home country supportiveness unfavorableness and outward foreign direct investment from china what drives the outward foreign direct investments ofdis by emerging market firms emfs drawing on a strategy tripod framework this article proposes a theoretical model to predict ofdi by emfs from china specifically we use institution and industry based views to examine two facets of home country environment namely the supportiveness from home government and unfavorableness from home industry as important determinants of ofdi and compare the relative strength of these effects further we use the resource based view to argue that the effect of the home country environment is contingent on the international experience portfolios of emfs

foreign direct investment mode choice entry and establishment modes in transition economies in this study we bridge two streams of foreign direct investment literature specifically studies on establishment mode choice i e the choice between an acquisition and a greenfield establishment and studies on entry mode choice i e the choice between a wholly owned outlet and a subsidiary with shared ownership we arrive at a conceptual synthesis for an examination of the effects of the same predictors on the dual entry establishment mode choice made in the context of a single foreign investment we demonstrate that a parent firm s technological intensity international strategy and experience determine both establishment and entry mode choices moreover we apply williamson s new institutional economics to investigate the influence of institution building on multinational enterprises dual investment choice in the context of transition economies we test empirically the possible moderating effect of a host country s institutional environment we conclude that the degree of the host country s institutional advancement moderates the effect of both technological intensity and international strategy on the establishment and entry mode choice

global value chain governance a relational perspective global value chain gvc governance is an established field within international business research yet the relational aspects of gvcs have to date garnered less scholarly attention than have efficiency considerations this conceptual study s objective is to explore the relational dynamics of gvc governance using an internalization theory perspective and by linking gvc research with insights from the business network literature gvcs are argued to be a distinct form of asymmetrical networks associated with economizing and capability creation features as well as costs the orchestrating firm can thus enhance efficiency outcomes of the gvc using social mechanisms similar to those adopted by core actors in a business network in the study six such mechanisms were identified 1 selectivity 2 inclusion of non business intermediaries 3 joint strategizing 4 relational capital 5 multilateral feedback and 6 rules for equitable value distribution while safeguarding the gvc s efficiency the above social mechanisms are associated with challenges and limitations and therefore do not guarantee international competitive success however deployed in an integrative fashion these social mechanisms facilitate coordination thus economizing on bounded rationality reduce the hazards of imperfect effort by partners thus economizing on bounded reliability and foster innovation and new capability development

down with mne centric theories market entry and expansion as the bundling of mne and local assets both anderson and gatignon and the uppsala internationalization model see the initial mode of foreign market entry and subsequent modes of operation as unilaterally determined by multinational enterprises mnes arbitraging control and risk and increasing their commitment as they gain experience in the target market oli and internalization models do recognize that foreign market entry requires the bundling of mne and complementary local assets which they call location or country specific advantages but implicitly assume that those assets are freely accessible to mnes in contrast to both of these mne centric views i explicitly consider the transactional characteristics of complementary local assets and model foreign market entry as the optimal assignment of equity between their owners and mnes by looking at the relative efficiency of the different markets in which mne and complementary local assets are traded and at how these two categories of assets match i am able to predict whether equity will be held by mnes or by local firms or shared between them and whether mnes will enter through greenfields brownfields or acquisitions the bundling model i propose has interesting implications for the evolution of the mne footprint in host countries and for the reasons behind the emergence of dragon mnes

overcoming the liability of outsidership for emerging market mnes a capability building perspective this paper develops and discusses a model describing how multinational enterprises from emerging economies emnes overcome the liability of outsidership in their internationalization from a capability building perspective our aim is to celebrate the important intellectual contribution of johanson and vahlne j int bus stud 40 9 1411 1431 2009 who introduced the liability of outsidership concept we first discuss learning from the local environment that can reduce outsidership and then explain how greater absorptive capacity can translate into better performance internationally finally we elaborate on how the institutional environment further conditions the process and the outcomes of learning we conclude with some suggestions for future research from five theoretical perspectives learning social network theory institutional theory resource dependence theory and mne structure and design

