Professor Agyenim Boateng

This study explores the environmental impact of industrial land prices and strategic interactions among local governments in China, with a focus on how they contribute to pollution. Departing from traditional economic growth models, modern approaches emphasize high-quality development and productivity, considering environmental sustainability. China faces a significant challenge in balancing its economic and environmental performance, necessitating a shift toward a greener development model. Using city-level data and industrial land transfers, we employ two-stage least squares estimates and a spatial lag model to assess the effects of industrial land pricing and local government competition on environmental pollution. Our findings indicate that lower industrial land prices exacerbate pollution, particularly in China's mid-western regions, where land supply policies have intensified this effect. Strategic interactions among local governments in these regions lead to a lose-lose scenario, diminishing the agglomeration effect and worsening environmental outcomes. However, the 2013 reform of China's evaluation system, which placed greater emphasis on environmental protection, has alleviated some of the pollution effects driven by low land price competition. We conclude that reducing land allocation distortions and their spatial spillover effects is critical to achieving high-quality, eco-friendly economic development in China.

Cross-border e-commerce is an important driver of regional economic growth. This article evaluates the impact of the development of cross-border e-commerce commerce on residents' income based on panel data from 300 Chinese cities over the period 2002–2023 in China, using the establishment of a comprehensive cross-border e-commerce pilot zone as a quasi-natural experiment. By employing a difference-in-differences (DID) model, this study examines the impact of these pilot zones on residents’ income levels. The findings reveal that the establishment of cross-border e-commerce pilot zones significantly enhances residents’ income levels, and this conclusion remains robust across various tests. Mechanism analysis further indicate that these zones contribute to income growth through three primary channels: exports, industrial development, and employment. Heterogeneity analysis indicates that the impact of cross-border e-commerce comprehensive pilot zone on residents’ income levels varies by city size and region. Specifically, these zones have a more significant effect on income levels in small cities. Regionally, the impact is particularly pronounced in the eastern region, moderately reduced in the central region, and negligible in the western region. These findings offer a theoretical foundation for promoting the income level of residents through the development of cross-border e-commerce.

This paper investigates whether international reward crowdfunding campaigns effectively attract global backers by testing the global market penetration level and explores the impact of home region orientation and international intensity on crowdfunding performance. Utilising 24,100 Kickstarter reward crowdfunding campaigns in the technology sector across the triad from 2009 to 2019, we find that home-region-specific advantages are important determinants of fundraising success. Our evidence also indicates that home region orientation positively moderates the multi-nationality-crowdfunding performance relationship. Lastly, cross-sectional tests reveal heterogeneous impacts of home-region advantages across backers’ home-country levels of financial inclusion and investor protection.

Using data of Chinese acquirers in strategic sectors, we assess the role of home government and the effects of the interaction between ownership type and government-directed investment policies on acquiring firm value in cross-border acquisitions (CBAs). We find that CBA activities in strategic sectors encouraged by the home-country government through its investment policies experience significant increase in acquiring firm value. We also find that firms investing in government-designated strategic sectors generate wealth for acquirers, but contrary to efficiency logic rooted in agency theory, state-owned enterprises appear to outperform private-owned enterprises. Further analysis indicates that three financial incentives associated with government-directed policies – namely, interest-rate reduction, tax incentives and direct subsidies – constitute sources of firm value. Our results raise several policy implications, including the need for transparent and rule-based policies and governance systems to be developed and implemented by governments in the home and host countries to regulate state-supported firms investing in sensitive strategic sectors.

This study investigates the effect of two key corporate governance mechanisms, board gender diversity, chief executive officer (CEO) power, and their interactions on firms’ implementation of lesbian, gay, bisexual, transgender, and queer (LGBTQ)-supportive policies. Using 348 Fortune 500 firms from 2003–2023, our study reveals that the presence of three or more female directors on the board is positively associated with LGBTQ-supportive policies. We also find that CEO formal (informal) power has a positive (negative) impact on LGBTQ-supportive policies. Lastly, we document that whereas the effects of the interactions of CEO formal power with both the gender diversity measures are positive, the interactions between CEO informal power and gender diversity measures: critical mass and token are positive and negative respectively. Overall, the results suggest that CEO power could act as a double-edged sword, and a high female director representation reduces the negative effect of CEO informal power on LGBTQ-supportive policy implementations.

Pandemic disease outbreaks generate economic disruptions and impact on liquidity needs of firms. However, how pandemics affect liquidity management policies of firms has received relatively little attention. In this study, we examine whether U.S. firms hold more cash during disease pandemics. We find that U.S. firms increase their cash holdings in response to high disease pandemic exposure. The increase is more pronounced for firms that are small, young, or highly exposed to the uncertainty through their greater reliance on government spending. However, expected cash holdings decrease significantly for firms with male CEOs, or more able (or specialist) CEOs who possess more specific rather than general knowledge of their business to make better judgements. In particular, holding more cash in the presence of high disease uncertainty alleviates the negative impact of disease pandemics on capital investment and corporate payout targets. Our findings demonstrate that cash holdings represent a vital channel in mitigating the negative effect of disease pandemics on firm strategic outcomes.

This study considers the combined effects of formal (i.e., national governance) and informal (i.e., national culture) institutions on corruption based on a sample of 52 African countries over the 2007–2022 period. Employing institutional theory, our findings are three-fold. First, we find weak formal institutions (i.e., national governance systems) to be associated with higher levels of corruption. Second, regarding the effects of informal institutions (i.e., national culture) on the level of corruption, our results suggest that high power distance, uncertainty avoidance, and collectivism are associated with higher levels of corruption. However, masculinity has a negative and significant influence on the level of corruption in Africa. Finally, our main results indicate that the joint effect of formal (national governance) and informal (national culture) institutions tends to be associated with a high incidence of corruption at societal level.

This article examines the effects of government policies and institutions on foreign direct investment (FDI) inflows in sub‐Saharan African context using both quantitative and qualitative approaches. On the quantitative approach, we analyzed the effects of institutions on FDI using two statistical techniques—canonical cointegration regression (CCR) and fully modified ordinary least square (FMOLS)—over the period of 1984–2012. We find that political instability, democratic accountability, and investment risk have significant impact on inward FDI in Nigeria. Using a trend analysis, our results provide evidence to suggest that liberal government investment policies have positive influence on FDI inflows. Our qualitative analysis over the 1962–2012 period supports the results of the quantitative analysis.

