Academy of Finland Project on International Divestment and Relocation Decisions: The Impact on Firm Value

Updated 8.5.2021 | 17:05

Suomen Akatemian rahoittaman projektin tarkoituksena on luoda ymmärrystä monikansallisten yritysten investointien purku- ja muuttostrategioista ja niiden vaikutuksesta yritysten arvoon. Tieteellisessä ymmärryksessä purku- ja muuttostrategioiden syistä, esteistä, päätöksentekoprosesseista ja arvopotentiaalista on yhä suuria tutkimusaukkoja, ja tutkimus edistää teoriaa integroimalla strategisen johtamisen, kansainvälisen liiketoiminnan ja rahoituksen kirjallisuutta. Tutkimus hyödyntää määrällistä dataa n. 2500 pohjoismaalaisesta tuotantoyrityksestä. Lisäksi projektissa kerätään haastatteludataa pohjoismaalaisilta yrityksiltä, jolla tutkitaan päätöksentekoprosesseja purkamisissa ja muutoissa. Projekti suoritetaan yhteistyössä kansainvälisten yliopistojen tutkijoiden kanssa, ja tulosten odotetaan auttavan yritysjohtajia suunnittelemaan ja suorittamaan purku- ja muuttostrategioita. Tulokset auttavat myös poliittisia päättäjiä ymmärtämään investointien purkusyitä kansallisella tasolla.

DPROJECT SUMMARY

Foreign direct investments (FDIs) in their various forms are the main form of entry by multinational enterprises (MNEs) into world markets. However, statistics on world investment reports and empirical studies have indicated that changing endogenous priorities of firms, turbulent political, economic and legal conditions in FDI host countries, and increasing globalization and technological development have led many MNEs to divest and relocate their FDIs. However, significant gaps remain in our understanding of the determinants, deterrents, decision process, and value creation potential of foreign divestment and relocation strategies. The purpose of this project is to provide a more comprehensive understanding of foreign divestment and relocation strategies of MNEs and their role in firm value.

The research project will adopt several different methods depending on the subprojects in question (qualitative, quantitative and mixed method) in order to provide a holistic understanding of the phenomenon. More specifically, we plan to collect secondary quantitative data on divestment strategies and firm value from ca. 2000-2500 investments and divestments of Nordic firms in manufacturing sector. We also plan to collect data from secondary sources for qualitative analysis as well as carry out interviews in 20 Nordic case firms (6-15 Finnish and other Nordic firms) to investigate foreign divestment and relocation decisions. This project will be carried out with Collaboration of Renowned Scholars from International Universities in at least six different countries.Scientific results of this project will be presented in leading international conferences and published in high quality peer reviewed international Journals. The project will help MNE Managers understand the determinants, deterrents, decision process, and value creation potential of foreign divestment and relocation strategies.

PROJECT ORGANISATION

Jorma Larimo - Project leader

Tahir Ali - Post-doc researcher

Pratik Arte - Post-doc researcher

Huu Le Nguyen - Post-doc researcher

Minnie Kontkanen - University Lecturer

Tiina Leposky - Post-doc researcher

Roman Filenko - Doctoral student

Ha Nguyen - Doctoral student

Arshed Iqbal - Doctoral student

Oskar Sniegowski - Research Assistant (2019-2020)

PROJECT OUTPUT

Published works

year	Author (s)	Headlines	Outlet
2019	Pratik Arte, Jorma Larimo	Taking stock of foreign divestment: Insights and recommendations from three decades of contemporary literature	International Business Review
2020	Yi Wang, Jorma Larimo	Survival of the full versus partial acquisitions: The moderating role of the firm's internationalization experience, cultural distance, and host country context characteristics	International Business Review

Conference presentations (competivive tracks)

year	Person (s) involved	Conference
2018	Pratik Arte, Jorma Larimo	EIBA Conference, Poznan

2019	Ha Nguyen, Jorma Larimo, Pervez Ghauri	AIB-UKI Conference, Brighton
	Desislava Dikova, Ahmad Arslan, Jorma Larim	AIB-UKI Conference, Brighton
	Pratik Arte, Jorma Larimo	AIB Annual Meeting, Copenhagen
	Huu Le Nguyen, Jorma Larimo	AIB Annual Meeting, Copenhagen
	Ha Nguyen, Jorma Larimo, Douglas Dow	AIB Annual Meeting, Copenhagen
	Pratik Arte, Jorma Larimo	15th Vaasa IB Conference, Vaasa
	Roman Filenko, Jorma Larimo, Tahir Ali	15th Vaasa IB Conference, Vaasa
	Yi Wang, Jorma Larimo, Jean Francois Hennart	15th Vaasa IB Conference, Vaasa
	Ha Nguyen, Jorma Larimo, Douglas Dow	EIBA Conference, Leeds

2020	Pratik Arte, Jorma Larimo	AIB-UKI Conference, Glasgow