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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 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 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 [...]

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 [...]

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 [...]

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 [...]

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 [...]

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). [...]

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 [...]

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 [...]

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 [...]

Building on a business network perspective, the aim of this paper is to present a theoretical view for studying service MNEs in ICT (information communication technology) projects centred on the improvement of public services. The four interrelated concepts of cooperation, legitimacy, commitment and knowledge are applied in the analysis of two projects. Defining the projects as object-based services, the study manifests how service MNEs manage three types of actors (business, political and social) having their legitimacy in different systems. The cases illustrate cross-border activities where MNEs from Sweden, Spain and China join forces in Brazil with local business, social and political actors and cooperate to strengthen their competitive market position. The study concludes that successful cooperation is partially explained by the management's ability to incorporate business resources into the needs of the socio-political actors. Furthermore, in object-based services, which are not similar to long-term business relationships, the three involved parties advance different types of relationships within a loose network structure. A key implication is that extensive public-private relationships are needed even when MNEs enjoy an established position in a foreign market. Keywords Business network * Socio-political behaviour * Cooperation * Legitimacy * Knowledge * Commitment * Competitive strategy, 1 Introduction Fierce competition in foreign markets has encouraged multinational enterprises (MNEs) to engage in solving social problems since this can leverage business profits and, at the same time, increase [...]

Absorptive capacity has been marked as one of the most important capabilities of Multinational Corporations for effective management of knowledge. To address calls for research on micro-level origins of the concept, this paper focuses on the determinants of individual-level absorptive capacity. We examine the extent to which individuals' capability to recognize, assimilate and exploit new knowledge from the environment is shaped by different forms of work motivation (i.e., intrinsic and extrinsic), overall ability, exposure to diverse country contexts and personal characteristics. Drawing on and extending the Motivation--Ability--Opportunity framework, we develop and test a set of hypotheses. Using a unique dataset collected from 648 individuals in a multinational corporation, we show that individuals' intrinsic motivation and overall ability are the key antecedents of absorptive capacity. In contrast, extrinsic motivation does not emerge as a significant predictor. We find that past international assignments to distant countries could be detrimental to individuals' absorptive capacity. However, our results suggest that for those individuals who are open to new experiences, assignments to distant countries become useful opportunity for absorptive capacity development. These findings contribute to existing literature by showing effects of alternative types of motivation and underscoring the importance of using selective assignment when considering exposure to diverse country context as a tool for employee capability development. Keywords Absorptive capacity * Distance * Extrinsic motivation * International assignments * Intrinsic motivation * Motivation--Opportunity--Ability framework * Openness to experience, 1 Introduction The ability to continuously renew, develop and transfer knowledge-based assets is a central goal for firms. In this regard, absorptive capacity stands out as the capability to support [...]

The paper analyses how multinational enterprises (MNEs) manage their interactions with host governments during the market entry process. A qualitative multiple case study collected data through in-depth interviews with multiple participants in six New Zealand MNEs. The analysis identifies two distinct political schemas which represent MNE managers' assumptions and heuristics regarding how to approach interactions with foreign governments, systematic and episodic, which lead to the enactment of distinct patterns of political activities, each supported by certain political resources and capabilities. We then identify several sources of the variations in these two political schemas at the managerial, firm, industry, and country levels of analysis. Our study deepens understanding of the micro-processes of corporate political activity (CPA) and the processes and activities through which political resources and capabilities are developed, deployed and leveraged by MNE actors in managing their interactions with host governments during the market entry process. In doing so, we highlight the role of international experience in influencing the process of political capability development, and also the role of managerial actions in shaping this evolutionary process.Keywords Corporate political activity * Foreign market entry * Political schemas * Political resources and capabilities, 1 IntroductionThe role of governments in shaping the market environment has long been recognized in the management and international business (IB) literatures (Baron 1995; Boddewyn and Brewer 1994). Through their [...]

