Knowledge that Transforms

This paper examines whether there are systematic differences in the traditional capital structure determinants between MNCs and DCs, and if there are additional, uniquely international factors that may help explain the capital structure choice of multinational corporations. The results suggest that specific international factors such as political risk and exchange rate risk are relevant to the multinational capital structure decision, that multinationals have higher agency costs than purely domestic firms, and that international diversification does not lower earnings volatility for multinational corporations.

Increasingly, scholars have suggested that there is a need to approach the problem of international risk from a multidimensional perspective [Brouthers 1995; Miller 1993; Shan 1991]. Miller [1992, 1993] developed and tested the most comprehensive framework to date. Miller [1993] showed high inter-rater reliability in his measure of Perceived Environmental Uncertainty (PEU). In this paper we test the dimensionality of the scales from a statistical viewpoint and find that the statistical determination is reasonably consistent with Miller's conceptual determination. We also investigate Miller's measure by comparing scales, conceptualized by Miller, with ones determined by factor analysis. We test the reliability of these scales and find that the conceptualized scales have generally high internal consistency in samples of both manufacturing and service firms. However, the findings also suggest that several changes in the PEU measure are warranted, resulting in a refinement of Miller's measure, which we have labeled PEU 2.

This study examines the determinants of foreign equity ownership in joint ventures in China. Drawing upon Duning's ownership, locational and internalization paradigm and the literature on bargaining power, eleven variables that impact foreign ownership preferences and concessions are examined. These variables are advertising intensity, foreign capital input, country risk of China, EJV investment amount, EJV contractual duration, cultural distance, competitive intensity, local partner state ownership, local partner alignment, foreign partner alignment, and EJV location. The empirical findings are largely consistent with the hypotheses. The empirical findings are largely consistent with the hypotheses. Further, interesting differences were found among U.S., European and Japanese firms with respect to the impact of these determinants.

Cooperative relationships between firms can be better understood if they are examined in the context of a network of connected business relationships. Based on research on business relationships and business networks, this paper formulates a LISREL model that analyses cooperation in international business relationships between suppliers and customer firms. Theory suggests that cooperation can raise the value of business relationships, and that business network connections have an impact on cooperation. The model is investigated in a sample of 136 international business relationships. The analysis shows that relationship profitability is directly affected by relationship commitment and, indirectly through commitment, by business network connections.

Despite widespread research on the export behavior of firms, no integrative review of the empirical work in relation to export development models exists in the extant literature. This article reviews the main models on the subject, identifies their structural characteristics, evaluates the methodologies used for their validation, and analyzes the key conceptual issues emerging from their assessment. While valuable inroads into the mechanics and constituent parts of the export development process have been made, this avenue of empirical inquiry has attracted criticism on structural, methodological and conceptual grounds. Future research in the field should harness the eclectic contribution afforded by existing theory and, at the same time, enhance its status with contributions from marketing, business and other disciplines.

This paper focuses on international strategic technology partnerships, and the choice that companies have in terms of the organizational mode, either through complex inter-organizational modes involving equity-sharing, or contractual non-equity alliances. The empirical results show that the choice of particular mode of cooperation varies with the technological characteristics of sectors of industry. Joint ventures are disproportionately represented in relatively mature industries. Contractual alliances dominate strategic technology partnering in so-called high-tech industries.

This paper examines the notion that the multinational's nationality influences its foreign subsidiary ownership decisions. It identifies theoretically meaningful constructs to represent nationality and examines, under carefully controlled conditions, their influence on subsidiary ownership preferences in American and European multinationals. The paper concludes that there are indeed significant differences in ownership preferences among various nationalities that can be explained using cultural as well as economic variables, but that these differences may become weaker in larger multinationals.

This exploratory study examines empirically expatriate performance appraisal (EPA) practices for U.S. multinational firms and assesses how such practices relate to the perceived accuracy of EPAs. From a sample of U.S. multinationals, the results suggest that a balanced set of raters from host and home countries and more frequent appraisals relate positively to perceived accuracy of EPAs. The data suggest, however, that most respondent firms did not follow these practices. In addition, the use of standardized and customized EPA evaluation forms relates negatively to perceived EPA accuracy. Implications of these exploratory findings for research and practice are also discussed.

This study investigated cross-national differences in managerial values. A total of 567 managers from twelve nations participated in the study. Managerial values were assessed by means of Rokeach's value survey. Factor analysis of the eighteen instrumental values included in Rokeach's Value survey revealed four underlying value dimensions. The value dimension that included the instrumental values broadminded, capable and courageous was ranked as the most important value dimension by managers from all twelve nations. National differences were found on three of the four value dimensions.