Abstract

This article examines the relationship between gender diversity, selected female attributes, and financial performance of FTSE 100 firms in the UK. Drawing on critical mass theory by measuring gender diversity as levels of female representation in the boardroom, this study finds a positive and significant relationship between gender diversity and firm performance. However, the results become highly significant and unequivocal when three or more females are appointed to the board compared to the appointment of two or less females. Further analysis reveals that post‐appointment financial performance is positively related to female age, level of education and where female board members also hold executive director positions. The results remain unchanged after accounting for endogeneity concerns and employing alternative measures of firm performance, namely, return on assets and Tobin's Q.

This study explores whether the nature of ownership may condition the extent and impact of political connections on credit risk decisions. We find politically connected boards to exert significant influence on credit risk. Further evidence shows that ownership type of the bank moderates the link between politically connected boards and credit risk. Specifically, state owned banks appear to be more susceptible to credit risk while independent directors in private banks tend to be effective monitors. Our findings have important implications for bank stability and provide a means to measure the success of corporate governance reforms carried out in emerging countries over the past two decades.

This study examines the motives, entry mode choice, and challenges of the international expansion in an emerging country context. Data were collected via interviews from 30 senior managers based on a sample of 10 Chinese commercial banks (CCBs) involved in international expansion over the period of 2001–2013. This study finds greenfield and mergers and acquisitions are the most popular foreign entry mode used by CCBs. The motives of emerging market banks’ internationalization appear to be intrinsically linked to market development to serve customers operating in overseas market, government policies, and strategic knowledge sourcing. In terms of challenges, the study finds lack of management resources/technical capacity, culture, adapting to the host country regulatory environment, and lack of experience to be the main challenges to bank internationalization.

Abstract

Drawing on institutional theory, we examine the impact of corporate governance (CG) on corruption. The interaction effects of national culture and CG on corruption are also examined. By employing a dataset of 149 countries, our baseline findings indicate that the quality of CG practices reduces the level of corruption. Findings also show that three cultural dimensions, namely, power distance, individualism and indulgence moderate the CG‐corruption nexus. Our findings indicate that CG and national culture explain the level of corruption among societies, with national culture appearing to matter more than the quality of CG. Our findings remain unchanged after controlling for endogeneities, country‐level factors, CG and corruption proxies.

Recent studies examining the effects of a credit rating on firms’ capital structure and adjustment of capital structure to target have focused predominantly on non-financial firms, with virtually no attention given to financial institutions. Using an international sample of 391 rated banks from 76 countries, this study examines the effects of credit ratings on the capital structure of banks. We find that, on average, banks near a credit rating upgrade have a higher capital to assets ratio compared to banks not near a rating upgrade. Most systematically important “too-big-to-fail” banks near a credit rating upgrade tend to have lower capital relative to assets than the rest of the banks in our sample. Furthermore, banks downgraded from an investment-grade rating to a speculative-grade rating, on average, hold 1 (3) percentage points less capital relative to assets in the short (long) run. Contrary to studies based on non-financial firms, our results show that credit ratings have relatively little economic effect on the speed at which banks’ capital is adjusted. Our results suggest that while rating agencies exert influences on banks’ capital structure, they are fewer in number and tend to be weaker, compared to those documented in non-financial firms.

This study investigates the relationship between corporate environmental performance, as captured by environmental investment, and firms’ access to trade credit. Using data from Chinese listed firms in heavy pollution industries, we find that corporate environmental performance significantly increases firms’ access to trade credit. The positive effect of environmental investment appears more pronounced for firms with stronger internal incentives to conduct eco‐friendly practices, lower external regulatory pressure and located in regions with higher economic growth rates. Two factors – namely, increased information transparency and reduced exposure to environmental risk – are found to be channels through which environmental investment affects trade credit. This paper provides a nuanced understanding of how a supplier as a stakeholder plays a significant role in financing environmental sustainability. The results are robust to alternative proxies, model specifications, sample compositions and endogeneity concerns.

We examine the effects of CEO compensation, excess reserves, and role of monetary policy on bank risk-taking behaviour based on a sample of 88 Chinese commercial banks over the period of 2003–2014. We find evidence that suggests that incentives present in CEO compensation contracts and excess reserves exert a positive and significant impact on risk-taking and credit risk. However, we find that the positive effects of CEO compensation and excess reserves on risk-taking are cancelled out by the interaction of CEO compensation and excess reserves. Further analysis suggests that the central bank’s monetary policy serves to restrain the effects of an interaction between CEO compensation and excess reserves on bank risk-taking and credit risk. This study extends the theoretical model, which indicates that excess reserves are a major source of credit risk, and notes that the effects of incentives inherent in CEO compensation contracts and excess reserves on bank risk policies are contingent on the monetary policy pursued by the central bank in China’s emerging economy.

Abstract

This study examines the impact of foreign equity portfolio investment on corruption. Employing a large dataset of 44 countries from 2001 to 2015 and three different measures of corruption, our results show that foreign investors from well‐governed countries tend to foster public accountability, reduce asymmetry information and corruption. We find empirical evidence that foreign equity portfolio investment interacts with stock market development and central bank transparency to reduce corruption. Our results suggest that stock market development and central bank transparency are regarded as complementary by international portfolio investors. Further analysis indicates that corruption appears more prevalent in countries where domestic investors dominate the stock market. Our results are robust to endogeneity using dynamic generalized methods of moments (GMM). The findings suggest that attracting foreign equity investors reduces corruption, implying significant benefits for portfolio diversification.

In this study, we examine the effects of political risk across a group of seven industrialised countries (G7) on hedge fund returns and further explore whether the effects of political risk on hedge fund returns vary according to hedge fund strategies employed by fund managers. Employing factor analysis to quantify political risk across the G7 countries, our results evince two interesting aspects. First, we find political risk to exert a negative and significant impact on hedge fund returns, suggesting that hedge fund performance tends to decrease as political risks across G7 nations increase. Second, the effects of political risk on hedge fund returns appear to vary with different hedge fund strategies employed by fund managers. Our results appear robust after employing three different analytical approaches and controlling a set of factors previously identified to affect hedge fund returns.

This paper explores the role of political connections in mergers and acquisitions (M&A) by examining the stock market performance in the short-run announcement period and the long-run post-merger period of Chinese M&A from 1998 to 2017. We further examine whether the corporate governance mechanisms and nature of ownership may determine the extent by which political connections may impact on M&A outcome. The results show that political connection has a positive and significant impact on firm performance for both privately-owned enterprises (POEs) and state-owned enterprises (SOEs). The results are more pronounced in the presence of strong corporate governance mechanisms: board independence and board gender diversity. We also find that the effect of political connection on post-merger performance is higher for POEs in comparison to SOEs. Our results are robust across alternative measures of firm performance and alternative measures of political connection.

