International Business Commons^™

Tax Avoidance And Esg Disclosure Mandates: International Evidence, Sadok El Ghoul, Omrane Guedhami, Yongtae Kim, Hyo Jin Yoon

Faculty Publications

This paper examines how regulations mandating environmental, social, and governance (ESG) disclosure affect corporate tax behavior. Using a difference-in-differences analysis on a sample of firms from 48 countries, we find that ESG disclosure mandates lead to significant reductions in tax avoidance, with stronger effects for mandates that include tax-relevant provisions. We identify increases in ESG information transparency and improvements in firms’ ESG performance as channels through which ESG disclosure mandates reduce tax avoidance. We further find that the decrease in tax avoidance following ESG disclosure mandates is more pronounced in countries with weaker financial disclosure requirements, legal and tax enforcement, …

Redefining Purpose: The Effect Of The 2019 Business Roundtable Statement On Corporate Tax Strategies, Sadok El Ghoul, Rana Jamshed, Omrane Guedhami

Faculty Publications

Business Roundtable (BRT) firms have faced intense scrutiny from investors, media, and the public following their 2019 “Statement on the Purpose of a Corporation,” which marked a shift from shareholder-centric governance to a stakeholder-focused approach. This shift has sparked debate over whether BRT firms are genuinely committed to social responsibility or merely using it as a branding strategy without implementing meaningful changes. This paper contributes to the debate by empirically examining a key dimension of social responsibility—corporate tax behavior. Using a difference-in-difference analysis covering 2004–2022, we find that BRT firms engage in higher levels of tax avoidance than other publicly …

Ceo Pay Differences Between Us And Non-Us Firms: A New Longitudinal Investigation, Ruiyuan (Ryan) Chen, Sadok El Ghoul, Omrane Guedhami, Feiyu Liu

Faculty Publications

Research Question/Issue

Public and academic debates typically portray US CEOs as exceptionally well paid. Yet, evidence on the existence and magnitude of a US CEO pay premium is mixed and dated. This study uses an expanded, longitudinal dataset to identify whether such a pay premium exists and explores potential differences across countries, time, and governance and institutional contexts.

Research Findings/Insights

Using a dataset of over 42,000 firm-year observations from 34 countries during 2001–2018, we document a persistent but heterogeneous US CEO pay premium. Compared with non-US peers, US CEOs receive 23% more total pay and 20% more equity-based compensation, on …

Transmission Of Geopolitical Shocks To Firm Behavior: A Synthesis And Integrative Model, Daniel S. Andrews, Harald Puhr, April Knill

Faculty Publications

This study examines the transmission of geopolitical shocks to firm behavior. While previous research has primarily focused on the direct relation between shocks and firm behavior, we provide a more nuanced understanding by conceptualizing geopolitical shocks as disruptions that evolve through explicit and implicit channels to influence firm behavior. Based on a systematic review of 159 articles, we identify the key mechanisms that transmit the impacts of a geopolitical shock. Our findings reveal that geopolitical shocks manifest in institutions and their lower-level mechanisms, and such transmission is neither uniform nor random. Furthermore, we categorize firm behavior into distinct response modalities. …

Beyond The Individual: Global Socioeconomic, Cultural, And Religious Contexts Of Male-Perpetrated Intimate Partner Violence, Wolfgang Messner

Faculty Publications

Intimate partner violence (IPV) against women remains a staggering global public health issue with profound human and economic costs. While individual-level factors have been extensively studied, broader contextual influences are less understood. Using an ecological Bayesian regression model, this study draws on past-year IPV prevalence data from the 2022 WHO report to examine the interplay between IPV and socioeconomic, cultural, and religious factors in 161 countries. The findings reveal that higher levels of gender egalitarianism, power distance, and assertiveness correlate with lower IPV prevalence, while institutional collectivism, in-group collectivism, and humane orientation are associated with higher prevalence. Economic development and …

Predictors Of Audit Quality: A Confirmatory Study, Joseph Philip Kambey, Williams Kwasi Peprah [email protected], Lenny Leorina Evinta, Cecilia Lelly Kewo

