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Computer Home Assignment

BMAN 70301 International Business Analytics and Research Skills

MSc International Business and Management 2023-24

GENERAL INFORMATION – IMPORTANT

· The computer assignment is an individual essay that counts for 50% of the mark of the course unit. Within the computer assignment, Part 1 and Part 2 count equally (50% each).

· The word count limit for the essay is 2000 words (-/+10%), excluding references and appendices. The word counts do not need to be equal for Part 1 and Part 2.

· If needed, statistical tables and other output can be placed in an appendix that does not count as part of the word limit. However, the text should make clear references to the output.

· The deadline for submitting this coursework is 12 January at 3pm (UK time), using Blackboard/Turnitin.

· Part 1 can be done in either Excel or Stata. We also accept responses using other statistical software that can produce the required analyses and output, including SPSS or R.

· Part 2 should be done in NVivo.

· This computer-based assignment uses the following uploaded materials: One dataset in Stata (dta.file) for Part 1. An Excel version of the dataset for Part 1 has also been uploaded. Two reports in PDF format for Part 2. All materials have been uploaded on Blackboard

· You should include the required output for all the analyses in your essay (e.g. copy-pasted tables and figures from Excel or Stata, and screenshots of NVivo results). Please read the questions carefully to see what output is required for your responses.

· Make sure to discuss the output in the text, although it is not necessary to refer to all the information in the tables (here you should choose the key information for the questions). Include titles for all tables and figures in the essay (e.g. Table 5 Correlation matrix).

· It is NOT required to include in the essay a technical description of how you produced the output (e.g. screenshots of the menus in Excel, Stata and NVivo, or Stata syntax).

PART 1. How to explain Chinese firms’ internationalization?

What drive(s) firms’ internationalization? This represents one of the most important questions that IB research tends to explain. In this dataset, you will find a list of Chinese firms in the manufacturing industries in 2009-2013. This dataset includes several key factors that could potentially influence the firms’ international expansion, which is indicated by the number of foreign subsidiaries established in a focal year. Below please find the descriptions of the variables in the dataset.

(Note: This dataset is constructed by Renfei Gao for his research “Inward FDI spillovers and emerging multinationals’ outward FDI in two directions”, published at Asia Pacific Journal of Management. You may want to read this paper if you are interested in this topic and/or the involved data.

Renfei collected the data from two sources: Orbis that provides firms’ subsidiary information, and China Stock Market & Accounting Research Database (CSMAR) that includes Chinese firms’ financial and governance information. In this paper, Renfei tries to explain Chinese firms’ internationalization in two directions, host countries that are more versus less developed than China. He focuses on inward FDI as the main independent variable (IV), measured by the presence of foreign MNEs in an industry in China. In this assignment, you will also explore this IV, together with several other key variables, to see how they can influence Chinese firms’ internationalization).

The list of variables

Firm code (the ID number of Chinese firms in the dataset)

Year

Internationalization (foreign_sub): number of foreign subsidiaries established by Chinese firms in a focal year (Chinese firms go to foreign markets, or outward internationalization/FDI from China);

Inward FDI (FDIindex): An index of foreign MNEs’ presence in an industry in China (foreign firms come to the Chinese market; or inward internationalization/FDI to China);

Firm size (firmsize): Total assets of Chinese firms;

Firm age (firmage): Firm age in the focal year;

Firm profitability (roa): Return of assets (ROA);

Firm innovation (rdintensity): R&D intensity, the ratio of R&D expenditures to total sales;

State ownership (Staown): the ratio of equity shares owned by state entities (e.g., governments) in the overall equity;

Industry competition (Competition): The intensity of competitive pressure in an industry.

1a. Descriptive statistics

Please use the Data Analysis package to produce descriptive statistics for all the numerical variables in the dataset. Include a table with the results in your essay (it can be in the appendix if needed). Comment briefly on the results for the Internationalization (the dependent variable) in terms of mean, median and minimum and maximum values.

1b. Scatterplot

Create a scatterplot between Internationalization and Inward FDI.

1c. Simple regression

Change the scatterplot layout to include the simple regression line. Does the scatterplot suggest a positive or negative relationship between the two variables?

Check your results by running a simple regression between the same two variables using the Data Analysis. Specify Internationalization as dependent variable and Inward FDI as independent variable and include the line fit plot.

1d. Correlation matrix

Please use the Data Analysis package to produce a correlation matrix for all numerical variables in the dataset. Briefly comment on (i) How Internationalization and Inward FDI are related to each other; (ii) How the other variables are related to the dependent variable (internationalization); (iii) Whether there are any high correlations among the other variables.

1e. Multiple regression and hypothesis testing

Please use the Data Analysis package to run a set of suitable multiple regression analyses testing the following seven hypotheses.

H1. Inward FDI has a positive effect on internationalization.

H2. Firm size has a positive effect on internationalization.

H3. Firm age has a negative effect on internationalization.

H4. Profitability has a positive effect on internationalization.

H5. Firm innovation has a positive effect on internationalization.

H6. State ownership has a negative effect on internationalization.

H7. Industry competition has a negative effect on internationalization.

When specifying the regression models, pay close attention to what are the dependent variables and what are the independent variables implied by the hypotheses. Explain whether each hypothesis is supported by considering the sign and statistical significance (at 0.1%, 1%, 5% or 10% level) of the coefficient for each of the variables mentioned in the hypotheses.

Briefly discuss the results for the hypotheses overall. Which factor(s) seem to be most important driver(s) for Chinese firm internationalization? Based on the results, what are the practical recommendations you may provide for Chinese firm managers in terms of promoting internationalization?

PART 2. Qualitative analysis of reports on global value chains

Changes of external environment such as tensions between major powers and the global health crisis in the past few years have generated important implications for multinational enterprises (MNEs) and policymaking. For Part 2 of the computer-based assignment, we will do qualitative analysis of reports by McKinsey Global Institute (MGI) and World Trade Organization (WTO) regarding global value chain (GVC) activities.

2a. Word frequencies and graphs

Import the MGI and WTO reports in PDF format into NVIVO separately and analyse each report. Please create a table with word frequencies, as well as word cloud graph illustrating the importance of the words, for each report.

Specifically, you need to generate a meaningful word frequency table and word cloud graph by identifying the most frequently used 30 words in each report. Please delete words without actual meaning or context. The tables and graphs can be placed in the appendix section to limit the word count.

Compare the word frequency tables generated from the two reports. Briefly discuss their similarities and differences in terms of the frequently used words. Discussion about similarities and differences could focus on 2 – 3 words.

Hint: Please refer to computer lab exercise in Week 4 about manifest content and latent content.

2b. Read the MGI and WTO reports quickly to search for paragraphs containing the following words

· Risk

· Security

· Shock

Select and code 2 passages of text for any two from the above in NVIVO. For example, you may select 2 passages about risk and 2 passages about security, i.e. a total of 4 coded passages by drawing from both reports. Please include the coding in the appendix section of your assignment. Based on your coded text, please discuss how these factors may influence MNEs’ strategy, especially concerning the orchestration and potential reorganization of GVC activities. In your discussion, please try to build upon the reports to avoid repetition

References

Gao, R. (2023). Inward FDI spillovers and emerging multinationals’ outward FDI in two directions. Asia Pacific Journal of Management, 40(1): 265-293.