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This paper examines the foreign exchange rate exposures of US companies and how they are linked to foreign macroeconomic determinants. I use US trade-weighted macroeconomic indices of foreign countries to explain the variation in foreign exchange rate exposures, measured as the sensitivities of stock returns to exchange rate returns of US non-financial companies over the period 1995 to 2017. I find strong evidence that the after-hedging exposures of potential exporters are affected by their expectations of foreign market gross domestic products, current account balances, consumer price indices, term spreads, unit labor costs as well as government expenditures.

Today’s internationalization challenges are no longer limited to dealing with cultural differences in bilateral interactions between a company’s headquarters and its subsidiary. Instead, companies need to simultaneously manage a portfolio of subsidiaries that can be culturally close or distant to each other. Existing literature has so far been slow at conceptualizing and measuring this phenomenon. Drawing on portfolio logic and an ambidexterity lens, we introduce the concept of international cultural ambidexterity (ICA) as a company’s dynamic capability to manage a portfolio of both culturally distant (exploration) and culturally proximate (exploitation) foreign markets. Developing ICA allows companies to benefit from cultural diversity and cultural distance and to better manage tensions arising from internationalization. We highlight differences between cultural distance, cultural diversity and ICA. Subsequently, we introduce a novel way of measuring ICA that extends studies on culture and ambidexterity in foreign market entry research.

Extant research shows that stock returns of investable firms are highly sensitive to foreign market and global information shocks, suggesting that having foreign investors might insulate investable firms from shocks to local fundamentals. Examining 24 emerging markets, we find that both investable and non-investable firms are sensitive to local monetary policy shocks. This allays the concern that emerging-market opening reduces the efficacy of local monetary policy. We also find that in 11 countries (46% of our country-sample), investable firms are more sensitive to local shocks than non-investable firms. Differences in leverage, stock liquidity, size, domestic product-market exposure, or industry cyclicality do not drive this finding.

This paper analyses the effect of home corporate taxes on a firm’s decision to expand the scale of its activity through exports using a rich dataset on Italian firms. Starting out from the observation that firms’ export activity vary greatly among them and tend to be systematically related to firm’s characteristics, we relate differences in firms’ export choices to firm level incidence of corporate taxes. Our results suggest that (i) corporate taxes matter at both the extensive and the intensive margin and (ii) higher corporate taxes may increase the probability of new firms’ entry in the foreign market while they decrease the export intensity of incumbent exporters.

International audience; The objective of this article is to examine the relevant dimensions of distance for foreign market entry mode choice. Based on a sample of 203 interfirm linkages formed by French multinationals with partners across the world, we analyze the impact of four dimensions of distance on the choice between cooperative alliances and mergers-acquisitions. The findings indicate that administrative and economic distance have a significant influence on market entry mode choice, whereas the impact of cultural and geographic distance is not significant. They further highlight the important role of the host country's government effectiveness for market entry mode decisions.

This paper focuses on the influences of minimum quality standards (MQS) on entry decisions for two firms located in different countries. More precisely, when each firm sells its product only in its domestic market, there is no restriction on its product’s quality. However, when choosing to enter its foreign market, the quality is required to be no less than a specified MQS. A multi-stage game is established to examine the effects of such MQS on firms’ strategic choices of entry into their respective foreign markets. It shows that strategic choices cause the emergence of heterogeneous equilibria in which both firms make different entry decisions and thus produce products with distinct qualities provided that the MQS lies in an intermediate range. If the MQS is relatively low, both firms are willing to enter their respective foreign markets so that they coexist in each market. A relatively high MQS induces each firm to stay only in its domestic market. Furthermore, firms never have more incentive to open a new foreign market compared to the socially efficient configuration. Compared to strong competition, weak competition causes that the equilibrium behavior privately by firms is too far from the allocation that is efficient for society.

