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Overview and Motivation for this Focused Issue Social innovation is an important concept in the field of innovation. Defined as novel solutions to effectively and efficiently address social problems and [...]

Submission Deadline: May 30, 2023 Overview and Motivation for this Focused Issue Social innovation is an important concept in the field of innovation. Defined as novel solutions to effectively and [...]

Focused Issue Editors: Samuel Adomako, University of Birmingham, UK (SAdomako@bham.ac.uk) Xiaohui Liu, University of Birmingham, UK (X.Liu,1@bham.ac.uk) Riikka M Sarala, University of North Carolina at Greensboro, USA (rmsarala@uncg.edu) Mujtaba Ahsan, [...]

Our paper revisits one of the fundamental questions of International Business (IB) scholarship, investigating the ways through which multinational enterprises (MNEs) establish legitimacy when entering a foreign market. We address this question in a novel context of Central and Eastern European (CEE) firms venturing into Sub-Saharan Africa (SSA), employing a multiple case study approach. We investigate the process of legitimacy formation by Polish firms entering SSA for market-seeking reasons. We find that the firms studied use their initial liabilities of foreignness, outsidership, and origin as starting points for pragmatic, moral, and cognitive legitimacy-building by developing narratives that neutralize the distance between themselves and important local stakeholders. Our findings contribute to an understanding of the contingent nature of 'liabilities' in IB literature and shed light on the role of narratives in the internationalization process. Keywords Central and Eastern Europe * Legitimacy * Multinationals * Sub-Saharan Africa, 1 Introduction Our paper revisits one of the important questions of IB scholarship, investigating the ways through which multinational enterprises (MNEs) establish legitimacy when entering a foreign market. We study [...]

This paper examines trends, challenges and opportunities in terms of research methodologies in qualitative IB research. In particular, it examines trends lor the dominant (positivism/(post)positivism) paradigm versus alternative paradigms (i.e., social constructivism, critical realism and interpretivism) and provides a comparative analysis of data collection and methods. Using mixed methods to collect and analyze data on qualitative articles published in International Business Review, Journal of International Business Studies, Journal of World Business, and Management International Review, we examine trends and differences between the dominant and alternative paradigms and use qualitative content analysis to investigate how alternative paradigm papers are conceptualized and presented. Moreover, we interview authors of non-positivist papers to gain in-depth understanding of the findings. We reveal differences across the paradigms and provide evidence of paradigmatic fit between methods and data collection techniques for the dominant paradigm, but more variation for alternative paradigms. Lastly, we provide prescriptions for IB scholars in terms of methodology diversity and how complex IB phenomena can be pursued vis-a-vis alternative paradigms. Keywords Research methodology * Qualitative methods * Philosophy of science * Alternative paradigms, 1 Introduction Recent studies have contended that international business (IB) research has encountered a 'relative decrease in methodological choices' due to increased use of quantitative methods (e.g., Nielsen et al., [...]

The paper advances epistemic reflexivity as a methodological process for dealing with knowledge biases in International Business research. By drawing upon Bourdieu's (1989) reflexive sociology, the paper develops an epistemic form of reflexivity that moves beyond the limiting focus on the researcher's social background and interpersonal relations with the researched, towards the conditions of knowledge production contained in the researcher's subjective role as well as intellectual bias and positioning. Such an approach enhances trustworthiness and credibility in all research processes (qualitative, quantitative, mixed and multimethod), through a systematic exploration of social scientific claims. This can be achieved by the IB researcher scrutinising their own Self, cultural practices, biases and 'unthought categories of thought', which, if not problematised, may limit our understanding of other peoples' 'social reality' and the IB phenomena that we investigate. The paper contributes to IB research methods literature by developing an epistemic theoretical foundation for reflexivity in addition to devising a methodological process for researchers to intellectually engage with, comprising of six reflexive, self-interrogating 'thinking tasks'. Keywords Reflexive sociology Epistemic reflexivity * International business research * Bourdieu * Methodology * Research practice * Knowledge bias * Culture, 1 Introduction: Linking Knowledge and Reflexivity Regardless of methodological, philosophical, theoretical, paradigmatic and disciplinary persuasion, all International Business (IB) researchers are in the business of knowledge production. As such, IB [...]

The entry mode decision is a critical topic in international business. Several studies have tested the antecedents of entry mode choices and compared the outcomes after entry. However, the results reported in these studies are contradictory and difficult to explain. Furthermore, the reviews using qualitative approaches cannot statistically combine empirical results and fail to fully discuss these relationships. Additionally, the mediating effects remain unexamined in the existing studies. Drawing upon transaction cost economics and the resource-based view, this paper presents a meta-analysis that combines entry mode choices, antecedents and post-entry outcomes to address these issues. This meta-analysis is based on 1499 effect sizes from 230 published empirical studies. This study focuses on 15 antecedents as well as post-entry performance and survival of entry mode choices. In addition to bivariate relationships (i.e. how a single antecedent affects entry mode choices), the paper uses meta-analytic structural equation modelling to analyse the mediating effects of entry mode choices on the antecedent - outcome relationship. Keywords Meta-analysis * Ownership mode choice * Establishment mode choice * Post-entry outcome, 1 Introduction A growing number of multinational enterprises (MNEs) are attracted by the opportunities and resources of international markets. In this context, choosing a suitable entry mode into a foreign [...]

In this study, we use an empirical example to demonstrate how a multi-stage pattern matching process can inform and substantiate the construction of partial least squares (PLS) models and the subsequent interpretation of and theorizing from the findings. We document the research process underlying our empirical investigations of business - civil society collaborations in South Korea. The four-step process we outline in this paper can be used to ensure the meaningfulness of the structural model as well as to maximize the use of PLS for theorizing. This methodological advancement is particularly helpful in situations when literature reference points exist, but further contextual information may add nuances to prevalent knowledge. The findings from the qualitative flexible pattern matching part of the study prompted us to conduct a multi-group analysis. The resulting path changes in the base model led to the identification of four partnering strategies for business-CSO collaborations: (1) partnering for visibility; (2) partnering for compliance; (3) partnering for responsibility outsourcing; and (4) partnering for value co-creation. Keywords Cross-sector collaborations * Business-CSO collaboration * Corporate Social Responsibility * Flexible pattern matching * Full pattern matching * PLS-SEM, 1 Introduction This paper uses an empirical example to demonstrate how a multi-stage patternmatching process can inform and substantiate the construction of partial least squares (PLS) models and the subsequent [...]

