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We develop the construct of global dynamic managerial capability (GDMC) and identify its underlying sources: (1) international human capital, (2) international social capital, and (3) international managerial cognitions. Consistent with dynamic capabilities view and upper echelons theory, we suggest that GDMC leads to global asset orchestration, which in turn, results in superior company performance in a two-stage process. First, GDMC leads companies to adopt global strategies that spread the risk of internationalizations across different entry modes and geographic regions. Second, the (re)configuration of global assets positively influences subsequent firm performance and thus mediates the relationship between GDMC and performance. Recognizing the triad of factors that form global dynamic managerial capability is crucial when selecting future managers of multinational corporations. Hence, firms with increasing international exposure – both domestically via foreign competition and internationally via foreign market presence – may seek to compose their upper echelons with a suitable combination of international human and social capital as well as internationally diverse cognitions in the pursuit of sustained competitive advantage.

Dans les affaires internationales, ainsi que dans de nombreux autres domaines des sciences sociales, les recherches de réplication ont longtemps été mal appréciées, découragées et traitées comme parents pauvres et « non originales ». Nous argumentons qu’en élucidant les facteurs de confusion, validant les mécanismes de causalité et testant les limites spatiale et temporelle, les recherches de réplication peuvent stimuler les débats, enrichir notre corpus de connaissances et affiner la théorie. Cet éditorial a pour objectif de promouvoir les recherches de réplication. Nous plaidons en faveur de celles-ci en reconnaissant leurs valeurs et présentant leurs différents types. Nous proposons également un canevas méthodologique permettant de les réaliser avec rigueur académique. Enfin, nous élaborons les recommandations concrètes sur la manière d’augmenter leur nombre de publication., In international business, as well as in many other social sciences, replication studies have long been treated as a poor relative, discounted and discouraged as “not original”. We argue that by teasing out confounding factors, validating causal mechanisms, and testing spatial and temporal boundaries, replication studies can stimulate debate, add to our body of knowledge, and fine-tune theory. Our goal in writing this editorial is to promote replication studies. We build a case for them by recognizing their value and showcasing their different types. We also offer a methodological template for carrying them out with academic rigor. Finally, we make concrete recommendations on how to go about increasing the number of them published.

Multinational corporations (MNCs) are considered as dispersed structures of power, in which diverse headquarters (HQ)–subsidiary power relationships collectively influence performance and management. Yet, few studies have accounted for the subsidiary portfolio characteristics shaped by the entire set of differentiated HQ–subsidiary power relationships, and little is known about their effect on the performance and management decisions of MNCs. Drawing on agency and resource dependence theories, this study investigates how the power structure of the MNC, or the pattern of power distribution in the subsidiary portfolio, affects MNC performance and expatriate utilization. Results from a comprehensive panel of Korean MNCs show that the degree of power concentration in the subsidiary portfolio has inverted U-shaped relationships with MNC performance and the use of expatriate control. However, the results also reveal that these relationships vary between manufacturing and downstream subsidiary portfolios. These findings suggest that the structural characteristics of the subsidiary portfolio are important determinants of MNC performance and management. This study opens an important new avenue for international business scholarship by explicitly conceptualizing the MNC as a portfolio of differentiated subsidiaries and by examining the consequences of the subsidiary portfolio characteristics.

We characterize the knowledge production process whereby the inventive capabilities of the firm generate innovation output in highly inventive multinational enterprises (MNEs). We explore the sensitivity of this relationship to the strength of intellectual property rights (IPR) protection across the MNEs R&D subsidiaries. We argue that MNE innovative performance will be enhanced when the firm’s R&D activities are based in locations where IPR protection is stronger. Moreover, when considering the internal geography of the MNEs R&D activities, innovation performance depends on the distance between the home- and host-country IPR regime. Thus, innovation performance is worse, as the difference between home and host IPR regimes increases. Finally, we explore asymmetries in this relationship, in particular that the deterioration is more marked when MNEs locate their R&D activities in host economies with IPR protection significantly less strict than in their home country. We test these ideas using a unique new dataset about the most innovative MNEs in the world, an unbalanced panel of around 900 MNEs observed for the period 2004 to 2013 and find strong support for all our hypotheses.