applying and advancing internalization theory the multinational enterprise in the twenty first century internalization theory has provided a resilient analytical framework that explicitly or implicitly underlines much of international business scholarship internalization theory is not a monolithic body of knowledge instead it has devolved into several streams each of which focuses on the interests of particular epistemic communities while also acting as a more generic organizing framework for those more broadly interested in its application to real world challenges following a review of the various streams we trace the frontiers of current research of the broader internalization framework and identify emerging themes raised by the papers in the special issue these include transaction cost considerations in the bundling and recombination of assets across diverse contexts the growing relevance of quasi internalization the theoretical challenges of bounded rationality for internalization theory and the increasing disconnect between ownership control and responsibility these developments point to new research frontiers for scholars looking to apply or advance internalization theory

liabilities of regional foreignness and the use of firm level versus country level data a response to dunning et al 2007 we are pleased that dunning et al have provided macro country level data demonstrating the increased internationalization of many nations over the past decade we also appreciate their findings lending support to our perspective on the regional nature of world business our work was based solely on micro firm level data both country level data and firm level data have methodological problems which we attempt to reconcile in this commentary we also address the broader conceptual issues of how to interpret country level vs firm level data

different shades of green global oil and gas companies and renewable energy abstract the long term energy transition from fossil fuels to renewable energy raises critical questions about the future of oil and gas firms this study asks why some oil and gas firms are committed to renewable energy while others continue to maintain a distinct fossil fuels focus with little or no investment in renewable energy the analysis reveals that there is a wide range in the degree to which oil and gas firms have invested in renewable energy some firms have no investments and others have investments in multiple renewable energy technologies across many countries we examine a combination of country based institutional factors and firm based knowledge and experience factors that could impact oil and gas firms decisions to invest in renewable energy activity regulative and normative pressures impacted renewable energy investments as did environmental citizenship and the degree of internationalization the study s integration of country level factors with firm level experiences provides insights into how firms are dealing with the energy transition by examining areas such as sustainability and regulatory policy the paper sheds light on the ways in which scholars can tap into measures and methods that can extend traditional ib research

internationalization in the information age a new era for places firms and international business networks the new techno economic paradigm of the information age has brought about new structures and processes in international business ib in this article we examine the changing nature of the competitive advantages of places the competitive advantages and strategies of firms and the governance structure of ib networks in what has also been called the third industrial revolution these three areas of change in ib activities can be mapped respectively to the location l ownership o and internalization i advantages of the eclectic paradigm we interpret these oli factors as dynamic constructs in order to depict analytically the shifts in the ib environment and their implications for ib

internal equity financing and the performance of multinational subsidiaries in emerging economies we examine the internal equity financing of the multinational subsidiary which retains and reinvests its own earnings internal equity financing is a type of firm specific advantage fsa along with other traditional fsas in innovation research and development brands and management skills it also reflects subsidiary level financial management decision making here we test the contributions of internal equity financing and subsidiary level financial management decision making to subsidiary performance using original survey data from british multinational subsidiaries in six emerging countries in the south east asia region our first finding is that internal equity financing acts as an fsa to improve subsidiary performance our second finding is that over 90 of financing sources including capital investment by the parent firms in the british subsidiaries come from internal funding our third finding is that subsidiary level financial management decision making has a statistically significant positive impact on subsidiary performance our findings advance the theoretical empirical and managerial analysis of subsidiary performance in emerging economies

the casino model of internationalization an alternative uppsala paradigm forty years after the publication of the original uppsala model we revisit the empirical observations that inspired its conceptual development the empirical evidence we suggest invites the formulation of an alternative and complementary model of the internationalization process of the firm one that we have named the casino model of internationalization the casino model uncovers a number of new research issues pertaining to internationalization and to the nature of strategic decision making under conditions of environmental uncertainty and partial ignorance

