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Our paper revisits one of the fundamental questions of International Business (IB) scholarship, investigating the ways through which multinational enterprises (MNEs) establish legitimacy when entering a foreign market. We address this question in a novel context of Central and Eastern European (CEE) firms venturing into Sub-Saharan Africa (SSA), employing a multiple case study approach. We investigate the process of legitimacy formation by Polish firms entering SSA for market-seeking reasons. We find that the firms studied use their initial liabilities of foreignness, outsidership, and origin as starting points for pragmatic, moral, and cognitive legitimacy-building by developing narratives that neutralize the distance between themselves and important local stakeholders. Our findings contribute to an understanding of the contingent nature of 'liabilities' in IB literature and shed light on the role of narratives in the internationalization process. Keywords Central and Eastern Europe * Legitimacy * Multinationals * Sub-Saharan Africa, 1 Introduction Our paper revisits one of the important questions of IB scholarship, investigating the ways through which multinational enterprises (MNEs) establish legitimacy when entering a foreign market. We study [...]

This paper examines trends, challenges and opportunities in terms of research methodologies in qualitative IB research. In particular, it examines trends lor the dominant (positivism/(post)positivism) paradigm versus alternative paradigms (i.e., social constructivism, critical realism and interpretivism) and provides a comparative analysis of data collection and methods. Using mixed methods to collect and analyze data on qualitative articles published in International Business Review, Journal of International Business Studies, Journal of World Business, and Management International Review, we examine trends and differences between the dominant and alternative paradigms and use qualitative content analysis to investigate how alternative paradigm papers are conceptualized and presented. Moreover, we interview authors of non-positivist papers to gain in-depth understanding of the findings. We reveal differences across the paradigms and provide evidence of paradigmatic fit between methods and data collection techniques for the dominant paradigm, but more variation for alternative paradigms. Lastly, we provide prescriptions for IB scholars in terms of methodology diversity and how complex IB phenomena can be pursued vis-a-vis alternative paradigms. Keywords Research methodology * Qualitative methods * Philosophy of science * Alternative paradigms, 1 Introduction Recent studies have contended that international business (IB) research has encountered a 'relative decrease in methodological choices' due to increased use of quantitative methods (e.g., Nielsen et al., [...]

Recent advances in technology (e.g., the Internet of Things, Augmented Reality, Virtual Reality, Cloud Services, Artificial Intelligence, and Blockchain), the shift towards digital products, and the increased use of digitalisation by firms have enhanced consumers' experience and transformed how companies operate, create products/services, and offer value to multiple stakeholders on a global scale. These technological innovations have led to the phenomenon known as the Metaverse. The Metaverse does not refer to any one type of technology but is a broad (and often speculative) shift in how we interact with different technologies in the same space. In the context of International Business (IB), the recent emergence of Metaverse appears to make geographical, sectoral, and operational barriers less relevant, raising complex questions about how current IB theories can explain the world-spanning, sectorally fluid, and centrifugal behaviour of firms in the era of digital globalisation. In this paper, we obtain a critical understanding of the important opportunities and challenges that the Metaverse and the fluidity of digital technologies bring to the IB field. Specifically, we discuss how traditional theories can be effectively utilised to explain firms' internationalisation, and adapted to reflect the new technological era. We propose a framework for new approaches to IB research to help advance research on Metaverse and IB, which can provide important opportunities for future work in this field. Keywords Metaverse * Digitalisation * Emerging technologies * Digital globalisation * IB theory * Internationalisation, 1 Introduction The traditional business environment has undergone significant changes at national and global levels over the past two decades. The accelerated development of the internet infrastructure and the World [...]

This paper examines the influence of social innovation on financial risk of emerging economy multinational corporations (EMNC's). Traditionally, research has focussed on Western MNCs' and their financial performance implications. However, the growing involvement of EMNC's in social innovation--albeit in environments characterized by institutional voids--and its effects on financial risk necessitate an in-depth examination. Drawing on stakeholder theory, we explored how EMNC's balance their social innovation initiatives with financial risks. To this end, we first examine how social innovation reduces the financial risk of EMNC's. Second, we examine the association between excessive social innovation and EMNC's' financial risk. In addition, borrowing insights from institutional theory, we assess the role played by institutional legitimacy in this process, acknowledging institutional legitimacy's potential to mitigate the financial risks associated with social innovation in emerging economies. We test our hypotheses based on data drawn from 90 EMNC's in 14 emerging economies, applying a panel regression model with robust standard errors and a rigorous robustness propensity score matching test. Our findings show that social innovation reduces EMNC financial risk, and challenge the assertions made regarding the potential negative implications of excessive social innovation on financial risk. Our results also demonstrate the intricate moderating effects of institutional legitimacy in balancing social innovation, excessive social innovation, and EMNC financial risk. Finally, we proffer critical implications for managers and policymakers in emerging economies. Keywords Social innovation * Financial risk * Institutional legitimacy * EMNC's, 1 Introduction Over the last decade, social innovation--which is defined as a 'novel solution to a social problem that is more effective, efficient, sustainable, or just than existing solutions and [...]