Recent advances in technology (e.g., the Internet of Things, Augmented Reality, Virtual Reality, Cloud Services, Artificial Intelligence, and Blockchain), the shift towards digital products, and the increased use of digitalisation by firms have enhanced consumers' experience and transformed how companies operate, create products/services, and offer value to multiple stakeholders on a global scale. These technological innovations have led to the phenomenon known as the Metaverse. The Metaverse does not refer to any one type of technology but is a broad (and often speculative) shift in how we interact with different technologies in the same space. In the context of International Business (IB), the recent emergence of Metaverse appears to make geographical, sectoral, and operational barriers less relevant, raising complex questions about how current IB theories can explain the world-spanning, sectorally fluid, and centrifugal behaviour of firms in the era of digital globalisation. In this paper, we obtain a critical understanding of the important opportunities and challenges that the Metaverse and the fluidity of digital technologies bring to the IB field. Specifically, we discuss how traditional theories can be effectively utilised to explain firms' internationalisation, and adapted to reflect the new technological era. We propose a framework for new approaches to IB research to help advance research on Metaverse and IB, which can provide important opportunities for future work in this field. Keywords Metaverse * Digitalisation * Emerging technologies * Digital globalisation * IB theory * Internationalisation, 1 Introduction The traditional business environment has undergone significant changes at national and global levels over the past two decades. The accelerated development of the internet infrastructure and the World [...]

This paper examines the influence of social innovation on financial risk of emerging economy multinational corporations (EMNC's). Traditionally, research has focussed on Western MNCs' and their financial performance implications. However, the growing involvement of EMNC's in social innovation--albeit in environments characterized by institutional voids--and its effects on financial risk necessitate an in-depth examination. Drawing on stakeholder theory, we explored how EMNC's balance their social innovation initiatives with financial risks. To this end, we first examine how social innovation reduces the financial risk of EMNC's. Second, we examine the association between excessive social innovation and EMNC's' financial risk. In addition, borrowing insights from institutional theory, we assess the role played by institutional legitimacy in this process, acknowledging institutional legitimacy's potential to mitigate the financial risks associated with social innovation in emerging economies. We test our hypotheses based on data drawn from 90 EMNC's in 14 emerging economies, applying a panel regression model with robust standard errors and a rigorous robustness propensity score matching test. Our findings show that social innovation reduces EMNC financial risk, and challenge the assertions made regarding the potential negative implications of excessive social innovation on financial risk. Our results also demonstrate the intricate moderating effects of institutional legitimacy in balancing social innovation, excessive social innovation, and EMNC financial risk. Finally, we proffer critical implications for managers and policymakers in emerging economies. Keywords Social innovation * Financial risk * Institutional legitimacy * EMNC's, 1 Introduction Over the last decade, social innovation--which is defined as a 'novel solution to a social problem that is more effective, efficient, sustainable, or just than existing solutions and [...]

The purpose of the paper is to find out how chain affiliation, an important strategic choice and a key determinant for hotel performance, influences the strategy-performance nexus in the emerging economy context. It combines the resource- and institution-based views to investigate how chain affiliation moderates the relationship between competitive strategy and performance. This is done by distinguishing between market-based strategies based on differentiation or cost leadership, and non-market strategies that manifest in institutional advantage. The empirical analysis draws from original survey data on 162 hotels located in the Russian cities Moscow and St. Petersburg. The paper finds that first, in emerging economies the competitive edge of chain-affiliated hotels largely arises from market-based advantage, but only in terms of cost advantage. The finding that differentiation advantage is not an important factor of performance for chain-affiliated hotels suggests that firmlevel resources derived from chain affiliation would not transform into competitive advantage in the emerging economy context. Second, it is found that institutional advantage is more important determinant of performance for independent hotels, demonstrating the importance of local knowledge and relationships for firms in emerging economies. This finding also suggests that chain affiliation might be rather a strategic constraint than asset for creating superior performance via institutional advantages in the emerging economy context. Keywords Chain affiliation * Competitive strategies * Firm performance * Hotel industry * Emerging economies * Russia, 1 Introduction 'What determines firm strategy and performance' is a fundamental question in strategic management and international business alike (Peng 2004). To answer this question, existing literature has often focused [...]

This paper analyzes how MNCs' intermediate units--those that exercise authority over other subsidiaries--apply specific control mechanisms: centralization, formalization, outcome control, and socialization. We combine agency and network theory to explain how intermediate units' dual agency role--as both principal and agent--and their network embeddedness form the choice of control mechanisms. More specifically, we propose hypotheses on how the intermediate units' internal and external relationships determine their choice of control mechanism. We study this issue in the context of Spanish intermediate units--owned by European MNCs--that exercise authority over subsidiaries in Latin America. Keywords Intermediate unit * Multilayered MNC * Control mechanism * Agency theory * Network theory, 1 Introduction The international business (IB) literature conceptualizes multinational corporations (MNCs) as inter-organizational networks consisting of units at multiple levels with several roles and, as such, a variety of relationships [...]

This paper examines the foreign direct investment (FDI) decision by family firms from an emerging economy, China. Despite the increasing attentions to family firms' FDI, extant research has focused largely on the comparisons between family firms and non-family firms with inconsistent findings. Limited research effort has been devoted to the heterogeneous FDI among family firms. We investigate how different family firm types affect its FDI. Family firms differ in the identity of family owners due to their variation in the trade-off between preserving family's socioemotional wealth (SEW) and maximizing firm economic goals. Family owners with different identities will behave differently in their FDI decisions. We find that family firms owned by a lone founder (i.e., lone-founder firms) who perceives himself more as an entrepreneur, have higher propensity and intensity of FDI than those owned by multiple family members (i.e., family-controlled firms) who share the identity of family guardians. Moreover, we find that the positive effect of lone-founder on family firms' FDI decisions is stronger when they have adequate access to internal capital markets through pyramidal ownership structure or financial slack. Overall, this paper enhances our understanding of family firms' FDI decisions and offers an explanation for prior inconclusive findings on this important area by highlighting the effect of huge heterogeneities among family firms on their FDI decisions. Keywords Family firms Foreign direct investment (FDI) Social identity theory Socioemotional wealth (SEW) perspective Internal capital markets, 1 Introduction The drivers of firms' internationalization have been well-studied by international business (IB) scholars (Hennart 2009), based on theories such as the electric paradigm (Dunning 1988, 2000), internalization theory [...]