beyond hofstede and globe improving the quality of cross cultural research journal of international business studies 2010 41 1259 1274 doi 10 1057 jibs 2010 41 overview of 41 8 hofstede and globe in cross cultural research while hofstede s work was not the first systematic study on crossnational cultures his seminal book culture s consequences international differences in work related values 1980 succeeded in putting cross cultural analysis at the forefront of international business ib research in a later paper he boldly asserted that the business of international business is culture 1994 1 despite the criticisms that have been voiced against his work see mcsweeney 2002 oyserman coon kemmelmeier 2002 hofstede s influence on the fields of ib and management is undeniable according to harzing s publish or perish citation index as of june 2010 there were over 54 000 citations to his work this is a remarkable record that attests to first the growing popularity of cross cultural research in light of continued internationalization of the world economy and second hofstede s personal impact on scholarly research this jibs issue brings together 10 articles on culture and ib all of which were submitted to the editorial team led by jibs editorin chief lorraine eden while the articles were independently submitted through the regular double blind reviewing process the decision to join them in one collection creates in effect a special issue on culture in international business research which the jibs editors hope will be widely read and cited by ib scholars in general terms the papers in this collection fall into one of two categories 1 articles and commentaries about conceptual and methodological issues associated with hofstede s oeuvre vs the global leadership and organizational behavior effectiveness globe project s cultural dimensions and 2 articles and perspectives that use culture and or cultural dimensions as well as the operational measurement thereof to explain differences in behavior and practices across countries the common feature of all these scholarly pieces is that they challenge particular assumptions often made too easily in conventional cross cultural research the first paper in this collection is a perspective written by franke and richey that cautions against questionable generalizations from small numbers of countries in international business research using statistical analysis to support their assertion franke and richey argue that in order to draw credible generalizations in ib a minimum of 7 10 countries must be used this is an important message researchers should never formulate strong conclusions about the impact of cultural dimensions on journal of international business studies 2010 41 1259 1274 2010 academy of international business all rights reserved 0047 2506

reassessing home regionalisation alan rugman and co authors argue that globalisation and with it global strategy is a myth this contention rests on a taxonomy of the world s largest firms based on their sales showing an overwhelming share of home regional firms we question the rationales underpinning their classification scheme when retesting the data using different schema we find that the original results are far from robust with a significant share of firms attaining bi regional or global status further longitudinal analysis shows that large firms increasingly are extending their sales beyond the home region our results defy regionalisation theory in its current form and we call for refinements through further research

towards more realistic conceptualisations of foreign operation modes we address a long standing discrepancy between theory and practice regarding how firms choose use and modify their modes of operation in foreign markets theory typically treats foreign operation modes as choices between well specified discrete alternatives observation of business practice reveals a messier reality we commonly observe mode packages within mode adjustments and mode role changes yet by and large these aspects of international business development have been relatively ignored in the literature and in theoretical and empirical research we propose richer and more realistic conceptualisations of foreign operation modes and look at their implications for theory and practice

a perspective on regional and global strategies of multinational enterprises multinational enterprises mnes are the key drivers of globalization as they foster increased economic interdependence among national markets the ultimate test to assess whether these mnes are global themselves is their actual penetration level of markets across the globe especially in the broad triad markets of nafta the european union and asia yet data on the activities of the 500 largest mnes reveal that very few are successful globally for 320 of the 380 firms for which geographic sales data are available an average of 80 3 of total sales are in their home region of the triad this means that many of the world s largest firms are not global but regionally based in terms of breadth and depth of market coverage globalization in terms of a balanced geographic distribution of sales across the triad thus reflects a special and rather unusual outcome of doing international business ib the regional concentration of sales has important implications for various strands of mainstream ib research as well as for the broader managerial debate on the design of optimal strategies and governance structures for mnes journal of international business studies 2004 35 3 18 doi 10 1057 palgrave jibs 8400073

intangible assets internationalization and foreign direct investment in manufacturing this study provides strong empirical evidence in support of the intangible assets model of foreign direct investment the percentage of lawyers in total employment is introduced as a proxy for the internalization advantage that is associated with the presence of intangible assets legal intensity is shown to be directly related to the level of u s foreign direct investment abroad for sixty one manufacturing industries from 1982 1989

