TONGJI UNIVERSITY SCHOOL OF ECONOMICS AND MANAGEMENT – THE UNIVERSITY OF SYDNEY BUSINESS SCHOOL

EMERGING MARKET RESEARCH GROUP (EMRG) JOINT RESEARCH WORKSHOP

1. Date and Time

11:30am-3:00pm (Shanghai Time), 2:30pm—6:00pm (Sydney Time)

December, 10^th, 2021

2. Where

Via Zoom

ID: 864 2162 0937

Link for registration: https://us02web.zoom.us/meeting/register/tZIpdeiurDsjGdMoinRY_P14LDXUHa67AdkiTongji SEM Onsite: Rm 2208 Tongji Building A (onsite limited seats available to Tongji SEM faculty and students)

3. Format

Paper presentations followed by Q&A

4. Participants:

Researchers and staff from Emerging Market Research Group, The University of Sydney Business School, and School of Economics and Management, Tongji University.

WORKSHOP CONTENTS

The workshop is the second joint research workshop between University of Sydney Business School and Tongji University School of Economics and Management: Advancing Emerging Markets Research. The workshop will be divided into three sessions with the following themes:

• Session 1: Institutions and OFDI of Emerging Economy Firms
• Session 2: Interactions between firms in new globalization era
• Session 3: Socialization and Digitalization of Firms in International Business

Session 1: Institutions and OFDI of Emerging Economy Firms

Topic: Institutional Capabilities and Time to First Internationalization: A Study of Indian Firms

Presenter: Vikas Kumar, The University of Sydney

Abstract:

Institutions have been shown to be an important determinant for a firm’s internationalisation strategy, yet the literature dealing with the role of institutional change is scarce. Both, host and home country institutional environment, as well as their evolvement, shape a firm’s internationalisation strategy, including their speed of first internationalization. To fully comprehend in how far such institutional change affect domestic firms’ speed of internationalization, the focus of this paper lies on home country capability development that enables a quick internationalization after inception. We argue that firms develop institutional capabilities from home country institutional change and incorporate aspects of experiential and organizational learning to understand capability development. We link this home country capability development to the firm’s ability to pursue a faster first internationalization.

Topic: Institutional-Driven or Institutional (In)compatible? The Influence of State Ownership on POEs’ OFDI to Developed Economies

Presenter: En Xie, SEM Tongji University

Abstract:

International business research has developed multiple theoretical lenses on how state ownership influences a firm’s outward foreign direct investment (OFDI). Institutional-driven view suggests state ownership boosts OFDI activity, while institutional (in)compatible view suggests OFDI is discouraged by privileged compatibility at home or lack of legitimacy abroad. This study focuses on whether state ownership promotes or reduces the OFDI to developed economies made by Chinese privately-owned enterprises (POEs). Using a sample of publicly-listed POEs in China, we find state ownership reduces POEs’ engagement in OFDI to developed economies, aligning with the prediction of institutional (in)compatibility. Furthermore, the subsidy a firm receives from the government weakens this negative effect, whereas negative media coverage of a firm strengthens it. These findings finally identify lack of legitimacy (institutional incompatibility) as the dominant mechanism through which state ownership of POEs hinders their OFDI.

Keywords: state ownership; OFDI; institutional theory; emerging economy

Session 2: Interactions between firms in new globalization era

Topic: Perceived Institutional Heterogeneity and Export Behavior of Emerging Market Firms

Presenter: Huan Zhang, The University of Sydney

Abstract:

This paper studies the relationship between institutional complexity and firms’ global strategies. This study conceptualizes a theoretical property of institutional complexity in emerging markets: institutional heterogeneity. We attempt to understand how perceived institutional heterogeneity in the home country influences the exporting behavior of emerging market firms? This study argues that perceived institutional heterogeneity has an inverted U- shaped effect on firms’ export propensity. However, once firms become the exporter, the perceived institutional heterogeneity reduces their export intensity. Further, this study proposes firms’ size and ownership structure can moderate the proposed relationships. The large size and state ownership intensify the inverted U-shape relationship between perceived institutional heterogeneity and export propensity. Meanwhile, large firm size and state ownership reduce the negative effect of perceived institutional heterogeneity on export intensity. The results provide supporting evidence for these predicted relationships in the analysis of a sample of 57,555 emerging market firms from 76 countries over 11 years.

Topic: The Asymmetric Interactions among Developed Country Multinationals, Emerging Market Multinationals and Local Firms in the Global Mobile Money Industry

Presenter: Nan Zhou, SEM Tongji University

Abstract:

Incorporating the concept of status into the study of legitimacy spillover and competition, this study examines the asymmetric interactions among developed country multinationals (DMNEs), emerging market multinationals (EMNEs), and local firms in the global mobile money sector. These interactions have led different types of firms to demonstrate different patterns, with regard to how established firms impact new entries. Our empirical investigation of market entry strategies, from 2001 to 2015, among DMNEs, EMNEs, and local firms in the global mobile money industry shows that: (1) there is legitimacy spillover from DMNEs to EMNEs, but not vice versa; (2) there is legitimacy spillover and competition between EMNEs and local firms; and (3) DMNEs and local firms represent competition to EMNEs, but not vice versa.

Keywords: status, legitimacy spillover, competition, DMNE, EMNE

Session 3: Socialization and Digitalization of Firms in International Business

Topic: Socioemotional Wealth and Family Firms’ Internationalisation

Presenter: Roshni Ali Quresh, The University of Sydney

Abstract:

It has been claimed that family firms are unique, because they prioritise non-financial goals over financial goals. However, this claim has received limited empirical attention. Motivated by this gap, my study utilises the lens of socioemotional wealth (SEW), based on behavioral agency theory, to explore family firms’ internationalisation. SEW is of particular interest, as it captures the non-financial nature of family firms. It is characterised by family control and influence, the identification of family members with the firm, binding social ties, emotional attachment, and the renewal of family bonds to the firm through dynastic succession. To explore the relevance of these potential influences, I conducted thirty-five semi-structured interviews with a sample of manufacturing firms in West Bengal, India, and utilised an interpretive case study approach. I used Template analysis to analyse the data. My findings illustrate how a series of familial values—a family’s joint living, goodwill, networks, emotional consequences, and planned succession—affect their internationalisation. These findings add empirically-grounded specificity to the concept of SEW, which has to date been described only in general terms.

Topic: Digital Name Matters! Strategic categorization in growth of global digitalization

Presenter: Tianyu Gong, SEM Tongji University

Abstract:

Scholars examined the technological impacts of digitalization on firm international activities. However, they have paid less attention to the socio-cognitive (i.e. category) impacts of global digitalization. This complication is of concern because category, a typical socio-cognitive construct, usually co-evolves with emerging technologies. Invoking a goal-based view in strategic categorization literature, we argue the growth of digitalization may motivate the firms from developing countries to strategically adopt a digital name, a symbol for digital category, to gain legitimacy that helps them attract foreign investment from developed countries. Further, we propose that developing countries firms’ outward foreign direct investment to developed countries facilitates their adoption of digital names. Moreover, media coverage amplifies the effectiveness of a digital name in attracting foreign investment from developed countries. We find empirical support for these arguments using a database of newly publicly listed firms in China between 2013 and 2018. This study enriches the category literature and influence of global digitalization on firm international activities.