Extant studies have focused on conceptualizing and measuring the general quality of the institutions and their impact on an array of firms’ strategies. We distinguish two dimensions of institutional inefficiencies in a host country – generalized and arbitrary – and theorize from a knowledge perspective their impact on the acquirers’ ownership decisions in cross-border acquisitions (CBAs). Our empirical examination of 5522 CBAs by firms entering emerging economies reveals that, when exposed to a higher level of host-country generalized institutional inefficiencies, the acquirer tends to take a lower ownership in a CBA. When exposed to higher levels of arbitrary institutional inefficiencies, however, the acquirer tends to take a higher ownership in a CBA. We further find that these relationships are contingent upon the acquirer’s experience in the host region and technological nature. info:eu-repo/semantics/publishedVersion

This study examines firm internal network structures as a defense of intellectual property rights (IPR) in high-risk environments with inadequate IPR protection. Specifically, we investigate firm social and knowledge-based network structures individually. A foreign subsidiary can intensify social complexity by strengthening the small-worldness in its collaboration networks and attenuate knowledge-relatedness by decreasing the small-worldness in its knowledge networks. In a subsidiary, the effectiveness of these measures depends to some extent on the parent firm’s experience in the host country. Longitudinal data on 401 foreign subsidiaries in the pharmaceutical industry from 1980 to 2017 have been analyzed in a quasi-experiment using difference-in-differences and two-stage regression. The results provide empirical support for these ideas. Findings highlight the explanatory power of internal network structures when discussing knowledge protection and show the utility of taking an internal network defense perspective in examining IPR protection.

This article argues that innovation in and from emerging economies is largely shaped by the challenges of sustained catching-up with the advanced economies. Just as firms and industries are constantly seeking to upgrade their technological and organizational capabilities, so too are their societies reconfiguring their institutions and networks to improve their knowledge resources. Such a co-evolutionary process requires IB scholars to draw on interdisciplinary work from the innovation and development literatures in order to reconsider the key drivers of innovation at multiple levels within these economies. Innovation is not just limited to technological activities, but includes organizational and transactional improvements, and is largely a process of recombination of local and imported knowledge, shared through multiple forms of collaboration. This can redefine the FSAs of local and foreign firms, often shaped by the strategies of local public and private actors. Simultaneously, policymakers need to develop the appropriate institutions needed to underpin R&D, training, standards, and knowledge coordination. MNEs play unique roles as instigators of innovation, as conduits for new knowledge, and as beneficiaries themselves, via their own recombination capabilities.

Global scaling – defined as a logic of multinationalization that seeks rapid growth through the replication of a global business model across foreign markets – is an increasingly visible real-world phenomenon; however, it is one which has not yet been theorized in international business research. The purpose of this editorial is to initiate a dialogue that will lead to greater discussion and research in this area. We present the theoretical facets of the global scaling logic and compare global scaling with other conceptualizations of rapid international growth. We then draw on previous research in international business and entrepreneurship to suggest facilitators of global scaling. Finally, we highlight the challenges of global scaling and areas for future empirical research to help us better understand which kinds of firms are likely to follow a global scaling logic, and which factors contribute to its successful implementation. Throughout the discussion, we use published case studies as examples, in order to provide suggestions for teaching material on global scaling.

This paper develops theory suggesting that, relative to purely domestic firms, multinational enterprises (MNE) have greater incentives and strategic and operational means to respond to expanding carbon emissions constraints. We test our resulting hypotheses with data on changes in carbon emissions by over 6,000 industrial plants during Phase 2 (2008–2012) of the European Union’s Emissions Trading Scheme. We find that MNE maintain: (1) consistent carbon reductions across institutional contexts, and (2) an overall carbon performance edge over domestic firms. The carbon performance gap between MNEs and domestic firms narrowed, however, in host countries transitioning towards more stringent market regulatory systems. By demonstrating that the effects of national and international carbon regulations on firm behavior interact in important ways with each other and with firm characteristics, this paper deepens understanding of how institutions are likely to shape the ongoing energy transition towards a low-carbon economy.

Prior international business research recognizes that networks can affect internationalization decisions, yet our understanding of how networks in the host country do so, especially with respect to establishment mode choices between greenfield and acquisition, remains nascent. Host-country networks become particularly salient after initial entry as the multinational enterprise (MNE) more directly engages with local actors and develops embeddedness in the host country. We draw from network theory to argue that establishment modes of post-entry foreign direct investments into a host country are shaped by the MNE’s position within local alliance networks. We posit that local network centrality increases the likelihood of choosing greenfield because it provides access to broad knowledge flows and higher social status that reduce the MNE’s need to pursue acquisitions of local firms. Conversely, local network brokerage increases opportunities for knowledge recombination, making greenfield a less likely choice vis-a-vis acquisition. Using data on automotive MNEs entering the U.S. over 22 years, we find support for our predictions. Demonstrating that distinct aspects of the MNE’s local network alliance position can operate in different ways to effectuate establishment mode choices, this study advances a more nuanced understanding of how networks shape internationalization into a host country.

