辅导 LUBS5901M Quantitative Method for International Business Semester Two 2021/2022调试数据库编程

LUBS5901M

Quantitative Method for International Business

Semester Two 2021/2022

Question 1.

In recent years, Multinational Enterprises’ (MNEs) strategies have been increasingly impacted by an accelerating rate of change in the external environment. A research project is carried out to investigate subsidiary performance amidst turbulence in China. Subsidiary performance is expected to be dependent on choices that the MNE makes when responding to environmental turbulence at the subsidiary level.

The researchers collected data from a questionnaire mail survey of senior managers in MNE subsidiaries in China in 2015. They selected 400 foreign subsidiaries from a list of clients or members provided by Shanghai Foreign Service Co., Ltd (SFSC), China International Intellectech Corporation (CIIC), and the European Union Chamber of  Commerce  in  China.  SFSC  and  CIIC  are  leading  human  resources  service providers in China with clients that were MNE subsidiaries including enterprises listed in  the  Fortune  500.  The  geographical  focus  was  foreign  subsidiaries  that  have investments in the Yangtze River Delta (Shanghai, Jiangsu and Zhejiang). This was chosen because it represented the fastest growing and the most prosperous region during China’s transition to a market economy, and one with potentially high variance in terms of environmental turbulence.

The questionnaire was in English and sent to the senior managers of the 400 foreign subsidiaries during the year 2015. 152 responses were received, yielding a response rate of 38%. There area diverse range of industries in the sample , including petroleum, consumer   goods,    IT,   industrial    machinery,   consulting,    pharmaceuticals   and healthcare.

Define the population of the research project. Evaluate the applied sampling strategy and the representativeness of the sample. Propose an alternative sampling strategy and justify its effectiveness. [20 marks]

Question 2.

A firm is seeking to form. an international joint venture (IJV) to achieve its international expansion. The firm carefully selects four potential partners (A, B, C, and D) that have complementary  resources  and  assets.  To  further  assess  their  suitability, the  top management team (TMT) collects quarterly financial information on the four potential partners in the last 10 years. The boxplot is reported in Figure 2.1.

Figure 2.1 Boxplot of Return on Assets (ROA) of the potential partners

In addition, by analysing the data on IJVs within the industry, the TMT finds that the longevity of the IJV (defined as the length of months an IJV survives) can be influenced by the perceived trustworthiness of the partner, cultural distance, and the host-country legal  protection  level.  They  visualise  the   industry  data   in   Figures  2.2   to  2.4. Accordingly, the TMT collects the information on those three factors for each of the four potential partners and reports it in Table 2.1.

Figure 2.2 Scatter plot between Perceived trustworthiness and IJV longevity

Figure 2.3 Scatter plot between Cultural distance and IJV longevity

Figure 2.4 Scatter plot between Legal protection level and IJV longevity

Table 2.1 The perceived trustworthiness, cultural distance, and legal protection level

Referring to the information provided, advise the firm which IJV partner to choose and explain your answer. [20 marks]

Question 3.

A project examines the quality of institutions and their impact on firms’ strategies. The study distinguishes two dimensions of institutional inefficiencies in a host country – generalised and arbitrary – and explores their impact on the acquirers’ ownership decisions in cross-border acquisitions (CBAs).

The  institutional  inefficiencies  are  defined  as  the  problems  in  an  institutional environment that make it less effective. Generalised institutional inefficiencies are the explicit problems in the rules of the game, which make the environment more difficult for all firms to operate. And arbitrary institutional inefficiencies are the problems in the application of the rules of the game, arbitrarily privileging, or hindering firms.

Six hypotheses are developed:

Hypothesis 1. The higher the degree of generalised institutional inefficiencies in a host country, the smaller the ownership acquired in CBAs.

Hypothesis 2. The higher the degree of arbitrary institutional inefficiencies in a host country, the higher the ownership acquired in CBAs.

Hypothesis  3a.  The  acquirer  MNEs’  CBA  experience  in  the  host  region weakens    the    negative    relationship    between    generalised    institutional inefficiencies in a host country and the ownership acquired in CBAs.

