Business Commons^™

Additional Evidence On The Impact Of The International Financial Reporting Standards On Earnings Quality: Evidence From Latin America, Mauricio Melgarejo

Scholarship and Professional Work - Business

The purpose of this paper is to explore whether the adoption of the International Financial Reporting Standards (IFRS) has an impact on the quality of earnings in Latin America. Studying a sample offirms from Argentina, Brazil, Chile, Mexico, and Peru, I find that management reports a lower level of discretionary accruals after the implementation of the IFRS. In addition, this study provides evidence that earnings are more persistent and stock prices are more associated with earning numbers after the application of IFRS. This paper provides evidence that earnings quality has increased after the adoption of IFRS in Latin America.

Banco Solidario S.A.: The Recovery Strategy, 2000–2004, Karina Caballero, Mauricio A. Melgarejo, Enrique Ogliastri

Scholarship and Professional Work - Business

Five years passed since, in April, 2000, Kurt Koenigsfest took over as the Chief Executive Officer at Banco Solidario S.A. (BancoSol), in La Paz, Bolivia. BancoSol had become the top Latin American bank specializing in providing microbusiness services. Since its beginning in 1992, BancoSol achieved excellent results and became an international reference in the microcredit area. In mid-2000, external and internal factors caused its performance to deteriorate. Kurt and his management team set and implemented a strategy that led the bank to be rated as the best financial institution in the Bolivian financial system in 2004. The time had come …

Taca, Pedro Raventos, Mauricio A. Melgarejo

Scholarship and Professional Work - Business

The airline industry is energy intensive, has high fixed costs and its demand is very sensitive to the economic cycle. After the industry worldwide undergoes deregulation, starting with the United States in 1978, two distinct business models develop. Traditional carriers operate hub and spoke networks, offer onboard service and engage in price discrimination, whereas low cost carriers operate point to point, charge for all services and have simple tariffs. TACA begins operations in Central America in 1931 and, by 1943, has a footprint that extends from the United States to Argentina. In 1998–2001 TACA faces increased competition and a significant …

When Do Domestic Alliances Help Ventures Abroad? Direct And Moderating Effects From A Learning Perspective, Hana Milanov, Stephanie A. Fernhaber

Scholarship and Professional Work - Business

While the importance of strategic alliances for new venture internationalization is well acknowledged, the effect of domestic partners remains less understood. Building on organizational learning theory's vicarious learning arguments, we suggest that internationally experienced domestic partners positively influence new ventures' international intensity. Moreover, acknowledging that ventures may have multiple learning sources, we argue that the effect is more pronounced when substituting for the lack of new ventures' top management teams' international experience, or when complementing the insights about foreign markets received from foreign alliance partners. The analysis of 194 publicly held new ventures largely supports our hypotheses.

Entrepreneurial Orientation And International Scope: The Differential Roles Of Innovativeness, Proactiveness, And Risk-Taking, Li Dai, Vladislav Maksimov, Brett Anitra Gilbert, Stephanie A. Fernhaber

Scholarship and Professional Work - Business

This research integrates the international business and entrepreneurship literatures by examining the independent influences of innovativeness, proactiveness, and risk-taking on the ability of a firm to broaden its scope across international markets. For each dimension of entrepreneurial orientation, a cost–benefit framework is applied to highlight the trade-offs associated with different levels in the internationalization context. Based on a unique dataset of 500 SMEs spanning 10 industries, the results reflect the consequences of being “stuck in the middle” with respect to their strategic posture on innovativeness and proactiveness, but reveal a nuanced role for risk-taking behavior. The non-uniform and non-linear relationships …

Is More Always Better? Risk Trade-Offs Among Internationalizing New Ventures, Stephanie A. Fernhaber, Patricia P. Mcdougall-Covin

Scholarship and Professional Work - Business

Purpose

Design/methodology/approach

International Exposure Through Network Relationships: Implications For New Venture Internationalization, Stephanie A. Fernhaber, Dan Li

Scholarship and Professional Work - Business

Drawing on the network literature and attention-based view, we examine the extent to which international exposure from key informal (geographically proximate firms) and formal (alliance partners) network relationships impacts new venture internationalization. Our findings are three-fold. First, international exposure from both types of network relationships positively influence new venture internationalization, and serve as substitutes for each other. Second, the effects differ based on the age of the venture. While older ventures benefit more from international exposure from alliance partners, younger ventures are more influenced by international exposure from geographically proximate firms. Third, our analysis confirms a three-way interactive effect of …

Untangling The Relationship Between New Venture Internationalization And Performance, Stephanie A. Fernhaber