MNC subsidiaries engage in a variety of corporate political activities to gain legitimacy in the host country. Based on institutional theory, our study examines five types of strategies that MNC subsidiaries pursue to gain legitimacy in foreign markets. Using data from Australian subsidiaries of MNCs operating in different industries, and whose parents originate from 28 different countries, we find that mimetic isomorphism strategy has the strongest effect whereas information strategy has no effect on subsidiary legitimacy. The other three strategies, namely, financial, constituency building and relational have strong to moderate effects on subsidiary legitimacy. In addition, we show that multiple CPA strategies are essential and work together synergistically to contribute to the legitimacy of MNC subsidiaries. Our paper provides empirical support to the widely recognized need for MNC subsidiaries to engage in different types of CPA to legitimize their operations in diverse institutional contexts across the globe.Keywords Institutional perspective * Corporate political activity * Legitimacy * MNC subsidiary, 1 IntroductionMultinational corporations (MNCs) employ a range of market and non-market strategies to succeed and grow in international markets. In international business (IB) research, scholars largely focus on the market-related [...]

Abstract The present research paper shows the results of an analysis of the existing literature on one of the topics that has sparked the most interest among scholars and researchers [...]

Abstract This paper explores the role of international assignments in sharing knowledge across multinational enterprises (MNEs) by examining how international assignees share knowledge of interpersonal networks and, in turn, the [...]

Abstract The aim of this paper is to investigate the relationship between global versus regional orientation and the performance of international new ventures (INVs). Building on internalization theory and organizational [...]

Abstract In this paper, we focus on the role of language in cross-border mergers and acquisitions and explore how organization members' language skills, or fluency, in the adopted lingua franca [...]

Scholars' opinions diverge on the relationship between a firm's negative attainment discrepancy and its international expansion. To reconcile the dispute, we draw upon the behavioral theory of the firm and develop an empirical framework that integrates the perspectives of problemistic search, experiential learning, and vicarious learning. We contend that a firm's search behavior is jointly influenced by its performance feedback and accumulated (both direct and indirect) experience. Specifically, the international experience of the focal firm or its peers plays an important role in triggering the firm's internationalization process by shaping the direction of problemistic search: a firm is more likely to pursue international expansion as a solution for performance shortfalls if it (or its peers) possesses more general experience or successful experience in foreign markets. Analysis on longitudinal data (2011-2019) from publicly listed Chinese firms supports our hypotheses. This study makes theoretical contribution on firm internationalization literature and the behavioral theory of the firm, and provides a practical insight into firms' strategic decision-making process. Keywords Behavioral theory of the firm * Problemistic search * Experiential learning * Vicarious learning * Performance feedback * Firm internationalization, 1 Introduction Why do firms engage in internationalization? This question has been a significant topic, spanning diverse literature in strategic management and international business (IB) studies, and leads to rich [...]

We study subsidiary capital structure as a mechanism of intra-MNE (multinational enterprise) governance from the perspective of 'new internalization theory'. We build on the argument from transaction cost theory that equity and debt are not just financial instruments but also alternative governance structures, with equity useful for financing specific assets that do not serve well as collateral, especially when external uncertainty is high. Inside an MNE, debt represents a partial reintroduction of market mechanisms that can limit governance costs and strengthen subsidiary manager incentives. However, debt financing may be inappropriate if subsidiaries possess specific assets that are lost if debt contracts are enforced. Using subsidiary-level panel data from Norwegian MNEs, we argue that patents registered in the subsidiary represent MNE-specific non-location bound knowledge assets, while subsidiary R&D income represents location-bound and subsidiary-specific assets. We predict MNE-specific assets to be negatively related to external debt, and subsidiary-specific assets to be negatively related to all debt, under conditions of external uncertainty. We find only partial support for our hypotheses. Patents are negatively related to external debt when external uncertainty in the form of political risk is high. However, we do not find similar significant results for location-bound and subsidiary-specific assets, measured by subsidiary R&D income. For both measures, there is evidence that debt financing is viable in low-risk contexts. Further analysis indicates different effects for joint ventures as compared to wholly owned subsidiaries. We build on the partly unexpected results to propose an expanded internalization perspective on subsidiary capital structure. Keywords Capital structure * Internalization theory * Transaction cost theory * Subsidiary * Foreign direct investment * Governance * Norway, 1 Introduction A growing literature in international business (IB) and finance demonstrates important linkages between corporate finance and international trade and investment, such as implications of credit constraints when internationalizing, [...]