We expand the conceptualization of psychic distance and use a multilevel framework by studying it as a founder’s psychic distance in the pre-entry phase of entering a specific foreign market, and the SMEs (firm) psychic distance in the post-entry phase of entering that specific foreign market. Based on qualitative research involving six SMEs’ with 18 internationalization events, we found that psychic distance at country and business levels causes difficulties for SMEs in the post-entry phase because of their lack of knowledge. Bridge-makers possessing knowledge about target markets help SMEs to overcome psychic distance challenges. Trust in the relationship with the bridge-maker is an important ingredient to gain knowledge that alleviates the SMEs’ psychic distance challenges. Finally, we go beyond country-business levels of psychic distance by showing that psychic distance also matters at bridge-maker level. This relates to their lack of knowledge about the target market and SMEs’ routines.

In this paper, I use South Asian firm-level data to examine the effect of political instability on firm-level decisions to enter the foreign market. This is the first micro-level study in the international trade literature to examine the relationship between political instability and the firm-level export decision. This study uses the IV probit model to analyze the repeated cross-sectional data collected by the World Bank. I estimate various specifications to show that political instability is closely related to firm-level decisions to enter the market. The results confirm that political instability increases the probability that a firm enters the foreign market.

Firms’ internationalization strategies can vary with changing environments. Occasionally, a firm may choose to re-enter a foreign market it had abandoned in the past if environmental conditions have improved. The present study provides insight into the foreign market exit and subsequent re-entry processes. Specifically, we utilize the strategic flexibility perspective to investigate the impact of market orientation, relational capital, and internationalization speed on market exit and re-entry decisions under turbulence in a host market. Using a sample of 156 Turkish firms that operated during the Arab Spring in the Egyptian market between 2010 and 2015, we find that the market-oriented firms are more flexible in their market exit decisions than less market-oriented organizations. In addition, relational capital specific to the host country has a negative impact on market exit decisions under conditions of political conflict. The results also suggest that strong ties with partners in the host country increase the propensity to re-enter the market.

Based on a sample of 114,098 investments committed by 12,258 limited partners into 20,473 private equity funds, we study an international home bias in fund manager selection in private equity. We find that limited partners overweigh their investments with fund managers domiciled in the same geographical region by 45% on average. The home bias in local fund manager selection holds across investor types, fund characteristics as well as market regions. Investments committed with locally domiciled fund managers are not only being overweighed, but also perform better than investments with fund managers domiciled in foreign market regions. We argue that limited partners benefit from information advantages and better fund access when selecting private equity funds within their home market region.

This paper tests a theory conjecturing that cross-listing can insulate firms from potential hostile takeovers owing to the increased cost concern of bidders. We find a significant and positive relation between the corporate control threat and the likelihood that firms cross-list in a foreign country. Firms facing takeover threats are more likely to choose hosting countries with greater accounting differences from the US GAAP. Subsample evidence suggests that cross-listing is more likely to be used as an antitakeover device if firms have foreign market exposure or when all-cash offers are less likely. Tests based on quasi-natural experiments provide further support.

Drawing on the distinction between small-scale and large-scale business model innovation, and between directive and empowering leadership, we examine how CEOs in SMEs lead business model innovation during the process of internationalization. Building on eight cases of Japanese manufacturing SMEs, we develop a theoretical framework pointing to two different patterns in the articulation between CEO leadership style and business model innovation. We show that small-scale business model innovation led by directive leadership results in a timelier foreign market entry. However, in order to increase international sales, large-scale business model innovation is required. This is facilitated by an empowering leadership style of the CEO.

The paper investigates the impact of the host country’s environmental uncertainty on the choice of entry mode and also discusses the moderating role of technological heterogeneity in this relationship. Based on the resource-based view and institutional theory framework, we first analyze the investment motivation of emerging industries in emerging markets and evaluate the environmental uncertainty from two dimensions, including the institutional environment (country level) and industry environment (market level). Then, the theoretical predictions are empirically tested using 173 overseas investment events in China’s high-end equipment sector from 2010-2018. Our findings suggest that when the uncertainty of the industry environment is low, no matter how uncertain is the institutional environment, most firms tend to choose a cooperative strategy. Once the industry environment indicators become turbulent, a high degree of institutional environment uncertainty causes firms to evade trade barriers by choosing a new plant. Alternatively, choosing a relatively conservative mode, such as export. Meanwhile, technological capability weakens the influence of environmental uncertainty on entry mode.

