Browsing International Business by Author "Aybar, Bulent"
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- ItemChanges in capital structure of listed emerging market firms in the aftermath of the 2007 – 2008 global financial crisis(Southern New Hampshire University, 2017-01-18) An, Botao; Aybar, Bulent; Samii, Massood; Dhakar, Tej; Ficici, AysunThe 2007 – 2008 global financial crisis led to one of the worst recessions in history and created enormous adverse impacts on global demand, equity and debt markets around the world. Globalization increases competition for emerging-market (EM) firms both inside and outside their domestic market. One of the key challenges that they have is how to finance their growth opportunities, especially under these adverse circumstances. The impacts on most developed-country (DC) firms were devastating while EM companies experienced different levels of effects due to the aftermath of the crisis. In this study, I explore how patterns of EM firms’ corporate financing decisions have changed in the aftermath of the global financial crisis. Using data from 10,860 listed firms from 22 emerging markets, which were classified by MSCI between 2000 and 2014, results show that EM listed firms with more growth options, have less profitability, larger size, more tangible assets, higher business risk, higher tax payments, higher degree of internationalization, can carry more debt. I then analyze the changing dynamic of EM listed firms’ leverage choices; results suggest capital structure determinants have different impacts on leverage prior to, during, and after global financial crisis. There is a delayed effect of impacts of the global financial crisis on EM firms’ leverage policy; creditors only took precautions on the adverse environment during the crisis period (2007 – 2009). Nevertheless, there is a changing pattern on EM firms’ capital structure determinants during recent decades. In the 1990s, EM firms’ debt usage decisions were dominated by institutional factors, and impacts of institutional factors on firms’ debt usages gradually transfer to firm-specific factors after the 1997 Asian financial crisis. Previous studies suggested EM firms’ leverage policies can be explained by the “pecking-order theory” and the “agency theory” before the 2007 – 2008 global financial crisis (Fan et al., 2014; Fernanedes, 2011). In this paper, I found that the “pecking-order theory” maintains its effectiveness in EM firms’ leverage policies, and the “trade-off theory” gradually shows its effectiveness throughout the sample period. Unlike EM firms in the whole sample, internationalized EM firms also follow different changing patterns in leverage policy determinants during the sample period, and they experienced the impact of the global financial crisis immediately. Due to additional risk exposure of internationalization, internationalized EM firms’ leverage policies show support to the “pecking-order theory,” but the “trade-off theory” and the “agency theory” are also supported in sub-sample periods. (Author abstract)
- ItemClimate change and sustainability strategy: MNCs performance assessment - impact of climate change on business sector(Southern New Hampshire University, 2018-11) AL Ghunaim, Mashari S; Samii, Massood; Dhakar, Tej; Aybar, Bulent; Lightfoot, William; Zilch, KathleenClimate change poses many challenges for business operations worldwide. The study evaluated multinational companies (MNCs) and the implications of climate change on their business operational activities. Moreover, the study adopted a mixed-methods research design in a bid to evaluate sustainability strategies embraced by these business organizations purposely to counter climate change risks. Two methods were adopted for this research. First, this study utilized the quantitative method where the Natural-Resource-Based View (NRBV) concept was adopted to investigate whether companies are complying with the implementation of strategies geared towards reducing its impact on climate change compared to their competitors whose strategies are less proactive. This study also embraced, the Return on Assets (ROA) and Asset Turnover (AST) for assessment purposes given their distinctive nature as financial parameters. The criteria used to select companies for this study was based on their best practices that met the requirements of the MSCI ESG Global Indexes, like, Climate Index, Environment Index, Pollution Index, Clean Technology, and Sustainability Index. The companies for this study were selected from industries located in the United States, Japan, ٍand some European and Asian countries. Findings for the first part of the study reveals that, United States companies, the proactive MNC’s financial parameter (mean AST) was significantly lower than the less proactive MNC’s. While, in the Japanese, Europe, and the Global group samples of the proactive MNC’s, financial parameter (mean ROA) was significantly higher than less proactive MNCs. Remaining Asian group sample show, no significant differences in mean ROA or the mean AST across proactive and less proactive MNC’S. Second, the study also utilized a qualitative method where research participants shared their different experiences, viewpoints, ideas, and thoughts on climate change were sought. The methodology also entailed the selection of 108 companies to help understand the impact of climate change on business and the sustainability strategies adopted to cope climate change risks. Data collection was conducted through self-administered open-ended questions with data analyzed qualitatively and quantitatively through thematic and descriptive methods respectively. In this part it was found that slightly more than half of the subjects were awareness of on climate change while the rest had no idea on climate change or were uncertain about the concept. By contrast, about three quarters of the subjects were not aware about the difference between climate change adaptation and mitigation; a quarter of them had some knowledge on the difference while only about a tenth of them were well versed with the differences. 