The issue of control in multinational corporations (MNCs) is central to international business scholarship. However, prior literature tends to provide a static perspective offering few theoretical insights on control changes, especially the practices that enable control adjustments. Adopting a practice theory perspective, we consider control as “in the making” whereby adjustments emerge through a social accomplishment, constituted and reconstituted as headquarters and subsidiaries engage in a co-creating process. Using a longitudinal case study approach, we had the rare opportunity to track and compare an unsuccessful and a successful attempt to adjust control in an MNC over time. Our main theoretical contribution is a model of adjusting control in MNCs that details the practices that enable control changes. This model offers theoretical implications for organizational control theory in MNCs, especially in relation to theorizing the subsidiary contribution in the design of control, the reconciliation of raised tensions in headquarters–subsidiary relationships, and the nature of unintended consequences in the adjustment process. Our study also contributes to theories on MNC change, as it details the construction of an ongoing strategy–structure alignment for strategic flexibility.

This article ties in directly with recently intensified interest in business models in international business (IB), using the energy transition as empirical context to explore their relevance in firm internationalization. The global energy transition presents a challenge for almost all industries, but some face specific difficulties particularly important from an IB perspective. We study a set of European firms that used to operate in a highly regulated context with (partial) state ownership, until government-directed market liberalization started to allow further competition and internationalization. Existing firms were prompted to adapt their business models to these changes, with new ventures entering the market to reap opportunities with novel energy-related technologies and business models. Linking insights from strategic management to the IB literature, we conceptualize business model-related specific advantages (BMSAs), and explore the role of BMSAs in the internationalization of the firms in our sample. We also uncover barriers to BMSA recombination in (potential) host countries, consider BMSA location-boundedness, and discuss implications for firms’ international expansion by presenting a new framework. Consequences for the energy transition and the actors already involved and (in)directly confronted with it are explicated, while outlining promising areas for further research, building on the insights and limitations of our study.

Forming international joint ventures (IJVs) with political institutions in emerging economies involves both benefits and risks for multinational enterprises (MNEs). While political partners can provide IJVs with various resources, their political status equips them with a strong position to appropriate rents in IJVs. We address this tension by examining how host state ownership affects both innovation inputs and outputs in China-based IJVs over 2008–2013. Despite the potential government opportunism, we find more R&D investment (innovation inputs) made in IJVs with state partners than in those with private ones. Thus, R&D investment can be politically motivated and symbolically managed to ensure continued resource exchanges with the host state. This political pressure is mitigated when foreign parents directly transfer home-country-based technology to IJVs, when the host-market dependence of IJV is weak, and when IJVs are located in a deregulated region. Moreover, we find foreign-host-state JVs deliver fewer innovation outputs (measured by patent data) than foreign-private JVs, which implies the failure of state partners to adequately absorb foreign technologies. These findings highlight both the state partners’ powerfulness to boost IJV innovation investment and their limits in shaping IJV innovation outcomes, and bear rich implications for the management of MNE–host government relationships.

Consumers in Western markets are increasingly critical towards globalization and re-embrace local values. Companies thus must decide whether to continue to pursue global branding strategies and/or rejuvenate local branding strategies. To explore the implications of market globalization for consumer preferences, we use signaling theory to investigate the role of perceived brand globalness (PBG) and brand localness (PBL) as signals of brand credibility, related downstream effects and boundary conditions, across two countries with differing levels of globalization. In globalized markets, PBG is a weaker signal of brand credibility than PBL, whereas in globalizing markets, the two signals are of equal importance.

Understanding the antecedents to, and consequences of, a firm’s degree of internationalization is integral to international business research. In order to be accepted by scholars, empirical research that tests hypotheses regarding drivers and/or consequences of firm internationalization needs to use a valid measure of firm internationalization. In this paper, we develop a new measure, the ratio of international market shares (RIMS); RIMS measures a firm’s degree of conformance to the theoretically grounded characteristics of a maximally internationalized global firm. RIMS is theoretically and empirically compared to three widely used measures of firm internationalization: foreign sales to total sales (FSTS), international diversification, and international scope. Each of the three is shown to have serious limitations while RIMS does not. In addition to being theoretically based, RIMS also has the advantages that it: measures the degree to which a firm has penetrated the rest of the world’s market relative to the degree it has penetrated its primary market; captures the combined effects of the breadth and average depth of internationalization; is easy to calculate; is easy to interpret, and is calculable for more firms than measures of diversification or FSTS. All four measures are tested on a sample of large manufacturing firms.

