FANG Hong;WANG Yimin
Foreign Economics & Management,2021,Vol 43,No. 01
Gender issue is the frontier research field of strategic management. Facing the deep and complex changes produced by the internationalization situation, it becomes a common choice to have females as the CEO of the company. As the decision-makers and leaders of internationalization strategies, how will female CEOs shape the internationalization dynamic process of Chinese companies? The previous studies have not conducted in-depth discussions on the cognitive logic and influence boundaries behind internationalization strategies. Based on the cognitive perspective of managers, this paper took the important feature of internationalization dynamic process—internationalization rhythm as the breakthrough point, and chose the dynamic panel data of A-share listed companies from 2008 to 2018 in Shanghai and Shenzhen stock exchanges to construct female CEOs’ explanation model to the internationalization rhythm of Chinese companies. Further, it examined the boundary effect of CEO genders on the internationalization rhythm from the perspectives of individual cognition and social cognition. The study has the following findings. Firstly, female CEOs have more comprehensive focus and more objective causal logic, and have relatively low perception of internationalization opportunities. So compared with male CEOs, female CEOs prefer regular and stable internationalization expansion. Secondly, with the improvement of CEOs’ educational level, the overconfidence of male CEOs is significantly reduced and the rational thinking is increased, which can build up relatively objective causal logic. Whereas, the educational level can enhance female CEOs’ self-confidence in their ability and decision-making behavior and adjust the focus of decision-making, and the gender difference in international decision-making will be reduced. Thirdly, female CEOs who pursue social role matching will pay more attention to team identity, and take into account the opinions of each member, thus increasing the degree of distraction and the degree of decision-making prudence. With the increase in the strength of TMT task-oriented faultline, female CEOs’ preference for regular and stable internationalization expansion model will be further enhanced. The main contributions of this paper are as follows. Firstly, it brings the focus deep into the internationalization dynamic process, and builds a more context-dependent theoretical model of the internationalization strategic behaviors of Chinese companies based on the characteristics of internationalization expansion rhythm of Chinese companies, to promote the deepening and integration of internationalization process theories. Secondly, based on the bounded rationality hypothesis, it returns to managers’ cognition itself and pays attention to the cognitive characteristics of decision-makers, such as focus of attention, causal logic, and social cognition, to deeply reveal the micro-cognition basis behind the leap-style internationalization process of Chinese companies and to respond to the call of micro-cognition movement in the strategic management field. Thirdly, it introduces the variables of CEO individual cognitive ability and TMT team structure to analyze the internal mechanism of CEOs’ decision logic and its effective interaction with TMT. This helps to deepen the understanding of the specific influencing mechanism of the internationalization rhythm of Chinese companies. Fourthly, under the situation of anti-globalization and trade protectionism sweeping the world, it has some practical guiding significance in optimizing the company governance structure and improving internationalization decision-making and other aspects.
ZUO Zhigang;YANG Fan
Foreign Economics & Management,2021,Vol 43,No. 01
This paper is to identify the role and mechanism of host-countries’ culture in determining the risk of cross-border merge and acquisition (M&A). With the increasingly complex international environment, cross-border M&A is not only affected by economic risks, but also facing non-economic challenges. Thus, the insight into the cultural characteristics of host-countries and their economic impacts is of great significance for improving the decision-making of cross-border investment. The questions discussed in this paper are what cultural characteristics affect the completion of cross-border M&A deals and what the underpinning mechanism is. These questions are hot issues in the field of cross-cultural finance research. From the angle of the origin of liability of foreignness (LOF) to cross-border acquirers, and based on the institutional theory and the social capital theory, this paper analyzed how the cultural characteristics of host-countries influence acquirers’ legitimacy disadvantage and information disadvantage. Empirically, this paper used a dataset of 2722 Chinese cross-border M&A samples from 1997 to 2017 and a logistic regression model to test the hypothesis. The results show that the level of cultural tolerance and trust in host-countries are negatively correlated with the risk of cross-border M&A failure. In addition, a test with the rule of law in host-countries as moderator variable finds that when the rule of law in host-countries is at a high level, the tolerance and trust have less impact on cross-border M&A risk, suggesting a substitute relation between formal and informal institutions. Further testing also finds that the cultural characteristics of host-countries have a similar impact on the post-performance of cross-border M&A. We conclude that tolerance and trust are two cultural vectors directly related to cross-border M&A risk. Tolerance culture has an impact on the legitimacy disadvantage of acquirers, and then forms the risk of whether M&A activities can be recognized locally; trust culture has an impact on the information disadvantage of acquirers, thus forming the risk in decision-making and contract execution. In the environment of a high level of the rule of law, the influence of culture as an informal system on cross-border M&A risk decreases. This paper contributes to the literature by overcoming the limitation of the popular cultural distance paradigm in international business studies, shedding light on the impact of cultural characteristics, and revealing that the two cultural vectors are significantly related to cross-border M&A risk. These findings deepen our understanding about the mechanism of LOF on cross-border M&A risk, and also provide practical implications to better cross-border M&A decision.