Ability, motivation, and opportunity (AMO) approaches have dominated studies of knowledge sharing in multinational enterprises (MNEs). We argue that there is a need to consider both the national and organizational cultural contexts. Beyond their direct influence on knowledge sharing with colleagues in other business units (BUs), national and organizational culture significantly reinforce the positive relation between individual motivation and knowledge sharing. Thus, our multi-level approach to knowledge sharing in MNEs gives rise to a contextualized AMO approach that provides a novel and more potent understanding of variations in knowledge sharing. At the individual level, our approach includes the degree of ability in the sense of professional competence, intrinsic motivation, and opportunities to interact with colleagues in other BUs. At the organizational and country levels, we examine the direct and indirect effects of a collaborative culture on knowledge sharing. We employ data from an MNE that operates across a variety of regions, including the Nordic countries, Central and Eastern Europe, and Southeast Asia. The sample consists of 11,484 individuals nested in 1235 departments in 11 countries. As well as confirming the significance of individual competence, intrinsic motivation, and opportunities for interaction for knowledge sharing, our findings reveal that both organizational culture and national culture are important factors for our understanding of knowledge sharing. This suggests that over and above recruiting intrinsically motivated employees, managers can enhance knowledge sharing by developing collaborative organizational cultures at the departmental level. Keywords Contextualized AMO * Knowledge sharing * Multi-level Intrinsic motivation * Collaborative organizational culture * Collaborative national culture, 2 Theoretical Framework Enabling the geographical mobility of knowledge that is at least partially tacit, and is embodied in individuals' skills and organizational practices is a key challenge for MNEs [...]

Small- and medium-sized enterprises (SMEs) can benefit from internationalization. However, there is little evidence of the extent of the benefit and its dependence on both research and development (R&D) intensity and collaborative intensity. Drawing on data of 262 SMEs, this study illuminates why some SMEs benefit more from internationalization than others, thereby illustrating an advanced application of partial least squares structural equation modeling by demonstrating conditional mediation analysis with two interdependent exogenous moderators (i.e., testing a second-stage three-way conditional mediation). Our findings substantiate that an SME's dynamic capabilities affect its degree of internationalization and indirectly its growth, and suggest a positive marginal growth impact of internationalization provided that an SME's R&D and collaborative intensities are proportional; when they are disproportional (i.e., one is 'greater' than the other), SMEs do not experience positive marginal growth. Keywords Dynamic capabilities * Internationalization * Growth * SME * R&D intensity * Collaborative intensity * PLS-SEM * Conditional mediation, 1 Introduction The inherent complexities of conducting international business (e.g., Buckley & Casson, 2001; Eden & Nielsen, 2020) complicate developing understanding about whether and how internationalization helps large or small- [...]

Structural equation modeling (SEM) has remained two mutually exclusive domains, factor-based vs. component-based, depending on whether a construct is modeled by either a factor or a component (i.e., weighted composite of indicators). Research in international management (IM) and international business (IB), however, needs to accommodate a more general model that considers a wide range of constructs from different disciplines at the same time, representing some constructs as factors (e.g., cultural distance and institutional distance) and others as components (e.g., international experience and export intensity). Integrated generalized structured component analysis (IGSCA) is a recently developed statistical method for estimating such models with both factors and components. IGSCA can provide overall fit indexes for model evaluation, including the goodness-of-fit index (GFI) and the standardized root mean squared residual (SRMR). However, the performance of these indexes in IGSCA is not yet investigated. Addressing this limitation, we (a) highlight the limitations of the dominantly used SEM approaches, (b) review the use of different SEM approaches in IM/IB research in the last decade, (c) conduct a simulation study, confirming that both GFI and SRMR distinguish well between correct and misspecified models with both factors and components, and (d) we illustrate the indexes' efficacy using a model concerning the role of personality traits and international experience in shaping cultural intelligence. Based on the review and the results of the simulation study and the illustrative example, we also propose rules-of-thumb cutoff criteria for each index in IGSCA. Keywords Integrated generalized structured component analysis * Structural equation modeling * Model fit * GFI * SRMR * Cultural intelligence, 1 Introduction International management (IM) and international business (IB) research is characterized by the complexity of the phenomena it investigates and their relationships (e.g., Eden & Nielsen, 2020). While some [...]

