Political risk, internal versus global value chain knowledge, and subsidiary operational integration

Early evidence on how Industry 4.0 reshapes MNEs' global value chains: The role of value creation versus value capturing by headquarters and foreign subsidiaries

In anticipation of the upcoming changes and turbulence caused by Industry 4.0, in which digital integration connects all value chain members, managers at leading multinational enterprises (MNEs) are scrambling to predict the associated changes in the market. This pioneering study advances our understanding by investigating the impact of an MNE's Industry 4.0 orientation on the globalization of its value chain network. Identifying two types of value-generation activities as potential moderators, namely value creation and value capturing, we compare the moderation effects when these activities are conducted by headquarters versus foreign subsidiaries. We test the proposed model using a panel dataset comprising 5572 subsidiary-year observations from 358 Korean MNEs from 2011 to 2019. The results show that an MNE's Industry 4.0 orientation leads to a more rapid expansion of its distribution network than of its supplier network. Furthermore, value creation by headquarters has a stronger positive impact on the globalization of its distribution network than that of its supplier network, whereas value creation by subsidiaries has a stronger positive impact on the globalization of its supplier network than that of its distribution network. However, value capturing has a stronger impact on the globalization of the MNE's distribution network than that of its supplier network when performed by both locations. This study concludes by discussing the theoretical and managerial implications.

Towards Financing System of Integrated Enterprise Development in the Time of COVID-19 Outbreak

The development of an enterprise under current conditions requires an integrated approach and an appropriate financing system. The purpose of this study is to justify the replication model of financing the integrated enterprise development. The research methodology suggests that each enterprise has its own development “genome”, which makes it possible to apply the replication of its directions based on a justified financing system of such an integration. The proposed replication model is augmented by regression analysis, which made it possible to carry out scenario forecasting of alternative options for the company’s development. The conduction of the study is based on 16 textile enterprises. The formed map of the integrated enterprise development enabled the determination of their points to replicate resources in four directions (environmental and economic, innovative, informational, and organizational). The interaction of companies on the basis of strengths diffusion (exchange of potential) with the application of financial netting is considered an alternative to replication. The research proved that an alternative option can solely be recommended for developed companies and requires the identification and minimization of risks. The strong link between the level of integrated and overall development of companies was acknowledged. Asymmetry of business development in the context of a replication model of its integration enables the achievement of high results while minimizing financial resources. Enterprises implementing the replication model of integration considerably improve their prospects and increase overall development performance. The application of the replication model of financing integration under the crisis and the COVID-19 pandemic fosters efficient use of financial resources and the overall enterprise development.