Hypothesis  3b.  The  acquirer  MNEs’  CBA  experience  in  the  host  region strengthens the positive relationship between arbitrary institutional inefficiencies in a host country and the ownership acquired in CBAs.

Hypothesis 4a. For high-tech MNEs (in comparison to low-tech MNEs), the negative relationship between generalised institutional inefficiencies in a host country and the ownership acquired in CBAs is weakened.

Hypothesis 4b. For high-tech MNEs (in comparison to low-tech MNEs), the positive  relationship  between  arbitrary  institutional  inefficiencies  in  a  host country and the ownership acquired in CBAs is strengthened.

The hypotheses were tested using a sample of 5522 CBAs by firms entering emerging economies. The results are reported in Table 3.1.

The variables involved in the analysis include:

•    Ownership acquired in CBAs, measured by the percentage – ranging from 10% to 100% - of the equity acquired in the target firm;

•    Generalised institutional inefficiencies,  measured by the mean value of the firms’   perceived   institutional   inefficiencies,   including   tax   administration, corruption, political instability, business licensing and permit, and access to finance, in that country and in that year;

Table 3.1 Regression results

•   Arbitrary  institutional  inefficiencies,  measured  by the variance  of the firms’ perceived institutional inefficiencies, including tax administration, corruption, political instability, business licensing and permit, and access to finance , in that country and in that year;

•   Acquirer CBA experience in the region, measured by counting the total number of CBAs that the acquirer MNE had completed in the target country’s region in the past;

•   Acquirer high-tech, a dummy variable based on the SIC code of the primary business of the acquirer MNE – high-technology firms are coded as 1 and low- technology firms as 0;

•    Transaction value, measured by the logarithm of the total value of the deal;

•   Acquirer assets, measured by the financial value of the acquirer firms’ assets (in millions of pounds);

•    Cultural distance, the differences of national cultures between acquirer and target firms.

You are required to answer the following questions:

a) Write down the statistical models for Model 3. [2 marks]

b)  Suggest  whether  the  results  in  Table  3.1  are  consistent  with  any  of the  six hypotheses.  Please  support your answer  with  detailed  analysis  (in  terms  of the directions and statistical significances of the key explanatory variables). [8 marks]

c) The CEOs in the emerging markets would like to knowhow the results of this project can help them make ownership decisions in CBAs. How would you respond? [12 marks]

Question 4.

A research team is investigating the innovation performance of firms in emerging markets and collects a sample of 47 firms. The dependent variable in the study is innovation performance, measured by the number of patents. The impacts of the following factors are examined:

•   R&D expenditure (the expenditure on R&D activities, in £k);

•   Foreign subsidiary (the number of foreign subsidiaries);

•   Foreign  country  (the  number  of  foreign  countries  where  the  firm  has operations);

•   High-tech (dummy variable, 1 if the firm is a high-tech firm and 0 otherwise);

•   Firm size (the number of full-time employees);

•   Education (the average number of years in school for all full-time employees).

The researchers conduct a linear regression analysis. The results are reported as follows:

Figure 4.1 Scatter plot of Foreign subsidiary and Innovation performance

Figure 4.2 Scatter plot of Foreign country and Innovation performance

Figure 4.3 Residual histogram

Figure 4.4 P-P plot

Figure 4.5 Scatter plot (̂(y) against e)

Table 4.1 Descriptive statistics

Table 4.2 Correlation

Table 4.3 Model Summary

Table 4.4 Coefficients

You are required to answer the following questions:

a)  Evaluate  the  use  of  the  linear  regression   model  in   explaining  the  causal relationships between variables. Please include all the linear regression assumptions in your answer. [20 marks]

b) Discuss the practical implications of the study from the perspective of the managers. [12 marks]

c) The research team categorises the dependent variable into a dummy variable, with a value of 1 if the firm’s patent number is greater than median (i.e., 103) and a value of 0 otherwise, and run a logistic regression. Write down the statistical model. [3 marks]

d) The log-likelihood of the intercept-only model is - 75.861 and the log-likelihood of the unconstrained model inc) is -65.135. Given X0(2).05,6  = 12.59, would you recommend that the variables in the logistic regression are useful to enhance our understanding on emerging market firms’ innovation performance? Explain your answer. [3 marks]