effects of inward investment on outward investment the venture capital industry worldwide 1985 2007 we identify inward investment as an important impetus to outward investment supplemental to the impetuses depicted in conventional internationalization frameworks by incorporating both the spillover and competition effects of foreign entrants we develop an integrated framework of the inward outward investment relationship for different investment modes and different home country and host country pairs our analysis of venture capital vc investments worldwide from 1985 to 2007 shows a positive spillover effect on outward investment for inward co investments and a negative competition effect on outward investment for inward standalone investments we find the strongest effects when the host country is a laggard in the vc industry and the home country is a leader

many roads lead to rome implications of geographic scope as a source of isolating mechanisms studies examining the competitive implications of geographic scope have largely focused on creating competitive advantage in an attempt to investigate a less illuminated role of geographic scope that of sustaining competitive advantage this paper investigates the sources of and relationships among the causal factors leading to creation of isolating mechanisms or barriers to imitation this paper first distinguishes two sources of causal factors linked to the creation of isolating mechanisms intrinsic characteristics of knowledge and geographic scope of knowledge acquisition and then investigates the relationships among the causal factors from the two sources employing the fuzzy set qualitative comparative analysis method this paper examines equifinality and functional equivalence of causal factors from the two sources empirical analyses with united states patent and trademark office patent data of the semiconductor industry corroborate the main thesis of the paper that multiple paths can lead to the creation of isolating mechanisms and in these paths causal factors from the two sources of isolating mechanisms can be functionally equivalent the results also provide managerial implications that firms with different sets of resources and capabilities can implement different types of isolating strategies to sustain their competitive advantage

multidivisional vs metanational governance of the multinational enterprise the effective and efficient management of diversified business firms that supply multiple products and operate in multiple dynamic markets especially large multinational enterprises mnes builds upon a number of specific governance principles these governance principles allow the alignment of environmental characteristics strategy and organization given the rising need to learn from the world doz et al in their influential harvard business school press book entitled from global to metanational have proposed a new set of governance principles described under the metanational umbrella concept this paper revisits the metanational using a comparative institutional perspective here we contrast multidivisional and metanational governance principles a comparative institutional analysis suggests that the metanational s application potential in terms of actually improving the effectiveness and efficiency of mne governance may be subject to more qualification than suggested by doz et al senior mne management must therefore reflect carefully before substituting metanational governance principles for the more conventional multidivisional ones with established contributions to managerial effectiveness and efficiency

digitalized service multinationals and international business theory banalieva and dhanaraj argue that digital service multinationals dsmncs possess a new category of firm specific advantage fsa the network advantage and that contrary to extant theory they use networks as a mode of governance i review the business models used by dsmncs compare them to non digital ones and explore what we can learn about them from extant ib theory i conclude that network advantages are not a new category of fsas that networks are not a mode of governance and that their use by dsmncs is well explained by extant theory

ecosystem specific advantages in international digital commerce we consider the applicability to digital platforms of extant international business scholarship the organization of digital platforms has been seen to such an extent as predicated upon the bundling of external resources for collective value creation that their expansion may follow the logic of externalization we further that literature contrasting the governance of network multinationals with that of platform centric ecosystems building on and extending the theory of the ecosystem we propose the concept of ecosystem specific advantages we identify costs and difficulties in the transfer of such advantages to new markets emphasizing in particular the idea of bottlenecks we then propose a framework that can be applied to future research on digital platforms focusing on the users suppliers of complementary products and platform firms we also call for research on the dynamic process of creating transferring and upgrading ecosystem specific advantages

global value chains a review of the multi disciplinary literature this article reviews the rapidly growing domain of global value chain gvc research by analyzing several highly cited conceptual frameworks and then appraising gvc studies published in such disciplines as international business general management supply chain management operations management economic geography regional and development studies and international political economy building on gvc conceptual frameworks we conducted the review based on a comparative institutional perspective that encompasses critical governance issues at the micro gvc and macro levels our results indicate that some of these issues have garnered significantly more scholarly attention than others we suggest several future research topics such as microfoundations of gvc governance gvc mapping learning impact of lead firm ownership and strategy dynamics of gvc arrangements value creation and distribution financialization digitization the impact of renewed protectionism the impact of gvcs on their macro environment and chain level performance management