Scholarship and Professional Work - Business

To help untangle the inconsistency in prior performance studies for new venture internationalization, the dynamic capabilities perspective is revisited to consider whether the relationship is more complex than previously assumed. While internationalization requires the reconfiguration of routines and resources, survivability is argued to peak at moderate levels of internationalization where the associated resources and risk is balanced between local and foreign markets. In contrast, sales growth is suggested to peak at either low or high levels of internationalization where a singular market focus and set of capabilities is being exploited. The results confirm that the level of new venture internationalization …

The Stock Market’S Reaction To Accounting Information: The Case Of The Latin American Integrated Market Abstract, Mauricio A. Melgarejo, Eduardo Montiel, Luis Sanz

Scholarship and Professional Work - Business

The purpose of this paper is to explore the stock market’s reaction to quarterly financial statements. We focus our study in two countries that are participating in the Latin American Integrated Market (MILA): Peru and Chile. We find that the cumulative abnormal returns and the absolute value of the cumulative abnormal trading are explained principally by the quarterly earnings surprises around the financial statements release date. We find that these effects are more pronounced in small firms, confirming that due to the lower level of pre disclosure information accounting numbers are the main source of information. Key words: Accounting Information, …

Beating Competitors To International Markets: The Value Of Geographically Balanced Networks For Innovation, Pankaj C. Patel, Stephanie A. Fernhaber, Patricia P. Mcdougall-Covin, Robert P. Van Der Have

Scholarship and Professional Work - Business

Being able to launch new products internationally is critical for technology-based ventures to recoup the high costs of R&D and to exploit their innovations fully. Despite the widely recognized importance of networks within the innovation development process, there appear to be contrasting viewpoints as to whether local or foreign network partners contribute more in the race to internationalize. Drawing on the theoretical underpinnings of comparative advantage, we propose and empirically confirm that ventures pursuing a balance of local and foreign network connections for the development of an innovation are able to bring the product more rapidly into the international marketplace. …

The Impact Of Interorganizational Imitation On New Venture International Entry And Performance, Stephanie A. Fernhaber, Dan Li

Scholarship and Professional Work - Business

We examine the impact of interorganizational imitation on new venture international entry and subsequent performance. Using a sample of 150 U.S.-based publicly held new ventures, we find that new venture international entry is in part an imitative response to the internationalization of other firms in the venture's home country industry and/or subsets of firms with certain traits or outcomes. We also find that interorganizational imitation moderates the relationship between new venture international entry and profitability, but not the relationship between new venture international entry and sales growth. These findings contribute to the growing body of literature on new venture internationalization.

Immigrant Business Enterprises: A Classification Framework Conceptualization And Test, Roberto Curci, Robert Mackoy

Scholarship and Professional Work - Business

This article proposes the Immigrant Business Enterprises Classification Framework to organize immigrant-owned businesses into categories associated with different levels of business integration into a host country's mainstream business community. The article applies the framework and reports the findings of structured face-to-face interviews with 199 Hispanic business enterprises (HBEs) in Indianapolis. The authors find Hispanic-owned businesses hold different characteristics depending upon the integration category in which they are classified; the findings suggest that to support immigrant entrepreneurship, governments, business development organizations, and researchers should address category-specific challenges, opportunities, and needs.

Venture Capitalists As Catalysts To New Venture Internationalization: The Impact Of Their Knowledge And Reputation Resources, Stephanie A. Fernhaber, Patricia P. Mcdougall-Covin

Scholarship and Professional Work - Business

Venture Capitalists (VC) play an important role in influencing the strategic direction of the firms in which they invest. The findings of this study reveal that VCs can serve as a catalyst to new venture internationalization through the provision of knowledge and reputation resources. Furthermore, the international knowledge of a VC is more positively related to new venture internationalization when the VC is also reputable.

Spanish Foreign Direct Investments In Latin America: Internationalization Strategies And Financial Management Practices, Roberto Curci, Guillermo Cardoza

Scholarship and Professional Work - Business

This study analyzes the internationalization strategies and the financial management practices of seven Spanish companies with the largest volume of investments in Latin America. The companies selected for an in-depth analysis represent approximately 80 percent of the total Spanish foreign investments during the period of analysis. Their investments have taken place mainly in service sectors such as banking, energy, and telecommunications. The study identifies the market conditions and the corporate strategies that have allowed these Spanish companies to successfully initiate and expand business activities into Latin America. The findings suggest Spanish investors have strengthened their global competitiveness and have accomplished …

Corporate Governance, Transparency And Performance Of Malaysian Companies, Mohd Che Haat, H. R. Raaman, Sakthi Mahenthiran

Scholarship and Professional Work - Business

The paper aims to examine the effect of good corporate governance practices on corporate transparency and performance Malaysian listed companies.