This paper analyzes how MNCs' intermediate units--those that exercise authority over other subsidiaries--apply specific control mechanisms: centralization, formalization, outcome control, and socialization. We combine agency and network theory to explain how intermediate units' dual agency role--as both principal and agent--and their network embeddedness form the choice of control mechanisms. More specifically, we propose hypotheses on how the intermediate units' internal and external relationships determine their choice of control mechanism. We study this issue in the context of Spanish intermediate units--owned by European MNCs--that exercise authority over subsidiaries in Latin America. Keywords Intermediate unit * Multilayered MNC * Control mechanism * Agency theory * Network theory, 1 Introduction The international business (IB) literature conceptualizes multinational corporations (MNCs) as inter-organizational networks consisting of units at multiple levels with several roles and, as such, a variety of relationships [...]

Despite the increasing importance of social innovation, research seeking to illuminate how firms engage in social innovation in emerging markets is limited. Utilizing survey data from 143 Pakistani micro-multinational firms operating in other emerging markets, this study examined how these firms undertook social innovation practices in host emerging markets. The findings indicate that the social innovation practices of these firms in host emerging markets are influenced by dynamic marketing capabilities. Furthermore, this influence is mediated by social embeddedness in the host market. Moreover, this mediated influence is positively moderated by a socially supportive culture of the host market. The impact of marketing capabilities on value creation in host emerging markets involves the serial mediation of social embeddedness and social innovation practices. The study demonstrates how resource-constrained emerging-market micro-multinational firms can generate value in host emerging markets, thereby validating the efficacy of dynamic marketing capabilities in the context of social innovation in emerging markets. The study also discusses practical and policy implications. Keywords Emerging market * Marketing capabilities * Micro-multinationals * Social embeddedness * Social innovation * Socially supportive culture * Value creation, 1 Introduction Social innovation refers to organizational activities or initiatives developed to address the social needs of societies (Crupi et al., 2022; Mulgan, 2006; Nguyen et al., 2023; Phillips et [...]

Taking a socially proactive stance that aligns with their economic imperatives has led multinational corporations (MNCs) to focus on social innovation that tackles environmental challenges (or eco-innovation hereafter). Their knowledge of eco-innovation is important to emerging markets that are facing severe environmental challenges and to emerging market firms (EMFs) whose eco-innovation activities face resource and knowledge constraints. MNCs, through their foreign direct investment (FDI) activities in host emerging markets, can divulge economic, knowledge and environmental values of eco-innovation, helping EMFs to improve their eco-innovation through knowledge spillover channels. Taking the value-based approach, we draw on the eco-innovation research and the MNC/FDI spillovers literature to develop hypotheses on the relationship between regional knowledge spillovers of MNCs and the eco-innovation of EMFs in a multi-dimensional task environment characterized by munificence, complexity and dynamism. Our empirical examination is based on a sample of Chinese manufacturing firms from 2003 to 2013. We find support for hypotheses that regional knowledge spillovers of MNCs enhance the positive effects of munificence and mitigate the negative effects of complexity and dynamism on the eco-innovation of EMFs. Keywords Eco-innovation * Green patents * Task environment * MNC * FDI * Regional knowledge spillovers, 1 Introduction Multinational corporations (MNCs) are increasingly chartered by their stakeholders to address social imperatives and to contribute to the United Nation's Sustainable Development Goals (SDGs) (van Zanten & van [...]

International social alliances--in which multinational enterprises (MNEs) and social enterprises (SEs) collaborate--are a vital source for the development and scaling up social innovations for value creation. Yet, these alliances face significant legitimacy challenges, which are more glaring in bottom-of-the-pyramid markets (BOPMs) within emerging and developing economies owing to weak and underdeveloped formal institutions. Drawing on the legitimacy, institutional, and social alliances literature, we develop a conceptual framework that explains the importance of developing social, institutional, and commercial legitimacy in international social alliances operating in BOPMs. We also explored the challenges faced by international social alliances in BOPMs and the factors that enable MNEs and SEs to build different types of legitimacy. We contribute to international business research by providing an understanding of various legitimacy building strategies enacted by international social alliances based in BOPMs for social value creation. Keywords International social alliances * Networks * Legitimacy * Institutional voids * Social innovation * Bottom of the pyramid markets * Emerging markets, 1 Introduction There has been an increasing scholarly interest in examining social innovation and how it is enacted across different contexts (Adomako & Tran, 2022; Arranz et al., 2020; Dionisio [...]