This paper develops and estimates a dynamic model of exporting to quantify how productivity and uncertain foreign demand separately influence firms' export participation. In this model, firms face uncertainty about their own foreign demand, and they update their beliefs based on individual export transactions according to Bayes' rule. I estimate the model using data on firm-level production and transaction-level exports to Germany in the Chinese ceramics and glass industry. The empirical results show substantial heterogeneity in productivity and demand belief. For experienced firms, productivity is the major driving force of export participation. In contrast, for potential entrants, demand learning plays a more important role. A counterfactual exercise suggests that trade cost reduction has a significant impact on stimulating the export participation of potential entrants. Importantly, more than half of the participation increase is attributed to firms' endogenous reaction to demand learning in the foreign market.

We estimate how a rise in uncertainty about future tariff rates impacts firm decisions to enter into and exit from export markets. Using Chinese customs transactions between 2000 and 2009, we exploit time-variation in product-level trade policy and find that Chinese firms are less likely to enter new foreign markets and more likely to exit from established foreign markets when their products are subject to increased trade policy uncertainty. Our analysis is based on the phenomenon of “tariff echoing” – after a tariff hike in one country, another country is likely to raise its tariff on the same product. Overall, we find that if there had been no trade policy uncertainty created by the use of contingent tariffs, Chinese entry into foreign markets would have been roughly 2% higher per year. We use our model to counterfactually estimate how much entry by Chinese firms over 2001–2009 was due to future trade policy certainty provided by membership in the WTO.

The literature on the price discovery of dually listed stocks postulates that domestic markets generally dominate in driving changes in prices and make a strong contribution to price discovery. In this study, we provide evidence challenging this view. We analyze a case of two dually listed mobile communication firms that experienced a more than 80% loss in their value in response to a regulatory decision to allow other new operators to enter the communication market in the domestic market. We find that during the negative momentum period, price discovery switched from the domestic to the foreign market, making the NYSE more important in terms of price discovery. Our findings suggest that, regardless of the origin of the news, such dramatic shocks that carry long-term implications are processed differently, with U.S. traders, rather than the domestic ones, being the main information processors.

Our interview-based study began as an investigation of Westerners residing in Vietnam. Our sample fell into three groups: local expatriates, expatriate entrepreneurs, and hybrids (those who worked for a multinational while owning a local company). Based on this finding, we re-examined the data to explore expatriates as employers. Two themes emerged. The first revealed expatriate entrepreneurs and hybrids as active market players who were competitors for local talent and/or potential local distributors or partners in Vietnam. The second theme indicated a parallel process: the internationalization of firms entering a foreign market and the internationalization of individuals entering that same market. Our contribution is the opening of the ‘homogeneous’ black box of Western immigrants and the expansion of the concept of the expatriate entrepreneur, thus reinserting the role of the individual in the process of firm internationalization.

How does international trade affect the exchange rate exposure of firms? Trade induces greater economic exposure to exchange rate volatility. But more diversification in trade destinations and foreign supply and demand strategies may offer financial risk reduction depending on market conditions. In this paper, we focus on the role of trade and offer an integrated analysis on measuring and explaining exchange rate exposure. Using Dutch firm-level weekly data from 2011 to 2015, we find that: (1) distinguishable communities of firms based on their exchange rate exposure exist; (2) under varying market conditions, buying from and selling to foreign and more diverse markets is a way for firms to reduce exchange rate exposure; (3) firms that hedge during market downturns experience less exchange rate exposure. Our findings provide new insights for policy makers and investors interested in exchange rate exposure (measurement and drivers).

