Etla » internationalisation

The Impact of Networking on Firm Performance – Evidence from Small and Medium-Sized Firms in Emerging Technology Areas

Matias Kalm — Fri, 31 Aug 2012 11:00:00 +0000

Recent developments in the field of network research have led to a growing interest in interorganisational relationships among social science scholars. One of the most important research areas is related to entrepreneurship research and how relationship networks affect firm performance. However, the existing literature focuses mostly on qualitative case studies and quantitative studies that analyse mergers and acquisitions or patent types of data.

By analysing connection and causality between activity in co-operational relationships and firm growth, this study seeks to empirically address the following research question : How does activity in network relationships influence the growth and internationalisation of technology-based firms in emerging technology areas? Furthermore, the connection and causality between activity in co-operational relationships and the internationalisation rates of firms are also analysed.

This analysis is based on a data set and interviews with 53 small and medium-sized firms. Both a descriptive analysis and regression methods are used to analyse the connection between activity in co-operational relationships and firm growth or internationalisation. Firm growth is measured with both revenue and the employment growth rate. In addition, the activity in in the co-operational relationships is divided into two components : increasing versus consistently high activity with network actors. To address possible causality issues, this research employs activity measures that are based on the importance of the relationships rather than simply the number of relationships.

The results show that increasing activity with network actors is positively connected with firm growth as measured in both revenue and employment growth. Furthermore, the results partially support the hypothesis that consistently high activity is positively connected to firm growth. Finally, the results suggest that growth firms positively benefit from increased relationship activity with both current and prospective actors in diverse relationship networks. Moreover, the single most negative result is the relatively low impact of relationship activities on public-sector actors and networks.

The Characterics of Finpro’s Clients

Mika Pajarinen — Tue, 23 Mar 2010 11:00:00 +0000

Finpro is an expert service organization, partly financed from public funds, providing services for internationalization market information, consulting and advice, business development, and other related services. It is one of the largest organizations in the Finnish innovation and business support system. Finpro regards its mission to include increasingly a role of an information intermediary, providing information on global megatrends, new business models, and early signals of business opportunities. The company clientele is close to 5000 Finnish businesses. This report studies the Finpros client firms, their characteristics and profile against the organizations mission and stated objectives. It turns out that firms using Finpros services are typically highly internationalized, innovative and knowledge-based. They use, more likely than Finnish firms on average, other publicly supported business services and receive funding from public funding organizations.

Mobility of Corporate Headquarter Functions: A Literature Review

admin — Wed, 21 Oct 2009 11:00:00 +0000

This paper reviews the recent literature on the relocation of headquarters (HQs). Overall results show that full and direct international relocations of corporate HQs are rare events. However, there is a trend that MNEs increasingly unbundle their HQs so as to spread their different HQs functions over several locations around the world. The literature on the organisation of companies shows that HQ unbundling can go hand in hand with different patterns of HQ relocations. The international trade literature underlines that falling communication costs enable firms to offshore HQ-tasks that were previously considered non-traded. International competition occurs now between individual workers performing similar HQ-tasks in different nations. The new economic geography literature explains the spatial concentration of HQs functions by the existence of agglomeration effects. Most empirical literature focuses on relocations within the United States. Relocations within the EU are less frequent which may be explained by legal and cultural barriers. An important finding is that many HQ relocations result from a merger or acquisition, but institutional factors, such as international tax incentives and labour market institutions, were also identified as key drivers of HQ relocations. The effects of relocations on the company performance are relatively small although results seem to depend on the motivation behind the relocation. For nations, the unbundling of HQs implies that the competition between (potential) locations for HQ functions will rise.

Pääkonttoritoimintojen liikkuvuus. Katsaus kirjallisuuteen

Distance-related Barriers and the Internationalisation of Finnish MNEs

admin — Mon, 07 Sep 2009 11:00:00 +0000

In an integrated global economy, multinational enterprises (MNEs) have more opportunities than ever to reap the benefits of broader markets and more possibilities for an extensive division of labour between different locations. In spite of this, the evidence on the spread of the activities of MNEs seems to indicate a strong regional tendency, at least for the largest MNEs. This paper examines the theoretical arguments for the existence of such boundaries in an integrated global economy, and then examines their empirical importance using recent evidence on the internationalisation patterns of Finnish MNEs. We find that while some of the largest MNEs do indeed appear to be quite regional, some of the smaller internationalising firms are notably more global in terms of the spread of their activities.

Regional and Global Patterns of Internationalisation of Finnish MNEs

admin — Fri, 19 Dec 2008 11:00:00 +0000

Much of the recent evidence on the internationalisation patterns of Finnish MNEs has come from analyses of the Top 30 firms. This paper uses newly available data from the Orbis database on the foreign affiliates of Finnish MNEs, and compares this to the existing sources of data from the Bank of Finland and Statistics Finland. By utilising firm-level that includes smaller internationalising firms, we are able to get a more com-prehensive picture of the international activities Finnish firms. We are also able to present an analytically grounded classification of the different types of internationalising firms in terms of the spread or entropy of their international activities. Such a classification will enable a more fine-grained measure of internationalisation in future studies that examine for example the effects of internationalisation on the home country.