the eclectic paradigm of international production a restatement and some possible extensions this article reviews some of the criticisms directed towards the eclectic paradigm of international production over the past decade and restates its main tenets the second part of the article considers a number of possible extensions of the paradigm and concludes by asserting that it remains a robust general framework for explaining and analysing not only the economic rationale of economic production but many organisational and impact issues in relation to mne activity as well

what lies between market and hierarchy insights from internalization theory and global value chain theory in this paper we suggest that internalization theory might be extended by incorporating complementary insights from gvc theory more specifically we argue that internalization theory can explain why lead firms might wish to externalize selected activities but that it is largely silent on the mechanisms by which those lead firms might exercise control over the resultant externalized relationships with their gvc partners we advance an explanation linking the choice of control mechanism to two factors power asymmetries between the lead firms and their gvc partners and the degree of codifiability of the information to be exchanged in the relationship

public choice and the economic analysis of anarchy a survey public choice economists began studying anarchy in the 1970s since then the amount of research on anarchy has burgeoned this article surveys the important public choice contributions to the economics of anarchy following early public choice economists many economists are researching how individuals interact without government from non public interested explanations of the creation of government to historical studies of internalizing externalities under anarchy public choice scholars are arriving at a more realistic perspective of human interaction with and without government although the economics of politics receives more attention the economics of anarchy is an important area of research in public choice

social criteria for evaluating population change abstract many applications of economic analysis require social evaluations of alternatives involving different numbers of people in this paper we use the tools of social choice theory to provide an axiomatic formulation of this problem it yields a class of social criteria called critical level generalized utilitarianism this class and its implications are compared with other criteria and are found to yield intuitively appealing results

offshoring administrative and technical work new fields for understanding the global enterprise in this paper we introduce the journal of international business studies special issue on offshoring administrative and technical services ats in doing so we have attempted to locate the topic within the international business research tradition as well as suggest challenges and opportunities that the phenomenon offers to theoretical and empirical research in the field we examine the interplay of costs knowledge and innovation in the evolution of ats offshoring from modest beginnings to its current stature as an accepted business practice we suggest that understanding the continuing evolution of ats offshoring requires researchers to take into account not only the business imperative of cost saving but also a more complex set of underlying factors and potential outcomes we argue that the rapid growth of ats offshoring has brought about an accumulation of resources including financial flows knowledge infrastructure and human capital to create new platforms for knowledge creation and innovation low costs may characterize the initial conditions for offshoring but they also provide the basis for up market moves as firms increasingly pursue innovation based strategies we introduce the papers in the special issue as integral elements in our discussion contributing new ideas that stimulated our thinking and hopefully will do the same for others seeking to understand this emerging area of globalization and international managerial practice journal of international business studies 2009 40 887 900 doi 10 1057 jibs 2009 22

global platforms and ecosystems implications for international business theories the emergence of digital platforms and ecosystems dpe as a venue for value creation and capture for multinational enterprises holds considerable implications for the theory and practice of international business in this paper we articulate these implications by considering the dual perspectives of cross border platforms and ecosystems as a venue for multifaceted innovation and as multisided marketplace and focusing on three overarching themes at the intersection of dpes and international business that is dpes as affording new ways of internationalization as facilitating new ways of building knowledge and relationships and as enabling new ways of creating and delivering value to global customers we explain specific dpe related concepts and constructs that underlie these themes and discuss how they could be incorporated into existing ib theories in ways that would enhance their richness and continued relevance as well as their ability to better predict a multitude of emerging ib phenomena

international acquisition success social community and dominant logic dimensions international acquisitions intended to achieve knowledge transfers and improvements of innovation capacity can only be successful if the acquirer devotes balanced attention to a building a unified social community and b achieving requisite commonality in dominant logic the balance between these two dimensions of success depends on the activity class considered in some activity classes imposing the acquiring firm s dominant logic will be dysfunctional and therefore the post acquisition managerial focus may need to shift towards social community building bresman birkinshaw and nobel s 1999 acclaimed jibs paper should be commended for identifying the social community dimension as a critical driver of international acquisition success