Faculty Publications

This study investigated the predictors of audit quality according to registered external auditors in Indonesia. Even though there are improvements in audit reports and practices, there is still some fraud and audit risk that affects the credibility of financial reports. This research is based on a random sample technique where 304 registered external auditors in Indonesia answered self-constructed research instruments and their validity was ascertained with exploratory factor analysis, where they resulted as good. The first-party distributed data were analyzed with multiple regression to determine the predictors of audit quality. The study revealed that internal controls, governance, and audit culture …

In The Ceo We Trust: Negative Effects Of Trust Between The Board And The Ceo, Kee-Hong Bae, Sadok El Ghoul, Zhaoran (Jason) Gong, Omrane Guedhami

Faculty Publications

In this study, we investigate whether and how trust between board members and the CEO (board–CEO trust) affects the performance of mergers and acquisitions. Contrary to conventional wisdom, we find that firms with higher levels of board–CEO trust exhibit poor M&A performance. High trust is associated with low acquisition announcement returns, long-term stock return performance, and post-deal operating performance. This negative effect of board–CEO trust is more pronounced among acquiring companies prone to agency problems. Our results suggest that, in the institutional setting of corporate boards, high trust can be too much of a good thing.

The Formal Institutional Context Of Informal Entrepreneurship: A Cross-National, Configurational-Based Perspective, Joshua K. Ault, Andrew Spicer

Faculty Publications

While previous comparative research has identified the formal institutional conditions that differentiate countries on their degree of informal entrepreneurship, this paper examines the characteristics that shape cross-national diversity in its type. Based on a series of fuzzy-set qualitative comparative analyses (fs/QCA) of 138 country cases, we find evidence of causal heterogeneity in the configuration of institutional conditions associated with entrepreneurial outcomes that are informal and growth-oriented and those that are informal and subsistence-oriented. Given our results, we propose that the formal institutional-based conditions that differentiate between types of informal sectors are best identified by the conjoint mixture of strength and …

Revisiting Institutional Voids: Advancing The International Business Literature By Leveraging Social Sciences, Marleen Dieleman, Stanislav Markus, Tazeeb Rajwani, George O. White Iii

Faculty Publications

Institutions are vital for solving collective action problems and enabling functioning markets. Based on this notion, the institutional voids literature has offered a dynamic research agenda for international business scholarship. In this perspective article, we leverage work from political science, development economics, legal studies, and anthropology to: (a) expose hidden assumptions about institutional voids in the management literature; (b) propose new directions for research based on our revised assumptions; and (c) provide direction-specific theoretical constructs from other social sciences to stimulate theory-building and empirical inquiry into institutional voids. We develop a framework that identifies four revised assumptions about institutional voids …

Revisiting Institutional Voids: Advancing The International Business Literature By Leveraging Social Sciences, Marleen Dieleman, Stanislav Markus, Tazeeb Rajwani, George White Iii

Faculty Publications

Institutions are vital for solving collective action problems and enabling functioning markets. Based on this notion, the institutional voids literature has offered a dynamic research agenda for international business scholarship. In this perspective article, we leverage work from political science, development economics, legal studies, and anthropology to: (a) expose hidden assumptions about institutional voids in the management literature; (b) propose new directions for research based on our revised assumptions; and (c) provide direction-specific theoretical constructs from other social sciences to stimulate theory-building and empirical inquiry into institutional voids. We develop a framework that identifies four revised assumptions about institutional voids …

Populist Syndrome And Nonmarket Strategy, Daniel J. Blake, Stanislav Markus, Julio Martinez-Suarez

Faculty Publications

Although recognized as a defining feature of the current political era, populism and its implications for non-market strategy remain undertheorized. We offer a framework that (a) conceptualizes populism and its progression over time; (b) outlines the risks populism generates for firms; and (c) theorizes effective nonmarket strategies under populism. Our framework anchors the political risk profile of populism in three interdependent elements: anti-establishment ideology, de-institutionalization, and short-term policy bias. These elements jointly shape the policymaking dy-namics and institutional risks for firms under populism. Our analysis shows how firms can calibrate two nonmarket strategies – political ties and corporate social responsibility …

Nothing Ventured, Nothing Gained: A Meta-Analysis Of Ceo Overconfidence, Strategic Risk Taking, And Performance, Barbara Burkhard, Charlotta Sirén, Marc Van Essen, Dietmar Grichnik, Dean A. Shepherd