This paper studies how enhanced tourism affects trade and FDI. Our analysis is distinct because interactions among tourism, trade, and FDI are examined comprehensively by relating the research on tourism-FDI relationships with the different trade-FDI relationships. The analysis uses bilateral data (i.e., inbound tourism, imports, and inward FDI) between Japan and 29 countries/areas during 1996–2011. Our analysis shows that the relative importance of inward FDI on imports increases with a rising number of inbound foreign tourists. The results suggest the effectiveness of policy instruments related to trade and FDI promotion, and that stimulating foreign tourism should be evaluated comprehensively, but not independently.

Theory suggests that an earlier age at international entry results in improved growth but also decreased survival chances. Empirical studies tell a different story, providing mixed and equivocal results that challenge the tenets of extant theory. To begin to bridge the gap between theory and results, we develop theoretical explanations for curvilinear (inverted U-shaped) relationships between age at entry and both firm growth and firm survival as well as the moderating impact of resource-providing initial public offering (IPO) on the resource-intensive internationalization process. Our findings support the inverted U-shaped relationships and that IPO performance steepens the growth curve and flattens the survival curve. Taken together, our study enhances understanding of the effects of age at entry, bridges the IPO and international entrepreneurship literatures, and offers avenues for extending the micro-foundations of the development of capabilities for new foreign market entry. In doing so, we advance knowledge about the conditions under which earlier or later internationalization leads some firms to thrive while others fail.

Researchers who take a network perspective argue that insidership in foreign market networks is a necessary condition for internationalization. In this study, we argue that insidership in home market networks also matters. The effect of home network insidership on outward foreign direct investment (OFDI) depends on both individual and joint effects of structural and relational network attributes. Our study based on a survey of 194 Chinese firms shows that firms in a central network position are more likely to engage in OFDI than those in a brokerage position. Furthermore, we find the interaction between firms’ centrality and their connections to foreign-invested enterprises to be significantly and positively associated with OFDI, whereas a significantly negative effect is evidenced when a firm is connected more to domestic firms.

Foreign market re-entry has increasingly attracted academic interest. However, different streams of research have developed largely independently of each other, which has hindered theory development and practical advancement in the field. By reviewing 45 relevant articles in international business and related disciplines between 1996 and 2020, this study provides a systematic review and analysis of the literature on re-entry. In addition, a framework is developed to direct future research efforts. Following the logic of ‘Antecedents-Phenomenon-Consequences’ and focusing on the time dimension, this study enables better understanding of the re-entry phenomenon and provides recommendations for future research in this area.

We study private firm innovation at an advanced stage of institutional transition in Central and Eastern Europe and the Commonwealth of Independent States. We adopt an integrated view, where the institution-based view of strategy is complemented by institutional imprints and entrepreneurial agency to argue that innovation at that stage of transition depends on private firm founding conditions earlier during the transition and on recent strategic initiatives to exploit specific opportunities, improving the innovation capacity of firms. In a ten-country sample of 2322 private firms, we find that firms founded earlier and those of larger size at inception are better at innovation because of imprints favoring network-based approaches. Innovation is even greater when these firms’ top manager has less industry experience, suggesting complementarity between network- and resource-based approaches. Additionally, firms that upgrade their management knowledge and improve their operational efficiency achieve higher innovation, and the effect of the former is augmented with a greater foreign market focus. Our findings also suggest that the role of entrepreneurial agency is stronger than that of institutional imprinting. These results have important implications for the institution-based view of strategy and private firm innovation in transition economies of CEE and CIS.

This article investigates the effect of exchange rate volatility on the exporting behavior of firms using a very rich Turkish firm-level data for the period of 1989–2013. The estimation results show that although exchange rate volatility has depressing impact on foreign sale share of firms, the magnitude and the sign of the effect differ substantially across firm classifications. More specifically, medium-sized firms, firms not listed in the stock market, and less foreign market dependent firms observe significant depressing impact of exchange rate volatility while the other firms are, by and large, immune to negative effect of exchange rate volatility. Furthermore sectors and firm age have important role on the differential impact of exchange rate volatility on foreign sales activity of firms.

The emergence and quick rise of online shops has dramatically changed the retail industry over the last decade (Gartner Industry Research 2012). E‐commerce already accounts for 2.45 % (EUR 423 bn) of European GDP (E‐Commerce Europe 2015). At the same time, internationalization of retailers is an ongoing trend.

