Seminar on Strategy & IB by Ms. Juan Bu (Sept 26, Tuesday)
posted by School of Business for HKU and Public
Event Type: Public Lecture/Forum/Seminar/Workshop/Conference/Symposium
Event Nature: Business & Economics
Strategy & IB Seminar
How Foreign Firms Alleviate Infrastructure Deficiencies in Developing Economies
Ms. Juan Bu
School of Business Administration
University of Miami
This study examines how developing country infrastructure deficiencies affect foreign firms' investment commitment and how these firms deal with such deficiencies. Drawing complementary insights from resource dependence and liability of foreignness logic, we propose that infrastructure (both soft and hard) deficiencies exert a negative effect on firms’ investment scale in developing countries and that this negative effect will be more salient for foreign firms than for local firms. We further suggest that foreign firms can alleviate the constraints from infrastructure deficiencies by adapting to host country environment or altering the interdependence with host country environment. Our analysis of a panel data comprising 2,219 firm-year observations of foreign firms operating in 56 developing economies during 2006-2014 validates our key arguments. We find that adapting through longer entry tenure in a host country and more time spent with host government agencies is more effective in curtailing the negative effect of hard infrastructure deficiencies on a foreign firm's investment scale, while altering interdependence via investing in technologically intensive industries (thus solidifying a foreign firm's bargaining power) or increasing the export intensity (thus limiting its economic exposure to the constraints) works better in lessening the adverse effect of soft infrastructure deficiencies on this investment commitment.
|Venue||KK1236, 12/F., K.K. Leung Building, The University of Hong Kong|
Registration is not required.
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