This paper investigates the relationship between board overconfidence and mergers and acquisitions (M&A) performance based on 754 M&A deals in the UK from 2002 to 2018. Employing three proxies to measure overconfidence, namely, fraction of male directors on the board, multiple acquisitions and merger characteristics, our results suggest that a higher fraction of male directors on the board and multiple acquisitions lead to poor M&A performance. The results also show that multiple acquirers’ deals generate higher returns than subsequent deals and this is due to self-attribution bias. In terms of merger characteristics, this study has found that, when overconfident acquirers use cash as the method of payment or when they embark on diversifying M&A, it leads to poor M&A performance. The results are robust across both univariate and multivariate analyses and also across alternate measures of post-merger performance. The findings of this study have important policy implication with regard to the ratio of male directors, number of acquisitions and the method of payment.

This study examines whether and how chairperson facial masculinity, a personality trait that signifies dominant power, influences firm value of mergers and acquisitions (M&As) over the 2004–2016 period. Using facial width-to-height ratio (FWHR) to assess personality from 1225 facial images (photos) of chairpersons of 1780 Chinese acquiring firms, we find chairpersons with high FWHR to exert a negative and significant influence on acquirer stock returns surrounding acquisition announcements, returns on assets and Tobin’s Q, suggesting that chairpersons with high FWHR destroy the value of acquiring firms in both the short and long term. Further analysis examining the potential channels through which the chairperson’s dominant power destroys firm value of M&As suggests that the time taken to complete the M&A transaction, the use of more leverage and the non-employment of professional transaction advisors explain the results. Our results remain robust after controlling for acquirer and deal characteristics, corporate governance variables and chairperson’s personal characteristics and accounting for endogeneity concerns.

We investigate the impact of political uncertainty on the relationship between foreign equity portfolio flow and the cost of capital. Using panel data from 40 countries from 2001 to 2016, our results show that the year before a national election is associated with a higher cost of capital. Further analyses show that the relationship between international equity portfolio flow and the cost of capital is sensitive to political uncertainty. In line with the institutional quality channel, we find that checks and balances interact with political uncertainty to reduce the negative effects of political uncertainty on the cost of capital. The results are consistent with the hypothesis that foreign investors strategically reduce their equity portfolio investment to the recipient country before a national election which reduces risk-sharing between domestic and foreign investors.

Purpose This paper aims to investigate the effects of external sources of finance and ownership type on the value creation of Chinese acquiring firms. Design/methodology/approach The data set consists of domestic-listed mainland Chinese firms engaged in domestic mergers and acquisitions during the period 2004–2012. Standard event study methodology and cross-sectional regression analysis are used to examine the relationship between external finance, ownership type and value creation of the acquiring firms. Findings This paper finds that whereas bank financing is positively related to the firm value of privately-owned enterprises (POEs), bank financing has a negative but insignificant influence on the firm value of state-owned enterprises (SOEs). Moreover, equity financing has a negative and significant effect on the value creation of SOE acquirers, however, this appears not to be the case of POEs. Research limitations/implications The results suggest that the capital markets in China take into consideration the discriminatory and cheap access to bank loans available to SOEs as negative signals to stock markets, which cause capital markets to punish SOEs through price depreciation. Conversely, capital markets reward POEs in respect of Chinese banks’ discrimination against POEs in bank financing. Practical implications The results suggest that the capital markets in China take into account the discriminatory and cheap access to bank loans available to SOEs as negative signals to stock markets, which cause capital markets to punish SOEs through price depreciation. Conversely, capital markets reward POEs in respect of Chinese banks’ discrimination against POEs in bank financing. Originality/value The results of this study show that external sources of finance and ownership type influence acquiring firm value in an environment where the corporate governance system is weak and the banking sector is dominated by state banks. Further reforms in the financial sector, particularly, in the corporate governance system appear warranted.

This study considers the interaction effects of government subsidies, financial constraints, and ownership structure on the firm’s net research & development (R&D) based on a sample of 3440 Chinese-listed firms during 2000-2019. Our results indicate that R&D subsidies reduce financial constraints irrespective of ownership type; however, the reduction appears more pronounced for private-owned enterprises (POEs) compared with state-owned enterprises (SOEs). Further analysis reveals that the impact of R&D subsidies on R&D investments depends on the interactive effect between financial constraint and ownership type. For financially constrained SOEs, subsidies spur net R&D investment whereas this is not the case for financially constrained POEs. We also examine the potential factors through which ownership types and financial constraints affect innovation input, namely, institutional development and industrial competition. Our evidence indicates that, in a more institutionally developed province, the effect of subsidies on net R&D input is negative for SOEs, but positive for POEs. In a more competitive industry, SOEs tend to face less agency risk and stronger monitoring, while POEs depend more on their financial slack. Our study challenges the ‘more money, more innovation investment’ story, suggesting that alleviating financial constraints does not necessarily stimulate more net R&D investments.

We investigate whether economic policy uncertainty and the interaction of foreign equity portfolio flow and economic policy uncertainty impact the cost of capital. Using panel data of 20 countries from 2001 to 2018, we find economic policy uncertainty to exert a positive effect on the cost of capital. However, the interaction between foreign equity portfolio flow and economic policy uncertainty has a negative effect on the cost of capital, demonstrating that, the combined effect of foreign equity portfolio flow and economic policy uncertainty has the opposite effect (i.e., reduces the cost of capital). Our results are robust to alternative specifications and endogeneity.

Political risk models highlight that political uncertainty matters for corporate investment decisions. However, how political uncertainty matters for investment allocation decisions is relatively under-explored. In this study, we examine the impact of political uncertainty associated with national elections on foreign equity portfolio in 48 countries. Our results indicate that political uncertainty reduces international equity allocations to the host country and such reduction appears more pronounced in the election year. Further analysis shows that the interaction between political uncertainty and institutional quality has a positive and significant effect on international equity portfolio flow, suggesting that the value of institutional quality outweighs the negative effects of political uncertainty. Lastly, we find equity home bias to be negative and significant; however, the interaction between political uncertainty and equity home bias appears insignificant.