Prior research on foreign-market entry determinants offers various firm-, industry-, and market-level explanations. Yet, few studies consider the subjective psychological attributes of the executives making actual decisions. Based on behavioral decision theory and the psychology literature, this study provides the first empirical evidence of the influence of managerial overconfidence on ownership decisions into foreign markets. The results show that CEOs’ tendency toward overconfidence increases the propensity for full over shared ownership, where their positive relationship is more pronounced when firms are exposed to greater information asymmetry or environmental uncertainty, in terms of greater home-host cultural and institutional distances, higher host-country risks, and inexperience in the local market. A powerful board weakens this positive relationship, but does not diminish the effect completely. The results hold with overconfidence measures based on both CEOs’ actual actions and public opinions. Our findings complement extant entry-mode decision literature by highlighting the imperative to incorporate firm leaders’ psychological biases.

In contrast with quotas and tariffs, it is theoretically ambiguous whether fewer (or ‘weaker’) rules over intellectual property rights will increase or decrease trade in patentable goods. The prevailing view is that anticipation of imitation reduces exporters' incentive to export goods to jurisdictions with ‘weak’ patent regimes. This empirical paper uses new measures of how the destination-country patent system can affect trade. In contrast with existing studies which assume would-be exporters can always get a patent in the target foreign market, we construct measures of the bias against foreign patent applicants and patents which may block imported goods. We find evidence that the presence of destination-country blocking patents has the larger (negative) impact on international trade. Being refused a patent also has a negative impact on trade but the magnitude is smaller.

A standard finding is that risk exposures of companies that cross-list tend to increase against the market in which they list, a change typically associated with a decline in the cost of capital. However, this finding is predicated on the assumption that the home and foreign market co-movements are stable over time. By contrast, another common finding is that risk exposures across market indices have increased over time due to international market integration. In this paper, I ask whether the firm-level findings for changing risk exposures are due to the more general changes in market co-movements. Indeed, for a panel of cross-listed firms in the U.S., I find that 72% do not find evidence of breaks in their relationships beyond those derived from their home markets. This finding suggests that the apparent increase in risk exposures for cross-listed firms arises from general market integration trends. Moreover, the remaining 28% of firms tend to have significant breaks after cross-listing, be younger, and have home markets with lower government regulation.

We study the consequences of market uncertainty on international trade. An increase in foreign market uncertainty dampens China's aggregate exports on both the extensive and intensive margins. The adverse effects are more pronounced in industries facing tighter financial constraints than in others. We propose a dynamic trade model to explain the facts. Greater uncertainty depresses a firm's expected value of exporting and borrowing capacity, leading to fewer exporters and a smaller average size of exports. Under calibrated parameters, the uncertainty shock accounts for a sizeable fraction of China's trade collapse in the 2008 financial crisis and the recent trade war.

In the past few years, the trading volume has steadily increased on the continuous intraday market of EPEX Spot, one of Europe's most important exchanges for short-term electricity trading. This is to a significant extent due to renewable energies in the form of solar and wind power, whereby interday trading is particularly well suited for the rebalancing of such energy production. We analyze the volatility and dispersion of individual hourly contracts, taking into account the particularities of the market, due to which the standard volatility measure from financial time series cannot be applied. We suggest and analyze five measures for the dispersion of intraday prices for a single contract. The different measures are similarly well suited for electricity contracts. We then identify fundamental drivers of price fluctuations. The relative share of wind in the overall mix, the traded volume, the absolute difference between the day-ahead auction price, and the volume-weighted intraday price increase dispersion. The traded volume between the German market and a foreign market decreases dispersion.

We exploit the recent surge in Chinese export growth to study the effects of a trade shock on workers and firms in a foreign market, the UK, in the period 2000–2007. We find that individuals initially employed in sectors highly exposed to growth in imports from China experienced lower income growth and remained out of employment longer than workers in sectors that were less exposed to import competition. The effects are heterogeneous, with initially lower-paid workers suffering more in terms of employment and earnings than those initially better-paid, and female workers experiencing a greater relative fall in total earnings than males, mostly through reduced years of employment. Plants in industries more exposed to Chinese products displayed lower employment growth and higher probability of going out of business than plants in sectors more insulated from competition with China, with stronger effects for larger plants.