This research note links insights from the family firm literature with extant internalization theory-based studies on family firm internationalization to explain how family-owned multinational enterprises (MNEs) can leverage family resources for successful internationalization, and why some family firms are unable to do so. We identify examples of internationally relevant resources contributed by the founding family, namely, social capital, long-term orientation, and reputation. We then differentiate between pre-existing resources that reside at the family level, and firm-specific advantages (FSAs) that reside at the firm level. In order to derive FSAs from family resources, and to profitably exploit those across borders, family MNEs must engage in two types of recombination. First, family and non-family resources are recombined to create actionable FSAs. Second, family-derived FSAs are recombined with location-specific resources in order to respond to differences between home and host country environments. We discuss complementary resources required for each type of recombination and specific mechanisms utilized by family MNEs to integrate those resources. By investigating a potential functional contribution of a family to successful internationalization, we extend prior internalization theory-based work, which focuses predominantly on family firms’ propensity toward bifurcation bias and the constraining effect of this bias on efficient international governance.

The lifetime of foreign equity partnerships is often limited. Research suggests that MNCs abandon their local partners when the need for sharing ownership in foreign subsidiaries has diminished. This study shows that MNCs may abandon their local equity partners to reap the benefits of multinationality: as MNCs gain a competitive advantage from leveraging resources across borders, they will initially benefit from sharing ownership with a local firm, to embed their foreign subsidiaries in the local environment and access local resources more effectively. Later, they will benefit from taking over the local partner’s equity share, to better embed their subsidiaries in the parent organization and transfer locally accessed resources to the MNC’s other locations. Moderated-mediation regressions provide evidence of such practice in the context of cross-border transfers of capital resources. This strategy seems to work: as a corollary of our model, panel regressions suggest that sharing ownership with local firms in a host country with a capital resource advantage is associated with appropriating more capital resources from the local debt market, while abandoning these partner firms later is associated with transferring more capital resources from this host country, via internal capital markets, to other parts of the MNC.

The growing interest in global value chains (GVCs) has been paired with a greater appreciation of the need for better measurement methods, as reflected by recent initiatives from academia and leading international organizations. This research note focuses on one method to measure GVCs that has been recommended in recent scholarly work, namely input–output models, but goes beyond the industry level of analysis by introducing intra-industry firm heterogeneity. Our illustrative application to multinational enterprises (MNEs) versus domestic firms’ participation in GVCs enhances our understanding of their specific role in GVCs and how such engagement varies across countries and industries. While showing that MNEs’ contribution to value-added exports is considerably smaller than what is suggested by traditional trade statistics, our findings also, interestingly, document that the higher import content of exports of MNEs can go hand in hand with the creation of local backward linkages as a function of their much higher specialization in only parts of the production process vis-à-vis domestic firms. By answering relevant questions on MNEs’ engagement in GVCs that have hitherto been impossible to address comprehensibly and in a cross-country comparative setting, this application illustrates how the methodology has great potential for international business research.

This paper develops and discusses a model describing how multinational enterprises from emerging economies (EMNEs) overcome the liability of outsidership in their internationalization from a capability-building perspective. Our aim is to celebrate the important intellectual contribution of Johanson and Vahlne (J Int Bus Stud 40(9):1411–1431, 2009), who introduced the liability of outsidership concept. We first discuss learning from the local environment that can reduce outsidership, and then explain how greater absorptive capacity can translate into better performance internationally. Finally, we elaborate on how the institutional environment further conditions the process and the outcomes of learning. We conclude with some suggestions for future research from five theoretical perspectives: learning, social network theory, institutional theory, resource dependence theory, and MNE structure and design.

The Uppsala Model - typically viewed as an internationalization process model, an internationalization stages model, or a sequential internationalization model - has served as a theoretical underpi ...

The taxation of the multinational enterprise (MNE) has been a continuing concern for policymakers. We argue that the changing nature of the mobile MNE (e.g., its improved ability to fine-slice the value chain and disperse it geographically) makes it increasingly important to rethink current tax policies. First, there should be more focus on the inefficiencies that arise when taxation leads to the inefficient location of MNE activities. Thus, MNEs may shift activities to low-tax jurisdictions that offer lucrative pecuniary and non-pecuniary incentives, but do not enable their investments to maximize their contribution to global value creation. Second, international tax regimes should ensure that MNEs pay for their consumption of local public goods, and public finance scholars have long known that the taxation-based distortions are minimized when the tax objects are immobile. However, the bulk of current tax policies are aimed at corporate profits that are both poor proxies for the consumption of local public goods as well as extremely mobile. Integrating theory from international business, public finance and economic geography, our analysis demonstrates that moving the incidence of taxation from corporate profits to dividends and consumption would unambiguously improve both wealth creation and efficiency.

