GW-CIBER Funded Research

The following research was supported by GW-CIBER during the 2006-2007 grant year: click here

Cross-border Mergers: The Role of International Competitiveness
PI: Protiti Dastidar, Assistant Professor, Department of International Business

Brief Description:
This project consists of two research papers addressing the following questions: (i) the impact of the institutional framework on cross-border acquisitions; and (ii) the cyclical patterns in and causes of cross-border acquisition activity. The PI investigates the characteristics that distinguish cross-border acquisitions from U.S. domestic ones, and examines how the macro-economic environment and market trends drive managers to take decisions that impact the international competitiveness of firms. Both research studies develop an interdisciplinary approach that draws from the international business, finance, and economics fields to develop testable hypotheses.

Working Papers:
No. 07-01. Alexander Sleptsov and Protiti Dastidar. Riding the Waves: Cross-border Acquisitions as a Quest for new Capabilities
Abstract: We argue that the cross-border acquisition activity is characterized by a cyclical pattern similar to the domestic merger waves. We consider several factors that can influence the cross-border merger waves, including the changes in the firms’ resource requirements following economic or regulatory shocks. The results of the tests on a large-scale archival dataset suggest that the motivations for cross-border and domestic waves may be different. In the cross-border waves, many acquirers are motivated by the search for new capabilities abroad; in the domestic waves, more acquirers are motivated by the desire to redeploy their existing capabilities.

No. 07-02. Anju Seth and Protiti Dastidar. Motives for Domestic and Cross-border Acquisitions: A Comparative Analysis
Abstract: Studies examining value creation in cross-border acquisitions are few, and there are none that compare value creation of domestic vs. cross-border acquisitions. Institutional differences (at both the firm and industry level) may, in addition to economic factors, cause systematic differences in the value created by cross border vs. domestic acquisitions, thus affecting a firm’s international competitiveness. We seek to investigate the characteristic features that distinguish cross-border acquisitions from U.S. domestic acquisitions and how total gains are shared between the target and the acquirer. Our empirical results indicate that acquisitions are primarily driven by synergy motives though managerialism and hubris also coexist in the sample. Acquisitions by US acquirers of domestic as well as international targets are characterized by hubris rather than managerialism in our sample of negative total gains, while acquisitions by foreign acquirers of US targets are characterized by managerialism. We show that institutional characteristics matter and that target gains are lower for US acquirers of foreign targets in bank or group oriented countries, which is consistent with the evidence on lower valuations with lower protection of minority shareholder rights in these countries. For the foreign acquirer-US target sub-sample the institutional structure of the foreign acquirer’s home country appears to have no impact on target gains.

Motivating Diaspora Homeland Investment
PI: Tjai M. Nielsen, Assistant Professor, Department of Management
Liesl Riddle, Assistant Professor, Department of International Business

Brief Description:
Diaspora members remit investment capital to their homelands in several ways, including through transnational entrepreneurship, foreign direct investment, and portfolio investment. The central aim of this project is to identify effective mobilization strategies for homeland governments, diaspora organizations, multilateral organizations, and investment companies that are targeting diaspora members for homeland investment. We pursue this goal through a three-pronged approach: 1) measuring diaspora homeland investment interest (including psychological and sociological motivations); 2) identifying marketing best practices, particularly the role of investment promotion agencies, including market segmentation, product/service, and promotion strategies; and 3) identifying and identifying strategies for reducing diaspora investment obstacles.

Working Papers:
No. 07-03. Tjai Nielsen and Liesl Riddle. Bridging Cultural Distance: A Multi-level Model of Diaspora Homeland Investment
Abstract: Little is known about why diaspora members invest in their homelands or why investment intensity varies among diaspora communities. Employing an interdisciplinary approach, we generate a multi-level, conceptual model of diaspora homeland investment. Our model examines the effects of inter-diaspora cultural differences, support from diaspora organizations, and three types of investment expectations—financial, social, and emotional—to better understand this phenomenon.

