Knowledge that Transforms

The literature on foreign direct investment offers rich evidence that foreign firms outperform their local peers in emerging economies from an environmental perspective. However, it remains unclear whether local firms can learn from the environmental excellence of foreign firms to undertake cleaner production, which helps protect the host country’s natural environment. This environmental spillover effect may offer critical support to the pollution halo effect; however, it has received insufficient empirical attention. By analyzing firm-level panel data on environmental performance in China and augmenting them with data from the input–output table, we investigate whether and how foreign firms improve local firms’ environmental management. Our findings present evidence that the presence of foreign firms in the same industry in the same city lowers the pollutant emission intensity of local firms, corroborating the environmental spillover effect. We also discuss two mechanisms for this spillover: community- and industry-based institutional channels. Furthermore, we find that environmental spillovers are stronger among small and medium-sized enterprises and in areas with higher levels of existing pollution.

This paper studies the effect of the United States (US) Foreign Corrupt Practices Act (FCPA) on US multinational firms’ foreign direct investment (FDI). Unlike prior studies that focused on the passage of the FCPA, our study examines how the actual enforcement of the FCPA affects firms’ foreign investment decisions. We show that initial FCPA enforcement in a host country triggers MNEs to reassess their likelihood of being targeted, which in turn has a strong deterrence effect on subsequent US FDI growth in the host country. This deterrence effect is stronger for host countries with a weaker rule of law and more severe corruption issues. We did not find evidence of significant FDI relocation due to FCPA enforcement. Together, these results provide a comprehensive evaluation of the implications of FCPA enforcement in the global market for FDI.

Motivated by international business research on institutional arbitrage and headquarters–subsidiary relationships, we examine the effect of regulatory distance on multinational banks’ (MNBs) reporting transparency abroad. Using an international sample of foreign subsidiary banks in 46 host countries from 47 home countries, we find that bank transparency declines when the home countries have tighter activity restrictions than the host countries. We bolster the causal inference using difference-in-differences designs that take advantage of banking reforms and cross-border bank acquisitions. We also find that the result is more pronounced when parent banks have lower capital ratios or when host countries have weaker supervisory power, suggesting that parent banks use opaque reporting to conceal risk-taking abroad. Further analysis finds that less transparent subsidiaries are more likely to fail during financial crises. Overall, our findings suggest that regulatory distance creates negative externalities for bank transparency and stability abroad.

We revisit the new perspectives that explain the internationalization and growth of multinational enterprises (MNEs) in emerging markets (EMs). Do we need a new theory for EM MNEs? Are the new theorizing efforts seeking the “just right” approach as in the Goldilocks story justified? We beg to disagree. We draw attention to the foundations of current international business (IB) and organization theories, rooted in culture, history, institutions, economics, strategy, and market dynamics to meet the challenges of theorizing the new EM MNE views. We offer complementary explanations on how to develop a more comprehensive approach, elaborate on the underlying assumptions and theoretical underpinnings of extant theories, elucidate their boundary conditions, and suggest how to alleviate the lack of systematic contextualization and directionality in causal relationships. We assert that while some EM MNEs display competitive advantages vis-à-vis their counterparts, not all possess superior capabilities compared to their advanced market rivals; as we exemplify, cases should not be generalized to the population but rather to theory.

We posit that international business and the emergence and spread of communicable diseases are intrinsically connected. To support our arguments, we first start with a historical timeline that traces the connections between international business and communicable diseases back to the sixth century. Second, following the epidemiology of communicable diseases, we identify two crucial transitions related to international business: the emergence of epidemics within a host country and the shift from epidemics to global pandemics. Third, we highlight international business contextual factors (host country regulatory quality, urbanization, trade barriers, global migration) and multinationals’ activities (foreign direct investment, corporate political activity, global supply chain management, international travel) that could accelerate each transition. Finally, building on public health insights, we suggest research implications for business scholars on how to integrate human health challenges into their studies and practical implications for global managers on how to help prevent the emergence and spread of communicable diseases.

This article reviews and critically assesses the large and diverse literature on top management teams (TMTs) that has focused on international business (IB) issues. We apply an organizing framework that centers around four key elements of TMTs – TMT composition, structure, processes, and governance – and the most commonly studied IB-related choices and outcomes. This framework allows us to synthesize the contributions of the literature on TMTs in IB and identify opportunities for future research. The contributions of our review are threefold. First, we offer a roadmap for navigating the large and diverse literature on TMTs in IB. Second, we provide a systematic and critical evaluation of the key empirical and theoretical developments in this literature. Third, we highlight opportunities for future research to make theoretical and empirical advancements in each of the areas of our organizing framework. In these future research opportunities, we draw particular attention to the need to further contextualize TMT research in IB by proposing opportunities to more systematically incorporate the unique nature of the MNE and the external environment in which the MNE operates.

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.

Correspondence: R Lee, IESE Business School, Barcelona, Spain e-mail: [email protected] The development of social science often reflects its historical context, and, in particular, the urgent questions and issues of the day. The evolution of cross-cultural management (CCM) is a case in point. As a subfield of international business, it has developed quickly since the 1960s during an era of rapid expansion of multinational enterprises originating from North America, then Western Europe and Japan, and most recently from emerging markets. Significant progress has been made in sensitizing practitioners and researchers to conceptualizing culture and capturing complex cultural differences with models depicting various dimensions of culture (e.g., Hofstede, 2001). In 2021, the world has become more divided between and within regions and countries, at a time when effective global collaboration is necessary to confront challenges, such as climate change and COVID-19, in a coordinated way. In a world that is both more interdependent and more divided, now is an appropriate time for CCM researchers to take stock and to critically evaluate how to advance the field. The publication of the Sage Handbook of Contemporary CrossCultural Management makes an important and timely contribution to re-energizing the field, in this period of worsening division among people which threatens the global order. Not only does it offer a comprehensive review of CCM’s past accomplishments, it also critically pushes for new, future-facing frontiers of research (in line with Caprar et al., 2015; Jack et al., 2008; Kirkman et al., 2006, 2017). This approach distinguishes it from previous handbooks on this topic (e.g., Andrews & Mead, 2009; Smith et al., 2008). Although Holden et al. (2015) also offered critical views on CCM, this handbook presents a tighter structure that reflects the editors’ coherent vision of the field and its future. Typically, a handbook covers the key subjects of the field and provides a comprehensive overview of the stock of knowledge to interested readers. This handbook capably fulfills that role over the course of 35 chapters (or 36, if we count the initial “setting-thestage” chapter by Adler & Aycan), divided into six categories: research paradigms for the study of culture, research methods in Journal of International Business Studies (2022) 53, 568–571. https://doi.org/10.1057/s41267-021-00443-0