Who Is Afraid of Globalisation? Finns´ Hopes & Fears and Realized Impacts

admin — Mon, 01 Dec 2008 11:00:00 +0000

According to EVAŽs annual attitude and value survey, two out of three Finns believe that globalization means loosing increasing amounts of jobs to low-cost-countries. However, 70 percent of the respondents think that their job is not easily transferrable and only 8 % are afraid that their own job is going to be offshored. As both national and international research indicates that the employment effects of globalization are rather modest, who is afraid of globalization and why? In this analysis it is found that highly educated, service sector, and male employees are the least afraid of globalization. Additionally, it is noticed that attitudes are more important than actual labour market experiences, when it comes to the expectations and perceptions of globalization.

Domestic Employment Effects of Offshoring: Empirical Evidence from Finland

admin — Wed, 19 Nov 2008 11:00:00 +0000

This study empirically explores whether the propensity to offshore affects the total domestic employment at the firm level. The analysis is based on a Finnish weighted sample of 652 firms and screens the effect of offshoring different kinds of tasks. Two main channels of offshoring tasks are taken into account : offshore outsourcing and in-house offshoring. The main conclusion is that offshoring can significantly affect the total domestic employment but that the significance and the direction of the effect depend on which kind of offshoring is involved. Our results offer evidence that in both the manufacturing and service sectors offshore outsourcing of services has a positive effect on employment. In addition it was found that the effect of R&D offshoring on the probability to anticipate an increase of total domestic employment depends on the offshoring channel. Offshore outsourcing of R&D has a positive effect on the anticipated domestic employment, whereas in-house offshoring of R&D has a negative effect. Specific for the manufacturing sector is that offshore outsourcing of production also has a negative significant effect. A final conclusion is that only in the service sector does in-house offshoring of services have a negative effect on the probability to anticipate an increase of domestic employment. By dissecting offshoring by tasks and channels the above empirical findings contribute to a better understanding of the aggregate effects of offshoring on domestic employment.

Domestic R&D Employment Effects of Offshoring R&D Tasks: Some Empirical Evidence from Finland

admin — Thu, 06 Nov 2008 11:00:00 +0000

This study empirically explores whether R&D offshoring affects the domestic R&D employment at the firm level. Overall, the Finnish survey data suggest that the impact of R&D internationalization on domestic R&D employment depends on the mode of internationalization (in-house offshoring vs. offshore outsourcing vs. in-house expansion of R&D abroad). Moreover, manufacturing and service firms are found to be different when it comes to R&D internationalization and its domestic employment effects. In the manufacturing sector, especially in-house offshoring of R&D has a significant negative impact on the plan to increase R&D employment. But the relationship between the in-house expansion of R&D abroad and domestic R&D employment turns out to be complementary. In the service sector, it is in the first place offshore outsourcing of R&D that has a significant negative impact on the plan to increase R&D employment. A final result supports the view that R&D does not always follow production but that a strong location link between production and R&D does have a significant negative effect on the domestic R&D employment.

The Home Country Employment Effects of Internationalisation – A Literature Review

admin — Tue, 02 Sep 2008 11:00:00 +0000

This report reviews some of the most recent literature examining the home country employment effects of internationalisation. A brief overview of the history of the internationalisation of Finnish firms is also presented. The general conclusion from the literature is that the absolute employment effects are modest, although there are likely to be notable effects on the structure of labour demand. However, the form of internationalisation, the level of aggregation of the data, and differences in labour market institutions all have an influence on the results. Most of the studies looking at the employment effects of outward foreign direct investment on the home country seem to indicate positive rather than substitution effects. On the other hand, when looking at the effects of offshore outsourcing, the results are ambiguous.

Finnish Firms Operating in the Czech, Slovak, Hungarian and Slovenian Markets

admin — Mon, 18 Dec 2006 11:00:00 +0000

We analyse the experience of Finnish firms operating in the Czech Republic, Slovakia, Hungary and Slovenia (CEE4 countries) and their future business prospects there. First, we review the state and development of these countries economies. The countries face different economic challenges. After that we analyse the results from our firm survey. The questionnaire was sent to Finnish firms that operate in the CEE4 countries. According to the results, growing local markets and the countries EU membership are the principal factors that support business there. The firms that answered the questionnaire plan to continue to expand their operations in the CEE4 countries. We also interviewed a number of Finnish business leaders whose companies have production in Hungary. Finally, the paper includes an analysis by a Hungarian researcher on the outlook of the Hungarian economy and the investment and business environment in the country. The economic size of the CEE4 countries and their growth potential form a possibility for Finnish firms. In the future, competition in the local markets will continue to increase, however.