Knowledge that Transforms

Based on a relational view of international business, we investigate the role of migrant inventors in cross-border mergers and acquisitions undertaken by R&D-active firms. We hypothesize that the migrant inventors’ international social networks can be leveraged by their employers in order to identify and/or integrate relevant knowledge bases of acquisition targets in the inventors’ home country. We nuance our hypothesis by means of several conditional logistic regressions on a large matched sample of deals and control cases. The impact of migrant inventors increases with the distance between countries and for targets located in countries with weak administrative/legal systems, as well as when targets are either innovative or belong to high-tech sectors or to the same sector as the acquirer, and for full versus partial acquisitions.

According to the conventional view of MNE–host country relations, MNEs faced with political risk condition their strategic responses on each party’s relative power positions – or bargaining influence. Drawing insight from network theory, institutional theory, and international relations research, I argue that firm sensitivity to political risk is contingent upon a complementary concept: social influence. Social influence arises through the mutual embeddedness of MNE and host government in a complex global network of nations. To test my hypotheses, I construct a global network of trade relations that I combine with a unique transaction-level dataset from the global petroleum industry. My results demonstrate that social influence, as modeled by home–host structural equivalence, moderates the effects of political risk. Further, my findings provide support for a conceptual and empirical distinction between social influence and the traditional bargaining influence examined in the literature.

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.

This paper presents a review and critique of the 20-year-old literature on institutional distance, which has greatly proliferated. We start with a discussion of the three institutional perspectives that have served as a theoretical foundation for this construct: organizational institutionalism, institutional economics, and comparative institutionalism. We use this as an organizing framework to describe the different ways in which institutional distance has been conceptualized and measured, and to analyze the most common organizational outcomes that have been linked to institutional distance, as well as the proposed explanatory mechanisms of those effects. We substantiate our qualitative review with a meta-analysis, which synthesizes the main findings in this area of research. Building on our review and previous critical work, we note key ambiguities in the institutional distance literature related to underlying theoretical perspectives and associated mechanisms, distance versus profile effects, and measurement. We conclude with actionable recommendations for improving institutional distance research.

International business (IB) research is designed to explore and explain the inherent complexity of international business, which arises from the multiplicity of entities, multiplexity of interactions, and dynamism of the global economic system. To analyze this complexity, IB scholars have developed four research lenses: difference, distance, diversity, and disparity. These four lenses on complexity have created not only unique research opportunities for IB scholarship but also unique research methodological challenges. We therefore view complexity as the underlying cause of the unique methodological challenges facing international business research. We offer several recommendations to help IB scholars embrace this complexity and conduct reliable, interesting, and practically relevant research.

We investigate the role of high distance in trust erosion between small partners. High distance is known to hinder the formation of trust between potential partners, but its role in trust erosion in established partnerships is less understood by international business scholars. Through a qualitative longitudinal study, we extend current theory of how high distance affects the trust dynamics between cross-border partners. Specifically, we unearth three interrelated mechanisms that together explain how and why trust can erode due to high distance. We show that, before a partnership is formed, high distance can lead partners to erroneously attribute cues to a potential partner’s high quality, leading to over-expectations of partner performance. Once the partnership is operational, high distance hinders actors’ ability to understand situational factors associated with disappointing outcomes, and so they are attributed to failings of the partner. At the same time, distance-related challenges of bounded reliability render partners reluctant to discuss partnership outcomes. This can result in a vicious cycle of inertia as partners strive to protect goodwill while abandoning efforts to produce partnership outcomes because of doubts of the other’s quality. Thus, our theoretical model illustrates the limitations of trust and explains how, paradoxically, high distance can facilitate both trust formation and trust erosion.