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SUMMARY: At Texas Health Resources, the well-being of our patients, our workforce, and our communities has long been at the core of who we are and the driving force behind business decisions, employee interactions, programs, practices, and the patient care we deliver. It is in our DNA, from our vision "to partner with you for a lifetime of health and well-being" to Our Texas Health Promise: Individuals Caring for Individuals, Together. That solid foundation-always the basis of our business preparations-made it possible for us to weather the challenges brought by the COVID-19 pandemic and to prepare ourselves for what comes next, emerging stronger and with sustained energy to transform the enterprise on the other end.

Research in management and related fields largely assumes that host-country state (“state”) ownership in investment projects raises risk for private coinvestors. We question that assumption in theorizing that minority state ownership may actually decrease investment risk in host countries where policy stability is low. Noncontrolling but still substantial state ownership signals to private coinvestors that states will maintain initial investment project terms yet limit interference in project management under those same initial terms. Analyses of 1,373 investment projects announced in 95 host countries from 1990 to 2012 support this proposition: (1) low policy stability in the host country increases investment risk, measured as the percentage of equity comprising all project capital funding on the announcement date, but (2) minority state ownership diminishes the risk-increasing impact of low policy stability, and (3) the risk-diminishing effect is greatest when policy stability is low and the state holds from 21% to 40% of investment project equity. Where permitted, private investors can use state ownership as a risk-reducing strategy in response to low policy stability. Our study highlights where these “minority rules” hold and state ownership signals credible assurance to private coinvestors in less stable policy environments.

Management research has a rich history devoted to understanding how different types of equity holders facilitate effective governance of investment in research and development (R&D). But scant research exists on understanding how different types of debt effectively govern R&D investment and virtually no research exists on this topic across institutional contexts. Yet, similar types of transactions differ across institutional contexts. This study develops and tests a transactional-institutional fit view of debt governance of R&D investment, grounded in transaction cost economics, which examines the alignment or fit between bank loan debt, bond debt, and R&D investment in bank-based and market-based countries. Analyses of 7943 firms across 12 countries from 1997–2010 support the key proposition: in bank-based (market-based) countries, higher levels of bank loan debt coupled with higher levels of R&D investment increase (decrease) firm performance.

Theoretical and empirical advances in international business (IB) depend heavily on archival data obtained from databases. As there has been scant research on the implications of database choice in IB research, we analyzed data from the three most-widely used databases in the field: Compustat Global, Osiris and Worldscope. We examined data coverage across several geographic regions and countries, analyzed descriptive statistics and regression results, and replicated a study by O'Brien (2003), who theorized and found a negative firm performance effect of innovation strategy matched with high levels of debt governance. Based on our empirical results, we found the presence of what we call a “database effect” – researchers likely would come to a different conclusion based on the database used – particularly for developing country results. The database effect is confirmed using multiple estimation techniques and also in our replication study. Our replication study also found evidence that O'Brien's (2003) findings do indeed apply to countries outside of the United States. However, in China, we found statistically significant contrasting results in two databases, requiring a need for more theoretical reflection of firm governance of innovation in different institutional contexts.

How do emerging market multinational enterprises’ (EMNEs’) firm-specific advantages (FSAs) drive their foreign acquisition location choice? We theorize EMNE FSAs as important contingencies influencing the effect of institutional distance (ID) on EMNE foreign acquisition location choice. As a baseline main effect, we expect ID to positively influence EMNE location choice, as well-developed institutionally distant host-country environments are attractive to EMNEs. This effect is reduced by EMNE FSAs shaped by home-country conditions, such as success in navigating institutional voids and superior human resource management, which are more competitive in institutionally closer countries. Conversely, this effect is heightened by EMNE FSAs shaped by investment choices for knowledge and for international venturing. Based on analyses of 278 EMNE acquisitions by EMNEs from nine emerging markets, our findings largely support our hypotheses. Our study extends research on EMNE FSAs, which often have been compared only with those of developed-country multinational enterprises.

