Journal Press India^®

As the global economy is making efforts to recover from the devastation caused by the Covid-19 pandemic, international business is transforming to adapt to a New Economic Order and a changed world that is witnessing shifting locations of economic activity, greater volatility in trade and investment, reordering of supply chains, and new and emerging technologies that are revolutionizing connectivity. Many of the changing trends in international business look destined to stay for a long time to come. These disruptions have made it imperative to examine the issues arising thereof for international business and understand their implications for various stakeholders. A number of papers in this issue of FOCUS have brought up such pertinent issues and discussed the way forward in dealing with them.

           With China’s agenda of expansionism being examined even more closely post the outbreak of the pandemic, the paper by Munim Kumar Barai and Minakshi Kar examines the significant role of South Asia in general, and India in particular, for the success of the Belt and Road Initiative (BRI) of China. The authors suggest that securing economic integration with South Asia, a region located at the intersection point of the Silk Road Economic Belt and the Maritime Silk Road, becomes crucial for India’s strategic presence in the Eurasian hinterland as well as to prevent a perceived policy of containment to confine China in East Asia. Another paper by Sanjib Banik, Arjun Gope, and Sujit Deb empirically examine the performance of global stock exchange markets in view of the challenges faced by these markets in the aftermath of the pandemic outbreak. The authors find that there is a sharp decline in index values of stock markets in India, USA, UK, Hong Kong and Germany in comparison to Shanghai and France. For the case of India, employing the mean-adjusted returns model for the event study, the findings suggest that during the lockdown period in India, the market acts as a semi-strong form of efficiency. This work could provide useful insights to understand the risk associated with the impact of lockdown on stock exchanges. The paper by S. P. Sharma and Ashima Dua examine the economic resilience of some leading economies of the world post the global financial crisis of 2008. Their resilience is tested in terms of the extent of price stability, the degree of their endurance to economic dynamism, their external trade position and extent of openness to international trade, the economy’s fiscal position, and domestic competitiveness. The paper also makes an assessment of the New Economic Order and discusses the implications for the post COVID-19 world.

           An insightful paper in this issue examines knowledge transfer between MNC subsidiaries and local firms, taking the case of Finland. Employing data collected from managers of foreign owned MNC subsidiaries operating in Finland, the results indicate that similarities in business practices and existence of rich communication between the units have significant positive impact on the amount of knowledge transferred.

          Outward FDI from emerging economies like India has been attracting a lot of attention in recent research in international business, in view of the increasing role of these economies as sources of FDI. Two papers in this issue examine different aspects of outward FDI from India. The paper by Anindita Goldar analyses the trends in India’s OFDI flows during the period 1992 to 2018 using the kinked exponential growth model for identifying the breaks in the growth rate based on the important phases of the evolution of India’s foreign investment policy. The results reveal that India’s policy liberalization especially the introduction of FEMA in the year 2000, significantly bolstered the growth rate of India’s OFDI flows, while they were adversely affected by the financial crisis. However, a rebound is seen since 2014 in India’s OFDI flows indicating that the future trend and outlook of outbound investments remain increasingly promising. Jaya Prakash Pradhan, Tareef Husain, and Ravinder Nath, in their paper, focus on the evolution of Indian OFDI flows into the ASEAN region since 1980. The paper highlights the sectoral composition, ownership structure, firm size, and acquisitions that most visibly characterize patterns of investments undertaken by Indian firms in ASEAN region.

          An interesting aspect of international trade, i.e. determinants of cross-border trade credit, have been examined by Rajeev Jain, Dhirendra Gajbhiye, and Soumasree Tewari, in their paper, using bank-level panel data for India. The authors find that the size of imports positively influences the flow of trade credit. Among the supply-side factors, banks’ financial health, size of their overseas network as well as funding cost in the international market are important. The paper by Shabnam Kumari and Himanshu Goel explores the depth of the ‘Fourth Industrial Revolution’ and investigates the dark side of ‘Globalization 4.0’. The authors observe that this revolution will help in transforming the technological system of health, education, communication, production, energy and distribution sector in an economy.

          I thank all the contributors for stimulating a discussion on pertinent issues in international business and hope that this issue makes for an interesting and insightful reading for all.

Dr. Niti Bhasin

      Editor