Building on insights from the multimarket competition and knowledge management literatures, this paper explores how multimarket overlap in knowledge activities influences firm decisions to internationalize their home-country generated innovations. I argue that higher multimarket overlap in knowledge activities with industry rivals pushes firms to internationalize and protect their innovations. At the same time, I argue that this strategic response will be attenuated for higher value firm innovations and in industries with higher global knowledge concentration across countries. Empirical results from a comprehensive panel of US MNCs and their worldwide family patents provide support for these arguments. While a higher overlap in knowledge activities with home and foreign rivals pushes firms to internationalize their innovations, this main strategic response is attenuated for higher value firm innovations and when industry knowledge is concentrated in fewer countries. Taken together, this paper extends the knowledge management literature by exploring how knowledge threats from home and foreign rivals impact the decisions of firms to transfer their innovations to foreign countries, while at the same time expanding the multimarket competition literature by offering new ways of identifying credible knowledge threats by rivals.

MNC subsidiaries benefit from managers with entrepreneurial skills for finding superior combinations of MNC and host-country resources. However, such management skills are scarce. We reason that subsidiaries can improve their performance by hiring host-country entrepreneurs as managers since they develop similar skills in start-ups. Our theoretical model integrates mechanisms from entrepreneurial experience into theory on the microfoundations of dynamic capabilities. We test and support our prediction using longitudinal employer–employee data for 5587 foreign MNC subsidiaries in Portugal. Further, we show that performance effects are weaker when a subsidiary’s management is internationally diverse and stronger in dynamic host-country environments.

In our award-winning 2009 article, we further developed the model that we originally presented in 1977. We observed that firms form relationships and that those relationships become networks, and thus in the end the business macro environment consists of networks of relationships between firms. Those relationships have far-reaching consequences, especially in terms of opportunity recognition and development. Since 2009, we have applied the Uppsala model to a number of different IB issues, most notably the process of globalization, which we believe is best understood as a driver of the evolution of the multinational business enterprise (MBE). We suggest that our model can still be improved further by recognizing the general psychological characteristics of managers, for instance, what makes them tend to shy away from radical change and to prefer instead an incremental approach? What does this mean for internationalization? Generally, we think that the closer our assumptions are to reality, the better the resulting model.

Our study reveals the financial performance implications of the speed at which Chinese multinational enterprises (CMNEs) expand into intra-regional versus inter-regional host countries. In doing so, we propose a framework that integrates internationalization speed and home regionalization literatures. Using data from 767 publicly listed CMNEs from the years 2002 to 2014, we discover that the faster the intra-regional internationalization, the better the firm’s financial performance, whereas faster inter-regional internationalization demonstrates a poorer financial performance. We also find that fast-mover CMNEs’ technological and marketing resources are valuable in intra-regional host countries, but vulnerable in inter-regional host countries. We discuss the implications of these findings for studies of the Uppsala internationalization process model and regional MNEs.

The rapid reshaping of the global economic order requires fundamental shifts in international business scholarship and management practice. New forms of protectionist policies, new types of internationalization motives, and new tools of techno-nationalism may lead to what we call “bifurcated governance” at the macro-level and “value chain decoupling” at the micro-level. As a result, innovation networks will require novel reconfigurations. We examine the emerging constraints on multinational enterprises, imposed by a bifurcated world order. We also discuss how the dynamic capabilities framework can guide scholars and managers alike to achieve new forms of evolutionary fitness.

We study how global connectedness can help MNEs become more environmentally sustainable. Based on the idea that environmental sustainability requires dynamic capabilities, we define dynamic green capability as the ability to build complementary green competences and reconfigure organizationally embedded resources to pursue competitive advantage in a rapidly changing stakeholder environment. We argue that MNEs with greater global connectedness in terms of international diversification or international environmental certification possess knowledge advantages in cultivating dynamic green capabilities. We extend the sensing–seizing–reconfiguring framework and propose that global connectedness substitutes for sensing as a driver of seizing by providing direct access to relevant green knowledge pools around the world, and that it complements seizing as a driver of reconfiguring by strengthening the knowledge routines needed to integrate green competences.

We study MNEs that tie their long-lasting competitiveness and internationalization to the deployment of their heritage assets, administrative heritage, and signature processes built in their home markets. When faced with changes, these “authentic” firms scan for and buffer against threats to their signature processes, use their heritage endowment to focus on their capacity to maintain and defend their niches, and preserve their capacity for stability. We complement the traditional dynamic capabilities perspective by redefining its boundary conditions. Furthermore, authentic firms resist and limit local adaptation of process and products, and internationalize only if opportune by deploying preservation capabilities.

We conceptualize the dynamic capabilities of multinational enterprises (MNEs) as learning and adaptation capabilities that address the pressure of global integration and local responsiveness. Complementing the extant literature on dynamic capabilities, which is focused on the supply side, our study draws attention to the demand-side influences, especially in terms of global demand heterogeneity. We propose that global demand heterogeneity provides pressures and opportunities for MNEs to learn and adapt and, thus, positively relates to the development of MNE dynamic capabilities. However, external sources per se may be insufficient. Firm-specific advantages, particularly human capital (at the managerial and employee levels), facilitate the internalization of external knowledge and pressure into the development of dynamic capabilities. An empirical study of Chinese multinational service firms strongly supports these arguments.