Current debates on organizational learning distinguish between two distinct and mutually exclusive learning modes: exploration and exploitation. This paper deals with the concept of ambidextrous routines in knowledge management (KM) initiatives. Specifically, drawing on a sample of 1468 MNEs from 24 regions in China, we find that a synergetic combination of explorative and exploitative virtual knowledge is positively associated with MNE performance. In contrast, an imbalance between explorative and exploitative virtual knowledge hurts MNE performance. Furthermore, the effect of imbalanced ambidexterity in virtual knowledge sharing is moderated by the cultural distance in the uncertainty avoidance between the R&D team and the region where the team operates. This paper elaborates on the characteristics of ambidextrous KM initiatives at the micro-level; firms use ambidextrous KM practices to create a learning context, defined by guidelines and methods rather than by a definite purpose. The clear separation of KM initiatives' purpose and their embedded learning routines and methods enables them to be used ambidextrously. Furthermore, this analysis indicates that ambidextrous KM initiatives follow a path characterized by an increasing variety of purposes but a decreasing variety of underlying structures. Consequently, firms create a learning context that can be activated when necessary in ways required in an exploratory and/or in an exploitative mode. Keywords International R&D teams * Ambidextrous virtual knowledge sharing within R&D teams * Uncertainty avoidance * Organization--environment cultural fit * International human resource management, 1 Introduction The seminal work of March (1991) on exploration and exploitation has inspired a search for the optimal balance between these two types of activities, known as 'organizational ambidexterity' [...]

Recent research identified firms' hypocritical behavior as a major threat to their reputation among consumers. This paper expands the dyadic relationship to a triadic relationship, integrating the hypocritical behavior of suppliers in global supply chains. Introducing a chain of blame, this paper suggests that the hypocritical behavior of the supplier backfires on the firm, leading to loss of reputation and increased boycotting tendencies. We test our proposed framework across one main study and two follow-up studies with consumers from two industrialized and two BRICS countries (Germany, US, China and South-Africa) and a total of 1177 respondents. Results show that consumers from various countries consistently hold firms responsible for their suppliers' hypocritical behavior, consequently lower their reputation ratings, and intend to engage in boycotting the firm. The analysis further identifies the origin of the supplier and consumer ethnocentrism as nationally-variant promoting factors of consumers' boycott intention and shows that the influence of those factors is contingent on consumers' expectations towards foreign vs domestic firms. Implications for managers and marketing-managers are given. Keywords Global supply chains * Corporate hypocrisy * Corporate reputation * Boycott intention * Consumer ethnocentrism * Expectancy violations theory, 1 Introduction In the contemporary competitive marketplace, where consumers are increasingly demanding better quality and services, building a sustainable relationship with consumers poses a key challenge for companies. Research suggests [...]

Drawing on the international relations literature, the purpose of this paper is to investigate whether and when diplomatic relations between countries have an influence on firm internationalization speed. We discover that the friendlier bilateral diplomatic relations between home and host countries, the more beneficial it is to enhance firm internationalization speed. In addition, the higher trade openness of the host country, the smaller contribution of bilateral diplomatic relations for firm internationalization speed in the host country and friendly bilateral diplomatic relations have a stronger positive impact on internationalization speed when the internationalizing home enterprise is a state-owned enterprise (SOE). Our findings not only contribute to both the firm internationalization speed literature and the international relations literature, but also have managerial significance for how enterprises can use the friendly diplomatic relations between countries to improve firm internationalization speed. Keywords Diplomatic relations * Trade openness * Nature of firm ownership * Internationalization speed * International relations JEL Classification F23 * F55, 1 Introduction Internationalization speed, defined as the average internationalization state achieved by a firm over a specific period (Casillas & Acedo, 2013; Chetty et al., 2014), has become a core [...]

This paper investigates the so far unexplored theoretical tension associated with foreign investor valuations of emerging market firms (EMFs) that tap into global capital markets. One line of argument expands the liability of foreignness perspective into the capital market domain where a foreign firm faces legitimacy and unfamiliarity issues. In contrast, there is recognition of the benefits to global investors in EMFs associated with geographic portfolio diversification. Our core premise is that EMFs face a cost-benefit trade-off associated with the extent of institutional distance when venturing abroad in search of financial resources. Based on a theoretical model grounded in institutional theory, we find a curvilinear effect of institutional distance on foreign equity valuations. Furthermore, we show that information spillovers through a focal firm's domestic capital market and international product market strategies moderate this relationship. Keywords Foreign equity market * Institutional distance * Capital market liability of foreignness * Spillover * Emerging market firms, 1 Introduction Need to access financial resources to support growth aspiration and increasing level of financial market integration motivate the emerging market firms (EMFs) to expand into foreign capital market [...]

By presenting an investigation of the impact of international trade protectionism on the reconfigurations of the global value chains (GVCs), this paper challenges the perceived assumption of ongoing globalization and the free flow of goods and services. Building on the de-globalization and GVCs' literature, we performed a historical content analysis on 174 articles from 2016 to 2020 published in leading and major national and international newspapers. Our findings suggest that international trade protectionism has altered the landscape of GVCs by causing widespread disruption to their functioning, thus making them prone to future external policy risks. Such disruption is having a varying impact on various industries, whereby it is causing greater harm to those industries that are more global in nature and thus rely on global suppliers. We draw implications of our findings for research and practice. Keywords De-globalization * Protectionism * Global value chains * Trade war * United States * China * Historical content analysis, 1 Introduction There has been an increasing interest in understanding the impact of international trade protectionism on the global organization and adaptive reconfigurations of value chain activities (e.g., Evenett, 2019; [...]

There is growing interest in the nature and possible extent of de-globalization. This paper explores the impact that protectionist measures have on multinational enterprise (MNE) reshoring back to the UK. Besides taking into account the global trends indicating a return to protectionism, the existing literature highlights various firm-level and structural country-level determinants of reshoring decisions. We test a conceptual model with parent-subsidiary firm-level data for the period 2009 to 2017. We conclude that firms that are more sensitive to wage costs in their overseas subsidiaries were more likely to reshore. We did not find that more capital-intensive firms had a higher propensity to reshore. We find that our results are mostly driven from UK MNEs with subsidiaries in EU. This result has clear implications for a potential Brexit effect. Theoretically, we base our findings in transactional cost economics to help explain why different types of firms behave in the way they do, and why different types of firms may respond in quite different ways to the same mix of institutions. Keywords Multinational Enterprises * Reshoring * Protectionism * UK, 1 Introduction The last decade has witnessed significant political and economic uncertainty on the back of events such as the election of Donald Trump in the US as well as [...]