an evolutionary approach to understanding international business activity the co evolution of mnes and the institutional environment this paper examines the co evolution of mne activities and institutions external and internal to the firm we develop a theoretical framework for this analysis that draws on the more recent writings of douglass north on institutions as a response to complex forms of uncertainty associated with the rise in global economic interconnectedness and of richard nelson on the co evolution of technology and institutions we link historical changes in the character of mne activities to changes in the institutional environment and highlight the scope for firm level creativity and institutional entrepreneurship that may lead to co evolution with the environment we argue that the main drivers for institutional entrepreneurship are now found in the increasing autonomy of mne subsidiaries thus mne agency derives from more decentralized forms of experimentation in international corporate networks which competence creating nodes of new initiatives can co evolve with local institutions unlike most other streams of related literature our approach connects patterns of institutional change in wider business systems with more micro processes of variety generation and experimentation within and across individual firms this form of co evolutionary analysis is increasingly important to understanding the interrelationships between mne activities and public policy

internalization advantage and subsidiary performance the role of business group affiliation and host country characteristics we extend internalization theory by examining the contingencies associated with market internalization and its impact on foreign subsidiary survival based on a sample of 6170 subsidiary year observations in 63 countries belonging to 292 mncs from korea during 1995 2013 we find that greater product and labor market internalization have weaker impacts on the survival of subsidiaries operating in countries with more developed institutional environments but stronger for subsidiaries of mncs affiliated with business groups the impact of business group affiliation is further dependent on host country institutional development and the diversification and size of the business group

market failure government failure and the private supply of public goods the case of climate controlled walkway networks two opposing models of public goods undersupply are those of market failure and government failure empirical work on the relative explanatory power of these two frameworks has been limited by the scarcity of acceptable data the case of climate controlled walkways in major urban cores is a rare instance where such difficulties can be overcome we investigate the supply of ccws in 55 large city cores in north america we find that 1 ccw networks are well supplied by market forces when 2 such forces are not frustrated by government policy we also find evidence that 3 rules based regimes dominate discretion based regimes these results are consistent with the position that the government failure paradigm is a viable alternative to the traditional market failure paradigm

the globalisation of technology what remains of the product cycle model this paper reexamines two hypotheses associated with earlier versions of the product cycle model the first hypothesis that innovations are almost always located in the home country of the parent company is rejected on the basis of evidence drawn from one hundred years of u s patent office data the second hypothesis that the international dispersion of activity is led by technology leaders is historically valid however over the last twenty years technology leaders have been ahead instead in the globalization of technology that is in developing internal international networks to exploit the locationally differentiated potential of foreign centers of excellence c 1995 academic press inc copyright 1995 by oxford university press

a perspective on multinational enterprises and climate change learning from an inconvenient truth this paper explores whether and how an important environmental issue such as climate change can not only give multinational enterprises the opportunity to develop green firm specific advantages fsas but also help reconfigure key fsas that are viewed as the main sources of firms profitability growth and survival we examine the nature and geography of such fsa development and develop two organizing frameworks which are subsequently applied to climate change using information from global 500 firms implications and future directions for international business research are indicated

might makes rights a theory of the formation and initial distribution of property rights this paper is a theoretical and empirical investigation into the formation and initial distribution of property rights violence is singled out as a major constraint on this formation process its role is explicitly modeled in a choice theoretic framework and some of the implications are tested using data collected from contracts written during the california gold rush of 1848

a dynamic capabilities based entrepreneurial theory of the multinational enterprise this paper develops a dynamic capabilities based theory of the multinational enterprise mne it first reviews scholarship on the mne with a focus on what has come to be known as internalization theory one prong of this theory develops contractual transaction cost informed governance perspectives and another develops technology transfer and capabilities perspectives in this paper it is suggested that the latter has been somewhat neglected however if fully integrated as part of a more complete approach it can buttress transaction cost governance issues and expand the range of phenomena that can be explained in this more integrated framework dynamic capabilities coupled with good strategy are seen as necessary to sustain superior enterprise performance especially in fast moving global environments entrepreneurial management and transformational leadership are incorporated into a capabilities theory of the mne the framework is then used to explain how strategy and dynamic capabilities together determine firm level sustained competitive advantage in global environments it is suggested that this framework complements contract based perspectives on the mne and can help integrate international management and international business perspectives