Despite growing concern in the social innovation (SI) literature about the tackling of grand challenges, our understanding of the role of multinational enterprises (MNEs) remains in its infancy. This article examines foreign MNE subsidiaries' SI investments focusing on United Nations' Sustainable Development Goals (UNSDGs) in host countries. Using financial data from large, listed subsidiaries of foreign MNEs operating in India, along with hand-collected data from firms' disclosures of corporate social responsibility (CSR) activity for five years starting in 2015, we utilise the externalities framework propounded by Montiel et al. (2021). This neatly translates the 17 UNSDGS into actionable goals to examine the efforts of foreign MNE subsidiaries in increasing positive externalities as opposed to reducing negative externalities via Si-related investment in host countries. The study also evaluates the effects of the local embeddedness of the foreign MNE subsidiaries on SI investment. We find that MNE subsidiaries tend to favour increasing positive externalities as compared to reducing negative externalities through their SI investments. Also, older subsidiaries tend to prioritize greater investments in SI projects related to reducing negative externalities and subsidiaries with higher MNE ownership tend to reduce investments in SI projects related to increasing positive externalities. We discuss possible interpretations of the exploratory results using the institutional logics perspective and conclude with implications for policy and future research. Keywords Social innovation * Institutional logics * India * MNE * UNSDG, 1 Introduction Societal grand challenges (e.g. poverty, hunger, migration, climate change) are receiving increasing attention from international business (IB) scholars primarily focusing on the role of MNEs because they '...transcend [...]

Although social innovation can help multinational enterprise (MNE) subsidiaries create social value for developing countries, they often encounter significant challenges in successfully implementing social innovation projects. This research applies the knowledge-based perspective to propose and test a theoretical framework to explain why MNE subsidiaries differ in their ability to pursue social innovation successfully in a developing country. The framework contends that MNEs' relationship learning contributes to social innovation variability under varying levels of subsidiary autonomy and mode of entry. Analysis of primary data collected from 207 subsidiaries of MNEs operating in Ghana shows that relationship learning has a positive relationship with social innovation. Further analysis reveals that subsidiary autonomy enhances the positive association between relationship learning and social innovation, and that this moderating effect is stronger for subsidiaries with equity entry mode as opposed to non-equity entry mode. These insights advance the limited understanding of the antecedents of MNEs' social innovation in developing countries and offer guidance on how MNE subsidiaries can successfully pursue social innovation interventions in a developing country. Keywords Relationship learning * Social innovation * Subsidiary autonomy * Entry mode choice * Ghana, 1 Introduction Sub-Saharan African countries offer under-tapped resources and cheap labor, combined with burgeoning consumer markets, making them attractive to multinational enterprises (MNEs) seeking growth and prosperity (The Amankwah-Amoah et [...]

The concept of social innovation has garnered increasing attention across various disciplines, driven by a growing recognition of the need to address complex societal challenges. However, despite the thorough examination of traditional innovation forms and their influence on global business practices, the scrutiny of social innovation within the realm of international business (IB) remains relatively nascent. This introduction delineates the scope of this focused issue and emphasizes the critical need to expand research on social innovation within IB, a field dedicated to enhancing social value and engagement among diverse stakeholders. This focused issue explores the catalysts and impacts of multinational corporations' (MNCs') social innovation endeavours in emerging markets. Departing from the profit-centric focus of conventional innovation studies, social innovation emphasizes the redistribution of knowledge, the encouragement of discovery, and the facilitation of co-creation, thus posing a challenge to the traditional paradigms and logics of innovation theory. This introduction provides a concise review of current social innovation literature in IB, highlights the contributions made by the articles in this focused issue, and concludes by outlining directions for future research in the domain of social innovation in IB. Keywords Social innovation * Multinational corporations (MNCs) * International business * Emerging markets, 1 Introduction The increasing societal expectations for multinational corporations (MNCs) to reconcile their economic performance with social development have often been underscored in academic literature, public discourse, and policy discussions [...]