Strategic Implications Of The Open-Market Paradigm Under Digital Convergence: The Case Of Small Business C2c, Sunran Jeon, So Ra Park, L. A. Digman

Scholarship and Professional Work - Business

This article presents the open-market paradigm in the context of digital convergence and proposes strategic directions for open-market participants. Although not a new phenomenon, open market has become the most popular e-business model, linking millions of buyer and seller individuals (Customer to Customer: C2C). This article examines the drivers of digital convergence that enable the open-market paradigm and conducts industry and Blue Ocean analyses for open-market business. Finally, a real-world application – the Cyworld market of Korea – is presented as an illustrative example.

Asp Effects In The Small Size Enterprise: A Case Of Bizmeka Of Korea Telecom, Hwanyoung Kim, Sunran Jeon, Jongheon Kim

Scholarship and Professional Work - Business

An application service provider (ASP) is a business model providing information technology (IT) enabled solutions to customers over the Internet. Utilizing an ASP model, small and medium-sized enterprises (SMEs) can acquire affordable IT solutions. Korea Telecom (KT), a leading IT company in Korea, provides an ASP service called Bizmeka to SMEs. In this study, we identify factors influencing the perceived benefits of Bizmeka usage. We also examine the relationship between the perceived benefits of Bizmeka usage and customer satisfaction. Based on the results of our survey, we found the following factors to be important in determining customer satisfaction with ASPs: …

International Entrepreneuship And Geographic Location: An Empirical Examination Of New Venture Internationalization, Stephanie A. Fernhaber, Brett Anitra Gilbert, Paticia P. Mcdougall

Scholarship and Professional Work - Business

In this paper, we argue that geographic location may be one reason why some ventures are able to acquire the resources needed to internationalize while others cannot. We use ecological arguments to predict an inverted U-shaped relationship between the concentration of industry clustering within a geographic location and the venture's internationalization. We also explore whether venture characteristics influence the nature of this relationship. Our hypotheses are regressed on international intensity and scope, and analyzed through a sample of 156 publicly held new ventures. Results confirm that location influences new venture internationalization, and firm characteristics impact the nature of the relationship.

Exploring The Role Of Industry Structure In New Venture Internationalization, Stephanie A. Fernhaber, Patricia P. Mcdougall, Benjamin M. Oviart

Scholarship and Professional Work - Business

While we have gained considerable knowledge since the late 1980s regarding the phenomena of international new ventures, less is known about the influence of industry structure on these ventures. In the present paper, we draw on literature from industrial economics, international business and entrepreneurship to identify industry structure variables that fit within the theoretical framework of international new ventures. We then offer propositions as to how the identified industry structure variables individually and jointly influence the likelihood of new venture internationalization.

"When Are The Japanese Japanese?" Negotiating Japanese Cultural Identity In A Japan-Us Binational Organization, Noriko Yagi

Scholarship and Professional Work - Business

Based on a seven-month ethnographic study in a Japanese subsidiary in the US located in Southern California, this research describes when the organization members categorized as the Japanese are Japanese. One of the purposes of the research is to challenge the widely held assumption in the body of international business research that every organization member from a certain nation is under the influence of the national culture all the time in terms of its impact on their behavior, cognition and emotive expressions. This research brings the assumption that an individual could have multiple cultural identities into the analysis. Under this …

Ethnography As Research Methodology For International Business Studies : Its Complementary Role To The Methodology Based On A Positivistic Paradigm, Noriko Yagi

Scholarship and Professional Work - Business

A goal of this paper is to introduce ethnography to the Japanese audience as research methodology for international business studies. Ethnography is defined as the study of describing a culture of a group of people. In the United States, ethnography has been established as one of the research methods in organizational studies. This does not apply to Japan, however. Thus, the paper aims to fill the void and inform the Japanese audience about how ethnography can contribute extending our understanding of the complexity of international cross-cultural management. The paper begins with outlining characteristics of ethnography in comparison to research methodology …

Intertemporal Covariance And Correlation Stability In Mexican Stock Returns, Roberto Curci, Terrance Grieb, Mario Reyes

Scholarship and Professional Work - Business

No abstract provided.

