Knowledge that Transforms

This study examines the impact of national corporate governance models on inward foreign direct investment (FDI) in emerging economies. We consider three potential mechanisms, and conduct an empirical test of how family ownership and control in large group-affiliated firms in Taiwan affect joint venture investment from US and Japanese firms during the period 1988–1998. Results support the neo-institutional perspective of FDI developed in this study: the home-country corporate governance models are likely to shape foreign firms’ choice of local partners.

Alliances are recognized as an indispensable tool for managers operating in a global business environment, and as a fundamental stage of the internationalization process of the firm. Drawing on a co-evolutionary framework, this article investigates the mimetic and experiential effects in international alliance formation. We focus on a critical unresolved issue in the literature: what is the role of mimetic behavior and previous alliance experience in mitigating the uncertainty associated with engaging in cross-border operations? An event history analysis of 792 international marketing alliance formations initiated by 317 firms in the US pharmaceutical industry is employed to test the hypotheses. The findings of two different hazard rate models reveal significant complex effects of density and cross-border alliance experience on the propensity to engage in new international marketing alliances.

A retrospective by John H. Dunning on location and the MNE, written in the form of responses to questions posed by Rajneesh Narula in an interview recorded at the University of Reading which was shown at the JIBS Decade Award session at the AIB annual meetings in Milan, June 2008.

Channel communications in emerging markets are embedded in the intricacy of economic and sociocultural environments. Managing channel relationships in emerging markets therefore requires more than formal interfirm communication to rely on interpersonal influence. Extending embeddedness theory, we offer a conceptualization incorporating three embedding elements – task environment, social relations, and institutional norms – into a preliminary model that specifies the antecedents, moderators, and contingent consequences of interpersonal influence strategies in marketing channels. Specifically, dependence, firm boundary spanners’ social capital, and their cultural values (e.g., guanxi orientation) may combine to shape firm boundary spanners’ use of interpersonal influence in channel communications, which in turn affects channel member satisfaction. In a Chinese marketing channel context, we test our research hypotheses with parallel analyses of 395 matched supplier–retailer dyads. The empirical results provide general support for the predictions, and reveal differences between suppliers and retailers in terms of the focal effects.

Scholars typically view offshore outsourcing as a means of reducing the cost of manufacturing activities for large corporations, yet offshore outsourcing may entail administrative and technical services, and may include activities outsourced by small and medium-sized enterprises (SMEs). Drawing on research in international entrepreneurship and services, we hypothesize and find evidence that offshore outsourcing of administrative and technical services by SMEs is associated with greater extent and scope of internationalization of sales. Offshore outsourcing enhances international competitiveness by enabling SMEs to reduce costs, expand relational ties, serve customers more effectively, free up scarce resources, and leverage capabilities of foreign partners.

Foreign direct investment, particularly cross-border mergers and acquisitions can spawn a range of individual-level outcomes from cross-cultural adjustment and synergistic learning, on the positive side, to work alienation, on the negative. Unsuccessful navigation of these individual-level outcomes leads to failed integration that can seriously affect the realization of desired organizational outcomes such as successful technology transfer, knowledge-sharing, and the general realization of global growth. By means of an iterative between-methods triangulation, the study surfaces cross-cultural work alienation as a phenomenon that can limit the overall success of such ventures, and identifies interventions that help to promote successful post-merger integration.

The extent of ownership in foreign market entry is an important topic in the entry mode literature. Yet the determinants of the share of ownership sought in cross-border acquisitions (CBAs) have not received much research attention. Drawing on multiple theoretical explanations, we develop and test hypotheses on factors influencing the share of equity sought by foreign firms in CBAs. Findings based on a sample of CBAs by US firms show that the share of equity sought is influenced by many factors, including the cost of valuing local firm assets, difficulty in integrating local firm managers in culturally distant countries, the cost of separating desired assets from the rest of the local firm, and the cost of resource commitment under exogenous uncertainty.

The trend of increasing internationalization of small and medium enterprises (SMEs) is noteworthy, because such firms typically have far fewer financial and tangible resources than large multinational enterprises. As a result, international business is often more challenging for smaller firms. In this study we investigate the widespread internationalization of SMEs, and specific factors that support their superior performance abroad. We uncover a collection of intangible capabilities that are especially salient to these firms and their growing international involvement. We identify international business competence (IBC) as an intangible, overarching firm resource that engenders superior international performance in the international SME. Through case studies and a comprehensive literature review, we identify four dimensions of IBC. We devise and assess a model that links IBC to SME international performance. Results suggest that international orientation, international marketing skills, international innovativeness, and international market orientation are all significant dimensions of IBC, and that IBC is instrumental in SME international performance. We discuss resultant findings and offer managerial implications.

This study examines the performance consequences of international attention, defined as the extent to which headquarters executives in the multinational enterprise (MNE) invest time and effort in activities, communications, and discussions aimed at improving their understanding of the global marketplace. Using detailed questionnaire and archival data on 135 MNEs, our analysis revealed three significant findings. First, international attention can be operationalized as a meta-construct that consists of three interrelated and reinforcing dimensions. Second, international attention has a curvilinear (inverted U-shape) relationship with MNE performance. Third, the performance benefits of international attention increase with three categories of moderating factors: the international assignment experience of top executives, the independence of value-adding activities across country locations, and the degree of industry dynamism.

Industry participants and observers view venture capital as fundamentally a local business. However, recent data show an increasing share of US venture capital investments flowing overseas. We suggest that cross-border venture capital flows are associated with the formation of “transnational technical communities” (TTCs), groups of immigrants active in both home- and host-country technical networks. Our results highlight the role of human networks as a mechanism of industry globalization, and support the view that TTCs are emerging economic actors in their own right.