45.37% of the subjects agreed that their companies were proactive in climate change adaptation, 28.70% strongly in agreed, 14.81% were uncertain and 10.19% disagreed. Only 1.85% of the subjects strongly disagreed. Moreover, 60.19% of the subjects disagreed that climate change affects business while 40.74% supported the idea. 56% of the companies did not have the climate change adaptation plan versus 44% that had. Additionally, 72.22% of the companies did not have the sustainability strategy for climate change versus 27.78% that had. Regarding knowledge sharing on mitigation and adaptation with partners, slightly more than one third of the companies shared their knowledge with partners compared to slightly more than half of the companies that did not. The study recommended future research to explore on factors contributing to this practice in order to facilitate effective climate change management. (Author abstract)
- ItemEssays on tax systems and corporate tax avoidance: the effect on MNC location choices and firm value(Southern New Hampshire University, 2016-12-31) Baker, Michael A.; Aybar, Bulent; Nugent, Nicholas; Ficici, Aysun; Dhakar, TejThe following dissertation is structured as two related essays on tax systems and corporate tax avoidance. The first essay focuses on the firm level impact of a government’s transition from a worldwide tax system to a territorial tax system. Utilizing a case study approach, ten firms within the tax jurisdiction of the United Kingdom are analyzed pre- and post-transition. Firm behavior is evaluated pre- and post-transition through firm level incentives to shift earnings and firm level utilization of tax havens (i.e. subsidiaries located in tax advantageous areas). Despite significant efforts put forth by governments to reduce corporate tax avoidance and tax haven utilization, case study findings reveal little evidence that territorial tax systems promote such firm behavior. The second essay focuses on the firm level change in share value, and the associated return to holding such shares, for firms that engage in corporate inversion. Cumulative abnormal returns are reviewed for a set of inverting firms to determine whether shareholders value corporate inversion transactions. In addition, this essay reviews the relationship between such cumulative abnormal returns and certain firm level incentives to shift earnings, tax haven utilization, and other firm characteristics such as permanently reinvested foreign earnings. Results reveal that the level of both permanently reinvested earnings and intangible assets impact the value shareholders place on the shares of firms engaged in corporate inversions. (Author abstract)
- ItemExchange rate fluctuation and firm value analysis of emerging market multinationals(Southern New Hampshire University, 2006) Thirunavukkarasu, Arul; Aybar, Bulent; White, Charles; Samii, Massood; Fellman, Philip VosThe purpose of this dissertation is to broaden the understanding of exchange rate exposure of Emerging Market Multinationals (EMNCs). It is well known that emerging markets are more risky than the developed markets therefore it was hypothesized that the exchange rate exposure of the EMNCs would be greater than the developed market multinationals (DMNCs). The findings of the thesis are as follows. Using a sample of 212 MNCs from emerging and developed markets it was found that a) More than 60% of the EMNCs and the DMNCs are significantly exposed to exchange rate fluctuations. This finding in is an improvement from the earlier studies in this area where the proportion of exposed firms was thought to be below 25%. b) Analyzing the magnitude of the exposure, EMNCs are 20% more exposed than developed market MNCs. c) On analyzing the direction of the real exchange rate exposure, EMNCs are predominantly positively exposed to the exchange rate risk, i.e., they gain in value with local currency appreciation. Since the EMNCs have significant multinational presence, it is concluded that the positive exposure is a result of presence of foreign currency debt. A direct implications of these findings for the investor community is that EMNCs are more exposed to exchange rate fluctuations than DMNCs. Further in analyzing the EMNCs as investment vehicles, attention has to be given to the level of foreign debt held by EMNCs as this can have direct implications on the firm value. (Author abstract)
- ItemThe impact of international cross-listings on firm value after the Sarbanes–Oxley Act: Evidence from American depositary receipts(Southern New Hampshire University, 2012-03) Cao, Man Minh; Aybar, Bulent; Samii, Massood; Ficici, Aysun; White, CharlesThe Sarbanes-Oxley Act is formally named the Public Company Accounting Reform and Investor Protection Act of 2002. The act is arguably one of the most significant reforms to affect the U.S. stock markets since the Securities Exchange Act of 1934. This study compares valuation implications of ADR announcements before and after the introduction of the act. A total of 234 ADR announcements are analyzed over a time frame spanning from 1994 to 2010 by employing event study methodology. Even though several studies attempt to explore the effects of the act on the value of firms issuing American Depository Receipts (ADR), reported results are either negative or positive. The empirical results presented in this study indicate that the impact on ADR issuing firms is not negative. The observed cumulative abnormal returns (CARs) reveal that investors on average positively react to ADR issue announcements during the post Sarbanes-Oxley period. However, empirical results do not lend support for the hypothesis that CARs are significantly different during the two periods analyzed in the study.