Multinational Enterprises (MNEs) are often under pressure to expand at the highest possible speed in international markets. They therefore embed themselves in networks of alliances where they can access resources in the form of relational assets, information, and learning to facilitate swifter internationalisation whilst circumventing the risks of time-compression diseconomies. Hence, drawing from the network theory of international business and the perspective of structural embeddedness of interorganisational relationships, this study aims to determine the relationship between access to and mobilisation of network resources in relation to the speed of international expansion among MNEs. For this purpose, we assembled a sample of 131 global-reach MNEs from the airline industry and observed their international expansion activities over a 5-year period. Partial-Least-Squares Structural-Equation Modelling (PLS-SEM) was applied to capture the multidimensionality of internationalisation speed, under the commitment-breadth-intensity framework, as well as the multidimensionality of both embeddedness and mobilisation; similarly, we employ Necessary Condition Analysis (NCA) to identify the necessary antecedent variables in our research model. As a result, understanding was gained of the position of each firm within an international alliance network, in terms of how it creates value by obtaining access to resources for international expansion; furthermore, we learned that access is as necessary as mobilisation to increase internationalisation speed, and that, mobilisation is required to mediate the capture of network opportunities. Consequently, the study provided insights for managerial practice: MNEs should pursue centrality in their networks at the same time as planning their resources mobilisation strategies. Keywords Internationalisation speed * Network resources mobilisation * Network resource access * International alliances * Embeddedness * Mediation analysis, 1 Introduction Even though internationalisation is conceptualised as a dynamic process, its 'time' factor has either been considered in an implicit way or it has barely been studied in an [...]

The purpose of this article is to examine the performance consequences of an early and rapid foreign network entry process. We develop a theoretical model that uses theories on first mover advantage and capability development as mechanisms to explain the relationship between the timing and speed of entering the network and SME performance in the network. The theoretical model is tested with a dataset collected on-site at 198 SMEs. The results show that earlier network entry positively affects performance and that the speed of relationship development in the network entered has a curvilinear (inverted U-shaped) effect on SMEs' performance. Although the extant literature recognizes that firm performance is affected by the degree of insidership reached in foreign business networks, little is known about the performance effects of the timing and the speed of entering the network. Our findings suggest that managers of exporting SMEs should move first into new networks to give themselves time to grow slowly in the foreign market network to mitigate diseconomies of time compression. Keywords SME exporting * Liability of outsidership * Network insidership * Entry * Speed * Time compression diseconomies, 1 Introduction Two of the most dominating recent research streams on small- and medium-sized enterprises' (SMEs) internationalization--that is (1) research that highlights the importance of networks for SMEs' internationalization and [...]

This study explores accelerated internationalization among inexperienced digital entrepreneurs who lack resources such as prior experience, knowledge, and networks, which previous research regards as prerequisites for such growth. Following an in-depth qualitative research methodology, the findings reveal three theoretical mechanisms through which inexperienced entrepreneurs can make international commitment decisions with regard to the internationalization of their digital firms. The first is a novel mindset-based approach through which an entrepreneur can make an affective commitment to the international stakeholders within a digital community. Entrepreneurs do that by applying pull-based tools in digital communication to build interest among potential network contacts. The second mechanism is a means-based approach following effectuation logic resulting in an effectual form of commitment to international stakeholders in the digital community. The mechanism relies on applying push-based tools for digital communication to facilitate interactions with known network contacts. The third mechanism is continuance commitment to international business that entrepreneurs can foster over time in tandem with accumulated international experiential knowledge. This research provides an entrepreneurial decision-making model that extends effectuation theory and integrates it with extant research. The resulting holistic entrepreneurial decision-making model explains the accelerated internationalization of digital firms. Keywords Effectuation and networking * Digital entrepreneurship * International experiential knowledge * International commitment decisions * Accelerated internationalization, 1 Introduction Digital technologies enable entrepreneurial activity that incorporates novel technology and creates new business ventures. Consequently, there has recently been additional room for accelerated internationalization, particularly during the COVID-19 [...]