Is there knowledge adoption of innovations from emerging economies? We theorize that, to help overcome information asymmetry across countries, granting patents to technology in the emerging economy of China can serve as a signal of technology potential and market opportunity to enhance technological knowledge adoption in a developed economy such as the United States. The effect may be greater in a complex technology sector with high information asymmetry than in a discrete technology sector, and in regions with less developed market intermediaries, where information asymmetry is high. Our difference-in-differences estimates using 4226 China–U.S. patent dyads and comparable U.S. patents support our hypotheses.

This paper builds on preceding papers. It distinguishes three domains of international business theory: the boundaries of the multinational enterprise, the external environment of the enterprise and its internal structure. The central concern of internalisation theory is the boundaries of the firm. Any general theory of international business must also analyse the external environment and internal structure. Competition dominates the external environment while co-operation dominates internal structure. Different models of decision-making are required for each. Different theories of decision-making must therefore be integrated in order to transform internalisation theory into a general theory of international business. This paper examines how this can be done.

We study the internationalization of digital service multinational enterprises (SMNCs), focusing on how digitalization alters internalization theory’s assumptions about the nature of firm-specific assets (FSAs) and the theory’s predictions about governance choices in cross-border transactions. We invoke Simon’s (Proc Am Philos Soc 106(6):467–482, 1962) near-decomposability concept to explain how digitalization enables two distinct types of FSAs – technology and human capital. Applying the ideas of modularity and skill complexity, we further distinguish between core versus peripheral technology FSAs and between generic versus advanced human capital FSAs. Building on the transferability and appropriability of these strategic assets, we theorize on the FSAs’ internalization propensity in the digital age. We propose that with rising digitalization, the network plays a dual role – as a governance mode and as a strategic resource. Integrating insights from network economics, particularly increasing returns to scale, we propose that network advantages (On) emerge as a distinct strategic resource that merits separate investigation from the traditional asset-based (Oa) and transaction-based (Ot) advantages.

We investigate the role of local labor standards on MNEs’ location decisions across different sectors and sub-national regions within a developing country. We suggest that foreign investors adopt selective location strategies in connection with specific labor standards as a result of reputational and operating considerations. Foreign firms in more hazardous sectors prefer locations with higher occupational health and safety standards because they are more exposed to reputational risks. Those in sectors with less reversible investments prefer locations with lower degrees of unionization because their lower bargaining power increases their sensitivity to operating costs. We test our arguments across 26 sub-national Turkish regions over the period 2005–2011.

This thesis comparatively analyzes the corporate governance rules of the publicly owned corporations in Germany and Ethiopia. Stock corporations in Germany follow the ‘two-tier’ board structure composed of supervisory board and management board whereas the boards of directors of share companies in Ethiopia adopt a single tier board of directors. Employees participate in the supervisory board of stock corporations in Germany in the form of codetermination. However, the concept of employees’ representation in corporate boards is unknown to the Ethiopian company law. The shareholders meetings are called in both jurisdictions to pass resolutions on important affairs of a company. Yet the scope of their powers varies across these two jurisdictions. The role of auditors in examining the financial flaws of companies is another important aspect of corporate governance in both jurisdictions and it will be comparatively studied. It is true that two jurisdictions can hardly have the exact same rules of corporate governance. Contrast to the literally imported rules of corporate governance in Ethiopia, Germany has legal regimes developed in its own environment. Ethiopia is on the verge of revising its old Commercial Code that is believed to have lagged behind the modern developments in corporate laws. It is expected that the experts in charge of the revision will consider corporate laws of foreign advanced economies such as Germany. The thesis will thus examine the differences and similarities between the rules of corporate governance of Germany and Ethiopia by focusing on the three important organs of public corporations: board of directors, shareholders meetings and auditors. Finally, what rules Ethiopia could possibly borrow from the corporate governance rules of Germany will be shown. The existing rules of corporate governance that Ethiopia should keep with slight or no modifications will also be identified.

Building on the network theory and the concept of organizational ambidexterity, we investigate the impact of structural characteristics of a firm’s whole buyer–supplier network: network density, betweenness centralization, and average clustering coefficient on its international business (IB) performance. We also explore the moderating roles of average path length and PageRank centrality. Using a manually-collected dataset and a robust empirical methodology, we find that, while network density is negatively related, betweenness centralization and average clustering coefficient have an inverted U-shape and a U-shaped relationship with IB performance, respectively. We also find significant moderation effects, and, in the process, we show the economic importance of firms’ whole buyer–supplier network to their IB performance. We contribute to the international business and whole buyer–supplier network literature.