This paper examines the impact of protectionism and intellectual property right (IPR) protection in host markets on cross-border mergers and acquisitions (CB M&As). CB M&As have become important vehicles for firms to expand into foreign markets and acquire strategic assets. In recent years, the topic has attracted significant scholarly interest. Recently, many countries have enacted protectionist measures to protect local firms and jobs. Consequently, the impact such measures have on economic activities is under debate in the literature. This study leverages the vital context of CB M&As undertaken by US multinational enterprises (MNEs) between 2011 and 2017 in 49 host countries. The findings indicate that host country IPR protection has a much more substantial and positive impact on CB M&A activities undertaken by USA MNEs than the protectionist policies of the host country by itself. The findings further suggest that, although local protectionism, by itself, does not play a significant role in CB M&As, its presence strengthens the positive efect of IPR protection on CB M&A activities in the host country, thereby supporting the contingent role of such protection. These findings have important implications for research, practice, and policy. Keywords CB M&As * Deals * IPR protection * Open market index * Protectionism * USA firms (MNEs), 1 Introduction Cross-border mergers and acquisitions (CB M&As) have attracted significant scholarly interest from strategy and international business (IB) scholars (e.g., Ahammad et al., 2018; Dikova et al., 2017; Khan [...]

This paper reports a systematic literature review by seeking to discuss research that explored the impact of networks on the entrepreneurial internationalization of international new ventures (INVs). A screening process resulted in a final sample of 73 papers published in 16 double-blind reviewed journals with the highest impact in the field from 1994 to 2015. This paper highlights the dominant connection between networking and the entrepreneurial internationalization and points out the acceleration role of the network. At the same time, it highlights a relevant gap in studies: still little is known and proven about the effective impact of ties on the entrepreneurial internationalization. In particular, we highlight some inconclusive or contradictory empirical results about the role of networks for INVs, and also an unclear understanding of their impact on specific target variables describing the early and fast growth in international markets. Hence, there is an open window for further research. Finally, this paper suggests promising directions for future investigation to develop particular research area. Keywords Entrepreneurial internationalization * International entrepreneurship * Network * International new ventures, 1 Introduction The purpose of this paper is to systematically examine and organize the current body of literature that has explored the impact of the network on the entrepreneurial internationalization [...]

Systematic international diversification research depends on reliable measurements of the degree of internationalization (DOI) of the firm. In this paper, we argue that the inclusion of social markers of internationalization can contribute to the development of more robust conceptualizations of the DOI construct. Unlike traditional metrics of DOI, such as foreign sales over total sales or foreign assets over total assets, social-based metrics of internationalization can reveal less visible foreign resource interdependencies across the firm's entire value chain. By combining social-based metrics of DOI with traditional measures of internationalization, we uncovered three distinct dimensions of internationalization: a real one, composed of the firm's foreign sales and assets; an exposure one, represented by the firm's extent and cultural dispersion of foreign subsidiaries; and a social one, represented by the extent of the firm's top managers international experience and the number and cultural zone dispersion of the firm's transnational board interlocks. Results from both an exploratory and confirmatory factor analysis show that these dimensions are sufficiently distinctive to warrant theoretical and empirical partitioning. These findings have implications for the way researchers select and combine DOI metrics and underscore the importance of conducting a thorough theoretical and statistical assessment of DOI conceptualizations before proceeding with empirical research. Keywords Transnational interlocks * Internationalization * Degree of internationalization, 'Internationalization is to a large extent a matter of establishing relationships in foreign markets' (Johanson and Vahlne 1990, p. 21). 1 Introduction Ever since Sullivan's (1994) seminal paper on measuring [...]

This paper contributes to theory building efforts around the concept of knowledge connectivity and its relevance in buyer-supplier relationships in global value chains. We use the Pakistani IT industry as our study context. Pakistan suffered a significant adverse perception bias following terror attacks in 2008-09. We based our illustration on the experiences of 12 Pakistani offshore service providers (OSPs) who succeeded in offsetting the negative implications of the country's adverse political environment. The case firms link into two distinct value chain configurations. In each configuration, we observe a distinct course of strategic action, which we term step-up and break-out, respectively. While these observations emerged from the Pakistani context, the implications of the resulting dynamic framework for theory and practice go beyond this particular adverse country setting. Keywords Global value chains * Connectivity * Adverse context * Practices * Supplier strategies * Global sourcing * Economic geography * Comfort zone * Catch-up, 1 Introduction The present paper sets out to investigate how 12 Pakistani offshore service providers (OSPs) linking into two distinct value chain configurations survive and grow despite their adverse home [...]

Research on the internationalization of small and medium enterprises based in emerging markets (EM-SMEs) is gaining momentum, yet, less is known about the specific factors that deter EM-SMEs' from internationalizing via foreign direct investment (FDI). In this paper, using institutional and organizational imprinting perspectives, we argue that EM-SMEs founded in the era prior to market liberalization are less likely to internationalize via FDI than those founded during or after market liberalization. We also argue that this effect is moderated by EM-SMEs' size and ownership dispersion. Our data used to test our hypotheses is based on 2277 SMEs from 14 emerging markets. Overall, we contribute to an improved understanding of the factors that determine the FDI-based internationalization of SMEs from emerging markets. Keywords Small and medium enterprises * Market-liberalization * Institutional theory * Foreign direct investment * Internationalization * Emerging markets, 1 Introduction Recent studies are increasingly focusing on the distinctive factors that determine the internationalization of small- and medium-sized enterprises based in emerging markets (EM-SMEs) (Deng & Zhang, 2018; Fabian [...]

The purpose of this study is to explore the differential gains from internationalization for different forms of corporate governance. In particular, we seek to move from the question concerning whether firms are able to generate differential gains from internationalization, to the question of why. Our focus is on ownership structure, and the differential rates at which business group affiliated firms and standalone firms gain from internationalization. Using a unique data set of some 356 standalone and business group affiliated firms, we show that while the marginal gains from internationalization may be greater for standalone firms, business group firms are better able to exploit firm-specific assets, leveraging these into higher returns to internationalization. Keywords Internationalization * Performance * Business group * Firm-specific advantage, 1 Introduction This paper seeks to explore the relationship between particular ownership structures and firm level returns to internationalization. We do this by asking two related questions. First, whether the [...]

Drawing on organizational learning theory and taking an institutional perspective, this study investigates (1) the dynamic relationship between internationalization and innovation in emerging market enterprises (EMEs), and (2) how state ownership moderates the focal relationships. Using a panel dataset of listed Chinese firms from 2007 to 2018, we find that internationalization encourages innovation input in EMEs, which in turn transforms into more innovation output. Higher innovation output leads to further international commitment, creating a dynamic upward spiral of internationalization and innovation. Interestingly, state ownership positively moderates the innovation input-innovation output link but negatively moderates the relationship between innovation output and internationalization. Our paper enriches and refines our understanding of the dynamic relationship between internationalization and innovation in EMEs by integrating the knowledge exploration, transformation, and exploitation perspectives, with the institutional perspective of state ownership. Keywords Internationalization * Innovation input * Innovation output * EMEs * State ownership, 1 Introduction Internationalization and innovation are two crucial strategies for emerging market enterprises (EMEs) to survive and prosper (Piperopoulos et al., 2018; Wu et al., 2016; Xie & Li, 2018). [...]