International business literature has historically been divided between scholars exploring the local obstacles foreign firms face (thereby overlooking foreign firms' capacity to deploy advantages locally) and those examining the internationalisation of firm-specific advantages (thereby overlooking the peculiarities of the local context in which foreign firms deploy their advantages). We still do not completely understand the process by which multinational enterprises (MNEs) - especially service MNEs - develop competitive advantages in relation to the host environment. Using a multiple-case study of four multinational banking subsidiaries in India, this research aims to explore the variety of competitive advantages deployed by foreign multinational banks (MNBs) in a hostile, competitive environment: the Indian banking industry. This article's main contribution is to bridge the gap between the obstacle-oriented internationalisation literature and the advantage-oriented literature through an exploration and comparison of a comprehensive set of locally relevant advantages deployed by the four MNBs studied. We introduce the concepts of global anchoring and local anchoring to make sense of the directionality of subsidiaries' competitive advantages, and we explore their broad associations with subsidiaries' commercial and financial performance. We conclude by discussing three theoretical lenses, situated at the intersection of the obstacle-oriented and advantage-oriented literatures, which can potentially account for the origins of competitive advantages in our sample, and we develop a series of propositions for future research. Keywords Internationalisation theories * Competitive advantages * Service industry * Multinational banking * India, 1 Introduction In spite of the increasing centrality of service multinational enterprises (MNEs) in the world economy (Greenwood et al., 2010), international business theory has engaged with these actors to [...]

We advance research on how international diversification affects MNEs' innovativeness by reconciling contradictory views on the role of international diversification for innovation. We do so by developing a portfolio perspective of MNE innovation that moves beyond foreign R&D subsidiaries to consider firms' entire international footprints and by theorizing that MNE innovativeness depends on the interplay of geographical (i.e., regional diversification and institutional distance) and organizational (i.e., asset diversification and functional mandate breadth) characteristics of the foreign subsidiary portfolio. We test our proposed relationships on a unique multi-source panel dataset of Japanese listed electronics firms (266 firms and their 4505 subsidiaries between 2007 and 2015 resulting in 1936 firm-year observations and 28,350 subsidiary-year observations). We find that the institutional distance and asset diversification of the foreign subsidiary portfolio constrain the extent to which geographical (regional) diversification can enhance MNEs innovativeness. We also find that, at high levels of geographical diversification, MNEs with low levels of institutional distance and asset diversification in the foreign subsidiary portfolio tend to achieve higher innovativeness. Lastly, we did not find empirical support for functional mandate breadth as affecting how geographical diversification influences MNE innovativeness. Overall, the study highlights that, for a nuanced understanding of MNE innovativeness, managers need an encompassing and deliberate portfolio-level strategy that explicitly considers the interrelatedness of geographical and organizational characteristics. Keywords Innovation * International diversification * Multinationals * Foreign subsidiary portfolio * International strategy, 1 Introduction International business research increasingly acknowledges that by going abroad firms can not only exploit their current capabilities, but also can develop new capabilities (Jha et al., 2018; Kuemmerle, [...]

Existing research into retailers' foreign market exits has uncovered a number of drivers that lead multinational retailers to divest from certain countries. While scholars have investigated these drivers in isolation from one another, combinations of drivers that affect divestment decisions simultaneously remain under-researched despite scholars having indicated their importance and having called for a detailed, more holistic analysis. In this study, using a case study approach and qualitative content analysis of a wide variety of publicly available contemporary documents from different perspectives and experts, we investigate the drivers leading to all 32 country exits of the 50 largest grocery retailers in Europe in the 5-year period between 2014 and 2018. In line with previous research, the study shows the most frequent exit drivers are a low performance of the subsidiary, a low performance of the parent company, and a strategic refocus of the parent company. However, we demonstrate that for most exits, combinations of multiple interrelated drivers at the subsidiary level, the host-country level, and the parent level have a joint influence on retailers' decisions to exit foreign markets. We also show that exits often include both failure-related drivers and strategy-related drivers. Furthermore, using the configurational approach, we identify exemplary combinations of market exit drivers that occur frequently and propose five archetypes of such combinations that suffice to explain all market exits in the dataset. For future research, we propose extending our typology through the application of a similar approach to different contexts and to use quantitative research based on the qualitative findings to generate more generalizable results. Keywords Market exit * Divestment motives * Foreign subsidiary divestment * Retail divestment * Configurational approach * Archetypes, 1 Introduction The internationalization of companies is now viewed not as a process of uninterrupted progression and linear expansion but as a process of constant transformation, characterized by periods of [...]