- ItemInternationalization of small and medium sized enterprises and longevity: A study of SMEs from software publishing services industry(2014-05) Ganesan, Vedavinayagam; Massood, Samii; Nugent, Nicholas; Aybar, Bulent; Dhakar, TejInternationalization of small and medium sized enterprises (SMEs) is an increasingly important area in international business research. One of the important discussions in internationalization of SMEs is relationship between internationalization and performance. A considerable amount of literature has been published on this relationship. Performance measures in these studies often include profitability, organization growth and competitiveness. So far, however, there has been little discussion about link between internationalization and longevity or survival of SMEs. Longevity as a measure of performance of internationalization of SMEs combined with other performance measures would give added understanding of internationalization of SMEs. The main purpose of this study, therefore, is to discover relationship between SMEs’ internationalization and their longevity. Despite their inherent vulnerabilities and heightened risks they face during their internationalization, SMEs continue internationalizing. Resource based view theories, location advantage theories and liabilities of foreignness theories can justify this counterintuitive behavior. SMEs’ ability to reap benefits of internationalization using their resources and location advantages improve longevity. Internationalization risks SMEs face are for short period and after these short-term hurdles, liabilities of foreignness decrease, benefits of internationalization overweigh risks and chances of longer survival improve. This study proposes that, all else being equal, internationalization has positive impact on longevity. This study focuses on SMEs from software publishing service industry. The study sample includes 67 USA based active and inactive small and medium sized software firms (SMSFs) existed between 1984 and 2013. Mean, Variation and Trend of degree of internationalization are related to number of years of firms’ existence using multivariate linear regression methodology. This study finds that size of internationalization alone does not have significant impact on longevity of SMSFs. Variation in level of internationalization has significant positive impact on longevity. Considering variations in level of internationalization as result of firms’ pro-active strategic actions, this study suggests that strategic variation rather than the level of internationalization help to improve longevity of SMSFs. This research also finds evidence that short-lived SMSFs spent more on R&D and acquired more assets when compared with long-lived SMSFs and SMSFs improved longevity through mergers and acquisitions. (Author abstract)
- ItemInvestor heterogeneity: Price momentum and trading volume reactions of foreign listed firms(Southern New Hampshire University, 2018-09-27) Zhang, Yan; Aybar, Bulent; Samii, Massood; Ficici, Aysun; Dhakar, TejInvestor homogeneity is an important assumption in the efficient market hypothesis. However, viewing the financial markets from the eye of a professional trader, they are never efficient. Financial markets are composed of heterogeneous investors with the aims of speculation. Due to the large gap between theory and reality, many anomalies often occur. Price momentum as one of the commonly seen anomalies attracts the most attention from both scholars and practitioners. Prior finance literature documents that momentum is caused by investors’ differential beliefs or investor heterogeneity. Recognizing the importance of investor heterogeneity prompts scholars to incorporate it into asset pricing models, but they face a series of challenges. The objective of this study is to address the current challenges of quantifying and testing predictions on investor heterogeneity. By analyzing investors’ compositions, I argue that foreign listed firms are natural habitats of diverse investors. Compared with pure US firms, foreign listed firms provide perfect market venues to study investor heterogeneity. Using stock data of 2,200 NYSE and NASDAQ firms from 2000 to 2017, I classified them into higher/low order foreign listed firms and pure US firms. Momentum is tested by the Winner and Loser strategy, while trading volume is modeled by a regression of absolute return on volume turnover. This study finds that the three groups of firms have long term momentum in decreasing order, and investor heterogeneity plays an important role in price momentum. From phenomenon to essence, this study constructs a novel paradigm to quantify and forecast investor heterogeneity. It is also the first study to investigate the microstructural explanation of momentum and trading volume, and to state the relationship between liquidity and heterogeneity. The “Two Period Order Flow Model” and the “Heterogeneous Market Hypothesis(HMH)” also have important implications and contributions in both academics and industry. The conclusions of this research can benefit professional traders and option strategists in designing their trading strategies; it can help researchers avoid using proxied variables to quantify investor heterogeneity, build heterogeneous asset pricing models and create theoretical foundations for technical analysis; the HMH is also an alternative theory in challenging the EMH; and it can also help regulators better understand the financial markets. (Author abstract)