Faculty Publications

Although overconfidence is acknowledged as one of the most common managerial decision-making biases, much uncertainty remains about its implications for firm performance. To resolve this uncertainty, we investigate how and why CEO overconfidence is related to firm performance using meta-analytic techniques on a sample of 199 studies. In particular, relying on behavioral decision theory, we develop alternative hypotheses regarding the impact of CEO overconfidence on firm performance. Contrary to the conventional belief that CEO overconfidence is detrimental, this study reveals that CEO overconfidence is, on average, beneficial for firm performance. Drawing on recent refinements of upper echelons theory and theoretical …

Long-Term Business Implications Of Russia’S War In Ukraine, Stanislav Markus

Faculty Publications

Following its invasion of Ukraine, Russia’s macroeconomic stability will worsen; foreign trade and Russia-bound investment will dry up; and human capital will become scarce. Russia will not fully compensate these losses with increased economic engagement with China, with particular deficiencies likely in high-tech areas for Russia. Import substitution is also unlikely to allow Russia to innovate its way out of economic isolation or escape the resource curse. As Kremlin-connected elites further dominate the impoverished economy, crony state capitalism and kleptocracy will rise. The global repercussions of Russia’s war will include commodity shocks and the attendant supply chain disruptions and inflationary …

Reply To Komatsu Et Al.: From Local Social Mindfulness To Global Sustainability Efforts?, Niels J. Van Doesum, Ryan O. Murphy, Marcello Gallucci, Efrat Aharonov-Majar, Ursula Athenstaedt, Wing Tung Au, Liying Bai, Robert Böhm, Inna Bovina, Nancy R. Buchan, Xiao-Ping Chen, Kitty B. Dumont, Jan B. Engelmann, Kimmo Eriksson, Hyun Euh, Susann Fiedler, Justin Friesen, Simon Gächter, Camilo Garcia, Roberto González, Et. Al.

Faculty Publications

No abstract provided.

Disparities In Demand For Covid-19 Hospital Care In The United States: Insights From A Longitudinal Hierarchical Study, Wolfgang Messner

Faculty Publications

Background and aims

This study examined disparities in hospitalization for COVID-19 within the U.S. by racial and ethnic groups, health insurance status, and social support structure.

Methods

Using publicly available ecological case and contextual data from July 2020 to April 2021, a longitudinal hierarchical model for the 51 U.S. states was constructed.

Results

Racial/ethnic disparities were observed, such as that hospitalization rates were higher in states with a higher percentage of Black (β = .002, P = .009) and American Indian or Alaska Native persons (β = .003, P = .03). Conversely, lack of health insurance was related …

Addressing Sustainable Rural Development With Shared Value: A Peruvian Model From The Cacao Industry, Armando Borda, Oswaldo Morales, Hildy J. Teegen, Gareth H. Rees, Maria Alejandra Gonzalez-Perez

Faculty Publications

Here we present a model aimed at contributing to the literature around sustainable supply chains by examining a novel redesign initiative of the chocolate supply chain within the Peruvian cacao (cocoa) industry. Using the Creating Shared Value (CSV) framework, we apply the case study method in examining the Peruvian Cacao Alliance's experience in redesigning both the stages and relationships within its supply of cacao to the world. Data were collected from both primary and secondary sources and analyzed after coding from categories defined in the literature on CSV. The case demonstrates the opportunity to successfully participate in the supply chains …

Inclusive Growth In Africa: Are Chinese Investment And Local Industry Participation Compatible?, Emmanuel T. Kodzi

Faculty Publications

Purpose - This study set out to explore whether increasing Chinese FDI is associated with rising contributions of local industry in African countries connected to the Belt and Road Initiative (BRI). The existence of cooperative industry linkages between Chinese investments and local businesses is a necessary condition for achieving the mutual benefits asserted by the BRI.