We examine the impact of social networks between independent directors and the CEO on firm risk. Employing the deaths and retirements of socially connected independent directors and the passage of the 2002 Sarbanes-Oxley Act for two identifications, we find that board-CEO social networks have a positive impact on firm risk. Specifically, CEOs who are socially connected to their independent directors are motivated to adopt riskier investment, operating and financing strategies. This positive influence is more pronounced for prior under-performing firms and for CEOs with low power or overconfidence, indicating that board-CEO social networks act as career insurance and a power-enhancing mechanism to encourage managerial risk-taking.

Purpose Prior studies suggest that, in an industry in which several public firms operate (i.e. greater public firm presence), uncertainty about business operations within the industry is reduced due to greater analyst coverage and quality of information disclosure. In this study, the authors examine how UK private firms respond to investment opportunities in fixed intangible assets (FIAs) in an environment characterised by greater public firm presence (PFP). Design/methodology/approach Using data from 61,278 (1,358) private (public) UK firms operating in ten sectors spanning from 2006 to 2016, the authors conduct this analysis by using panel econometric techniques. Findings The authors observe that private firms are more responsive to their FIA investment opportunities when they operate in industries with more PFP. Also, the authors find that firms in industries with better information quality use more debt and have longer debt maturity security but less internal cash flow. Overall, the findings indicate that PFP generates positive externalities for private firms by lessening industry uncertainty and enhancing more efficient FIA investment. The results are robust to endogeneity concerns. Research limitations/implications A key limitation of the study is that it focuses on a single country (the UK) and therefore there is a likelihood that the results found are specific to this setting but not others, particularly developing and emerging economies. Thus, future studies could explore these ideas from the viewpoint of multiple countries. Practical implications Overall, the study demonstrates the importance of information disclosure in driving investment decisions of firms. Originality/value While this paper builds on the information disclosure and corporate investment literature, it is one of the first attempts, to the best of the authors’ knowledge, to explore how private UK firms respond to investment in FIAs in an environment characterised by greater PFP.

Most of the growth in international production over the past decades has been via cross-border mergers and acquisitions (CBM&As). Yet prior studies examining the trajectory of cross-border M&A activities as an entry mode of FDI have focused on industry and firm level factors. Dunning (2009) emphasised the importance of macroeconomic variables which may explain foreign direct investment and called for more research to improve our understanding on the effects of macroeconomic variables. Building on prior studies, this study attempts to investigate the role of macroeconomic influences on CBM&As activities in the UK over the 1987-2006 period. This study finds that GDP, exchange rate, interest rate and share prices have significant impact on the level of outward UK CBM&As. On the other hand, GDP, money supply and share price have statistically significant impact on the UK CBM&As inflows. © 2010 Elsevier Ltd.

The main objective of this article is to provide more insight into the empirical determinants of target capital structure of Canadian firms. Panel data covering the period 1996 to 2004 was analysed using a much stronger estimation technique, that is, a dynamic regression model. The results show that profitability and tangibility have a positive and significant impact on the firm leverage, whereas growth opportunities and size have a negative influence on the leverage of Canadian firms. The study also suggests that firms have long-term target leverage ratios, but the speed of adjustment to the target leverage ratios is relatively slow in the context of Canadian firms. © 2010 Taylor & Francis.

Performance of international joint ventures (IJVs) has been an overarching theme of research over the past two decades. In the context of West Africa, however, IJV performance has received scant attention. This paper examines a number of aspects of performance of 57 IJVs in the West Africa context. Multivariate analysis shows that partner capabilities, capital adequacy, congruity of motives and goals are significant determinants of performance. Level of control was found to have a negative impact on performance. A further significant finding is that over a number of dimensions IJVs with a private sector host partner are perceived to perform better than IJVs with the host government as a partner.

This paper considers the strategic motivation and performance of Chinese cross-border M&A activities of 27 deals which took place in Shanghai and Shenzhen stock markets in the period of 2000 -2004. The study finds that cross border M&As formation by Chinese firms are primarily motivated by market development, that is increasing market share, to enable faster entry into new markets, diversification and to obtain foreign advanced technology and other resources. In terms of wealth creation, the study finds that cross border M&As create value for Chinese acquiring firms.

Very little is known about the business environment in the countries of l'Afrique Occidentale Française (or francophone), the French‐speaking countries of West Africa, here referred to as francophone West Africa (FWA). Yet chief executive officers and corporate managers are under increasing pressures to assess the business environment before entering any such overseas markets. Therefore, the aim of paper is to scan the macro‐environmental forces operating in the FWA market. An audit of these external factors produces an “ETOP” framework, describing the current external threats and opportunities for would‐be entrants, and identifying practical implications for international marketing planners. The FWA countries are classic case of an emerging market, about which more deserves to be known, especially by non‐francophone decision makers in multinational corporations.

We examine whether a concentrated interbank market stimulates bank collusion or monopolistic pricing towards enhancing performance. We explore this nexus by incorporating the role of bank conduct into the structure–performance paradigm. The results show that the interbank market structure provides a channel for banks to collude and engage in monopolistic pricing in the market for bank and business loans to consequently increase bank performance. Further, while the interbank market structure is both profit and cost efficient for non-conglomerate banks, it is cost efficient for foreign banks. Hence, collusion and other anti-competitive behaviours in the interbank market may exacerbate incentives for foreign and non-conglomerate bank entry. We also explored the theoretical and policy implications of these findings. Our results are robust to alternative measures of market structure, bank conduct and performance, and the use of a wide range of specifications and econometric models.

This study examines the effects of firm-level political risk on firm leverage decisions and speed of adjustment. We uncover that firm-level political risk has a negative impact on a firm's total and long-term leverage. We also find that firms facing high political risk tend to prefer debts with short-term maturity. However, firm-level political risk is positively related to debt specialisation, suggesting that firms are more inclined to adopt fewer debt types when they face high political risk. Further analysis reveals that firms with high political risk are associated with a faster speed of adjustment to target than those with low political risk. Our results are robust to endogeneity concerns and the effects of financial crisis.

Despite the ongoing bank regulatory reforms, relatively little research attention has been given to the effects of bank business models and opacity of bank balance sheet structure which may hinder regulation and market discipline. In this study, we explore the effects of business model strategies on banks' earnings opacity in the UK banking sector. Distinguishing between the short-term (within) and long-term (between) effects, our findings suggest that retail-oriented business models reduce the likelihood of earnings management practices in the short term but not over the long term. In contrast, wholesale-oriented business models increase the probability of earnings manipulation both in the short and long term. While bank business models characterised by a greater degree of functional diversification tend to lower earnings manipulation in the short term, the long-term incentives cannot be mitigated. Our findings also demonstrate that low failure risk (or greater solvency) represents an important channel in mitigating the effects of business models on earnings management practices both in the short and long term. Our results are robust to alternative proxies for earnings management and failure risk, and the use of alternative methods.