No. 07-04. Tjai Nielsen and Liesl Riddle. Partnering to Beckon Them Home: Public-Sector Innovation for Diaspora Homeland Investment Promotion
Abstract :This paper examines a little-studied component of public administration existing in most countries around the world and particularly important for developing countries: national investment promotion agencies (IPAs). Diasporas are an increasingly important and relatively untapped resource for development and many homeland governments view diaspora foreign investment as key to their economic development. In addition to being generally under-resourced, many IPAs struggle to identify ways to effectively target, cultivate, and facilitate diaspora homeland investment (DHI). To accomplish these goals, these public-sector entities are beginning to identify and leverage key partnerships in the NGO sector. This paper describes the services IPAs offer and enumerates the challenges they face associated with DHI. Drawing on three illustrations of IPA-NGO partnerships, the paper develops preliminary tools for identifying and designing partnerships for the purpose of promoting DHI based on their scope, function, and degree of formality.
This paper is presently in publishing and can be cited as below:
Riddle, Liesl; Brinkerhoff, Jennifer; Nielsen, Tjai. (in press) “Partnering to Beckon Them Home: Public-Sector Innovation for Diaspora Homeland Investment Promotion” Public Administration and Development Journal.
If you would like to purchase this paper please click here.

Resource Nationalism Meets the Market:
Competition between Private and State-Owned Enterprise in Oil
PI: Robert J. Weiner, Professor, Department of International Business

Brief Description:
This project is developing a workshop around Turmoil in the World Oil Market: Causes & Consequences, to assess the state of knowledge in the area, as well as brainstorm future directions. The workshop will be convened in partnership with Resources for the Future (RFF, a respected non-partisan Washington think-tank with experience holding web-disseminating workshops) and the World Bank, and is aimed at policymakers, researchers, development practitioners, institutional investors, and industry people. Secondly, research will be conducted into political-risk aspects of energy security. The aim is not only to apply International Business (IB) methodologies, but also to move the IB research agenda itself forward, building on Professor Weiner’s work using oil crises as natural experiments. For example, IB views political risk and market risk as separate, yet current high oil prices and turmoil have led many oil-exporting governments unilaterally to change terms previously agreed with petroleum companies. ?

Working Papers:
No. 07-05. Reid Click and Robert Weiner. Does the Shadow of Risk Fall on Asset Prices?
Abstract: In the oil sector, emerging economies appear to be moving in the opposite direction from that assumed in the conventional wisdom on their integration into the world economy – as oil prices have soared, institutions such as regulatory stability, and contract sanctity and enforcement appear to be in decline, while political risk appears to be increasing. Does institutional deterioration harm the value of the very natural resources on which these countries depend?

This paper investigates the effect of political risk on the value of real assets – here petroleum (crude oil and natural gas) reserves – associated with the country in which the reserves are located. We utilize a global transactions database of 1,655 mergers and acquisitions in which petroleum reserves were traded during the period 2000-2006. To capture the riskiness of the location, we consider the political risk rating calculated by International Country Risk Guide (ICRG) and the country risk rating published in Institutional Investor. Controlling for factors that affect reserve value, we demonstrate the value-destruction of political risk, and estimate the asset discount for 37 countries. Furthermore, contrary to the assumption in the scholarly literature, we show that the discount depends on market conditions – the higher the expected future market prices of oil and gas, the larger is the discount, regardless of a country’s riskiness. Our findings suggest that treating political risk and market risk separately is likely to yield inaccurate estimates of asset value. The results are salient for evaluating investment opportunities in industries where political risk depends on world markets.

Enduring Industries-Foster Economics Development by Safeguarding Human Capital
PI: Tenagne Haile-Mariam, Assistant Professor, School of Medicine and Health Services, Department of Emergency Medicine

Brief Description:
This project explores the impact of “brain drain” or loss of human capital on the Ethiopian economy and specifically, the health care industry. The project will examine strategies developed by businesses that have successfully recruited and retained employees in Ethiopia and will seek methods to apply them to the health sector.

Partnership for Improving Humanitarian Assistance and Business Systems Resilience
PI: John Harrald, Professor, School of Engineering and Applied Science, Institute for Crisis, Disaster and Risk Management

Brief Description:
This project supports the ongoing work of the Institute for Crisis, Disaster, and Risk Management (ICDRM) that is working to identify strategies to better coordinate efforts between multi-national corporations and public/non government humanitarian and emergency management organizations, in order to improve societal preparedness and corporate crisis management. By identifying current challenges and opportunities facing global organizations, the strategies and best practices developed through this partnership project with Bogazici University will enhance businesses’ ability to survive and to assist their employees and customers, and ensure regional recovery.

Organizational Challenges for Businesses, PVOs and Developing Country Partners: Strategy of Bottom-Up Market Development, Scope of International Enterprises, and the Case of BRAC
PI: Stephen Smith, Professor, Columbian College of Arts and Science/Elliott School of International Affairs, Department of Economics

Brief Description:
This project supports research and in-depth analysis of strategies employed by various U.S. multinational enterprises to target extreme poverty in developing countries. An in-depth look through the development of randomized trails will explore BRAC, the world’s largest NGO, and the impact of its comprehensive and multi-sector approach on the development of institutions in Bangladesh and Uganda.