- ItemKnowledge transfer in multinational enterprises: intra-firm and inter-firm perspectives(Southern New Hampshire University, 2016-05-17) Wang, Lingling; Samii, Massood; Ficici, Aysun; Aybar, Bulent; Collins, J. StephanieThis dissertation aims to explore one of the most important aspects of knowledge management, knowledge transfer in multinational enterprises (MNEs). It examines this knowledge transfer process from two distinct perspectives: intra-firm and inter-firm. Intra-firm transfer of knowledge refers to the knowledge flow between headquarters and subsidiaries and inter-firm transfer is defined as the knowledge transfer between partners in international joint-ventures (IJV). Specifically, it attempts to investigate the factors that influence the intra-firm knowledge transfer process and the willingness to share knowledge between partners in IJVs, in order to improve the performance of MNEs. Since willingness to share knowledge between partners is more complex than that between parent and subsidiary due to the difference in ownership structure, if MNEs are able to manage the willingness to share knowledge in IJVs, then dealing with it between parent and a subsidiary should be much easier. To examine intra-firm knowledge transfer, system dynamics (SD) modelling is adopted and simulations demonstrate that both the transmission willingness and capacity, and absorptive willingness and capacity are important for MNEs to enhance its performance, since knowledge transfer is a two-way communication process. In order to reach a win-win situation, both headquarters and subsidiaries should be willing to share knowledge and learn from each other. To improve the effectiveness of knowledge transfer, ways to enhance transmission willingness and absorptive capacity, and cultural factors that influence cross-border communication are explored and discussed. In inter-firm knowledge transfer, most of the research literature examines at the absorptive capacity of recipients of knowledge, but does not examine the willingness to share knowledge. In fact, knowledge will not be effectively and efficiently transferred between partners if only capacity is involved. Therefore, the willingness to share knowledge is equally important in the knowledge transfer process. After a survey of literature, several factors that may influence willingness to share knowledge between partners in IJVs are identified. Then questionnaire was sent out and based on the responses of the survey, three case studies are employed to verify those factors that determine the willingness to share knowledge in IJVs in China. This dissertation attempts to get a better understanding of the intra-firm and inter-firm knowledge transfer in academia and provide some useful insights to practitioners in order to effectively and efficiently manage knowledge in MNEs and enhance firms’ performance, since knowledge is the most important strategic asset that firms possess and is closely related to their sustainable competitive advantage. (Author abstract)
- ItemThe obsolescence of patent proxies as country and firm innovation measures(Southern New Hampshire University, 2016-12) Chambers, John G. II; Samii, Massood; Aybar, Bulent; Ficici, Aysun; Nugent, Nicholas; Dhakar, TejStrategic practitioners and business scholars continuously analyze and study competitive advantage through innovation, seeking measurements that provide evidence of cause and effect. As a policy matter and academic matter, the impact of intellectual property rights on innovation is still debated. Despite the argument from authority via some bureaus, institutions and vested interests, who do emphasize some empirical studies, the matter remains unsettled. This would appear perplexing considering the volumes of scholarship surrounding this topic. This dissertation encourages a stepping back and, via refreshed considerations of classical and contemporary international business literature, a baselining of the analysis. A means to balance the holistic with the detailed is necessary; innovation proxies, such as R&D spending or patent activity, are suspect given the fluid nature of innovation. Offering an enhancement to the value chain paradigm, a means to assess innovation as comparative advantage demands respect to the holistic activities of firms and country institutions. Property rights are often employed to show economic growth and innovation; however, property rights require parsing to determine if physical property rights alone are an impetus to innovation without reliance on intellectual property rights. The usage of patent as innovation proxy is challenged in this thesis. Thus, the argument is constructed by viewing multiple, theoretical drivers that effect the firm as well as country-specific institutions. The results indicate that patent protection is not correlated with macro-level views of innovation, and it is not an appropriate proxy for innovation unless confined in the narrowest of scenarios. (Author abstract)