This study examines the effects of co-opted directors and further tests the monitoring effectiveness of non-co-opted independent directors and co-opted independent directors on capital structure decisions. Employing a large sample of 2548 US firms over the 1996–2015 period, we find strong evidence that co-opted boards exert a positive and significant influence on firms' financial leverage. We also find that, whereas co-opted independent directors are positively associated with financial leverage, non-co-opted independent directors have a negative influence on a firm's leverage ratio, suggesting that co-option weakens the effective monitoring, thereby increasing the firm's leverage ratio. Further analysis indicates that co-opted boards adjust towards target leverage levels at a faster speed, with a half-life within a year for book and market leverage. Lastly, our results show that the agency costs of managerial discretion and stockholder-bondholder conflicts arising from board co-option are important drivers of financial leverage relative to tax incentives. Our results are robust to alternative measures of board co-option, financial leverage, and endogeneity concerns.

Capital structure has attracted intense debate and scholarly attention in the financial management arena over the past four decades. However, in the context of sub‐Saharan Africa capital structure has received a scant attention. This paper attempts to rectify this position by considering the firm specific factors influencing the capital structure of international joint venture formation based on a sample of 41 firms in Ghana with partners from Western Europe, North America and Asia. The results indicate that size of joint venture, type of joint venture industry and ownership level of joint venture partner have a positive bearing on the capital structure of joint ventures in Ghana.

In this paper, we examine the effects of monetary policy on the risk-taking behaviour of Chinese banks in the presence of involuntary excess reserves based on a sample of 95 banks. We find that involuntary excess reserves lead to more aggressive risk-taking suggesting that large involuntary excess reserves stimulate the rapid expansion of credit and the price bubble in the Chinese financial market. However, banks with larger involuntary excess reserves tend to reduce risk-taking more rapidly under the tightening monetary policy regime. The paper sheds light on the effectiveness of government monetary policy in reducing the risk-taking behaviour of banks in an emerging market where involuntary excess reserves are present.

Micro small-sized enterprises play a vital role in poverty reduction and development of many developing countries. Yet the issue of credit availability to small firms continues to be a major problem which impedes the growth of micro-small enterprises. This article examines the factors influencing the extension of bank credit to micro small-sized enterprises based on a sample of 572 in Ghana and Nigeria. The results indicate that size of the firm, age of the firm, ownership type and relationship banking have a positive bearing on a decision to extend credit to small firms in West Africa.

JEL Classification: G21, N27

The uncertainty of technological innovation and the trend of sustainable development require enterprises to adjust their business models and development strategies accordingly. However, existing research often overlooks the integration of sustainability with market performance. In particular, the coordinated development of green and market performance is crucial for advancing research on corporate innovation willingness. This paper uses the A-share listed companies in China from 2009 to 2022 as a sample to test the innovation effect of corporate green business performance based on coupling coordination method. Corporate innovation willingness is constructed based on text analysis. The findings reveal that corporate green business performance significantly boosts corporate innovation willingness while effectively curbing corporate greenwashing behavior. The robustness results are confirmed through sensitivity analysis, instrumental variables analysis, and double debiased machine learning. This study offers empirical insights from developing countries and contributes to understanding ecosystem-oriented business development models.

This study examines the impact of climate policy uncertainty (CPU) on the environmental, social, and governance (ESG) performance of energy firms, as well as the moderating role of cloud computing technology (CCT). Building on an integrated theoretical framework that combines resource dependence and dynamic capability perspectives, we conceptualize CPU as a dual-pressure that constrains both risk and resource access. Our findings show that CPU deteriorates ESG performance by increasing external risks and limiting resource access. However, energy firms with higher CCT adoption exhibit greater resilience to CPU, sustaining ESG investments in the face of CPU. Additional heterogeneity analyses indicate that the negative impact of CPU on ESG performance is especially acute among non-state-owned, smaller, and less resource-rich energy firms. This study extends existing theory by integrating resource dependence and dynamic capability perspectives into a unified framework. The findings underscore the strategic importance of CCT in maintaining ESG performance amid policy uncertainty, providing practical guidance for managers and policymakers.

The connection between green investments, carbon markets, and traditional energy markets in emerging economies is still not well understood. Yet understanding how risk moves between these markets is important for helping investors manage volatility more effectively. Thus, this study examines how volatility is transmitted among green bond markets, energy sector indices, and carbon price indices in the MSCI Emerging Markets (MSCI EM). Using the Time-Varying Parameter Vector Autoregression (TVP-VAR) model, it captures the strength and direction of risk transmission across these sectors. The analysis is based on daily data covering green finance indices, carbon markets, energy indices, and oil prices. The findings show that the relationships between green finance, carbon pricing, and traditional energy markets are non-static, as they change over time. These evolving connections have important implications for investors and policymakers, particularly in terms of building diversified portfolios, managing risk, and shaping sustainable financial systems in emerging economies.

This paper considers the effects of female representation and the proportion of female representation on corporate boards and audit committees on financial performance in an African context where institutions are weak. Employing a panel of 77 firms, our results show that female board representation exerts a positive and significant influence on firm financial performance. The study also finds that the performance effect of gender diversity is stronger for firms with two or more female directors, suggesting that building a critical mass of female representation enhances firm financial performance. Further analysis indicates that the inclusion of females on the audit committee appears to have a positive impact on firm financial performance. Our results are robust after controlling for endogeneity and the use of alternative measures of board gender diversity.

The paper investigates the effects of institutions and their interaction with firms’ research & development (R&D) levels on foreign direct investment (FDI) inflows in China based on a sample of 680 European Union (EU) firms over the period of 1998–2008. Employing panel data estimation approaches and further augmented with the cross-validation technique, our results indicate that EU FDI in China is influenced by the host country’s institutions, rendering support to the institutional theory. Our analysis indicates that the rule of law, institutional reforms and the interaction between institutional reforms and R&D have significant effects on FDI inflows in China. Further analysis suggests that the coefficient for the interaction between the rule of law and R&D is positive and significant after World Trade Organisation (WTO) entry implying that the effects of reforms following the WTO entry much outweigh the impact of rule of law in EU firms’ decisions to invest in China. We also find evidence that EU firms tend to adjust their FDI levels in China in an attempt to reach the desired investment level.