mnes and market valuation of firms a cross sectional study of indian electrical and electronic goods manufacturing firms this paper argues that inter firm differences in the direction of change in market valuation will depend mainly on the salience and unique risk characteristics of the firms these characteristics are largely influenced by mulinational enterprise mne affiliation the sample for the study consists of electrical and electronic manufacturing firms in india for 1994 1996 maximum likelihood estimates of the probit model show that even during a downswing in the stock market mne affiliates were able to hold their own and increase their market valuation these results hold good for a wide variety of products produced in this sector where both mnes and local firms compete the results have implications for theories relating to mnes stock market valuation and also for policy makers

extending the theory of the multinational enterprise internalization and strategic management perspectives this paper assesses the continued relevance of buckley and casson s 1976 book on the future of the multinational enterprise mne against a background of increasing criticism of transaction cost related scholarly work we demonstrate that the schism that can currently be observed in the field between international business and international management is misguided as the transaction cost internalization school may offer useful insights to both management scholars and managers for this to occur however it is necessary first to extend the empirical scope of transaction cost based reasoning to include the functioning of differentiated network mnes the paper suggests that buckley and casson s book still represents a beacon of clarity and a superb starting point for the study of the mne even if the complexity of this governance structure has grown far beyond what any international business scholar or even international management scholar could have predicted 25 years ago

entrepreneurship in the global firm introduction and overview types of subsidiary initiative fighting the corporate immune system how the initiative process works the consequences of initiative perspectives on the theory of entrepreneurship mapping the process of subsidiary evolution perspectives on theory of the multinational firm an internal market model of the multinational firm implications for management practice

the entrepreneurial m form strategic integration in global media firms many researchers believe that bounded rationality prevents ceos in large complex multidivisional m form corporations from personally formulating division level strategies instead ceos are seen as guiding a bottom up process whereby division managers propose strategies for review and approval by the corporate office contrary to this view we argue that ceos in global media firms frequently drive strategy in a top down manner especially when their firms seek to expand by integrating the activities of two or more existing divisions we refer to such firms as entrepreneurial m forms and maintain that their reliance on an activist ceo offers benefits 1 in turbulent environments when the use of slow bottom up planning processes risks forfeiting first mover advantages and 2 when expansion entails major capital commitments and division managers may be reluctant to accept the career risks associated with sponsorship of bet the company projects

the regional nature of japanese multinational business in the world s largest 500 firms there are 64 japanese multinational enterprises mnes with data on regional sales but only three operate globally whereas 57 of them average over 80 of their sales and foreign assets in their home region why is there such a strong intra regional dimension to their activities using empirical data and a new framework for analysing both downstream sales assets and upstream production assets we analyse why most large japanese firms appear to have firm specific advantages fsas that are based in their home region a structural contingency approach is applied to two case studies to explain how home region bound fsas constrained the ability of japanese mnes to implement internationalisation strategies

transactions cost economics and the multinational enterprise an assessment abstract this paper applies transactions cost principles to the multinational enterprise in order to ascertain its distinctive properties as a mode of economic organization the analysis helps identify just when and where contractual alternatives to the multinational firm are likely to be viable this turns out to depend upon the nature of the technology the regime of appropriability within which the firm operates and the characteristics of the markets in question transactions cost analysis is also extended to the multinational enterprise host country relationship implications for management and public policy are derived

causes of the difficulties in internationalization we study the causes of the difficulties faced by firms when they internationalize in search of new markets we build on the resource based theory to argue that the difficulties in internationalization can be separated into three main sets based on their relationship to advantage loss of advantage provided by resources transferred abroad creation of a disadvantage by resources transferred abroad and lack of complementary resources required to operate abroad in each set we further distinguish difficulties that are specific to a firm from those that are common to a set of firms we argue that only a few of the resulting types of difficulties of internationalization are exclusive to the cross border expansion and propose solutions that address the root cause of each type