This paper investigates the context in which firms' ownership strategies in international ventures may be affected by their international experience, which shapes their dynamic capabilities. Based on a statistical synthesis of empirical insights accumulated in a large body of literature, this paper examines multiple firm-, industry-, and country-specific moderators simultaneously. With models tested drawing on data from 102 samples across 114,118 international entry decisions, this meta-analysis finds empirical evidence largely supporting theoretical predictions of sources of international experience, economic development stages of host countries and firm size that moderate the relationship between international experience and ownership strategy (IE-OS relationship), and this relationship is not contingent upon industries in which a firm resides. In particular, the contingency effect of country-specific experience is more important to the IE-OS relationship than others. This paper demonstrates the contextual nature of the IE-OS relationship and contributes insights into the contingencies that affect the impact of experience-based dynamic capability deployment in an international business setting. Keywords International experience * Dynamic capabilities * Ownership strategy * International entry * Meta-analysis, 1 Introduction A critical issue in international business (IB) research is the investigation of factors that influence firms' strategic decisions in the process of internationalization (Hitt et al. 2015). Previous [...]

This paper addresses the need for a stronger perspective of history in International Business research. In order to illustrate this matter, we will discuss the topic of 'escape FDF as a motive for foreign direct investments (FDIs). While prior research suggests a connection between 'escape FDI' and an economy's degree of societal coordination in a quasi-ahistorical manner, we will argue that 'escape FDF is an issue that liberal and coordinated market economies alike have witnessed. In fact, the relevance of simple dichotomies, such as coordinated and liberal economies, seems to break down in the face of shifting institutional conditions that are bound to very specific periods. Quite consciously, the present paper combines social science and historical methodologies, in an effort to produce a synthesis that will benefit both approaches to understanding international business and its larger context. Keywords Business history * Escape FDI * Varieties of capitalism, 1 Introduction Over 10 years ago, Jones and Khanna prominently called for a (re-)integration of historical perspectives into International Business (IB) in the pages of UBS (Jones and Khanna 2006). [...]

This paper reviews the scope for economic modelling in international business. It argues for a multi-level theory based on classical internalisation theory. The theory extends the 'systems approach' to the multinational enterprise in which modular activities, such as production, marketing and R&D, are linked by flows of semi-processed products and proprietary knowledge. It is shown how this theory can be extended from the firm level to the industry level in order to analyse inter-firm co-operation and rivalry. The theory can be extended to higher levels (e.g., the global economy) and lower levels (e.g., personal relationships within plants and offices). Keywords International business * Multinational enterprise * Internalisation * Theory * System * Modularity * Decision tree, 1 Introduction This paper reviews the scope for economic modelling in international business (IB) theory. Economic modelling was commonplace in the 1970s, became unusual in the 1990s, and was controversial [...]

In this paper we examine how foreign actors capitalize on their ethnic identity to gain skills and capabilities that enable them to operate in a new and strange environment. We explore the mechanisms by which Bulgarian entrepreneurs in London use their ethnic identity to develop competitive advantage and business contacts. We find that the entrepreneurs studied gain access to a diaspora network, which enables them to develop essential business capabilities and integrate knowledge from both home and host country environments. The diaspora community possesses a collective asset (transactive memory) that allows its members to remove competition from the interfirm level to the network level (i.e., diaspora networks vs. networks of native businesspeople). Additionally, the cultural identity and networks to which community members have access provide bridging capabilities that allow diaspora businesspeople to make links to host country business partners and thus embed themselves in the host country environment. Thus, this paper adds to the growing body of work showing how foreignness can serve as an asset in addition to its better-known role as a liability. Keywords Outsidership * Foreignness * Assets *9 Diaspora * Transactive memory, 1 Introduction International business research shows that firms operating outside their home countries face additional costs of conducting business activities (resulting, for example, from a lack of local institutional and [...]

The rise of multinational enterprises from emerging countries (EMNEs) poses an important test for theories of the multinational enterprise such as internalisation theory. It has been contended that new phenomena need new theory. This paper proposes that internalisation theory is appropriate to analyse EMNEs. This paper examines four approaches to EMNEs--international investment strategies, domestic market imperfections, international corporate networks and domestic institutions--and three case studies--Chinese outward FDI, Indian foreign acquisitions and investment in tax havens--to show the enduring relevance and predictive power of internalisation theory. This analysis encompasses many other approaches as special cases of internalisation theory. The use of internalisation theory to analyse EMNEs is to be commended, not only because of its theoretical inclusivity, but also because it has the ability to connect and to explain seemingly desperate phenomena. Keywords Multinational enterprises * Emerging markets * Internalisation theory * International investment strategies * International corporate networks * International mergers and acquisitions, 1 Introduction This paper examines four research approaches to the rise of emerging market multinational enterprises--international investment strategies, domestic (capital) market imperfections, international corporate networks (including business groups) and the [...]

Bringing in insights from sociolinguistics, this conceptual paper advances the theorizing on language and identity in the MNC, viewed as socially constructed by individuals in interaction when they cross fluid linguistic and geographical boundaries. We posit that the identities of global business professionals in the MNC are not intrinsically tied to nationality and native language, they are rather cosmopolitan and constructed in interactions in English as the working language (BELF: English as a Business Lingua Franca). We further conceptualize the multilingual MNC as a social constellation--providing the context for processes of identity construction but also shaped by them. We outline three propositions that capture the ways in which BELF contributes to the construction of a cosmopolitan identity on three dimensions (individual, interactional and contextual) in multilingual professional MNC settings. The first one concerns the identification of individuals as participants in BELF interactions drawing from their different linguistic resources, national origins and professions, and previous experiences. The focus in the second one is on BELF interactions that manifest an orientation to both sharedness and difference in skills, knowledge and social relations. The third proposition concerns the MNC context in terms of enabling BELF interactions and being (re)constructed as a social constellation with fluid linguistic and geographical boundaries. We further elaborate on the methodological implications of sociolinguistic and cosmopolitan approaches to IM research on identity in general, and how our propositions could guide future research on language and identity in the MNC in particular. Keywords Cosmopolitanism * English as business lingua franca * BELF * Identity * Language * Multilingualism * Multinational companies * MNC, 1 Introduction Globalization has broadened the sphere of social interactions by making intercultural encounters easier and professional networks more diverse. Many such interactions are carried out in the global language--namely [...]