We study the role of the strength of Intellectual Property Rights (IPR) law protection and enforcement in influencing horizontal productivity spillovers from inward FDI to domestic firms in host countries. While most WTO countries adopted strong IPR legislation due to exogenous pressure resulting from the signing of the Trade-Related Aspects of IPR (TRIPS) agreement, public IPR enforcement strength continues to vary significantly between countries. We meta-analyse 49 studies and find that public IPR enforcement strength has a direct positive effect on horizontal productivity spillovers from inward FDI to domestic firms and a negative moderating effect on the relationship between IPR law protection strength and horizontal productivity spillovers from inward FDI to domestic firms. Keywords Intellectual property rights * Horizontal spillovers * Meta-analysis * Inward foreign direct investment, 1 Introduction This study investigates the role of national Intellectual Property Rights (IPR) systems and particularly the strength of IPR law protection and the effectiveness of public IPR enforcement (e.g., [...]

International business scholarship suggests that inward FDI (IFDI) may elicit a wide variety of strategic response from host country firms. While few studies have examined emerging market firms' outward FDI (OFDI) strategy as a response to IFDI by foreign MNCs, no study has examined if and how family firms--a common occurrence in emerging markets--initiate similar response. Drawing on three streams of literature (competitive dynamics of emerging market firms, institutional development, and family firms), this study empirically examines a sample of Indian family firms over a six-year time-period. Results suggest that family firms increase their existing OFDI in response to IFDI announcements by foreign MNCs. Results also demonstrate that the OFDI-growth response varies across firms and is shaped by heterogeneity in management type (professional/family-based), extent of foreign institutional ownership (high/low), and family CEO's international experience (possessed/not possessed). These findings are new to the literature. The study concludes by discussing the theoretical and managerial implications of the findings, and highlighting fertile avenues of future research. Keywords Strategic response * Family firm * India * Competition * Outward FDI, 1 Introduction How inward FDI (IFDI) impacts host country firms? This question has spawned a decent volume of international business scholarship over the years. Available research broadly suggests that IFDI [...]

We examine the interactions of project-specific scale and country-specific economic and institutional attributes in determining inward FDI location choices in emerging economies. We study a large project-level sample with over 15,000 investments originated in 20 industrialised countries and located in 25 emerging economies, between 2003 and 2014. Overall, firms show investment location preferences for emerging economies characterised by larger consumer markets, cheaper labour costs, lower corporate taxes and lower institutional distance. The effects of such country attributes on FDI location are significantly moderated by the project's scale (measured as Capex and Employment). Larger project scale renders FDI location more sensitive to larger market size and to cheaper labour costs, but less sensitive to lower corporate taxes and to lower institutional distance. These results are consistent with the notion that project scale significantly affects firms' locational sensitivity to country attributes when choosing between FDI target locations. Keywords Foreign direct investment - FDI location choices * Emerging economies * Investment scale JEL codes F210 * F130 * F140 * F230, 1 Introduction FDI (Foreign Direct Investment) is a strategic source of finance for emerging economies, exerting beneficial impacts on employment, technological upgrading, productivity and economic growth (Alfaro 2017; Wei and [...]

Outward foreign direct investment (OFD1) of small and medium-sized enterprises (SMEs) from emerging economies has emerged as a significant phenomenon in global markets. However, extant research has not paid sufficient attention to this trend. Particularly, there is a lack of understanding of how SMEs' internal resources may interact with their domestic institutional environment in driving OFDI. Drawing on the resource-based view and the institutional theory, this study fills this gap and examines how research and development (R&D) intensity influences OFDI frequency of SMEs from China, one of the largest emerging economies, and the moderating effects of coercive pressure, normative support, and mimetic force from SMEs' domestic, regional institutional environment. Using a sample of 2620 Chinese SMEs publicly-listed on the Chinese Growth Enterprise Market during 2010-2017, we find that R&D intensity can be viewed as a key strategic resource that drives Chinese SMEs' OFDI frequency and that three factors in their regional institutional environment (regional marketization, ties to industry associations, and peer OFDI frequency in the region) strengthen the relationship between R&D intensity and SMEs' OFDI. This study contributes to the literature on SMEs' OFDI by demonstrating the importance of combining the resource-based view and institutional theory to examine the roles played by both SMEs* internal resources and their domestic institutional environment in driving their OFDI activities in emerging economies. Keywords R&D intensity * Outward foreign direct investment * Domestic institutional environment * Small and medium-sized enterprises, 1 Introduction In an increasingly competitive global environment, small and medium-sized enterprises (SMEs) from emerging economies (EEs) have been witnessed to rise and rapidly expand in international markets (Buccieri et [...]