Design/methodology/approach - Under growing FDI, we framed increasing local industry contribution as indicative of existing industry linkages. Using principal component analysis and multiple regression on collated country-level data, we examined relationships between key industry output variables and several independent variables representing Chinese investment and …

Investors’ Reactions To Csr News In Family Versus Nonfamily Firms: A Study On Signal (In)Credibility, Naciye Sekerci, Jamil Jaballah, Marc Van Essen, Nadine Kammerlander

Faculty Publications

We study family firm status as an important condition in signaling theory; specifically, we propose that the market reacts more positively to positive, and more negatively to negative, CSR news (i.e., signals) from family firms than to similar news from nonfamily firms. Moreover, we propose that during recessions, the direction of these relationships reverses. Based on an event study of 1247 positive and negative changes in the CSR ratings for all firms listed on the French SFB120 stock market index (2003-2013), we find support for our hypotheses. Moreover, a post hoc analysis reveals that the relationships are contingent on whether …

Taking Advantage Of Institutional Weakness? Political Stability And Foreign Subsidiary Survival In Primary Industries, Nathaniel C. Lupton, Donya Behnam, Alfredo Jiménez

Faculty Publications

Purpose

This paper aims to investigate the extent to which locating primary industry subsidiaries in politically unstable countries impacts their survival. The authors argue that foreign multinational enterprises in less stable political environments can shape policies that are impactful on the costs of operating in primary industries and avoid compliance with more stringent policies at home.

Design/methodology/approach

Using a sample of 753 primary sector investments of Japanese multinational enterprises during the period 1986 to 2013, the authors conduct a parametric survival analysis of the relationship between political stability and subsidiary survival.

Findings

Political instability has a slight, curvilinear relationship with …

Configurational-Based Institutional Analysis: Unbundling The Multi-Dimensional State Fragility Construct, Joshua K. Ault, Andrew Spicer

Faculty Publications

To guide researchers interested in replicating our configurational approach to comparative institutional analysis, we report on a methodology that builds from existing state fragility indices to differentiate between types of state fragility in 189 countries across the world. We first present the steps we used to identify three constituent dimensions of state fragility. We then report how we configured these first-order institutional measures to build a large-N, fuzzy set qualitative set analysis (fs/QCA) of variation in the degree and type of informal economic sectors found across the world. Our discussion of the methodology shows that:

• Configurational-based analysis requires unbundling aggregate …

National Income Inequality And International Business Expansion, Nathaniel C. Lupton, Guoliang Frank Jiang, Luis F. Escobar, Alfredo Jiménez

Faculty Publications

We examine the extent to which host country income inequality influences multinational enterprises’ (MNE) expansion strategy for foreign production investment, depending on their specific strategic objectives. Applying a transaction cost framework, we predict that national income inequality has an inverted U-shaped relationship with foreign production investment. As inequality increases, MNEs accrue lower transaction costs arising from interactions with various local actors, leading to higher probability of investment. As income inequality increases further, its effect on location attractiveness will become negative, as its attraction effect is increasingly offset by additional monitoring, bargaining, and security costs owing to the more fractious nature …

U.S. Fdi And Shareholder Rights Protection In Developed And Developing Economies, Vishaal Baulkaran, Nathaniel C. Lupton

Faculty Publications

We examine the impact of shareholder rights protection on U.S multinational firms’ Foreign Direct Investments (FDI). We hypothesize that the expropriation of wealth is less likely to occur in countries with strong shareholder rights and hence, these countries will attract more FDI relative to countries with weaker shareholder rights protection. We also hypothesize that this relationship will be more important for developing countries compared to developed countries. Based on an analysis of US FDI data over the period 1997-2016, we find support for our predictions. These findings emphasize the importance of institutional development for economic development, via the attraction of …

From Design To Delivery: Teaching Supply Chain Management To Ib Majors, Emmanuel T. Kodzi

Faculty Publications

Curricular development is critical for preparing students in a coordinated fashion for life after graduation – especially when their roles will involve cross-border business decisions. The design of specific courses in any curriculum must be purposeful in terms of what is taught, how it is taught, and how all the course components fit together. For a supply chain management course targeted at international business (IB) students, one key purpose is to understand how competitiveness is developed across the extended enterprise, rather than within the confines of individual companies. This “winning together” view helps foster capabilities for connectedness and cooperation in …

Social Ties, Prior Experience, And Venture Creation By Transnational Entrepreneurs, Sarika Pruthi, Mike Wright

Faculty Publications

The interaction between resources, and host and home country contexts of transnational entrepreneurs (TEs), is important for understanding their strategies and hence performance of their ventures. Yet, how they deploy their unique experiences and social networks in the founding of ventures in multiple institutional contexts is less understood. Based on 15 in-depth interviews with TEs of Indian origin in the UK, and nine of their counterpart heads of transnational venture (TNV) operations, we explore the use of prior experience, and personal and industry ties in the founding of TNVs in their home country. Our findings show that the way TEs …