This study examines the impact of liquidity and involuntary excess reserves on interest rate pass-through in China. Employing Error Correction Model estimation based on a sample of 86 banks over the period of 2000–2013, the study finds that liquid banks can better shield against tightening monetary policy and adjust lending rate sluggishly. In contrast, banks with larger involuntary excess reserves tend to increase lending interest rates more rapidly in response to tightening monetary policy. We conclude that unwanted liquidity may lead to risk-taking behaviours which are detrimental to financial stability.

This paper examines the effects of interaction between stringent insider trading laws, institutional quality and equity portfolio allocation on the cost of capital. Using a dataset drawn from 44 countries over the period from 2001 to 2015, we find that stringent insider trading laws interact with institutional quality and foreign equity portfolio allocation to reduce the country-level cost of capital. Further analysis from a quasi-natural experiment based on the 2008–2009 global financial crisis suggests that the findings are robust to endogeneity. Our results imply that the enactment of stringent insider trading laws and their interplay with the quality of institutions are not only important to portfolio investment allocation decisions but reduce the country-level cost of capital.

Theoretical arguments suggest that as countries enact insider trading laws and complement them with enforcement, stock market information risk reduces and investor participation increases, and this will therefore have a negative effect on liquidity trading cost. Consistent with this expectation, based on panel data comprised of 32 countries for the period 2001–2015, we find that stringent insider trading laws and enforcement reduce stock market transaction cost. However, in countries where investor protection is poor, our results show that stringent insider trading laws have no effect on liquidity trading cost. We further find that stringent insider trading laws interact with institutional quality to reduce liquidity trading cost. Our findings are robust to difference-in-differences based on the 2008 global financial crises. The overall evidence implies that market participants will experience lower liquidity trading cost if insider trading laws are enforced.

This study investigates the role of information sharing offices and its association with market power in the African banking industry. The empirical evidence is based on a panel of 162 banks from 42 countries for the period 2001-2011. Five simultaneity-robust estimation techniques are employed, namely: (i) Two Stage Least Squares; (ii) Instrumental Fixed effects to control for the unobserved heterogeneity; (iii) Instrumental Tobit regressions to control for the limited range in the dependent variable; (iv) Generalised Method of Moments (GMM) to control for persistence in market power and (v) Instrumental Quantile Regressions (QR) to account for initial levels of market power. The following findings have been established from non-interactive regressions. First, the effects of information sharing offices are significant in Two Stage Least Squares, with a positive effect from private credit bureaus. Second, in GMM, public credit registries increase market power. Third, from Quintile Regressions, private credit bureaus consistently increase market power throughout the conditional distributions of market power. Given that the above findings are contrary to theoretical postulations, we extended the analytical framework with interactive regressions in order to assess whether the anticipated effects can be established if information sharing offices are increased. The extended findings show a: (i) negative net effect from public credit registries on market power in GMM regressions and; (ii) negative net impacts from public credit registries on market power in the 0.25th and 0.50th quintiles of market power.

This paper examines whether foreign acquisitions lessen financial constraints, improve investment in research & development (R&D) and productivity of the target firms in China based on a sample of 914 cross-border mergers and acquisitions (CBM&A) over the period of 1994–2011. Using investment to cash-flow sensitivity to measure financial constraints, we find that foreign acquisitions in China are associated with a reduction of target firms’ financial constraints, irrespective of the ownership type of the target firm. However, the extent of financial constraint reduction is pronounced for non-SOEs compared to state-owned enterprises (SOEs). This study also provides evidence that foreign acquisitions improve Chinese target firms’ productivity and investment in R&D.

Prior work examining the antecedents of capital structure for small and medium-sized enterprises in emerging markets is limited. This paper sheds light on how the corporate governance mechanisms adopted by firms on the newly established Growth Enterprise Market (GEM) in China influence their use of debt. We find that the financial leverage of GEM firms is positively influenced by executives’ shareholding and their excess cash compensation. Ownership concentration appears to reduce leverage, whereas the percentage of tradable shares increases leverage. In contrast, institutional investors’ shareholding does not influence the level of debt. Traditional factors such as tax and operating cash flow are insignificant in explaining the debt levels among GEM firms.

We examine the impact of executive and leadership shareholding and cash compensation on analyst forecast error and dispersion as proxies for information asymmetry. We find that firms pay higher compensation (or excess compensation) to executives and directors are associated with higher information asymmetry. The positive association is stronger where executives’ and directors’ shareholdings are higher. Shareholding appears to facilitate managerial entrenchment and gives highly paid executives/leadership stronger structural power which adversely affects information disclosure leading to larger forecast error and dispersion. These results are robust to different measures of compensation and alternative models controlling for the predictability of firm-level earnings. Our findings indicate that executive/director shareholding and compensation do not provide sufficient incentives for information disclosure by Chinese firms.

How to measure performance in charitable organisations continues to excite interest among academics and practitioners. Despite the intellectual interest, little consensus has emerged as to what are the best measures of performance in charities. This is against the backdrop of an increased demand by donors and other stakeholders on charities to provide information on their performance. Building on prior studies, this paper examines the measures of performance in charities using a hybrid methodological approach which consists of 14 exploratory interviews and a quantitative survey of 105 chief executive officers/board of trustees of large British charities. The results of factor analysis and internal reliability produced five broad measures of performance of charities: (1) financial measures; (2) client satisfaction; (3) management effectiveness; (4) stakeholder involvement; and (5) benchmarking, indicating that the overall performance of charities is best measured by a set of factors that reflect the multiple and diverse stakeholders associated with charities. Further analysis using structural equation modelling corroborates the results that non‐financial measures such as management effectiveness, stakeholder involvement and benchmarking are important to the performance of charities.

Purpose – The cultural element in M&As' integration process has been identified as one of the key issues that may help explain the failure of many mergers and acquisitions. Yet what needs to be done to improve cultural integration in order to enhance M&As' success has received relatively little attention. This study attempts to examine the role played by culture and provide a framework for enhancing the success of mergers and acquisitions. Design/methodology/approach – This study is based on 32 interviews with senior managers of 16 merger and acquisition deals in the chemical industry. Findings – The study finds that culture differences between the merging firms are a key element affecting effectiveness of the integration process and consequently the success of M&As. Furthermore, the study finds that, although managers agree that cultural differences create organisational challenges, yet the attention given to cultural integration issues during M&As are at best tenuous and in some cases reactive. This study, therefore, suggest a four staged approach in dealing with cultural differences. Practical implications – The managerial implication of this finding is that cultural fit constitutes a key factor in M&As' success and should be given the necessary attention at all stages of M&As. The tentative conclusion to be drawn here is that good pre‐merger planning with culture placed at the heart of integration strategies and implementation and the creation of a positive atmosphere for the change – before initiating any actual consolidation of human and physical assets – are likely to contribute to acquisition success and value creation. Originality/value – This article provides a framework for managing culture in mergers and acquisitions.