When cross-border acquisitions take place, whose institutional logics should dominate the control in the daily operation of the acquired entity--the acquirer or the acquiree? To answer this question, this paper investigates how Geely, a Chinese automaker, successfully acquired Volvo from Sweden, a developed country, and managed the differences in the institutional logics of the two firms by transforming its dominant institutional logic. Through the lens of matching theory, we employ an inductive approach and conduct a longitudinal case study of Geely's acquisition. We find that matching commercial and social logic is an inevitable requirement to cope with external institutional pressures in cross-border acquisitions. We further reveal that the structured interaction between compatibility and complementarity facilitates the matching process between commercial logic and social logic, resulting in a synergistic logic via the three different mechanisms of compatibility, complementarity, and co-evolution. Our findings challenge previous research that focuses on conflicts as the foremost drivers of the transformation of different institutional logics in organizations. Based on our findings, we develop a matching process model that offers insights for firms from developing economies to navigate dominant institutional logic transformation and thrive in the marketplace through their strategic cross-border acquisitions. Keywords Commercial logic * Social logic * Compatibility * Complementarity * Co-evolution * Cross-border acquisition, 1 Introduction Cross-border acquisition often requires firms to adjust their dominant institutional logic to address the institutional discrepancies between the acquirer or the acquiree. But how to synergize different institutional [...]

As the sharing economy has grown rapidly and replaced the traditional businesses, new rules and norms for data and digital trade have emerged divergently in many countries. Such divergence in global e-commerce policies may be a major barrier to the internationalization of the sharing economy business. This paper aims to develop an internationalization theory that addresses how the sharing economy firms can internationalize under the condition of the divergence of global e-commerce policies. Drawing on Hayek's knowledge economy approach, we build a new internationalization theory for the sharing economy firms that facilitate autonomously self-organized business ecosystems and adapt to the lack of harmonized rules and norms for the sharing economy. We first theorize on the attributes of the digital platform-based transactions for the internationalization of the sharing economy firms and then provide some insights into the current international debates of e-commerce policies. Our theory offers two main insights: (1) the competitive advantages of the sharing economy firms stem mainly from digital platform algorithms to catalyze digital platform-based transactions between autonomous actors; (2) the divergence of global e-commerce policies and different internet regimes in different countries may affect the internationalization of business models based on such digital platform-based transactions. Keywords Internationalization * Platform-based transactions * Sharing economy * Network effects * Policy, 1 Introduction In the rise of new e-commerce based on a digital economy, international business (IB) researchers and policymakers have some critical debates on the necessity of internationally harmonized e-commerce [...]

Despite the exponential growth of crowdfunding in recent years, research on the role it plays in business internationalization is still embryonal. Building on the Resource Based View (RBV) and Knowledge Based View (KBV), this study explores how SMEs can use equity crowdfunding (ECF) and reward crowdfunding (RCF) to internationalize and the related potential limitations. Using an inductive qualitative research design, based on multiple case studies of Italian SMEs, our study showed that ECF and RCF models help SMEs in acquiring the financial resources needed to internationalize and, at the same time, offer significant added value to their internationalization. Our findings support the idea that ECF and RCF play a key role in helping companies to overcome their resource limitations in regard to internationalization, not only in terms of the provision of financial resources but, above all, by compensating for any lack of knowledge on aspects relevant to the internationalization process. Furthermore, our results show the limitations of SMEs use of crowdfunding in order to internationalize (i.e., a lack of ad hoc e-commerce policies in relation to equity crowdfunding and to the regulation of the pre-ordering mechanism in the reward model). This paper concludes by discussing the theoretical and managerial contributions to the international business domain, and highlighting fruitful avenues for future studies. Keywords Equity crowdfunding * Reward crowdfunding * Internationalization * SMEs * International business * Financial resources * E-commerce policy, 1 Introduction Internationalization is a phenomenon that has been explored extensively over the years with a focus on both large and small/medium enterprises (SMEs). The similar international issues faced by [...]

Research in international business and management (IM) is highly complex, contextual, and spans various subfields and related theoretical lenses. These characteristics pose research challenges that require utilizing sophisticated research designs and methodologies. This paper and our focused issue on 'The use of partial least squares structural equation modeling (PLS-SEM) and complementary methods in IM research' further clarify whether and how researchers using PLS-SEM can address (some of) the challenges in IM research. We explain how researchers can benefit from the (advanced) capabilities that PLS-SEM offers; either as a stand-alone method or in triangulation efforts that leverage complementary approaches. In addition, we review the IM literature for PLS-SEM applications and evaluate whether and how researchers are already using these approaches. We identify some room for improvement when it comes to the application of both more advanced PLS-SEM capabilities and the triangulation of PLS-SEM with qualitative data analyses, and techniques such as fuzzy set qualitative comparative analyses and necessary condition analyses. For better guidance, we refer to PLS-SEM application examples in which the methodological advances are used., 1 Introduction Research in international business and management (IM) has its inherent challenges that, in turn, demand the application of fitting analytical methods. First, it is characterized by high complexity, [...]

This study examines Korean foreign direct investment (FDI) in the context of the organization and development of local firms into global factories. Specifically, we explore the relationship between FDI decisions and the nature of Korea's imported and exported goods. We argue that the global factory approach explains the mechanisms by which FDI can lead to technological upgrading. We employ a unique data-set that incorporates information on FDI motive from South Korea, as well as the unit value of traded goods within sectors. Our findings indicate that FDI location and motive vary by trade destinations and trade unit prices; something that has not received attention in existing literature. Keywords South Korea * Internationalization strategies * Global value chains (GVCs) * Foreign direct investment (FDI) motivation * Location choice * Global factories * Korean multinational firms, 1 Introduction This paper applies the concept of the 'global factory' to the development of emerging economies, and seeks to understand how the global factory approach can explain the relationship [...]

The abundant research on the multinationality-performance relationship has yet to provide cohesive findings concerning the nature and shape of the relationship. This paper joins a small, but growing body of research considering the effect of performance on multinationality. Drawing on resource-based theory and prospect theory, the authors develop competing hypotheses for the impact of performance on multi-nationality. Using non-linear ordinary least squares regression on unbalanced panel data for 2066 firm-year observations of Swedish publicly listed firms over 12 years, the authors find strong support for a positive U-shaped relationship. The foremost contribution is that performance drives internationalization, much more than vice versa. The model for the traditional causal direction from multinationality to performance explains less than half the variance, has marginal significance on key variables, and has an illogical outcome. Another contribution is how risk-taking attitudes, in accordance with prospect theory, explain a high level of internationalization when performance is negative. As performance rises towards zero, internationalization drops to an inflection point, where in accordance with resource-based theory, the degree of internationalization begins rising. This debunks the prevalent view that internationalization is contingent upon positive performance and abundant resources. Keywords Performance * Multinationality * Internationalization * Prospect theory * Resource-based view, 1 Introduction For over 40 years, the multinationality-performance relationship has been one of the most researched and debated topics in the international business domain (e.g., Click & Harrison, 2000; Contractor [...]