Live And Let Live: Africa’S Response Options To China’S Bri, Emmanuel T. Kodzi

Faculty Publications

Kodzi offers a timely perspective on the ongoing debate about how China’s BRI might deliver tangible benefits to African partners. The impact of Chinese engagement on local businesses in different regions is explored both broadly, and in a specific African country context. Using the resource dependence theory and the supply chain practice view, the chapter focuses on technology- and knowledge-enhancing industry linkages to conceptualize a pragmatic response by African industry sectors to the competitive pressures associated with Chinese business engagement. By adopting a response view, this chapter proposes credible options for African countries to increase the strategic value of their …

Cooperative Strategies In International Business And Management: Reflections On The Past 50 Years And Future Directions, Paul W. Beamish, Nathaniel C. Lupton

Faculty Publications

Over the past 50 years, cooperative forms of governance such as equity joint ventures and other strategic alliances have received tremendous attention in international business and management research. This article traces the history of this research over these past five decades with particular emphasis on the critical role that (Columbia) Journal of World Business has played in disseminating scholarly and managerial expertise on the successful management of cross-border, inter-firm collaboration. We highlight the evolution of interest in different contexts, phenomena, theories, and methodologies, along with the factors that have driven interest in these topics. Several suggestions for future research are …

Going The Distance: The Pros And Cons Of Expanding Employees’ Global Knowledge Reach, Shad S. Morris

Faculty Publications

While some scholars have suggested MNEs to be superior to markets for managing knowledge across geographically distant boundaries, how they actually accomplish this has not been fully considered. We address this void by developing and testing a model that highlights the critical role of organizational incentives in enhancing employees’ internal search and use of knowledge. Data from 166 knowledge-intensive projects support our argument that, in contrast to process-based incentives that influence more local search, outcome-based incentives motivate employee teams to reach well beyond their immediate location, which in turn enhances performance. At the same time, we demonstrate that expanded reach …

Innovation Outcomes Of Knowledge-Seeking Chinese Foreign Direct Investment, Xianming Wu, Nathaniel C. Lupton, Yuping Du

Faculty Publications

Purpose

The purpose of this paper is to investigates how organizational learning, absorptive capacity, cultural integration, specialization of the acquired firm and characteristics of transferred knowledge impact innovation performance subsequent to overseas acquisitions.

Design/methodology/approach

Survey responses from 222 Chinese multinational enterprises engaged in overseas acquisitions.

Findings

Differences between acquiring and acquired firms’ capabilities, while having a positive direct influence, suppress the positive impact of organizational learning and absorptive capacity, suggesting that multinationals require some basic level of capabilities to appropriate value from overseas acquisitions.

Research limitations/implications

This paper investigates the impact of knowledge-seeking overseas acquisition of Chinese multinationals on innovation …

The Clash Of Missions: Juxtaposing Competing Pressures In South Africa's Social Enterprises, Emmanuel T. Kodzi

Faculty Publications

Social enterprises seek critical resources to fulfill their mission in a defined domain of action. However, this quest also constitutes a distraction that complicates the operations of any social enterprise. By analyzing the logic of control versus the logic of empowerment for operating scenarios in South Africa, we examine the process trade-offs that enhance or limit social impact. Our findings prioritize efficiency in resolving process trade-offs, since the focus on value creation diminishes the replenishment cycle for value capture. We propose that value chain processes be controlled to the extent that the enterprise acts as a custodian of community empowerment …

International Expansion Through Flexible Replication: Rethinking The Propositions, Emmanuel T. Kodzi

Faculty Publications

The international expansion of businesses today invites the analysis of organizational mechanisms that allow these businesses to thrive in spite of the known challenges of doing business in a foreign culture or market. Specifically, the extent to which firms replicate their existing business models relative to the perceived need for local adaptation is topical. This paper is a commentary on the brilliant work of Anna Jonsson and Nicolai Foss, who outline a model of flexible replication, drawing from a longitudinal study of IKEA, the famous Swedish home furnishing company. Their study concludes with four propositions for further investigation. For the …