Lilach Nachum

Measurement of productivity of professional services

Existing measures of productivity were designed to measure productivity in industries in which both input and output are tangible standardised quantities. They are inadequate for productivity measurement of professional services, where intangible and specialised factors of production are in use. This paper seeks to address the difficulties associated with the measurement of productivity of professional service firms and to propose a more adequate measure of productivity in these industries. This measure is tested on a sample of Swedish management consulting firms, and is assessed in relation to several performance indicators of these firms. The findings illustrate the inadequacy of the manufacturing‐based measurement procedures and demonstrate that a measure which acknowledges the unique characteristics of professional services correlates better with firms’ performance. As this field of research is in its infancy, these findings are only suggested as indications for direction in which future research is needed.

Neo-Marshallian Clusters and Global Networks: The Linkages of Media Firms in Central London

Abstract This paper examines the nature of the external linkages of firms in the media cluster of Central London, and draws implications for the competitive advantages that firms in clusters develop. The analysis suggests that although these firms are strongly embedded in the local cluster and rely heavily on resources and processes available locally, they also maintain linkages that extend well beyond the local cluster. We argue that firms need to identify a successful balance between localised sources of interaction and those residing at wider geographic areas, and to establish linkages at these different geographic scales in order for them to compete successfully.

Does It Matter Where Countries Are? Proximity to Knowledge, Markets and Resources, and MNE Location Choices

We suggest that the proximity of a country to other countries is a factor that affects its choice as a multinational enterprise (MNE) location. We introduce the concept of a countrys proximity to the global distribution of knowledge, markets, and resources, and frame this concept as a function of both geographic distance and the worldwide spatial distribution of these factors. We test our location model on a data set comprising 138,050 investments undertaken by U.S. MNEs worldwide. Our findings show that the proximity of a country to the rest of the world has a positive impact on MNEs choosing that country as a location. Proximity to the worlds knowledge and markets are stronger drivers of location choice than is proximity to the worlds resources, after accounting for the countrys own endowments. Larger firms are able to benefit more from remote locations than smaller firms are.

When is Foreignness an Asset or a Liability? Explaining the Performance Differential Between Foreign and Local Firms

I seek to make sense of the variety of performance differentials between foreign and local firms observed in international competition and to examine the circumstances that explain these varying outcomes. Toward this end, I develop a theoretical framework that allows for situations in which the costs and advantages that foreign firms have relative to local firms are stronger, weaker, or nonexisting. In this framework, the costs and advantages are measured relative to local firms, and the balance between them determines performance. Tests of the hypotheses on samples of local and foreign financial services firms in London show that affiliates experience the costs and advantages differentially in relation to local firms with varying characteristics. Affiliates enjoy superior advantages when compared with purely domestic local firms, but these differences disappear when affiliates are compared with local multinational enterprises (MNEs). Ownership levels significantly influence the strength of the costs and advantages, but different entry modes undertaken by MNEs have no discernible effect. These findings contribute to the understanding of the implications of foreignness in international competition and the reasons for it being an asset under certain circumstances and a liability under others. They illustrate the merits for practice of understanding the grounds for performance differentials between foreign and local firms, in that different reasons for this outcome require different strategic responses.

MNE linkages and localised clusters: foreign and indigenous firms in the media cluster of Central London

This study examines the operations of multinational enterprises (MNEs) in clusters in an effort to gain insight into the impact of cluster participation on the organisation of international activities and the generation of competitive advantages. Drawing upon the theories of international business and management, in combination with lessons from clustering and networking theories, the study examines the linkages of foreign affiliates in the media cluster of Central London, using indigenous firms in this cluster as the yardstick for comparison. This examination suggests that the major factor affecting the advantages accruing to MNEs from cluster participation is the extent to which internal linkages within MNEs substitute for local cluster linkages.

Does Having Women on Boards Create Value? The Impact of Societal Perceptions and Corporate Governance in Emerging Markets

Many governments seek to impose gender equality on boards, but the consequences of doing so are not clear and could harm firms and economies. We shed light on this topic by conceptualizing the relationships as firm- and board-specific and embedded within specific contexts. The theory is developed with reference to emerging markets, and tested on Malaysian firms. We find that female directors create value for some firms and decrease it for others. The impact varies across different performance indicators, firms’ ownership and boards’ structure. The findings call for nuanced responses in relation to women’s nominations from both governments and firms.

The Choice of Variables for Segmentation of the International Market

Little is known about the explanatory value of variables commonly used for international segmentation. Therefore there are only vague criteria for guiding the choice of variables for segmentation. Meets this need, using statistical significance in explaining variation in import demand among countries as the criterion. The results show that, in most cases, a small set of variables suffice for explaining variation of import demand; and that measures of trade patterns and monetary situation have strong explanatory value for variation in patterns of import demand for industrial goods. Some of the variables most commonly used as bases for segmentation of these products (e.g. GNP, GNP distribution, size) lack explanatory power. For consumer products the most important explanatory variables are income per capita and level of education.

Winners and Losers in Professional Services: What Makes the Difference?

This paper seeks to explain differences in performance among professional service firms competing in the international market. The empirical analysis focuses on a single industry within this sector: advertising. A comparison between winners and losers is used to isolate the variables with significant explanatory value. The main findings are: 1. Most important explanatory variables for variance in competitiveness among advertising agencies are measures of international activity (duration and intensity of business activity outside the domestic market); 2. Size, scope, creativity and reputation have strong explanatory value for variance in competitiveness among advertising agencies; and 3. Some of the common explanations for variance in competitiveness among manufacturing firms lack explanatory value for differences among advertising agencies (e.g., productivity per employee).

Diversification strategies of developing country firms

Large diversified firms have been a dominant factor in the economies of many developing countries. Nonetheless, they have received only limited research attention, and consequently our knowledge of the nature and extent of their behaviour is limited. This research sought to contribute to filling this gap. Analysis of 163 diversification moves undertaken by 44 firms in various developing countries shows a considerable variation across developing regions and over time in terms of the objectives that drive the diversification activities and the strategies pursued to implement them. This variation can largely be attributed to specific characteristics of countries and regions that affect the behaviour of firms.

Home country and firm-specific ownership advantages: A study of US, UK and French advertising agencies

This study seeks to assess the extent to which home countries affect the ownership advantages of TNCs and their subsequent international competitiveness, and to examine the possible origins of ownership advantages in certain characteristics of the home countries of the TNCs concerned or in specific attributes of individual firms. The paper presents an empirical analysis based on examination of the explanatory power of a set of ownership advantages for the international competitiveness of advertising agencies and their discriminatory power between winners and losers based in the UK, the US and France. The findings suggest that home country characteristics are critical, but they provide only a partial explanation for the nature and extent of the ownership advantages which advertising agencies develop. While some advantages can be attributed to specific home country characteristics, and are thus shared by agencies of the same nationality, others tend to be related to the particular attributes of individual agencies.