The last quarter century has witnessed substantial growth in applications of real options theory (ROT) to international business (IB) research. In this review, we explicate the core ROT concepts in the IB context and discuss the contributions of ROT-based research to three core IB issues: timing and scale of market entry or exit, entry mode and governance form, and the role of multinational networks. Based on our review, we propose a holistic ROT view of the multinational enterprise that synthesizes the insights of existing studies. Finally, to move the field forward, we highlight key questions and challenges in current ROT-based work, provide a more precise definition of exogenous and endogenous uncertainty, suggest empirical designs to test unique ROT predictions, and explore areas where ROT can be combined with other theoretical perspectives to better understand IB phenomena.

Although international business scholars have begun to recognize the division of entrepreneurial labor between MNEs and SMEs, there is a fragmented understanding of the different forms MNE–SME cooperation can take. We develop a typology that takes into account not only complementarity of capabilities but also, crucially, the compatibility of intent between MNEs (exploration vs. exploitation) and SMEs (international vs. domestic orientation). The framework offers a novel way to understand the forms and dynamics of MNE–SME cooperation. We also show how it can be applied more broadly, by considering its application to societal challenges, such as achieving the United Nations’ Sustainable Development Goals.

This study examines the decision to convert international joint ventures to either foreign or local wholly owned entities and the subsequent impact on performance from the perspective of incomplete contract theory. With China’s relaxation of the joint venture requirement, foreign partners are more likely to take full control and thereby improve performance in provinces with fewer institutional barriers and industries with high intangible asset intensity, while local partners are more likely to do so in provinces with higher institutional barriers and low intangible asset intensity. Furthermore, the performance improvement is more salient when transitioning from foreign minority-local majority joint ventures.

While prior research suggests that family firms are risk-averse with regards to internationalization, Hennart et al. (J Int Bus Stud, 2017) show that family firms selling high-quality niche products internationalize as much as their nonfamily-firm counterparts. Our Counterpoint extends Hennart et al.’s (2017) thesis by suggesting that this effect is not universal but depends on the external context (country-of-origin pro-market development) and internal context (professionalization practices). Our study demonstrates that family firms selling high-quality niche products struggle to internationalize when they are from countries with weaker pro-market development. We also show that professionalization practices benefit family firms selling high-quality niche products abroad.

This paper identifies two main dimensions – institutional diversity and dynamism – in the research stream that has substantively engaged with the important contribution of Jackson and Deeg (J Int Bus Stud 39(4):540–561, 2008). Taking into account their core criticism that institutional analysis in international business research is often de-contextualized, and building on these two dimensions, we present two possible paths for institutional analysis that are sensitive to context. The first is a methodological shift towards configurational analyses, and specifically the analysis of counterfactual scenarios that could reveal new information about decision alternatives. The second is a shift away from a focus on costs, and towards the possibility of MNEs building capabilities in an exploratory manner when confronted with institutional diversity. Both approaches build on an understanding of MNEs as strategic actors that co-evolve with their environments.

We investigate the role of domestic interfirm networks for the foreign divestment decisions of firms. We argue that firms’ foreign operations risk being divested when a firm becomes more central in its domestic network. Positive changes in firm centrality at home facilitate access to information about new business opportunities, but they may also lead firms to consider reconfiguring their value chain activities and resources across locations. The resulting opportunity costs of maintaining foreign operations could subsequently lead to their divestment. Moreover, we argue that the positive association between an increase in firm centrality in the domestic network and foreign divestment is stronger under higher uncertainty, as pursuing new business opportunities at home becomes more appealing. We distinguish between firm-specific uncertainty and domestic market uncertainty. We test and get support for our hypotheses using foreign subsidiary data from U.S. firms in the ICT industry.

This article investigates the location strategies of Canadian and Chinese multisite firms in international and domestic investment decisions at the metropolitan level. By integrating research from international business studies and economic geography, we combine knowledge-based understandings of multinational corporations and industrial clusters to develop propositions regarding the location strategies of multisite firms in cluster networks. It is argued that firms from clusters are more likely to adopt knowledge strategies than firms from other areas and that they tend to choose cluster locations that are specialized in the same or similar industries to achieve their knowledge goals – both in domestic and international investment decisions. We establish and analyze a database of 3500 investment cases within and between Canada and China to test our propositions. The results show that firms in knowledge-intensive industrial environments with substantial business experience are especially inclined to direct their investments to clusters. Consistent with our emphasis of the subnational as opposed to the national scale, we find that cluster-of-origin effects are more important than country-of-origin effects in explaining firms’ investment choices in clusters. These findings support the idea that multisite firms, particularly MNEs, leverage local knowledge pools by strategically locating affiliates across clusters.