Emerging-market multinational enterprises (EMNEs) are, on the one hand, investing in both developed and developing countries aggressively. On the other hand, they are facing greater pressures from their home and host countries to operate in a socially responsible manner. In this paper, combining institutional theory with strategic perspectives on corporate social responsibility (CSR), we argue that EMNEs spending on CSR more intensively in their domestic context are likely to have a greater scope of internationalisation. We also argue that this effect decreases for government-owned EMNEs and increases when EMNEs target developed host markets or institutionally stronger emerging markets. Our data used to test our hypotheses are based on a sample of 686 Indian firms. Our findings provide support for most of our arguments, and we contribute to a greater understanding of the relationship between CSR and internationalisation. Keywords Corporate social responsibility * Internationalisation * Emerging market multinational enterprises * International business * Liabilities of origin, 1 Introduction The internationalisation of firms from emerging economies is gaining widespread academic attention, as these new types of multinationals are increasingly engaging in foreign direct investment (FDI) in both [...]

This paper conducts a meta-analytical review to examine the impact of internationalization on innovation, with particular attention to the role of research design factors that may confound causal inferences. The existing literature is examined (1) to determine the average effect of internationalization on innovation and (2) to assess how variations in key aspects of research design has affected results. Analysis of 99 studies reveals that the effects of internationalization on innovation are diverse but are generally positive, albeit the effect sizes are mostly small to moderate. The inferred magnitude of such effects is influenced by research design factors and that country-context matters. The results suggest that internationalization measurements, data characteristics and statistical artifacts affect the variations in effect sizes. We conclude with a discussion of opportunities and challenges in future research on the internationalization-innovation nexus. Keywords Internationalization * Innovation * Meta-analysis * Research design factors, 1 Introduction The nature of the relationships between internationalization and innovation (the internationalization-innovation nexus) is an important consideration for firms that undertake cross-border activities. Firms engaging in exporting and FDI [...]

In this paper, we draw on the notions of breadth and depth of internationalization speed in an attempt to examine the performance implications for multinational enterprises (MNEs) that rapidly and concurrently internationalize in new and existing foreign markets. Specifically, we examine the organizational paradox which suggests that firms which grow internationally by concurrently expanding rapidly in both new foreign markets (breadth) and in foreign markets they currently operate (depth), are better off than firms which do not adopt such an approach. Since past research has not examined the interaction between the breadth and depth of MNE internationalization speed on firm performance, we contribute to the temporal dimension of the internationalization process by developing a novel, yet paradoxical approach. Our analysis is based on a longitudinal sample of the world's largest retail MNEs covering the period 2003-2012, which includes the 2008 financial crisis that had a significant effect on the global economy. We find that concurrent internationalization speed positively relates to firm performance during periods of stability. Further, we draw from the upper-echelons theory and find that the aforementioned relationship can be strengthened by the level of CEO international experience and CEO education. Keywords Concurrent internationalization speed * Breadth of internationalization speed * Depth of internationalization speed * Paradox theory * Upper echelons theory * Firm performance, 1 Introduction The internationalization process is considered one of the most important tenets of corporate strategy (Melin, 1992; Vermeulen & Barkema, 2002). Therefore, MNEs have been interested in gaining a [...]

In this paper, we study the effect a CEO's international work experience has on his or her compensation. By combining human capital theory with a resource dependence and a resource-based perspective, we argue that international work experience translates into higher pay. We also suggest that international work experience comprises several dimensions that affect CEO compensation: duration, timing and breadth of stays abroad. With data from Europe's largest stock market firms, we provide evidence that the longer the international work experiences and the more numerous they are, the higher a CEO's compensation. While, based on our theoretical arguments, we expect to find that later international work experiences pay off for CEOs, our empirical analysis shows that earlier international work experiences are particularly valuable in terms of compensation. In addition, our data support the argument that maturity allows a CEO to take advantage of the skills, knowledge and competencies obtained via international experience--and to receive a higher payoff. With our study, we improve the understanding of how different facets of a CEO's background shape executive remuneration. Keywords Executive compensation - Human capital theory * Resource dependence theory * Resource-based view * International top managers * International experience * International work experience * Maturity * Cultural distance, 1 Introduction Multinational corporations (MNCs) need top managers who are able to navigate in diverse environments. Hence, it has repeatedly been emphasized that top managers with international experience are beneficial [...]

It is increasingly clear that China's economic and political power rivals that of the US. This is potentially a serious problem for multinational companies, since China's rise could lead to more US-China trade conflict and disruption of supply chains, threatening new and ongoing foreign direct investment, and drawing other countries into the jostling for power. However, we argue that globalization is not necessarily endangered by China's emergence as a comparable power to the US. The US and China both have vested interests in maintaining the open economic order, and these two countries are each providing the global public goods that incentivize economic openness among other countries of the world. In this paper, we develop a theory corresponding to this argument and provide evidence that globalization has not declined even as the global distribution of power has shifted. While global integration is likely to persist, disruptive skirmishes between the US and China will occur with some regularity. Therefore, we suggest that international company strategies today should focus more on risk management related to policy shifts stemming from China's rise and less on achieving least-cost global supply chains. We present a risk management framework for this purpose. Keywords China * Trade * Dual hegemony * International business * Global integration, 1 Introduction Scholars and commentators increasingly see China as a global superpower (Anngang 2012; Cao and Paltiel 2015; Fish 2017) and China's rise is widely understood to be ushering in [...]

Entrepreneurial small- and medium-sized enterprises (SMEs) play a significant role in nearly all economies and are responsible for a significant proportion of cross-border transactions. In order to create and capture opportunities across borders, entrepreneurs in SMEs rely heavily on both self- and vicarious- and experience-based organizational learning. Although a significant percentage of the academic literature has concerned itself with learning from successful experience (or general experience), learning from failed experience (or learning from success versus failure) has receive much less attention. This is despite the fact that failure is generally more pervasive, particular with respect to SMEs, than success. In this paper, we review the extant knowledge on SME success- and failure-based learning from internationalization, with particular emphasis on how the two bases of learning interact. In addition, we relate the five focused issue articles that build on and extend this literature into a set of insightful theoretical and managerial contributions. Keywords Internationalization process * Learning in internationalization * Learning from success versus failure * Small and medium-sized enterprise (SME), 1 Introduction It is well established that the process by which a firm internationalizes has important repercussions for the future success or failure of firms operating in those foreign markets [...]