International business scholars have long recognized the potential influence of cultural differences on foreign divestment; however, the empirical results are mixed. Our study helps resolve this contradiction and contribute to the existing literature in three ways. First, we advocate the use of cultural friction metric, instead of the more traditional cultural distance approach. This overcomes a key limitation in the modelling the impact of cultural differences. The friction construct metric includes an index of firm-specific factors, referred to as the degree of 'cultural interaction'. This index moderates the impact of cultural distance, reflecting firm--level differences. We also build on calls for more Positive Organizational Scholarship by challenging the negative bias in the international business literature and propose a curvilinear effect of cultural differences on divestment probability. Lastly, we investigate a potential boundary condition--the moderating effect of entry mode on the main hypothesis. Our empirical sample include 2120 Finnish foreign subsidiaries operating in 40 countries during 1970-2010. Our analyses confirm that the cultural differences, when measured by the friction metric, appear to be a significant and superior predictor of subsidiary divestment probability, and that the relationship appears to be U-shaped. Our robustness analyses also highlight the importance of which cultural framework is applied and controlling for selection bias. Keywords Foreign divestment * Subsidiary performance * Cultural friction * Cultural distance * Cultural distance paradox * Entry mode, 1 Introduction Foreign direct investments (FDIs) have an important strategic role in multinational enterprises (MNEs). However, a significant number of these investments are subsequently divested (UNCTAD, 2021). As such, foreign [...]

Born global firms (BGs) contribute significantly to economic growth, but few studies have examined the post-internationalization stage of BGs. In addition, studies of the impact of changes in strategic aspects as BGs mature on BG performance and survival have yielded conflicting results. To address this gap in knowledge, the present study examines the relationships between intelligence generation and innovation orientation, and branding strategies as moderated by maturity. The data were received from 133 senior managers of BGs of various ages. The analysis shows that BG maturity negatively moderates the relationship between intelligence generation and functional branding strategy but does not influence the relationships of innovation orientation with branding strategies. Furthermore, emotional branding showed stable association with both financial and market performance indicators. This study demonstrates that maturity affects the orientations and performance of BGs and calls for a reassessment of the competitive international strategy of BGs at the post-entry stage. Keywords Born global * Maturity * Intelligence generation * Innovation orientation * Branding strategies * Performance, 1 Introduction Research on born global firms (BGs) has gained substantial momentum in the three decades since Rennie (1993) first coined the term. These young and rapidly internationalizing firms are [...]

1 Protectionism in the International Business Despite the scholarly recognition that internationalization is a rather complex process that is neither always forward moving nor monotonic, and the fact that there [...]

Over more than 30 years, research on the interactions between multinational corporations (MNCs) and their institutional host environments has produced rich but scattered insights, which this review organises and integrates. We map the current state of knowledge and build an integrative model involving motivation and host context as antecedents; interaction strategy and actors as the phenomenon; and consequences, especially at the organisational level, as outcomes. By reviewing 176 articles published in leading journals, we reveal previously hidden relationships between host-country institutional context, proactive and reactive strategies, and positive and negative outcomes for the focal organisation. We also identify three future research frontiers focused on understudied aspects of interactions between MNCs and institutions: dynamics of strategies, dynamics of impact, and microfoundational dynamics. We suggest that combining organisational institutionalism and comparative institutionalism offers a pathway to push the outlined research frontiers. Keywords Multinational corporations (MNCs) * Institutions * Organisational institutionalism * Comparative institutionalism * Varieties of capitalism * Review, 1 Introduction The relationship between institutions and multinational corporations (MNCs) is a main theme of international business (IB) research (Kostova et al., 2008). Prior work tends to explore how the [...]

In the face of growing global tendencies of anti-globalization and de-globalization, emerging economy multinational enterprises (EMNEs) are suffering from a trust deficit and multiple liabilities of foreignness in leading economies. The purpose of this study is to empirically examine the coping strategies of EMNEs towards the challenging institutional environment in host countries. It adopts a qualitative approach, conducting longitudinal multiple cases studies among MNE subsidiaries and employing interviews as the main method of data collection. The findings reveal that EMNEs are not passive recipients of the adverse institutional environment and adopt institutional adaptation as the only response strategy. Given that a single strategy cannot be effective, they have developed both proactive and protective strategies to handle the multiple liabilities of foreignness and trust deficit. This study can help EMNEs gain a better understanding of the dominance effect and develop more effective measures to manage challenging institutional environments in host countries. Given that interactions between institutional environments and firm-level strategies of MNEs remain under-researched, this study advances understanding of strategies and behaviours of MNEs in host countries. Keywords Foreignness effects * Institutional environment * Liabilities of foreignness, 1 Introduction Understanding cross-national activities of multinational enterprises (MNEs) and their strategic responses to the institutional environment of host countries is a central topic of international business studies (Henisz & [...]