دو روی قابلیت های مدیریت خارجی: سرمایه گذاری مستقیم خارجی و بهره وری تولید در بخش خرده فروشی انگلستان

We investigate the impact of management capabilities of foreign firms on the management capabilities and performance of domestic firms using survey data on the UK retail sector. On average, foreign-owned retail firms achieve higher management capability scores and are more productive than domestic firms. Our results suggest two faces of foreign management capabilities. On the one hand, capabilities that can be codified, for example human resource management capabilities, generate some positive spillovers on the relevant management capabilities of local firms. On the other hand, dimensions of capabilities that are more tacit and highly competitive exert a negative competitive effect on domestic firms’ own management capabilities. While the overall management capabilities of domestic firms are found to have a significantly positive effect on their own productive efficiency, we find no evidence of a direct efficiency effect of foreign management capabilities on local firms.

Management capabilities are a key determinant of the competitive advantage of firms (Teece & Pisano, 1994) and a major source of ownership advantage of multinational enterprises (MNE) (Cantwell, 1991 and Dunning, 1988). Although there is a substantial literature on the impact of foreign direct investment (FDI) on local firms, most of the literature focuses on research and development (R&D) and technological capabilities. Research exploring managerial knowledge spillovers is rare, especially for the service sector, where management capabilities are likely to play an important role (Bloom and Van Reenen, 2007 and Bloom and Van Reenen, 2010). The share in GDP accounted for by the service sector in industrialized countries has been growing steadily over the past four decades and it now accounts for around 60 percent of value added (including public administration, health and education services) in all OECD countries (McManus, 2009). In the UK, the service industry represents by far the most important sector. Excluding public administration, health and education services, it accounted for nearly 50 percent of total employment in the UK by the end of 2009.1 However, the relatively larger share in employment accounted for by the service sector is paired with lower productivity relative to the manufacturing sector (Griffith et al., 2004 and Wölfl, 2005). Considering the enormous effort that has been devoted in the literature to understanding performance of manufacturing firms, further work targeted at understanding firm performance in the UK service sector promises to be particularly instructive. Important issues in the discussion of firm performance in the manufacturing sector revolve around the presence of foreign firms and their effect on domestic firm performance through the generation of inter-firm spillovers and competition effects. Yet, such analysis is almost absent from the literature on the service and in particular the retail sector with a few exceptions (see for example, Añón-Higón and Vasilakos, 2008, Fortanier and van Wijk, 2010, Griffith et al., 2004, Hamida and Gugler, 2009 and Miozzo and Grimshaw, 2008). These studies provide evidence on the impact of FDI in the service sector on local firms through training and linkages in the supply chain. Yet there is still a substantial lack of empirical evidence on the impact of FDI in the services and in particular the retail sector. Although many studies suggest managerial knowledge spillovers as a channel for FDI to affect domestic firm performance, direct empirical evidence is scarce. An exception is Fu (2009) who explores managerial knowledge spillovers from FDI in terms of dissemination of modern management practices. Also, in light of evidence such as Buckley, Wang, and Clegg (2007) who point out differences in the impact of FDI on local firms across industries according to their labor intensity, findings for the service sector may differ substantially from what has been found for the manufacturing sector. In this paper, we examine the impact of foreign management capabilities on local firms’ own management capabilities and productivity using comprehensive survey data of domestic and foreign firms’ management capabilities in the UK retail sector. This paper contributes to the literature on FDI spillovers as the first empirical study investigating specifically the impact of foreign managerial capabilities on the performance of local firms in the retail service sector. Our findings suggest that foreign management capabilities have two faces with respect to their impact on local firms. On the one hand, capabilities that can be codified, for example human resource management (HRM) capabilities, generate some spillovers on the relevant management capabilities of local firms. On the other hand, dimensions of capabilities that are more tacit and highly competitive appear to be negatively associated with domestic firms’ own management capabilities. Moreover, we do not find any evidence in favor of a robust link between foreign management capabilities and domestic firm performance. Nevertheless, we confirm previous findings that foreign-owned firms have on average higher productivity levels than domestic firms and establish a positive association between a firm's own managerial capability and its efficiency. In Section 2, we discuss the existing related literature and the theoretical underpinnings of our empirical investigation; Section 3 describes our data set; Section 4 outlines the methodology adopted to carry out our empirical analysis. Section 5 provides a summary of the results and Section 6 concludes.