International market withdrawals by firms continue to persist regardless of geography, industry, firm experience, and national origin. The extant literature argues that a host of factors, such as firm characteristics, organizational capabilities, host country environment, international business risks, strategy and strategic choices are among the likely reasons for firms to prematurely exit the markets they have entered. Drawing from the contingency theory, we contend that underlying most market exit events is the misalignment of firm strategy with the foreign market risk environment. This happens when managers fail to optimize strategy formulation and implementation in view of the foreign market risk environment. Based on an in-depth examination of 62 cases of foreign market exits via pattern coding using NVivo 12, we delineate common patterns accounting for market withdrawals. We then formulate propositions with respect to how misalignment between strategy and risk environment interferes with foreign market exits in accordance with the contingency theory. We conclude with a discussion of theoretical implications, managerial recommendations, and suggestions for future research and limitations.

This paper reviews the theoretical foundations of the equity based foreign market entry (FME) decisions literature. We analyse 1055 academic FME papers published over four decades (1970–2013). We identify and analyse the theories that informed and guided FME research over time. Our review indicates that scholars have recently started to challenge some of the core assumptions of established theories, draw on and integrate insights from multiple theoretical perspectives which, in turn, generated a multiplicity of approaches for studying FME decisions and their performance outcomes. The paper discusses the explanatory power of the different theories, assesses the relevance of the different theoretical perspectives to our understanding of current FME phenomena and recommends directions for further research.

We examine how uncertainty affects firms' internationalization choices. We begin by unveiling a new empirical regularity: using a unique dataset that allows us to study the dynamics of firms' exports and foreign direct investments (FDI) in individual destinations, we show that most firms serve a market via exports before investing there. To rationalize this pattern, we describe a model in which firms are uncertain about their profitability in a foreign market and may experiment via exports before engaging in FDI. In line with this idea, we show that the probability that a firm starts investing in a foreign country increases with its export experience in that country. In more uncertain destinations, firms delay FDI entry, experimenting longer with exports before establishing foreign affiliates.

As developing economies have weak institutional environments, and these are highly distant from SMEs’ home conditions in developed economies, those firms entering into developing economies should acquire new knowledge resources for a successful entry. In this paper, we analyze the type of knowledge required by SMEs to enter a foreign market, the alternative sources for acquiring that knowledge, and the specific challenges associated with the case of SMEs from developed economies in their first entry in developing economies. In our empirical work, we examined the specific case of Spanish SMEs entering Senegal as a first incursion in developing economies. This work shows evidence of usefulness to contribute to literature. Specifically, we found that the key knowledge is that which is specific to the target market, rather than the general knowledge about internationalization. In addition, we provide a matrix that summarizes the most appropriate sources to acquire each type of knowledge in the light of the main challenges identified: myopic managerial thinking, inflexible managers, absence of a culture of cooperation, and relevant knowledge embedded in local networks of the host market.

This study examines the role of the institutional quality and diversity of foreign markets on exporting firms’ innovation performance. Building on the institutional economics theory, the institution-based view of international expansion, and the literature on international diversification, this study proposes that expanding into a foreign market with well-developed institutions helps exporting firms improve innovation performance and that a high degree of institutional diversity of multiple foreign markets positively influences firm innovation. The study also suggests that institutional diversity weakens the positive relationship between institutions and firm innovation. The findings provide support for the proposed hypotheses. Implications for both theory and practice are discussed.