- ItemOverinvestment of free cash flow in emerging market firms: An empirical analysis(Southern New Hampshire University, 2018-12-15) Hruban, Nicole; Aybar, Bulent; Chugh, Lal; Dhakar, Tej; Samii, MassoodFree cash flow overinvestment stemming from agency conflicts and moderators of this relationship have been empirically confirmed in several studies for developed markets. Research on emerging market firms has however produced less coherent results. While it can be argued that these incongruities are a consequence of the samples analyzed and the methodologies applied, they might also be rooted in the theoretical underpinnings: Agency theory originates from developed market research, consequently assuming an institutional environment as well as firm characteristics different from those observed in emerging market companies. This study empirically evaluates the investment behavior of a sample of emerging market firms with a methodology that specifically allows a test of the agency-based explanation of excess investment. The findings support overinvestment as a function of free cash flow, thereby confirming the free cash flow hypothesis in emerging market firms. Additionally, the results propose that this relationship can be negatively moderated by corporate governance mechanisms as well as ownership concentration; suggesting (similar to developed market firms) a principal -agent conflict motivated overinvestment. Debt as a “traditional” way to mend this agency problem can however not be confirmed. Furthermore, the study provides empirical evidence for a moderating effect of the institutional environment on the free cash flow overinvestment relationship via its interaction with firm characteristics. This proposes that the two are interrelated and that agency theory might not be invariant to the specific institutional setting. (Author abstract)
- ItemPolitical risk and MNC's location decision - a dynamic perspective(Southern New Hampshire University, 2006) Rajamanickam, Mohana; Samii, Massood; Aybar, Bulent; Dhakar, Tej S.; Fellman, Philip VosThis thesis builds a dynamic modeling tool for analyzing the impact of political risk on the production location decisions of multinational corporations (MNCs). The choice of location by MNCs involves various decisional factors and the time- dependent interactions among them. A sophisticated location analysis has to incorporate these complexities in a holistic perspective. The combined impact of learning and political risk on the location decision was studied in this thesis through computation simulation. The key findings are as follows. a) The cost of operating in a host country increases with increasing political risk. Hence, a country with high political risk receives increasing investment at a later point in time than a country with lower political risk. From a country’s national perspective, FDI policy makers need to focus on reducing the transaction cost due to political risk in order to receive earlier investments .b) An increased rate of learning by MNCs helps to reduce their transaction costs and this helps them expand internationally at an earlier stage compared to a slower learning MNC. A fast learning MNC in a risky environment can outpace a slow learner in terms of lower operating costs and profitability. It thus follows that MNCs need to consider the risk of the host country in combination with their learning capacity when evaluating international production locations. c) If the alternative location choice is a cheaper destination but has high political risk, smaller MNCs cannot gain a cost advantage by investing in such a host country because they lack economies of scale necessary to utilize this potential advantage. It only makes economic sense for large MNCs to move their production locations to riskier countries for cost advantages. Finally, the dynamic methodology employed in this thesis is a novel analytical contribution to the discipline of international business. By altering the variables in the simulation model, various scenario analyses specific to a firm and country can be performed which can be of value for FDI decision makers in a variety of settings including corporate strategy, marketing, finance and economic and social policy. (Author abstract)