Using survey data for the UK retail sector, this paper examines whether there exist capability spillovers from foreign to domestic firms and whether these spillovers have any effect on domestic firm management capabilities and performance measured as firm-level efficiency. On average, foreign-owned retail firms appear to be more productive than domestic firms and enjoy higher scores for our management capability measures. Using several measures to capture horizontal, vertical and regional spillovers, we find limited evidence for the existence of statistically significant capability spillovers originating from foreign to domestic firms confirming the tacit, context-dependent and imperfectly imitable nature of capabilities. Our results suggest two faces of foreign management capabilities. On the one hand, capabilities that are more likely to be codified, i.e., human resource management capabilities, generate some spillovers on the relevant management capabilities of local firms. On the other hand, those foreign management capabilities which are more tacit and firm-specific exert a statistically significant negative competition effect on domestic firms that are located within the same UK regions as the foreign-owned companies. There appears to be no robust link between foreign management capabilities and domestic firm performance measured as firm efficiency. However, firms’ own overall management capacity is positively associated with their productive efficiency. Considering the limitations of our analysis imposed by the availability of longitudinal data, conclusions need to be drawn with caution and causal statements are not warranted. There are some important policy and practical implications that arise with regard to the use of FDI in the retail sector. First, internationalization of retailing has been a major trend in the past two decades. Retail transnational corporations have expanded not only to the developed economies in the West, but also the emerging markets which have grown rapidly. Opening up the retail market to MNEs is expected to provide competition, a broader range of better services available to consumers and also to enhance capabilities of local retailers through knowledge transfer and competitive pressure. Our results show that in the retail sector, which is capital-intensive and which is increasingly using sophisticated management practices and strategies at the managerial level in various management areas, MNEs appear to have superior managerial capabilities and to represent more a source of competitive pressure than of knowledge spillovers. On the one hand, some management capabilities are reflected in codifiable management practices. Such capabilities will spill over to domestic firms through demonstration or word-of-mouth diffusion, for example, ‘routinely giving feedback to shop floor staff on their performance’, ‘ensuring stock is on the shelves and available at the right time’, ‘providing incentives that motivate staff’ and ‘empowering shop floor staff to take responsibility and make operational decisions’. These capabilities and practices may be imitated by domestic firms by adopting the same practices, although the quality of adoption and execution of these practices may differ in the domestic firms according to the skills and competences of domestic top-level and shop floor managers. On the other hand, most of the capabilities are tacit and context-specific, such as ‘managing poor performers’ and ‘retaining good staff’. These capabilities are important for productivity of retail firms. But there is no unified code and routine for such tacit capabilities. They are very much dependent on the experiences of managers, the context of the problem, and the characteristics of the employees concerned. Similar productivity-enhancing tacit capabilities include ‘controlling waste’, ‘solving problems quickly on the shop floor’, ‘working flexibly on the shop floor’, and ‘using shop floor systems and processes that are clear and well-understood’. In respect of marketing capabilities, significant tacit capabilities such as ‘providing customers with value for money’ and ‘advertising and promotions’ are also crucial for retail productivity but difficult to transfer and imitate. All these tacit management capabilities represent a competitive advantage of MNEs, but are unlikely to spill over to domestic companies as they are difficult to imitate. Evidence from this research also suggests that firms, including both MNEs and domestic firms, are well advised in investing in their management capabilities and thereby enhance their competitiveness. For MNEs that are concerned about the leakage of core knowledge and capabilities, management capabilities are those crucial factors in their ownership advantage which are unlikely to leak to their rival companies in host countries. For managers in local retail firms, our research suggests that many tacit capabilities are difficult to imitate and have to be built up through intensive learning and training. Therefore, a combination of internal capability-building and transfer of suitable ‘best practices’ should be a strategic choice for local retail managers to confront the challenge of foreign competition.