Jim Slater

FDI, Regional Economic Integration and Endogenous Growth: Some Evidence from Southeast Asia

This empirical study investigates whether FDI caused spillover effects which led to the economic growth of the ASEAN-5 economies (1970–96), and, if that is so, whether the ASEAN Preferential Trade Agreement (APTA) had a significant effect in attracting FDI to the region. Its findings are that FDI has stimulated economic growth most effectively through human factors, and knowledge/technological learning-by-doing effects; and that the formation of the APTA had a lagged influence on FDI inflows to the advantage of the more-developed member countries, and disadvantage of the less-developed member countries.

The European Union and Asean : trade and investment issues

Introduction SECTION 1: THE MACROECONOMIC PICTURE Bridging Two Continents: EU-ASEAN Trade and Investment Foreign Direct Investment in ASEAN: an Historical Perspective Foreign Direct Investment in ASEAN: a Contemporary Perspective ASEANs Outward Direct Investment in Europe SECTION 2: THE ASIAN FINANCIAL CRISIS Financial Upheaval in ASEAN: a European Perspective The Banking Crisis and Competitiveness in the Asian Economies SECTION 3: MICROECONOMIC PERSPECTIVES Floating Market: Currency Crises and ASEAN Tourism Exports The Effects of Outward Direct Investment for the Performance of Locally-Controlled Companies in Malaysia The Distribution of Foreign Direct Investment in Vietnam: An Analysis of its Determinants SECTION 4: THE FUTURE Enlargement to Include Formerly Centrally Planned Economies: ASEAN and the European Union Compared Conclusions

Ethnicity and decision making for internationalisation

Purpose – This paper seeks to review the internationalisation strategies of Japanese and Singaporean firms within the context of Dunning, Hymer and Rugman. Design/methodology/approach – The literature pertaining to culture, environment and Asian management is reviewed and the question is posed whether the management style is changing in response to global market convergence. The study used a mail questionnaire to explore the FDI factors deemed motivational for Japanese and Singapore managers. Findings – The paper finds that managers need to consider the impact that environment and culture exerts on the decision-making process as corporations expand their international reach. Practical implications – One approach to explaining the theory as to why firms expand and perform at different speeds could be to suggest that the cognitive rationale that drives management thinking is environmentally dependent. This would appear plausible given that when the way in which managers make decisions across countries of the same region are compared, differences in thinking do occur. This then exerts an effect on the internationalisation paths pursued by firms. Originality/value – This research questions the suitability of a “one size fits all” approach to internationalisation given the cultural variables that exist between markets. This builds on the literature that examines the suitability of market convergence but at the same time enables the evaluation of the extent to which Asian managers are driven by market capitalism theory at the organisational level.

The global implementation of the “winner's competitive cycle”

Purpose – The purpose of this paper is to revisit the winning cycles model proposed by Abegglen and Stalk to investigate the competitive strategies being deployed by Japanese firms.Design/methodology/approach – This paper discusses the literature on the international strategies of Japanese corporations and explains why simplification of work; elimination of waste; discipline; and continuous improvement and radical innovation strategies are presently contributing to a re‐enactment of the “winners competitive cycle”.Findings – As international competition intensifies, the winners competitive cycle has been re‐engineered as Japanese corporations change course in search of alternative routes for sustaining and maintaining a source of competitive advantage.Originality/value – This paper explains why increased competition and global success has required Japanese firms to reposition their competitive strategy.

Globalisation, levitt and the evidence from Japan and Singapore

Levitts 1983 paper, “The Globalisation of Markets” (Levitt, 1983a), has provided an insightful conceptual framework since first publication. However, its acceptability as a template for globalisation has, in recent years, been questioned by a number of scholars. While globalisation has provided corporations with an opportunity to widen their geographical coverage, it could also be argued that these same opportunities have made the business environment more competitive and the business strategies that need to be adopted, more complex. This is because of the differences that exist, firstly, among the needs, wants and aspirations (Maslow, 1970) of consumer groups; secondly, because of the knowledge and sophistication of consumers today, who are increasingly well informed and sophisticated; and, thirdly, in response to the cross cultural preferences that exist between markets (Chen, 1995; Trompenaars, 1997). Levitt believed that consumers everywhere were waiting to access internationally branded and standardised goods but mainly American goods, at a low price. His theory, though, was not about economies of scale but of the economies of scope and the international availability of standardised, often branded goods of internationally acceptable quality at a low price, which represent a good value for money proposition. In this paper, we revisit Levitts theory and assess whether it is applicable to present day international marketing given the cultural diversity that now exists both across and within markets.