We explore how family-owned small and medium-sized enterprises (SMEs) control their investments abroad: through full ownership (wholly owned subsidiaries) or sharing the ownership with other partners (joint ventures). Focusing on the role of family control (family members as CEO and/or board chair) and three dimensions of distance (cultural, geographic, and institutional) to explain this choice, we analyze 1475 foreign subsidiaries owned by 701 family SMEs and find that cultural, geographic, and institutional distance affect the choice of ownership mode in different ways. Moreover, family control moderates the relationship between distance and foreign ownership mode in the case of cultural and institutional distance, but not in that of geographic distance. Our study contributes to the international business literature by helping to explain the effect of distance on foreign ownership mode choice and by highlighting the importance of the characteristics of main decision makers. The paper also contributes to the literature on family business, shedding light on the role of family control in family SMEs' foreign ownership mode choice. We thereby offer new insights into the preferences of family leaders and explain how, under certain conditions, when family members cover a central role in the governance, the foreign ownership modes differ. Keywords Family control * Joint venture * Wholly owned subsidiaries * Ownership-mode choice * FDI * Socioemotional wealth (SEW) perspective, 1 Introduction In recent years, the literature has increasingly focused on the internationalization of family-owned small and medium-sized enterprises (SMEs) (Fernandez and Nieto 2014; Kontinen and Ojala 2010, 2012; Zahra [...]

This paper investigates the impact of genealogical language distance in cross-border communication on private participation infrastructure projects. Our analysis of 5440 projects in 64 countries (1990-2004) shows that the probability of success of private participation projects is lower in countries characterized by a larger genealogical language distance. We also find that this effect is weaker when the project involves a local investor or the host country government. In contrast, the same effect is strengthened when the project is greenfield. Finally, including the host country government as an investor in the project has no moderating effect in the effect of genealogical language distance on private participation projects. Keywords Cross-border communication * Language * Genealogical language distance * Private participation projects, 1 Introduction Cross-border communication plays an important role in many aspects of international business (Barner-Rasmussen et al. 2014; Felin et al. 2012). Difficulties to communicate between individuals from different countries [...]

Despite the growing trend of internationalisation in e-business, academic research in this area is sparse. This study develops and tests a theoretical framework of the drivers of international performance for emerging market e-business firms. Specifically, we focus on the role of institutional capabilities in terms of socio-political networking and business model innovation in shaping emerging market e-business's international performance. Based on a unique sample of Chinese e-business firms, our empirical findings indicate that these firms' institutional capabilities are positively associated with their performance in foreign markets, and that the relationship is stronger when the firms face more intense domestic institutional hostility and when the institutional environments between the home and host countries are similar. However, the relationship is weaker for firms with better reputations. The paper discusses the theoretical and managerial implications. Keywords E-business * Institutional capabilities * Emerging markets * China, 1 Introduction E-business companies operate online and provide products/services/platforms to customers using the Internet (Amit and Zott 2001). (1) Examples of e-business companies include on-line markets/platforms makers, on-line portals, and [...]

Liability of foreignness (LOF) refers to the difficulties and additional costs that multinational enterprises face when they operate in a foreign market. Rooted in institutional theory, extant literature has discussed isomorphism, transference, and sociopolitical activism as legitimation strategies to counteract LOF. This view relates to the macro level of firm and society, assumes passivity of subsidiaries, and neglects implementation of these strategies. Consequently, this paper aims at complementing this restrictive view through a qualitative study to explore how French multinational banks respond to LOF challenges in India, an adverse institutional environment typical of emerging markets but also unique due to strong economic nationalism and cultural traditions. As such, the present article contributes to the institutional research stream by (1) presenting an empirical investigation at the micro level of subsidiary organisational practices to operationalise legitimation strategies in managerial terms; (2) revealing rhetoric proactive strategies beyond the passive or reactive paths identified previously; and (3) discussing the internal implications of implementing legitimation strategies directed at external recipients within the intraorganisational network of multinational banks, using the resource-based view. Keywords Legitimation by isomorphism * Legitimation by transference * Liability of foreignness * Organisational practices * Rhetoric legitimation strategy, 1 Introduction The banking industry represents an exceptional context to investigate the so-called liability of foreignness (LOF) that is, the difficulties and additional costs that multinational enterprises (MNEs) encounter when [...]

This study investigates how home-country political connections affect the internationalization of service firms. There are conflicting arguments in the literature on the effect of political connections on firms' internationalization with some researchers arguing that political connections have a facilitating effect while others argue that they have a constraining effect. In this paper, we argue that which effect dominates largely depends on the type of firm--because of the importance of being locally responsive to customers and heterogeneity among service firms, it is difficult to transfer and utilize the benefits of home-country political connections in international markets, as they are context-specific and home-country based. We also argue that, compared to content-oriented services, process-oriented service firms face less need for customer involvement and have a greater dependency on technical skills; therefore, the negative effect of home-country political connections will be weaker in process-oriented service firms. However, marketing capabilities possessed by the firm can help firms transfer and utilize the home-grown advantages in other countries, which can positively moderate the relationship between political connections and internationalization. We test our hypotheses using data on a sample of publicly listed service firms in China from 2012 to 2016 in a dynamic panel model. Keywords Political connection * Internationalization * Service firms * Marketing capabilities * Process oriented service * Content oriented service, 1 Introduction Technological advancements and the liberalization of the service sector have propelled the internationalization of service firms; however, the internationalization of service firms remains under-researched (Goerzen and Makino 2007; [...]

Although there is extensive research in the field of services and lately on the internationalization of services, the topic of how service firms interact with society and political organizations, during their internationalization process, remains almost untouched. As an answer to the call for further research on the interaction between service firms, society and policy makers, this paper aims to advance the knowledge by proposing an integrative theoretical view. Dissimilar to the earlier research where each study stands on a specific theoretical discipline (economic, behavioural or political science), the proposed theoretical view asserts the need for an interdisciplinary approach. The integration of these three perspectives is vital since business, policy and society have different legitimacy and dependency grounds and yet their goals and objectives have been converging over the years. Isolating these disciplines from each other is, thus, not very helpful in advancing the knowledge and understanding the conditions, motives and consequences of multinational enterprises in foreign markets. Moreover, the internationalization of services and the extent of heterogeneity in service products/solutions, from banking to retailing and e-commerce, create new challenges that need for interaction between these parties; the three pillars of our society. Keywords Internationalisation * Service firms * Socio-political actors * Interdisciplinary approach * Society and politics, 1 Settings the Research Arena The interplay between society and political organization in the internationalization process of multinational enterprises (MNEs) has become a crucial issue in international business (IB) research [...]