THE TWO ORGANIZATIONS highlighted in this issue's feature articles are engaged in a journey that many hospitals, health systems, and physician organizations are recognizing is key to the task of transforming the US health system. Palomar Health and ProMedica are developing and deploying physician and other clinical leaders in governance, design, operations, and outcomes. Although each feature article describes a different approach, scope, and scale, the organizations are making good investments that will yield positive results. Without engaged physicians leading healthcare redesign, we are doomed to fail. Organizations must build strong programs to engage and develop physician leaders to succeed in the challenging environment ahead. The question remaining for all of us is how to best accomplish this.Texas Health Resources' approach to welcoming, developing, and deploying physician leaders evolved as it moved from three independent systems in 1997 to one combined organization. Our efforts accelerated five years ago when the system sharpened its focus on its mission of improving the health of people in the communities we serve. Texas Health has transitioned from an acute care hospital system to a healthcare system that includes a physician group with more than 500 physicians and more than 200 physician assistants, nurse practitioners, and extenders; it is the largest health system in North Texas. Some of our approaches are similar to, and some are different from, those demonstrated at Palomar Health and ProMedica. We are similar in recognizing that physicians must be involved in decision making and that our organizational cultures must support a shared vision and mutual trust based on experiences gained by working together. Our priorities align, yet we differ in execution. At Texas Health, we are seeing results and a return on our investment in this important area of transformation. Physician leadership is crucial to developing strategy and designing products and processes that standardize care around evidence-based quality metrics, enhancing service and patient satisfaction, increasing reliability, and, ultimately, improving outcomes.The American Hospital Association (AHA) and American Medical Association (AMA) issued a historic joint position paper in 2015 titled "Integrated Leadership for Hospitals and Health Systems: Principles for Success." The organizations acknowledge that integrated physicianhospital leadership models provide a pathway for delivering greater value to patients and populations.PHYSICIAN LEADERSHIP AND GOVERNANCEOostra describes ProMedica's governance philosophy of maintaining local boards as organizations join its system. Texas Health shares this practice and has held this philosophy since its creation in 1997. As healthcare has evolved and relationships with physicians have grown closer, we have built leadership models that reflect our underlying philosophy.At ProMedica, physician seats have increased to 16 percent of nearly 500 board seats across the system. Both employed and independent physicians hold seats, with six serving on the parent board. At Texas Health, 35 percent of 264 board seats are held by independent and employed physicians. The benefits of this structure include a focus on safety and outcomes, a clear understanding of physicians' motivating factors, and a focus on the patient experience.Oostra notes that, in addition to and because of increased participation in governance, physician leaders have grown in number and been deployed across a wide continuum of settings and businesses. Texas Health has sought to increase the number of clinically trained leaders across the system. Two-thirds of our hospital and physician group leaders are physicians or nurses. Physicians make up one-third of our executive leadership committee membership. Sharing governance with physicians and increasing the number of physicians in the ranks of senior leaders have changed Texas Health's perspective regarding strategy development and deployment. …

We develop and test hypotheses derived from a multi-level theoretical framework for understanding factors shaping the credit risk and capital structure of a quintessentially Asian form of investment known as project finance. It differs from other corporate financing approaches. A project company is separate and bankruptcy remote from the investing firm sponsors that create it. The project company relies extensively on debt capital provided by creditors to fund project operations. Creditors provide more (less) debt as a percentage of overall project capital when there is less (more) risk of project failure and non-repayment. We define a target risk framework identifying country-, industry-, syndicate-, firm-, and project-related factors shaping Asian project finance company credit risk and thus, project debt. In a sample of 238 project finance companies announced in 13 Asian countries from 1995–2004, we observe substantial effects on project capital structure with respect to country-level factors linked to institutional and macroeconomic theories, syndicate structure factors linked to agency theory, and lead sponsor experience and project size factors linked to learning and transaction cost theories. We argue that these and other determinants of project finance company credit risk and capital structure in Asia since the mid-1990s anticipate similar relationships now emerging elsewhere around the globe.

We re-examine foreign investment risk-mitigating effects of firm experience and equity stakes using an empirical context largely ignored by international business (IB) research: project investment companies (PICs). PICs permit cleaner separation of individual investment project risk from the parent firm, which may otherwise pool risk characteristics from managing multiple projects across different industries and countries. PICs also permit potentially unbiased, prospective risk assessment at the time of a project’s initial announcement based on the mix of debt and equity funding the project. In observing risk at initial announcement, we can also observe risk characteristics for completed and uncompleted projects. Consistent with previous IB research, our analyses of 396 PICs announced in 53 countries from 1990-2006 indicate that investment risk measured as the percentage of equity capital funding a PIC decreases with greater host-country policy stability, lead-investor experience in the host country, and lead-investor equity stakes. But contrary to previous IB research, we find that lead-sponsor experience and equity stakes reduce overall PIC equity less (not more) at announcement as host-country policy stability deteriorates. From a PIC perspective, investor experience and equity stakes are complements to (not substitutes for) host-country policy stability. We confirm these trends with alternative analyses replacing the percentage of PIC equity at announcement with a related risk measure, whether there is a substantial delay in securing financing for the PIC after it is announced. PIC-based evidence complements existing evidence on foreign investment project risk and suggests future research opportunities that might benefit from integrating both evidentiary sources.

We discuss recent developments in real options theory and its applications to strategic management research, examine the potential difficulties in implementing real options in theory and practice, and propose several areas for future research. Our review shows that real options theory has provided substantial insights into investment and exit decisions as well as into the choice of investment modes. In addition, extant research studies have contributed significantly to our understanding of whether and how organizations can benefit from real options. Future research that addresses difficulties in applications will further advance both real options theory and practice in strategic management. We call for future generations of research to enhance the impact of real options as an emerging dominant conceptual lens in strategic management.

We examine whether and when publicly-legislated and privately-contracted dispute resolution mechanisms (DRMs) reduce risk for foreign investing firms. We theorize that publicly-legislated DRMs such...