Small-and-medium-sized enterprises (SME) often need to draw on the knowledge of their supply chain partners to remain innovative and competitive in the marketplace. In the context of global value chains (GVC), this study examines the factors enabling the learning of SMEs from their GVC dependence by applying the logic of power and the logic of embeddedness. Specifically, we identify the technical adaptation of SMEs in the GVC as a response to their interdependence on the GVC following the logic of power, and an action that heightens information exchange and interorganizational learning at the dyad level following the logic of embeddedness. Linking these logics, we hypothesize that the technical adaptation of an SME mediates the relationship between its GVC dependence and its learning outcome from the GVC, namely the knowledge transfer it receives. Furthermore, this mediating role is stronger when the SME has a longer history of transactional relationship with its GVC partners which amplifies the logic of power, and when it possesses a higher level of financial slack which strengthens the logic of embeddedness. Using multisourced survey data from 292 Thai manufacturing SMEs, we find substantial support for the hypothesized relationships. Our findings offer theoretical and practical implications in terms of enabling and supporting the learning pathway of SMEs participating in the GVC. Keywords Technical adaptation * Knowledge transfer * Global value chains * Smalland-medium-sized enterprises * Interdependence, 1 Introduction With resource restrictions, small-and-medium-sized enterprises (SMEs) are typically specialized, as opposed to vertically integrated, business organizations that focus their resources on a limited range of value-adding activities (Musteen [...]

This article explores learning among rapidly internationalizing small and medium sized enterprises (SMEs) and how this supports the post-internationalization growth and survival of these firms. We utilize a qualitative multiple case study approach of ten information and communication technology (ICT) SMEs from a key emerging market--India. Findings suggest that during the post-entry stage, rapidly internationalizing SMEs use a wide range of internal and external sources of knowledge. External sources of knowledge include peer networks, associations in the same industry, international clients/partners, and international connections developed through trade fairs and trade missions. Internal sources of knowledge such as self-learning, especially from trial-and-error and experiential efforts, were found to enhance product, market and technological knowledge; and consequently aided geographic and product diversification. The findings also indicate that firms use a mix of integrated, vicarious, congenital and experiential learning approaches in their post-entry growth and survival phases. Experiential and congenital learning were found to be facilitated by firms' internal network sources, whereas external network sources provide an ideal platform for vicarious learning. The study provides new insights into networking and learning by providing evidence that exposure to and connection with diverse types of networks can result in various forms of valuable learning for rapidly internationalizing SMEs, which enhances their post-entry growth. Keywords Rapidly internationalizing SMEs * Networks * Learning * Knowledge * Post-entry growth * Emerging markets, 1 Introduction Rapidly internationalizing small and medium-sized enterprises (SMEs) play a significant role in driving economic growth (Trudgen and Freeman 2014; Gerschewski et al. 2018). Accordingly, the strategies used by [...]

Integrating research on foreign direct investment spillover and management innovation literature, this study develops and tests a spillover-management innovation-performance process model. The model posits that managerial spillovers, defined as the movement of managers from multinational enterprises to domestic firms, are indirectly related to the latter's performance through management innovation, which serves as a conversion platform internalizing acquired knowledge for performance attainment. Moreover, we propose that the density of foreign direct investment and indigenous firms' absorptive capacity moderate the spillover-innovation and innovation-performance relationships, respectively. Our findings support these propositions. Keywords Managerial spillover * Management innovation * Absorptive capacity * FDI density, 1 Introduction The pioneering work of Caves (1974) has inspired a plethora of studies on foreign direct investment (FDI) spillover effects (for reviews of this line of research, see Crespo [...]

