This paper seeks to investigate whether and to what extent psychic distance (PD) is considered by scholars as specific determinant of inbound and outbound foreign direct investments (FDI) in China. The key finding of the study is that PD as a determinant influencing FDI seems to be under-investigated. The paper also aims to systematize the limited and fragmented literature about non-tangible perceptions of “distance” between home and host economies and contributes in raising awareness on the concept of PD. It provides useful insights and practical implications for various interest groups such as international business scholars (a more comprehensive review and systematization of the concept of PD), managers (awareness raising on PD, opportunities and challenges in the IB scenario, setting up and strengthening long-term cooperation between Europe and China), and policy makers (investment flows between Europe and China, key barriers which affect companies and require action politically and institutionally to ensure that opportunities are fully exploited by companies).
We review a sample of transfer pricing literature and conceptualize a moderated mediation model of the transfer pricing behavior of managers of multinational firms (MNFs). Our conceptual model suggests that transfer pricing decisions present complex problems to MNF managers that involve interactions between many factors, which could have many consequences, some of which may be at odds with each other. We provide relevant information to managers of MNFs and the regulatory agencies that will assist them in continuing the search for a regulatory and compliance frame work that works in the mutual interest of all relevant stakeholders.
In the international business development, foreign direct investment (FDI) as a general phenomenon has been extensively studied, yet the understanding of particular characteristics of FDI in the retail industry remain limited. The success of international retail trade relies heavily on the understanding of consumers in the host countries. Therefore, this paper analyzed the characteristics and performance of foreign direct investment (FDI) in retail trade using the Japanese FDI data (JFDI) from 1986-2001 as a case. We found (1) an overall trend for JFDI to move from the developed countries to developing countries; (2) a modest correlation between subsidiary size and performance; (3) in certain countries/regions, a positive and significant correlation between entry mode and performance; and (4) a focus of JFDI on the USA and the Greater-China area. The results of this paper provide important implications for countries which want the FDI in retail trade and for companies which want to invest in international retail trade.
Of late, there has been a dramatic shift of world economic power towards less-developed countries, in particular, emerging economies (EEs). The growing influence of EEs is shifting the global competitive landscape, as these new economies are a great source of opportunity, inspiration and innovation. However, companies face the challenge to identify what organizational capabilities are required to serve mass market customers to meet their unique demand and price-performance conditions. In depth empirical studies in this context are largely unexplored in the academic literature. Focusing on the product innovation for India and other EEs with the creation of passenger vehicles from the Indian multinational automaker- Mahindra & Mahindra, our analysis highlights that capabilities to recombine are required to achieve an altered price-performance package. Furthermore, linkage capabilities are required to economize on resources. Also, capability to modularize is required for product performance improvements to serve multiple tiered customers. Using case study design, our study aspires to contribute to the innovation literature on mass markets formulating a set of testable propositions to advance research in this subject.
Piracy of intellectual property, and especially unauthorized downloading of music, movies and software programs, causes significant loss of revenue to US firms. While the illegal downloading of intellectual properties by Chinese consumers has been the focus of various reports published in the popular press, not much academic work on the topic has been published. This paper, based on a review of the extant literature on this topic, is an attempt to further our understanding of this phenomenon. This paper proffers several testable propositions covering a whole gamut of downloading behavior by Chinese consumers and the causes thereof. The paper concludes with a discussion on the limitations of the study followed by directions for future research that could potentially deepen our understanding of this topic.