This study investigates the influence of social media activities on stock price informativeness. Using a panel of 49 countries with 231,462 balance‐panel firm‐year observations from 2010 to 2020, we find that social media activities increase stock price informativeness. Furthermore, social media engagement for political and civil activities reduces information asymmetries that are linked to greater stock price informativeness. We further evidence that the intensity of the impact of social media activities varies between economic development and sectors, which implies that while some of the social media activities proxies are more pronounced in developed countries, others are more pronounced in emerging economies. The same applies to the services and non‐services sectors. The result is more pronounced when varying offline political actions are most commonly mobilised on social media. For identification, we employ principal component analysis, difference‐in‐difference, and propensity score matching.

This study examines the effect of ownership structure (classified as concentrated, institutional, and managerial ownership) on corporate governance (CG) disclosure. Using a sample of 96 East African firms, we document that, whereas concentrated ownership has a negative effect, institutional ownership has a positive and significant association with CG disclosure. However, we find the effect of managerial ownership on CG disclosure to be negative and insignificant. We also find CEO power to moderate the link between ownership structure and CG disclosure. Further analysis indicates that, whereas the effects of institutional and concentrated ownerships on CG disclosure remain unchanged irrespective of a firm’s debt levels, the effect of managerial ownership on CG disclosure is driven by external pressures associated with debt financing. Our findings provide evidence on how different ownership types have different preferences, thereby influencing corporate disclosure practices differently. Our results are robust to the two-stage system generalised method of moments (SGMM) and other alternative sensitivity tests.

We examine the effects of political uncertainty on the informativeness of stock prices. Using panel data from 49 countries and 441,882 firm-year observations from 2000 to 2020, our results evince several interesting aspects. First, we find that, whereas political uncertainty reduces stock price informativeness in the year prior to elections and during the elections, stock prices tend to be more informative in non-election years. Second, we find that the sensitivity of stock price informativeness to political uncertainty is reduced by the strength of institutional quality. Third, the effects of political uncertainty appear to be heterogeneous across less/unregulated and regulated industries. Lastly, our channel analysis indicates that during the year of elections, firms tend to disclosure less information thereby exerting a negative impact on stock price informativeness. Our results are robust to the system generalized method of moments (SGMM), difference-in-difference, and alternative specifications.

© 2017, © Emerald Publishing Limited.Purpose: The purpose of this paper is to examine the trends, patterns and the impact of cultural and home country macroeconomic influences on Chinese cross-border mergers and acquisitions (CBM&A) as foreign entry strategy for the period of 1998-2011. Design/methodology/approach: Using three regression models, namely, ordinary least squares, the random effects and fixed effects to examine the impact of home country macroeconomic and cultural factors on CBM&A outflows as an entry mode of Chinese firms. The authors check the robustness of the results using system GMM. Findings: The findings suggest that CBM&A as a preferred mode of market entry provides a means for obtaining strategic resources to develop competitive advantages for the Chinese emerging market firms. The regression results indicate that home country macroeconomic and cultural variables, including gross domestic product (GDP), liquidity, interest rates, inflation, acquisitions in resource seeking sectors and cultural distance play an important role in explaining the trends of CBM&A outflows by the Chinese firms. Research limitations/implications: The results imply that government support to emerging market multinational enterprises (EMEs) to acquire strategic assets and economic policies in the home country play an important role in shaping international expansion behaviour of EMEs through CBM&A. The study demonstrates that outward investments of EMEs are partly a function of the level of economic policies and government support at home. The limitation is that most of the Chinese CBM&A transactions took place in Asia/Pacific locations. Future studies appear warranted if new data become available. Originality/value: The study demonstrates how the institutions, strategic asset seeking with government support and economic policies in the home country play important role in shaping international expansion behaviour of emerging market enterprises through CBM&A thereby contributing to the political economy literature and institutional theory. More importantly, the study shows that the level of economic policies and development such as GDP, money supply, interest rates, inflation of the home country are important for EME growth in the international market.

sThis paper considers the effects of state ownership and institutional influences on value creation through cross-border mergers & acquisitions by Chinese firms during the period using a sample of 468 firms. The findings indicate that Chinese bidders experience wealth gains ranging from 0.4771% to 1.5210% over a 10-day event window. The cross-sectional analysis indicates that state ownership, formal institutional distance, reforms in the foreign currency approval system exert significant impact on shareholder value. By considering the state ownership and institutions, this study provides evidence that government and institutions play a huge role in value creation of emerging market firm internationalisation through cross-border mergers & acquisitions (CBM&A).

This paper examines the impact of macroeconomic factors on foreign direct investment (FDI) inflows in Norway under the location-specific advantage. Using cointegrating regressions with Fully Modified OLS (FMOLS) and the vector autoregressive and error correction model (VAR/VECM) on quarterly data, the study finds that the real GDP, sector GDP, exchange rate and trade openness have a positive and significant impact on FDI inflows. However, money supply, inflation, unemployment and interest rate produced significantly negative results. The results imply that in seeking to promote a dynamic competitive advantage in the home country, governments need to pay more attention to their macroeconomic policies to help fashion and reduce production and transaction costs of MNEs.

The Research Problem: This study examines the effects of board size, board independence, and the interaction effect between board independence and CEO/CFO on corporate governance disclosure practices. Motivation: Despite corporate governance (CG) reforms around the world, research evidence indicates that the levels of corporate governance disclosures (CGDs) in developing countries remain poor due to weak institutions and corporate governance systems. In particular, the corporate boards as a key mechanism of CG and the board nomination processes in East Africa remain largely opaque and dominated by majority shareholders, Chief Executive Officers and Chief Finance Officers (CEOs/CFOs), giving rise to opportunistic behaviours which may be detrimental to firm value. The distinctive feature of the board nomination process/CG system in East Africa has implications for monitoring and corporate governance disclosure practices and compliance and calls for systematic research in this under-explored subject. Target Population: Stakeholders including firm managers, practitioners, regulatory authorities, policymakers and investors. Methodology: Ordinary least squares (OLS), fixed effect model and system GMM. Analyses: Using a large and hand-collected dataset comprising 1,000 firm-year observations from 2007 to 2017 in East Africa, this study develops a corporate governance disclosure index (CGDI) of East Africa consisting of 164 provisions. To test our hypotheses, this study adopts three analytical approaches, namely OLS and fixed effect (FE) regressions and the two-stage system GMM to address the endogeneity concerns. Findings: We find that large boards and independent directors are associated with greater disclosure of CG information. Different from environments with stronger institutions and corporate governance systems, our analysis suggests that the CEO/CFO power negatively moderates the link between board independence and corporate governance disclosure. Thus, firms whose CEO and CFO are involved in remuneration or nomination committees disclose less CG information. The combined effect of CEO and CFO on selection and remuneration committees and independent board in reducing corporate disclosure appears more pronounced for the post-financial crisis period compared to the crisis period.

