Research

Abstract

This paper advocates for a methodological advancement in international management research by demonstrating how the use of online experiments can improve causal identification and expand the empirical and theoretical boundaries of the field. We employ a nationally representative online experiment involving 3,010 US residents to investigate anti-foreign sentiment's impact on businesses. Our approach transcends the conventional reliance of the literature on macro-institutional data, enabling direct measurement of anti-foreign sentiment and uncovering nuanced micro-level heterogeneity. We validate our findings against real-world Foreign Direct Investment (FDI) data and find similar patterns to the ones emerging from our experiment. By offering a detailed exploration of public attitudes towards both foreign and domestically owned firms with foreign ties, our approach sheds light on the fluid nature of 'foreignness' in public perception. Our research not only advances the methodological tools in the study of international management, but also offers practical insights for firms to strategically navigate anti-foreign sentiment, tailoring their strategies to align with diverse stakeholder preferences in an increasingly complex, polarized, and nationalistic business environment.

Abstract

The relationship between strategy and structure is a longstanding one. In this paper, we argue that corporate groups are organized to maximize managerial efficiency in the presence of diversification. We construct a novel dataset that tracks the ownership links of nearly 1.2M parent companies from 201 countries down to nine layers of controlled subsidiaries. These 2.9M ‘ownership paths’ allow us to investigate in detail the legal organizational structures of companies around the world and derive new insights. We demonstrate that vertical (or pyramidal) ownership structures are rarely used to magnify the control rights of ultimate owners. We propose, rather, that vertical ownership structures exist to minimize monitoring costs in (industrially and geographically) diversified firms. The results show that more diversified and unrelated firms have longer ownership paths, that is, more pyramidal structures. This is consistent with the idea that these structures may allow for more efficient management in diversified or unrelated conglomerates.

Abstract

Scholars highlight difficulties in measuring firms' socio-environmental performance, leading some firms to disclose positive social and environmental practices while withholding negative actions on these aspects, a phenomenon known as greenwashing. In this paper, we develop a set of testable hypotheses of the kind of conditions that may lead firms to send a more greenwashed message to their investors, depending on how easy it is to impute environmental damage to their operations. We test our predictions using an innovative methodology that combines textual, sentiment, and visual analysis of company annual and sustainability reports. Results suggest that firms operating in contested areas such as the Amazon region have a higher level of environmental reporting, with more emotional content, and more use of shades of green relative to firms that do not operate in those regions. Moreover, we introduce the concepts of fuzzy and sharp accountability, to characterize how easy it is, or not, to attribute environmental damage to a firm, and show that firms under the former adopt more deliberate greenwashing practices, while the latter rely on subtle, visual greenwashing of their reports. Thus, our research contributes to the literature on greenwashing by adding predictions of how and when firms may greenwash messages, as well as by providing a set of tools to analyze company reports to detect these practices.