance form in emerging markets

Abstract: Purpose – The purpose of this study is to attempt to explore how host governmental restriction and interfirm trust influence telecommunications operators (telcos) to choose international telecommunications alliance forms among equity alliances, relational alliances and recurrent alliances in three emerging markets: China, Hong Kong and Taiwan. Design/methodology/approach – This study utilizes multiple discriminant analysis to analyze 111 international alliances established in China, Hong Kong and Taiwan during 1993-2004. Findings – This study finds that host governmental restriction exerts greater influence on the choice of alliance form than interfirm trust. Telcos tend to develop non-equity alliances when governmental restriction is strong. In addition, they tend to develop equity and relational alliances when interfirm trust in high. Research limitations/implications – Two limitations are: this study only explores the impacts of a number of factors (host governmental restriction and interfirm trust) on...