Does FDI Facilitate Domestic Entrepreneurship? Evidence from the Czech Republic
PI: Meghana Ayyagari, Assistant Professor, School of Business, Department of Internaitonal Business

Brief Description:
Funding for this project supports research on the impact of foreign direct investment (FDI) in strengthening entrepreneurship in transitional economies. The study examines the critical role FDI plays in accelerating economic growth, technology transfer, development of new markets, and enterprise restructuring.

The Bloom of Regionalism: Implications for U.S. Multinational Firms
PI: Maggie Chen, Assistant Professor, Elliott School of International Affairs, Department of Economics

Brief Description:
This project investigates and quantifies the impact of regional trade agreements (RTAs) on U.S. multinational firms and Foreign Direct Investment (FDI). The study examines the complexity of regionalism and the opportunity and challenges facing U.S. Multinational Enterprises (MNE) as they consider optimal locations for regional economic integration to increase gains and competitiveness.

Diasporas and Institution-Building in War-torn Societies: International Collaboration in Assessing the Methodological State of the Art
PI: Stephen Lubkemann, Assistant Professor, Columbian College of Arts and Sciences, Department of Anthropology

Brief Description:
This project aims at convening a symposium of 15-20 leading researchers in order to share key methodological insights about displacement diaspora research. This group will: 1) be inter-disciplinary; and 2) have established records of fieldwork in/with displacement diasporas. In partnership with Oxford University and Tufts University, this conference will: 1) produce a landmark methodological volume to be published as a book or as a special peer-review journal edition; 2) consolidate GWU’s emerging international profile in contemporary diaspora research; 3) develop GWU’s working relationship with three key international centers in this field (COMPAS-Oxford, Danish Institute for International Studies, Tufts); 4) take steps to create an international network of diaspora research centers based on research collaboration and annual workshops; 5) enhance GWU’s standing with major donors interested in supporting “diasporas in war-torn societies” research; and 6) establish a stronger US institutional presence in an important domain of development and international security policy research.

Transnational Washington: Diasporic Institutions
PI: Marie Price, Associate Professor, Columbian College of Arts and Sciences/Elliott School of International Affairs, Department of Geography
Elizabeth Chacko, Associate Professor, Columbian College of Arts and Sciences/Elliott School of International Affairs, Department of Geography
Robert Albro, Columbian College of Arts and Sciences, Department of Anthropology

Brief Description:
This project traces the transnational linkages and institutions forged from Washington, D.C. to numerous communities and their impacts on development. The study will focus on seven of the largest country of origin groups in the region (Afghans, Bolivians, Ethiopians, Indians, Koreans, Salvadorans, and Vietnamese) and elaborate on the diversity of transnational actors which have converged upon a relatively new urban immigrant destination.

The Public Policy Process and Business Political Strategies in Developing Nations
PI: Jorge Rivera, Assistant Professor, Department of Management

Brief Description:
This project studies business political strategies addressing governmental demands for increased corporate social/environmental responsibility in developing countries. The research will identify and document at least four cases that illustrate how business’ political resistance to environmental/social responsibility and regulatory demands varies depending on the stage of the policy process and country contextual characteristics. The cases will be used in a new course offered to George Washington University graduate students.

The Security Behavior of International Business and NGOs
PI: Deborah Avant, Associate Professor, Columbian College of Arts and Sciences/Elliott School of International Affairs, Department of Political Science

Brief Description:
This project examines U.S. business and NGO response to new security threats and how the actions that they employ to manage these risks, impact the surrounding communities and the relationships between their home and host government and societies. The study will result in a framework of analysis for non-state actors and security planning; database of corporate and NGO response to security, conflict, and crisis management issues over times and territory; and a book, series of articles and policy papers utilizing the database to answer theoretical and policy questions.

The Implications of Union Political Ties for Economic Development
PI: Emmanuel Teitelbaum, Assistant Professor, Columbian College of Arts and Sciences/Elliott School of International Affairs, Department of Political Science

Brief Description:
This project examines the economic effects of union political ties in developing countries. The study will test the hypothesis that major political parties restrain and institutionalize protest through the compilation of three original cross-national datasets. These datasets will help determine how the political structure of the labor movement affects worker protest, the ability of the working-class to influence legislative outcomes, and ultimately, the impact of labor protest and working-class political mobilization on economic performance.