创新系学术工作坊No.23：国际商务研究

Registration: Zijingang Campus, Zhejiang University

Time: 14:00 – 19:00

Arrival

Welcome Speech

Time: 8:00 – 8:15

Time: 8:15 – 8:30

Keynote Speaker: Alain Verbeke

Building a Research Stream upon Correct Conceptual Foundations

Facilitator: Zhenyu Wu, University of Manitoba, Canada

Time: 8:30 – 9:45

Coffee break

Time: 9:45 – 10:00

Session A

Time: 10:00 – 12:00

Chair: Jijun Gao, University of Manitoba, Canada

Multinational Firm Debt Structure and Financial and Agency Risks

Authors: Jonathan A. Batten (University Utara Malaysia and University of Sydney), Karren Lee-Hwei Khaw (University of Malaya), Peter G. Szilagyi (Central European University), and Martin R. Youngf (Massey University)

Abstract: One key concern for multinational firm stakeholders is the mitigation of agency costs associated with internationalization (a cost of doing business abroad). In this study we build upon this literature and show that while agency costs arise as part of the internationalization process of the firm, debt can be used to mitigate these costs. Multinational firms have access to different choices of debt financing (e.g. convertible bonds versus straight bonds without options, as well as bonds with different maturities). These securities all have different agency costs. The key results of the paper show that multinational firms can utilize the different financial risks associated with different types of debt to mitigate agency risks. Importantly, in this study, we consider the option-like properties -and focus specifically on convertibility - present in some securities issued by multinational firms. We find that both domestic and multinational firms use long term debt to match the growth opportunities of the firm measured by the Market to Book Ratio. Doing so reduces liquidity risks and default probabilities. Institutional investors are also able to utilize convertible debt as a way of controlling agency costs by imposing restrictions on the absolute level of debt. These findings suggest that institutional investors can proactively manage the potential benefits that apply to convertible debt holders from the long-term growth options associated with international expansion.

Overcoming adverse origin stereotyping: Cross-listing in developed economies as a signal

Authors: Jiang Wei (Zhejiang University), and Yan Zuo et al. (Zhejiang University)

Abstract: This article theorizes the signalling role of cross-listing in overcoming adverse origin stereotyping on emerging economy corporations. Combining ideas from institutional voids and institutional fields, we first clarify the asymmetric distribution of information as the key to resolving this challenge. Following the well-established “bonding hypothesis” in international finance, we then demonstrate that cross-listing in developed economies can serve as a signal to overcome origin stereotyping and the regional institutional voids are a prominent boundary condition. Taking Chinese firms’ cross-listing in Hong Kong and their establishment of international joint ventures with developed economy corporations as our research setting, we find empirical supportive evidence. Our contributions and future research directions are further discussed.

Geopolitical Instability, Firms’ Balance Sheet Strength, and Corporate Investment: The International Evidence

Authors: Guangzhong Li (Sun Yat-Sen University), Karen Jingrong Lin (University of Massachusetts Lowell), and Ying Zheng (Sun Yat-Sen University)

Abstract: Using an international sample covering 18 emerging countries over the period spanning from 1995 to 2014, we examine the instrumental role of firms’ balance sheet strength played in mediating the impact of geopolitical instability on corporate investment decisions. We find that geopolitical instability significantly reduces corporate investment for firms with weak balance sheet, but has no significant impact on firms with strong balance sheet. We exclude the possibility that strong balance sheet firms have unobservable characteristics that could impair their investments during geopolitical shocks by showing that geopolitical instability does not affect firms’ sales revenue or accounting performances conditional on firms’ balance sheet strength. Our results are not driven by firms with weak balance sheet being less productive or having less investment opportunities. Further analysis shows that the negative effect of geopolitical instability on corporate investment for firms with weak balance sheet can be attenuated by a country’s degree of financial development and its capital dependency on the banking industry. Our results shed lights on a policy implication that a country could minimize the impact of geopolitical risks on its economy growth by increasing firms’ balance sheet strength.

Lunch

Time: 12:00 – 13:30

Session B

Time: 13:30 – 15:30

Chair: Luke Zhu, University of Manitoba

Asset Investment or Capital Flight? Internationalization in Small and Medium-sized Chinese Family Firms

Authors: : Bao Wu (Zhejiang University of Technology), Chenfei Jin (Zhejiang University of Technology), and Hanqing Fang (Missouri University of Science and Technology)

Abstract: This study investigates two distinctive types of internationalization (asset investment and capital flight) in Chinese family business. Results based on 2,723 Chinese small- and medium- sized family firms support our hypotheses, such that family involvement has a negative effect on international asset investment and a positive effect on capital flight; whereas family political connection has a positive effect on international asset investment and a negative effect on capital flight.

One Tale for Many Cities: Strategic Motivation of International New Ventures in China

Authors: Aiqi Wu, and Di Song (Zhejiang University)

Abstract: Although the increasing number of new ventures competing in global market has spurred a wide range of discussions within international entrepreneurship literature, little has been done to scrutinize the varied strategic motivations pertaining to early and rapid internationalization. By investigating multiple types of international new ventures in China, this study highlights the different nature of early foreign market entry in terms of the underlying strategic purposes. It contributes to the theory of international new venture by providing a more nuanced categorization, and encourages scholars to see and study entrepreneurial internationalization as more heterogeneous.

Performance Relative to Aspiration and R&D Internationalization: A Backward-Looking Approach

Authors: Jian Du, Xiaoran Chang, and Bin Guo (Zhejiang University)

Abstract: Under bounded rationality of decision-makers and high uncertainty, this study provides a backward-looking analytical framework for decision on R&D internationalization. Adopting the behavioral theory of the firm, and using the data from Chinese A-share listed manufacturing firms, we find that when firms fail to reach their aspirations, they are more likely to conduct R&D internationally, and the greater the gap, the higher the risk of R&D internationalization mode chosen by them. While the negative effect of positive performance gap is non-significant. This study enriches the literature in IB and innovation, and answers the “timing” question in R&D internationalization field.