The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link. We examine whether portfolios of U.S. stocks can mimic foreign index returns thereby providing investors with the benefits of international diversification without investing directly in assets that trade abroad. We study 7 developed markets and 8 emerging markets over 1975-2013. Portfolios of U.S. stocks are constructed out-of-sample to mimic these international indices using a range of domestically available assets. We show that investors can gain considerable exposure to foreign indices using domestically traded stocks. Results indicate increases in exposure to the foreign market are strongest when emerging markets are mimicked. Our out-of-sample portfolio choice analysis shows that for most cases mimicking portfolios can be a good substitute for direct foreign investment. Hence, a possible explanation for the high proportion of domestic stocks held by investors and fund managers is that such assets are sufficient to provide much of the benefits of international diversification without directly investing abroad.

We address the phenomenon of country total risk, confounded by the risk of holding assets abroad and operating them in the foreign market. The findings point to deep differences in risk patterns as ownership of intangible assets exposes the holders to a higher risk. Indeed, the asset-specific risk is the dominant component of advance market volatility, explaining more than 80 percent of the cross-sectional variance. The model in the study accounts for the deficiencies in the related research streams and attempt to alleviate the typical problems in popular estimation methods.

FDI research has presented consistent evidence that firm experience moderates the effect of risk on entry in a new foreign market. This conclusion is contested by recent research. By revisiting the conceptualisation of risk by economists and behaviourists, we show that the proposed learning mechanism only applies to endogenous risk, not exogenous risk. As assessing endogenous risk involves self-evaluation of risk-reducing capability, it is posited that firms have differential tendencies to take such risks even when experience and ownership are accounted for. We find both observed and unobserved variations in firms’ responses to endogenous risk, as opposed to exogenous risk.

We show that two major puzzles in financial economics, the home bias puzzle in international equity allocations and the choice of destination market for cross-listing, are related. In particular, the level of cross-listing activity from the home market to a foreign market is strongly positively related to the degree of over-/under-investment of the home market investors in that particular foreign market, after controlling for other potential explanations of cross-listing decisions. This finding suggests that corporate managers, when making a cross-listing decision, may be prone to the same behavioral/familiarity bias as investors, and both puzzles may in fact be the same.

Using a unique newly constructed dataset on U.S. banks' foreign activities since 1997, this paper examines how bank, market and regulatory conditions in the U.S. and host countries affect U.S. banks' choices of which foreign markets to enter and how much claims and liabilities to take on there. Using a two-stage structural estimation framework, the determinants of foreign market entry/exit, cross-border claims, and foreign affiliate claims and liabilities choices are examined in 107 host countries around the world. It is shown that (1) the health of the balance sheet is the primary driver of foreign market entry/exit choices (especially so during the Subprime crisis), while host market and regulatory conditions play important roles in the choice of claims/liabilities volumes; (2) banks choose their foreign activities during banking and market crises differently than they do in ‘normal’ times; and (3) in addition to bank size, previous experience with managing a global lending network significantly increases the intensity of banks' foreign involvement. Structural estimates of the costs of foreign market entry/exit and host market regulatory stringency are also derived.

While learning plays an important role in firms’ internationalization process, the impact absorptive capacity has on the international performance when considering the timing of the internationalization is still unclear. Our research explores the role of absorptive capacity in international performance of early internationalizing firms and international experienced firms. Combining established theories, we propose opposing effect of absorptive capacity as the learning advantages of newness vanish over time and are replaced by organizational rigidities and inertia. Based on survey data from 162 Chinese firms, our empirical results indicate that the influence of absorptive capacity on international performance becomes stronger when the firm enters foreign market in its earlier stage of life cycle. However, we find that as the learning advantages of newness diminish, so does the effectiveness of high levels of absorptive capacity. Absorptive capacity resources become captured by organizational and operational rigidities and contribute less to firm performance.

The paper describes how the lack of tourism marketing strategy may result in a reduction in the number of both, foreign and domestic visitors to the destination. It defines tourism destinations; characterizes the principles of marketing strategy development and its role in competitiveness of the destination. Slovakia possesses a large number of inherited or created assets, but it has not been able to realise its full potential in tourism development in the new millennium. The paper compares Slovakia's, the Czech Republic's, and Austria's results in the development of the domestic and foreign tourism market. The destinations were subject to research using secondary data to identify tourism products and analyse time series of selected data in the tourism markets. The results were subjected to evaluation using the Spearman's correlation coefficient to measure the strength of dependence between the development of the domestic and foreign market in each destination. Based on the results of the analysis, recommendations for the development of invigorating marketing strategy are formulated.

