GW-CIBER Research Sponsored by rkl3d, llc: 2014-2015
Transparency in Foreign Direct Investment: Theory and Evidence from Petroleum-Reserve Acquisitions
PI: Robert Weiner, Professor, Department of International Business, GWSB
Transparency in multinational enterprises (MNEs) is widely viewed by policy makers as necessary for alleviating the challenges of poor governance, weak institutions, and corruption common in developing countries. These problems are acute in oil-rich countries, a phenomenon known as the “resource curse.” Recent rulemaking under the Dodd-Frank Wall Street Reform and Consumer Protection Act in the United States, and similar laws around the world, seeks to mandate project-level disclosures by extractive industry firms listed on stock exchanges. These measures have proven highly contentious among MNEs, who contend that mandating disclosure of proprietary information increases their risks abroad, especially when competing against foreign state-owned enterprises (SOEs). Yet, scholarly work on MNE transparency is limited. Theory does not yield consistent predictions, and little empirical work has examined transparency in foreign direct investment, focusing instead on cross-country comparisons of domestic firms. To address these gaps, this project seeks to extend the literature in two ways. First, we will explicitly examine MNE transparency with respect to foreign investments, which we term investment transparency. Second, we expand beyond prior work that focuses solely on publicly traded companies to understand how SOEs differ from traditional MNEs in regards to transparency decisions. The implications of this project should be of interest to US policy makers, and MNE managers competing against increasingly-internationalized SOEs.
Leveraging Carbon Emissions: The Impact of Firm Engagement and Home Country Participation in the Carbon Sequestration Leadership Forum
PI: Anu Phene, Professor, Department of International Business, GWSB
This study explores the impact on firm-level carbon emissions as a consequence of their home country’s participation in an inter-governmental organization (IGO), the Carbon Sequestration Leadership Forum (CSLF). The study proposes that firms from home countries that participate in CSLF are better able to achieve their emission outcomes through the deployment of mechanisms by virtue of better access to technology and knowledge, through CSLF sponsored activities. The study further hypothesizes that these baseline relationships are moderated by the extent of firm engagement in IGO events. Greater engagement by the firm in CSLF facilitated events enhances its understanding of and exposure to worldwide knowledge important for achieving its emissions outcomes and is expected to function as a positive moderator. On the other hand when the home country of the firm possesses strong capabilities in carbon capture and storage (CCS) technologies, the need for, and the value added by technology and knowledge from CSLF is reduced. Consequently home country capabilities in CCS technologies act as a negative moderator.
Radical and Incremental Innovation in Foreign Subsidiaries
PI: Heather Berry, Associate Professor, Department of International Business, GWSB
This paper builds on insights from the innovation, operations management and international business literatures to explore how intra-MNC linkages including parent firm knowledge transfers and manufacturing integration influence the incremental and radical innovation generated in foreign subsidiaries. While both types of linkages help to embed foreign operations in the internal knowledge network of MNCs, the study argues that they are likely to have different effects on local host country knowledge search, which will impact the type of innovation that is generated in foreign operations. Considering parent firm knowledge transfers, the innovation and foreign knowledge seeking literatures suggest that knowledge dependence can limit the breadth of local host country knowledge search, which would make innovation in these operations more incremental in nature. In contrast, the operations management literature highlights both responsibility and autonomy associated with manufacturing specialization, which may increase local host country knowledge search and help to generate more radical innovation that assimilates local host country knowledge with MNC knowledge. Empirical results from a comprehensive panel of US MNCs and the patents from their 36 foreign subsidiaries support these arguments. Overall, this paper furthers our understanding of global innovation in MNCs by exploring how different types of linkages and integration within MNCs influence innovation outcomes in foreign operations.