Despite much research on 'distance', little attention has been paid to the effect of divergence of managers' perceptions of distance from reality (i.e. distance divergence) and its implications for firm performance. This knowledge is highly important since managerial perceptions of the firm's environment do not always coincide with the actual environmental characteristics. Consequently, strategies based on inaccurate data may result in erroneous forecasts, missed opportunities and business failure. Using survey data from senior managers of Swedish exporters and corresponding objective data, this study is one of the first attempts to explore the ex-post performance implications of 'distance divergence' when expanding into foreign markets. Our results demonstrate that the larger the divergence between managers' perceptions of cultural distance and corresponding 'objective' distance, the lower the performance expressed in companies' sales. However, over/underestimation of cultural distance does not have differential effects on firm performance. Keywords Cultural distance * Distance divergence * Managerial perception * Firm performance * Internationalization, 1 Introduction 'Distance' (i.e. country differences) is the essence of international business (IB) (cf. Williams and Gregoire 2015; Zaheer et al. 2012). Firms engage in IB to find and exploit [...]

Developed-country multinationals (DMNEs) have increasingly engaged in the practice of offshoring innovation to emerging countries. In this article, we leverage and extend the institution-based view to further our understanding of this phenomenon. Specifically, we examine the differential effects of formal and informal institutions on DMNEs' strategic decision to offshore innovation activities aimed at augmenting (versus exploiting) home-base-knowledge to emerging countries. Concerning formal institutions, we argue that the stronger the emerging host country's IP protection, the higher the likelihood that a DMNE offshores innovation activities aimed at augmenting home-base-knowledge. Regarding informal institutions, we argue that the greater the cultural differences between the developed home country and the emerging host country, the higher the likelihood that a DMNE offshores innovation activities aimed at augmenting home-base-knowledge. Additionally, we propose a key contingency that attenuates the relationship involving IP protection while strengthening the one involving cultural differences: the DMNE's experience with offshoring innovation. Analysis of 128 offshoring innovation implementations by 78 DMNEs in ten emerging countries provides support for all our hypotheses except for the one focused on the moderation effect of experience on the relationship involving cultural differences.Keywords Offshoring * Offshore outsourcing * Innovation * Emerging countries * IP protection * Cultural distance, 1 IntroductionDeveloped-country multinational enterprises (DMNEs) have increasingly relocated innovation activities to foreign locations, thus engaging in the commonly termed practice of offshoring innovation (Cantwell and Mudambi 2005; Castellani et al. [...]

This study investigates the drivers of pressures from various institutions in the nonmarket environment and the responses of MNEs to these pressures in a host country. By taking a broad institutional perspective, this study pairs and integrates the economic perspective of new institutionalism and the sociological perspective of neo institutionalism with the corporate political strategy perspective. This research provides a systematic review of the drivers underlying pressures from various types of nonmarket institutions that explain the preference of firms to use a transactional or relational strategy to deal with these pressures. The evidence is based on research involving MNEs in the Netherlands. The nonmarket institutions that exert the greatest pressures at the national level pushing MNEs to use transactional more than relational strategies and tactics are regulatory and standards agencies. The pressures of political institutions, interest groups, and the media, in contrast, trigger MNEs to employ relational rather than transactional strategies and tactics.Keywords Nonmarket institutions * Pressures * Drivers * Transactional and relational strategies and tactics, 1 IntroductionIn the current competitive business landscape, it has become essential for most multinational enterprises (MNEs) not only to focus on the relationships with market actors, but also with nonmarket [...]

Abstract The aim of this study is to investigate the value-adding role of corporate monitoring and corporate involvement in 'sticky' inter-subsidiary innovation transfer environments. The value added role of these [...]

Abstract Although the importance of cross-country cultural distance is widely acknowledged in the international business literature, we have limited understanding about how culture distance at different levels influences multinational corporations' [...]

Abstract Seeking critical assets is known to be a key motivation for emerging economy firms to make acquisitions in foreign markets, especially those in developed economies. In this study, we [...]

Abstract The psychological contract describes a set of individual perceptions concerning the terms of the exchange relationship between individuals and their organizations. While this concept has substantially advanced our knowledge [...]

Abstract The debate about divergence and convergence of managerial values has focused on the effect of macro-level influences on values. In contrast, little attention has been paid to micro-level influences, [...]

Abstract In this focused issue on the theme of 'Leveraging Values in Global Organizations', we highlight several prevalent themes on national, organizational and individual values in the literature. We argue [...]