Multinational enterprises (MNEs) sometimes pursue opportunities in largely uncharted, distinctive institutional environments. How do these firms sustain operations in such settings? We explore how MNEs tailor and maintain operations in institutionally weak, precarious, and challenging host-country environments, such as those devastated by conflicts. We draw on the business ecosystem framework and analyze a qualitative longitudinal case study of a Chinese state-owned MNE that entered and developed its operations in the Democratic Republic of Congo (DRC) in Central Africa. Our findings indicate that after entry, the MNE sustained its operations in the DRC by engaging in collective actions and coevolving with key stakeholders within its business ecosystem. These stakeholders included the home and host governments, state-owned enterprises, privately owned enterprises, and local communities. Our qualitative data further suggest that the MNE’s business ecosystem evolved through three stages—exploring, establishing, and embedding—and that within this ecosystem, the key stakeholders also coevolved with the MNE by adopting new roles over time.

The burgeoning of ibusiness firms in the modern digital economy challenges the received internationalization theory. Given that ibusinesses such as social networking sites create value by providing a digital platform for users to interact with one another, we employ a user-network perspective and externalization logic, suggesting that ibusinesses’ internationalization process depends critically on users’ collective interactions, instead of being solely driven by firms’ market commitments, as noted by the Uppsala model. However, ibusinesses may suffer from liabilities of outsidership due to the boundedness of international network effects. Drawing on social network theory, we demonstrate that such liabilities can be mitigated by first diffusing the ibusiness platform in countries with higher clout. Our analysis using a unique dataset of mobile ibusiness platforms finds empirical support for the hypotheses. We discuss theoretical implications for the network approach of the Uppsala model in the digital era.

Despite extensive research, the literature is unclear about the circumstances under which a firm learns from its past foreign entry modes and how this experiential learning is related to future mode choices. Building on the internationalization process (IP) model and the idea that some experiential learning is location-bound, while other learning is non-location-bound, we develop and test theory to explain how experiential learning about foreign operation modes and markets impact future mode choices in new foreign markets. Overall, we argue that mode-based experiential learning is limited. Through the repeated use of a specific operation mode firms develop routines and processes that are non-location-bound and can be replicated in new foreign markets, leading to the use of this same mode type in new locations. But when complemented by experiential learning about a target market/region firms opt for operation modes with greater commitment in new foreign markets. Drawing on a sample of German SMEs and examining four different types of entry modes we find some support. However, we also identify a number of notable exceptions to our theory. In this way, we help provide unique new insights informing future IP model, experiential learning, and international entry mode research.

There is scant research on the important managerial question of how to maximize returns on investments in either international business or international marketing literature. We propose and test a conceptual framework using data from a large technology manufacturer-service provider. Despite early adoption by innovators and early adopters, the early majority segment is most profitable. However, the late majority segment and the early adopters segment are the next most profitable in the developed and emerging countries, respectively. We propose a decision support framework incorporating cross-national distances on single-generation and multi-generation profitability for MNEs offering multi-generational products in multinational markets to be more profitable.

We aim to build a greater understanding of how young entrepreneurial firms internationalize fast through foreign subsidiaries to become a multinational enterprise (MNE). Despite the prevalence of fast-paced international expansion, theory development on how it is achieved through high-commitment entry modes has been scarce. Our work substantially addresses this gap by conceptualizing how rapid multinationalization occurs. Using qualitative case studies, we explore eight young entrepreneurial firms operating in the software-as-a-service (SaaS) industry aspiring to achieve early market dominance internationally through rapid multinationalization. Drawing on the concept of industry recipes, we explain how recipe heuristics and recipe augmentation enable rapid multinationalization and showcase the economic and knowledge acquisition logics which underpin these endeavors. This study introduces internationalization via industry recipe, explains the micro-level regulation of internationalization speed, and contributes to aligning international entrepreneurship and MNE perspectives on internationalization. Technology Management Research Center (TMRC), Rutgers University and College of Business, University College Dublin

We review the classic theory of the MNE and past attempts to use it to understand the internationalization of firms from emerging markets. We offer two criteria to determine whether EMNEs modify classic theory or not: (1) establishing appropriate theoretical reference points, and (2) distinguishing between theoretical constructs and empirical variables. We suggest that the literature can benefit from moving beyond comparing EMNEs to DMNEs and focusing instead on more fruitful issues. Specifically, emerging markets offer the opportunity to observe the origin of the capabilities of MNEs in general and the development of the institutional ecosystem that supports internationalization.