Mexican Peso Futures And Exchange Rate Volatility, Roberto Curci, Cynthia J. Brown

Scholarship and Professional Work - Business

The reintroduction of Mexican peso futures contracts in April 1995 resulted from a refocus of governmental policy to the use of market-based mechanisms to stabilize the exchange rate. Interest in the Mexican peso future contracts has been high as investors look to manage their exposure from transactions and investments denominated in pesos. This study utilizes a VAR framework to analyze the relationship between the volatility in theMexican peso spot market and futures contracts trading activity. Shocks to the exchange rate volatility lead to increased hedging-type activity. Furthermore, an increase in futures contracts trading activity (reflecting additional speculation-type activity) results in …

Market Interdependence; Gold Bullion, S&P500, Mining Company Adr’S And Underlying Security Markets, Roberto Curci, Robert A. Clark, Cynthia J. Brown

Scholarship and Professional Work - Business

The internationalization of equity markets appears to be associated with a level of interdependence and transmission of stock price movements across national markets. This study examines the responses of international and ADR securities common stimulus. The study analyzes the equity price behavior of companies engaged in the production of such companies which are cross-listed in U.S. equity markets through ADRs and in underlying economic markets.

European Banking After The Euro: Progress And Problems, William K. Templeton, Robert Clark

Scholarship and Professional Work - Business

The introduction of the euro has presented the European banking industry with an opportunity to examine its structure and address its fragmentation. The leaders in European banking will evolve as the efficiencies in a single currency are realized. This article discusses the changes in European banking since the introduction of the euro, providing statistics on mergers and acquisitions and their effects on assets both inside and outside the eurozone. It considers the factors which make cross-border mergers less attractive, the effect of consolidation on costs, and the impact of the euro on foreign exchange earnings, debt markets and cash management …

Selecting International Modes Of Entry And Expansion, Gregory E. Osland, Charles R. Taylor, Shaoming Zou

Scholarship and Professional Work - Business

Selecting a mode for entering or expanding in a foreign market is a crucial strategic decision for an international firm. This article identifies and compares the most influential factors that affect the international modes of entry and expansion decisions of US and Japanese firms. Using mail surveys, this is one of the first studies on this subject to collect data from top executives in both Japan and the USA. Findings reveal that the Japanese are particularly sensitive to external risk and other target market factors. For Americans, company factors, such as international experience, appear to be most important when selecting …

Foreign Market Entry Strategies Of Japanese Mncs, Charles R. Taylor, Shaoming Zou, Gregory E. Osland

Scholarship and Professional Work - Business

While much prior research has focused on Japanese multi‐national corporations’ (MNCs) marketing strategies, little is known about the factors that influence Japanese MNCs’ foreign market entry mode choice. In this study, a survey of Japanese MNCs is conducted in order to assess the factors that are the most influential in the foreign market entry decisions of Japanese MNCs. Using bargaining power theory, eight factors are identified in the study. The findings indicate that five of the eight factors (stake of the host country, need for local contribution, riskiness of the host country, resource commitment, and host government restrictions) are significant …

Banking On The Euro: Changes And Challenges, William K. Templeton, Charlotte A. Bond

Scholarship and Professional Work - Business

Considers the likely effects of EMU and the introduction of the euro on the “fragmented” European banking industry. Recognizes that transition to the euro will be expensive in terms of equipment, training, customer care etc.; and that some new products and services will be demanded (e.g. cross-border cash management systems, euro-denominated bonds etc.) while others will decline (e.g. foreign exchange hedging, commercial loans etc.). Refers to US experience to identify growth opportunities and discusses the current and future impact of increased competition in the new market; and strategies for surviving it.

The Experf Scale: A Cross-National Generalized Export Performance Measure, Shaoming Zou, Charles R. Taylor, Gregory E. Osland

Scholarship and Professional Work - Business

A large number of studies have attempted to identify factors that are correlated with exporting success. However, much controversy exists about the key determinants of export performance and their relative importance. A major reason for this lack of consensus is the absence of a unified measure for capturing export performance. In this study, an attempt is made to develop a generalized export performance measure, the EXPERF scale, that can be applied to multiple countries. Results from a survey of top executives of U.S. and Japanese exporters support a three-dimensional scale for measuring export performance. The three dimensions of the export …

Performance Issues In U.S.–China Joint Ventures, Gregory E. Osland, S. Tamer Cavugsil

Scholarship and Professional Work - Business

Based on an in-depth study of U.S.-China joint ventures, this article offers some insights into the performance of such international business relationships. While the conventional literature treats government as an amorphous aspea of the political-legal environment, in this case government is an active participant and influence in the performance of international joint ventures (UVs). It has both a constraining and enabling effect on LJV structure, strategy, and performance. For example, limits can be placed on ownership shares of joint ventures and on prices of the output. At the same time, government can cooperate with LJVs and foreign parent companies by …