DUAN Yongqian;CHEN Jin
Foreign Economics & Management,2021,Vol 43,No. 01
With the development of venture capital industry and the success of venture capital-backed start-ups, more and more scholars have engaged in research on the role of venture capital in innovation. However, there still exists controversy on this topic, especially on how venture capital influences innovation at the firm level. Most reviews attribute these differentiated results to various factors existing in the relationship between venture capital and start-ups, only based on qualitative analysis. Regarding the lack of theoretical support and quantitative evidence in previous research, this paper firstly integrated the bibliometric method into literature review and explored the underlying mechanism behind the influence of venture capital on start-ups. According to the evolutionary path of applied theories and the mapping knowledge of theme topics in 692 related articles, this paper figured out how previous literature reveals the relationship between venture capital and firm innovation from different perspectives of signal theory, resource-based view (knowledge-based view), institution theory and real option theory, and clarified the differentiated research trends towards private venture capital (PVC), (corporate venture capital (CVC), and government venture capital (GVC). In order to make a more comprehensive and solid illustration, this paper sorted out all the critical factors in each phase of venture capital investment cycle as analytical bases, including fundraising, pre-investment selection, investment strategy, post-investment management and exit management. Based on these essential variables, this paper illustrated how venture capital enhances firms’ innovation efficiency by releasing signals to other stake holders, influences firms’ innovation degree and quality through the flow of resources and knowledge, constructs firms’ innovation efficiency and pattern via institutional logic, and constraints firms’ innovation quality and pattern due to distorted incentives. Further, the differentiated influential consequences and mechanisms of PVC, CVC and GVC were compared from four theoretical perspectives. The results reveal that PVC plays a dominant role in prompting firms’ innovation degree and efficiency, CVC is the most supportive for firms’ high-quality and exploratory innovation, and GVC can just work as stimulus in venture capital industry but has no directly positive effect on start-ups. Meanwhile, all the influences of venture capital are contingent to the macro and industrial environment. Thus, taking the moderate role of environmental variables into account, this paper finally constructed a holistic model between venture capital and firm innovation at multi dimension, which specifies the prerequisites, contingent factors, central driving forces and underlying mechanisms behind the influences of venture capital. On the one hand, this model clearly demonstrated the multiple roles of venture capital in firm innovation, explaining why controversy exists in the related literature. On the other hand, it built up a comprehensive analytical structure and logical chain for future research, with strong theoretical reference and evidence support.