The paper aims to examine the role of network relationships in the internationalization of Italian winemakers. Based on a case study analysis, it shows that networks are a key factor for internationalization. Firms mostly relied on their relationships with friends, tourists visiting the farm, and also local firms and agencies in the tourism industry. However, local networks among wine producers did not result as relevant for foreign market development.

Despite significant differences between small and medium-sized enterprises (SMEs) and large multinational enterprises (MNEs), the majority of extant foreign market entry mode choice literature has focused on MNEs. The current state of knowledge regarding SME foreign market entry mode choice is equivocal. The present paper reviews the current state of SME foreign market entry mode choice literature and maps future research directions. To this end, we systematically analyze 33 relevant journal articles for their theoretical frameworks and contextual dimensions. Based on this review, we identify gaps in the literature and develop an agenda to guide future scholarship in this important domain of research in taking SME-specific characteristics into consideration.

Advances in business process outsourcing and open innovation practices have made the choice of technology commercialization strategy increasingly relevant for technology-based new ventures. We investigate effects of intellectual property (IP)-based, product-based, and hybrid (both product and IP) commercialization strategies on internationalization propensity and intensity in technology-based new ventures. We find that new ventures adopting a product-based commercialization strategy are less likely to internationalize than those with hybrid or IP-based strategies. In addition, new ventures using IP-based commercialization strategies exhibit higher international intensity after foreign market entry than those with hybrid and product-based strategies. These findings provide novel insights into the dependence on external resources associated with different types of commercialization strategy.

Prior studies document that investors concentrate their holdings in culturally similar and geographically nearby foreign markets. Using a comprehensive sample of institutional investors from 46 countries, we document that, in contrast to the behavioral bias argument, the observed foreign portfolio allocation to familiar markets is driven by the investor’s desire to effectively utilize an information advantage. The familiarity with a given foreign market gives investors a mechanism for exploiting profitable investment opportunities resulting in better portfolio performance. This study suggests that investors rationally concentrate their holdings in familiar foreign markets.

Traditional portfolio theory predicts that investors’ portfolios should be diversified across international markets. In contrast, empirical studies document that investors are more likely to invest in their home country and in familiar foreign markets. These findings imply that investors do not take advantage of international diversification opportunities. This study focuses specifically on foreign market asset allocations and examines empirically whether the familiarity driven foreign portfolio investment is a rational choice attributed to information advantage. Using a sample of over 46,000 institutional investors from 46 countries, we show that investors overweight foreign markets that are familiar but also earn higher risk-adjusted returns in those markets. Furthermore, we document that more skilled investors benefit the most from familiarity based allocations.

This study adopts a resource perspective to explore a non-linear relationship between corruption and two measures of bank foreign market commitment, the capital invested and the share of equity, on a sample of 131 bank entries in forty host countries. Our findings support a U-shaped relationship providing evidence of the "grabbing hand" view at low to moderate levels of corruption and, supporting the "helping hand" view at high levels of it. In addition, market-seeking motives are found to have a positive moderating effect on this relationship. This study contributes to the long-standing debate about the effects of corruption on FDI.

This paper develops a model and structural dynamic estimation of bank behavior to map the relationship between U.S. banks’ choices of foreign banking activities, and bank and foreign market traits. This estimation framework is applied to a unique bank-level dataset compiled from regulatory sources, covering U.S. banks’ foreign activities in 83 host markets over the 2003–2013 period. Bank traits are better able to explain the evolving patterns of foreign banking than host market characteristics. After controlling for these traits, the post-financial crisis period shows a structural shift away from cross-border claims towards foreign affiliate activities. Structural estimates of foreign market entry costs and regulatory attitudes towards risk are derived. Simulation exercises confirm the strong impact of banks’ and regulators’ risk stance on bank profits and portfolio composition.