Global Expansion

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In order to survive the global competition and sustain their business, cooperation may grow their size by expanding their markets internationally. Expansion means that cooperation is approaching the target market that they have already served but in a different location or reaching new market to increase sales and profit. Another advantage of expansion is cost efficiency due to several reasons such as (1) maximum advantage of global supply chain; (2) lower labor costs; (3) new technology; (4) tax benefits; and (5) reduced transportation cost. Further, corporation is able to add more product line if they choose to capture specific international market. Besides, this avoids dependency to one nation’s economy. By diversifying their business internationally…show more content…
There have been some significant researches on this matter. Research by Dyck and Zingales (2004), Guiso et al. (2004), Stulz and Williamson (2003) and Treisman (2000) show a significant correlation between religion and economic behavior. Evidence provided by Dyreng et al. (2010), Grullon et al. (2010) and McGuire et al. (2010) find that religion is an important control mechanism in which reduces the likelihood of unethical corporate behavior such as aggressive earnings management that could cause corporate law suit. The reason religion is considered relevant for economic behavior is because it is reflected on decision maker’s preference of behavior (Grullon et al. 2009). However, every religion has its own set of values that may polarize with other religion. For example each religion has different level or definition of trust, this phenomenon can be observed from religion such as Catholic and Protestant. In Catholic countries, creditor rights are weaker (Stulz and Williamson, 2003), and private benefits to controlling shareholders are higher compared to Protestant countries (Dyck and Zingales, 2004). This may indicate that there is a significant influence of religion in corporate decision making. Other studies find religiosity influence gambling preferences on corporate innovation (Adhikari and Agrawal,2004). Aside from…show more content…
This demography characteristic makes Indonesia a potential target market by multinational firms owned by other countries. Currently, there are a significant amount of MNCs subsidiaries listed in Indonesia market. Therefore, we aim to examine how religion and culture of the parent country of the MNC may affect the corporate decision-making in their subsidiaries in Indonesia. Specifically, we will test this influence on the board of director composition and dividend policy, to see whether the headquarters do have some level of control on the corporate governance and decision making of their
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