ZHOU Yijin;BAI Meijiadai
Foreign Economics & Management,2021,Vol 43,No. 01
Unlike the passive consumers depicted by the traditional theories of celebrity endorsement, nowadays, it is the fan community that plays a crucial role especially in the process of new celebrity brand endorsement. Incented by the affection to their idol, fans voluntarily gather together to form blurry-boundary organizations to collectively promote the market performance of brands their idol endorsed, which in turn impacts the operation and decision-making of the brands. Such active participation of the fan community produces a new mechanism of celebrity endorsement, to which the current literature has not yet responded with convincing explanations. Based on an 18-month online netnography study of multiple fan communities, this paper discovers that the new celebrity endorsement is no longer a linear value delivery process; instead, it is a dynamic circle of value co-creation consists of a rising star, his/her fan community, and the endorsed brands. In social media, a fan community is driven by both the platform rules and the strong affection to its idol to transform from a tribe bounded purely by affection into an organization of production; the core organization goal consequently changes from affective interaction into expanded reproduction of the celebrity capital, in the process of which celebrity endorsement becomes one of the means to achieve the organization goal. Generally speaking, fans of a rising star with relatively low celebrity capital would expect high value brands to pick up their idol as endorser so that the idol could benefit from the brands. Yet to the brands such cooperation may benefit more to the rising star rather than vice versa. In order to attract brands to the seemingly unappealing deal, the fan community will proactively offer its free labor brand communication as well as consumption to compensate the potential brand equity outflow—they not only act as heavy consumers of their idol-endorsing brands, but also actively help these brands to grab more market shares. As a result, brands are paid off by better communication effects and market performances, which lead to increasing brand equity. Meanwhile, the rising star’s celebrity capital is nurtured and enhanced. In this triangular loop, the fan community not only supports and accelerates the value exchange between celebrity and brand, but also proactively constructs the brand equity as well as the celebrity capital. In this way, the fan community actually generates new capital investment opportunity by attracting other higher-value brands to consider their idol as endorser, hence pushes the celebrity capital to the next higher level of value co-creation circle. As such, the idol’s celebrity capital spirals up through multiple brand endorsement co-creation circles, and the subsequent endorsed brands acquire higher equity in return. Meanwhile, as the bound between the fan community and its idol being continuously reinforced, fans are rewarded by emotional satisfaction and strong confidence grown out of their collective achievement. This study innovatively complements the existing endorsement theories by emphasizing the influence of fans’ voluntary labor; it also enriches the theories of fandom studies and provides important implications to brands to make strategic decisions on celebrity endorsement in the social media environment.
ZHANG Xinmin;YE Zhiwei
Foreign Economics & Management,2021,Vol 43,No. 01
The issue of investment with short-term financing has received increased attention as the central government proposed to fend off and defuse major risks. Previous literature mainly focused on the financial supply-side structural reform, and found that measurements such as increasing the appropriate level of monetary policy, liberalizing interest rate control and strengthening bank-enterprise relations can effectively alleviate investment with short-term financing. This article expanded the research perspective to social trust. We argued that social trust can guide people to follow the social norms recognized by most people and internalize social norms into honest and trustworthy values. Affected by regional social trust, enterprise managers and employees can reduce personal opportunistic behavior and are more willing to trust counterparties. The above-mentioned changes of enterprise managers and employees are likely to reduce enterprise opportunistic behavior and transaction costs, thereby alleviating banks and other creditors’ concerns about enterprise over-investment and debt default risk, and helping to promote long-term close cooperation between banks and other creditors and companies. In this way, social trust is able to help enterprises obtain debt financing that matches their investment, thereby alleviating the degree of investment with short-term financing. By studying all non-financial Chinese listed firms from 2007 to 2018, we find that social trust can alleviate investment with short-term financing. In addition, with the increase of social trust and the decrease of investment with short-term financing, the operating risk and financial default risk of enterprises can also be reduced. Further analysis finds that a sound legal environment can enhance the negative effect between social trust and investment with short-term financing. Our results are robust after controlling endogeneity and different measures of social trust. The potential contributions of this article are as follow. First, it enriches the literature on factors affecting investment with short-term financing from the perspective of social trust in informal institutions. Second, this article expands the literature on the economic consequences of social trust. Existing literature found that social trust can affect the scale of international trade, long-term economic growth, auditing, financial behavior, corporate bond and stock market performance. This article further expands the research on the economic consequences of social trust by examining investment with short-term financing. Third, this article contributes to the literature on the interaction between informal institution and formal institution. Studies have shown that a sound legal system can enhance the mitigation of social trust on investment with short-term financing. This shows that formal systems can promote social trust effects, which provides evidence to the complementary relationship between informal institution and formal institution. Our study also contributes to practice. The findings above provide alternative policy approach to decision-makers to mitigate investment with short-term financing. They also provide academic support for decision-makers to establish and improve a social trust system.