In this paper, we examine the dynamic effects of key macroeconomic factors on the UK crossborder mergers and acquisitions (CBM&A) outflows over the period 1987–2008. Using a seven variable vector autoregressive/vector error correction models (VAR/VECM), the study finds that a number of home country macroeconomic variables, including GDP, broad money supply, stock prices and real effective exchange rate exert a positive and significant influence in explaining the CBM&A outflows by the UK firms. However, inflation rates and interest rates tend to have a negative impact on the volume of CBM&A. The findings support the notion that home country macroeconomic factors can create advantages to improve the outward Cross-border M&A activities.

The relationship between foreign entry mode choice and the performance of small-medium sized enterprises (SMEs) has been an overarching theme of research of the past decade. However, the research in this area has been hampered by the difficulty of defining and measuring performance. In this study, we used a multi-item measure of performance, which takes into account the relative importance of each measure and the perceived level of satisfaction, to analyse 146 SMEs in Norway. Our regression analysis shows that firm characteristics: size and sector of operation, significantly influence performance. However, prior international experience did not significantly influence performance. In terms of entry mode via international joint venture, trust and congruity of goals between partners have a positive and significant influence on performance.

© 2015, Springer Science+Business Media New York. We examine the effects of state ownership, institutions and resource-seeking behavior on post-acquisition stock price returns of Chinese cross-border mergers and acquisitions over the period 1998–2008. Chinese acquiring firms experience negative returns ranging from 2.92 to 10.80 % in 12- and 60-month post-event periods, respectively. State ownership (SOE), interaction between R&D and SOE, formal institutional distance and acquirer size have a positive and significant impact on the long-term acquirer returns. However, the interaction between tangible resources and SOE and acquirer cash holdings appears to have a negative and significant impact on long-term returns. Overall, our results suggest that the state and institutions constitute important sources of long-term value creation for Chinese acquirers.

This paper considers the adoption, perceived benefits, and expected future emphasis of western management accounting practices in the Chinese emerging market economy based on a sample of 64 joint ventures (JVs) and 115 State Owned Enterprises (SOE) gathered from a questionnaire survey. The study finds that the level of adoption of management accounting practices is most influenced by ownership type of the enterprise (JV or SOE) and to a lesser extent by the nature of the management accounting techniques to be adopted. A further significant finding is that management accounting practices such as budgeting for controlling costs, profit and sales budgeting, and target costing are perceived to be more beneficial for SOEs compared to JVs. However, responsibility accounting which is traditionally associated with SOEs and accounting for decision making is perceived to be less beneficial to SOEs compared with JVs. © 2007 Elsevier B.V. All rights reserved.

This study provides insight into the factors that influence change in Chinese management accounting practices. Multivariate analysis indicates that the size of the firm, foreign partner and level of knowledge of senior managers and employees have positive bearing on the changes in management accounting practices of the foreign-partnered joint ventures. The size and level of knowledge of senior managers appear to influence changes in management accounting practices. However, no support is found for the hypothesis that the Chinese government has a significant influence on the changes in management accounting practices of joint ventures and state-owned enterprises. © 2010 Taylor & Francis.

This study provides insight into the factors that influence change in Chinese management accounting practices. Multivariate analysis indicates that the size of the firm, foreign partner and level of knowledge of senior managers and employees have positive bearing on the changes in management accounting practices of the foreign-partnered joint ventures. The size and level of knowledge of senior managers appear to influence changes in management accounting practices. However, no support is found for the hypothesis that the Chinese government has a significant influence on the changes in management accounting practices of joint ventures and state-owned enterprises.

© 2018 Elsevier Inc. This paper examines the effects of culture and the interaction between cultural distance and salient acquirer characteristics on value creation of acquiring firms based on a sample of 209 firms over the period of 1998–2012. The findings indicate that Chinese acquirer experience wealth gains ranging from 0.45%–1.49% over a 10 day event window. We find cultural distance to exert a negative influence on value creation of acquirers in the short-and long-term. However, the negative returns are significant only in the short-term but not in the long-term. Further evidence shows that acquirer large size, prior experience and high Tobin's q positively moderate the link between cultural distance and value creation. The results suggest that the effect of culture distance is conditioned by the acquirer size, prior experience and Tobin's q implying that acquirer resources and managerial capabilities are important in dealing with and overcoming cross-border mergers and acquisitions (CBM&A) cultural challenges.

Purpose – What drives small to medium-sized enterprises’ (SMEs’) internationalisation strategy remains a significant issue in international business research, despite the huge research efforts on this subject over the past three decades. The purpose of this paper is to investigate and compare the motives behind the equity modes of foreign market entry in Norway. Design/methodology/approach – Employing a cross sectional survey, a sample of 146 firms consisting of 42 international equity joint ventures (IJVs), 53 cross-border mergers & acquisitions (CBM&As) and 51 wholly owned subsidiaries (FWOS) from Norway was collected and analysed. Findings – It was found that whereas market development and power influence the choice of IJVs and CBM&As, the need to access resources and control resources appear to be the most important motives behind FWOS as an entry mode choice. Moreover, the regression results indicate that market development and power, technology development, location advantage and synergistic gains appear to have a significant bearing on different entry mode choice in Norway. Research limitations/implications – The paper examines the motivation for the choice of foreign entry mode from the point of view of senior managers in Norway. Future research should accommodate multiple perspectives simultaneously from the parent companies and subsidiaries in a single paper to significantly advance the field. Practical implications – The paper discovers that the motives behind the choice of cooperative modes of entry tend to be more linked with market development, technological development while FWOS are motivated by the need to control proprietary resources. The implication for the Norwegian government is that its financial incentives do not affect the mode choice of entry. Original/value – The paper finds that different motives and theories influence the choice of foreign market entry by SMEs in Norway and provides insights for senior managers on the factors taken into account in making choice decisions in Norway.