Strategic inertia and the Japanese pharmaceutical industry

This paper examines the behaviour of Japanese pharmaceutical corporations in the light of recent merger activity, questioning strategic momentum theory given the particularly significant influence of culture on the decision‐making process in this market. The international performance of Japan’s pharmaceutical industry has been poor; therefore, we examine the regional orientation of the top global pharmaceutical TNCs, inquiring as to why there has not been greater convergence among Triad countries. Irrespective of cultural differences, this industry has been slow to respond to international macro change, but mergers, acquisitions, and other convergence strategies are now being observed.

The influence of national culture on management style: Are managers in Asia becoming less adverse to change?

The literature describes how institutional environments engineer certain behaviours and cites a number of theories to explain the institutional behaviour patterns exhibited by firms. Three of the theories, namely, ecological (Hannan, 1977, 1984;); resource dependency (Pfeffer and Salancik, 1978); and institutional theory (Scott, 1983; DiMaggio and Powell, 1983; Lincoln, 1978, 1986) share a common theme since they attribute business performance to environmental circumstances. The ecological explanation proposed by theorists, adopts a Darwinian approach to management since it posits a degree of “natural selection”. It assumes populations operating in a free market institutional environment will adapt to the opportunities and constraints of the market place (Hannan, 1977,1984; Childs, 2003). In contrast, the resource dependency view cites resources as a key determinant of performance and argues that national boundaries influence the way institutions behave because of the positive or negative influences that boundaries can and do exert on resources. (Pfeffer and Salancik; Childs, 2003) 1978) Institutional theory extends these theoretical explanations to the wider aspects of the environment and suggests macro-forces trigger institutional change. (Scott, 1983; DiMaggio and Powell, 1983; Lincoln, 1978, 1986; Rosenzweig, 1991; Mizruchi, 1999; Davis, 2000). In response, mimetic behaviours are observed between populations. (Haunschild, 1997)

Government policy, industrialisation and the investment development path: the case of Thailand

This study investigates the interactive role government policy has played in influencing industrialisation and, hence, the pattern of the investment development path (IDP) of Thailand. We start by analysing how, until the 1997/8 financial crisis, the increasing attractiveness of Thailands economy generated benefits from foreign direct investment (FDI) inflows. While its sources of comparative advantage were changing, financial deregulation lured Thailand into abandoning the necessary checks in the financial system thus instigating a financial crisis, which had dire effects particularly on the FDI outflows. Consequently, the traditional pattern of the IDP was disrupted. We conclude that Thailand can re-track into the traditional pattern of the IDP if it pursues the right policies.

ASEAN’s Outward Direct Investment in Europe

Prior to the 1997 currency crisis in Southeast Asia, outward direct investment from the region had been conspicuously on the increase. UNCTAD (1997a) reported that, among the leading outward investors, the ratio of ODI to gross fixed capital formation averaged 9.5 per cent for Singapore, and 6.9 per cent for Malaysia, over the period 1991–95. These figures compare with an average of 5.6 per cent for all developed countries, 7.9 per cent for the European Union, and 6.6 per cent for the United States. Some Asian governments were, and are still, actively encouraging ODI, and the scale of existing and potential movements of capital have made a significant impact on global aggregate flows.

The Effects of Outward Direct Investment on the Performance of Locally-Controlled Companies in Malaysia

One of the most significant developments in international trade and investment over the past decade has been the growth of investment flows by firms from developing countries, such as Hong Kong, Singapore, South Korea, and Taiwan. Investment flows from developing countries have increased from 3 per cent1 of total world outflows for the period 1970–90 (United Nations, 1992: 291), to 15 per cent2 in 1995 (UNCTAD, 1997: 5); a trend which seems likely to continue. Furthermore, recent economic studies have shown that the real value of outward direct investment (ODI) from developing countries has increased at a higher rate than inward direct investment (Tolentino, 1987). Although the percentage of ODI from developing countries is small, most (89 per cent in 1996) originated from a small number of developing Asian nations (nine in 1996), which suggests that the flows are of some importance to these economies (United Nations, 1997: 149). These nine countries included the four Asian Newly Industrializing Economies (NIEs), four developing countries in Southeast Asia, and China (United Nations, 1997: 83).