managing interrelated tensions in headquarters subsidiary relationships the case of a multinational hybrid organization while all multinational organizations face the challenge of managing tensions between local integration and global responsiveness they are increasingly required to pursue additional often paradoxical objectives such as social and commercial goals however we know little about how these tensions at the core of the mnc strategy interact based on an inductive qualitative study of four headquarters subsidiary relationships in a latin american multinational hybrid organization we develop a model showing the interplay of multiple tensions and management approaches to address them this allows us to contribute to research on subsidiary roles which we found to differ depending on how multiple tensions are addressed furthermore we add to the literature on hybridity in multinational organizations by pointing out how regional differences between units of a single organization unfold finally we provide some practical recommendations for the management of multinational hybrid organizations

population ethics and the existence of value functions abstract this note provides a corrected version of a representation theorem in population ethics while it is true that the fixed population axioms continuity and weak pareto are sufficient for the existence of an ordering of population size representative utility pairs that can be used to rank social alternatives we show that in order to obtain the existence of a real valued representation continuity must be strengthened

measuring the power to monopolize a simple game theoretic approach abstract this paper proposes a measure of the power to monopolize based on the ability of firms to induce a shift from a competitive to a non competitive regime through coalition formation first in the framework of monotonic simple games we show how to use the shapley value in terms of a power index for individual firms within an industry second we construct an aggregate power index for industries it is based on axioms allowing to make explicit the respective roles of the number and size of the minimal winning coalitions and aggregates additively non normalized individual power indices

corporate venture capitalists autonomy obstacles and performance abstract this report presents the results of a formal study of the corporate venture capital community in the united states and is based upon responses to a questionnaire completed by 52 corporate venture capitalists cvcs the central question addressed in this study involves which approach to corporate venture capital is most likely to produce successful results this question was addressed via cluster analysis which segregated the cvc community into two broad classes pilots which are marked by substantial organizational independence and copilots which are highly dependent on corporate management with respect to venture funding and decision authority pilots achieve equal or higher levels of performance and are plagued by far fewer obstacles than their highly dependent counterparts the results suggest the following 1 the corporate venture fund should be established as an independent entity and should have access to a committed separate pool of funds this will enable cvcs to respond aggressively to and manage investment opportunities with minimal corporate interference such an independent entity will defuse justifiable concerns on the part of entrepreneurs related to such interference 2 the fund should be managed by skilled venture professionals who may be drawn from the independent venture community or the small but growing pool of experienced cvcs corporate executives may comprise a part of the management team 3 if the corporate venture fund hopes to attract top quality managers it must be prepared to offer compensation and authority commensurate with their skill level in short corporate venture capitalists should be treated like independent venture capitalists by organizing the fund as an independent entity the political problem associated with establishing compensation levels above those of the corporation can be minimized 4 all cvcs should establish a primary focus on the realization of financial objectives i e return on investment strategic benefit objectives are not necessarily ill advised so long as they do not interfere with sound financial decision making when they do the corporate venture capital process is likely to become less effective for instance a corporate venture fund should only confine itself to investing in a few industries if there are sufficient high grade investment opportunities within those industries to ensure adequate deal flow the venture fund should not be pressured investments that appear exciting from a corporate perspective for technological or marketing reasons but are not financially attractive may well drain resources rather than produce opportunities 5 venture proposals failing on financial criteria might be referred to other parts of the corporation with the purpose of exploring an alternate relationship e g a development contract or joint venture if this is appealing to the corporation a mechanism such as a corporate liaison or reporting system might be established to facilitate the flow of information 6 a corporation should be willing to make a complete commitment of talent and capital if it establishes its own corporate venture fund the corporation should then be willing to accept a limited role if the corporation is unable to accept a limited role with respect to its own fund it may be best for it to participate as an investor in a traditional fund where such limitations will be enforced however this latter approach may significantly dilute or eliminate potential for strategic benefits

a note on the transnational solution and the transaction cost theory of multinational strategic management this article assesses the extent to which the results of bartlett and ghoshal s 1989 work can be incorporated in what has now become one of the core explanations of multinational strategic management i e the transaction cost based theory of international production we demonstrate that the transaction cost approach fully incorporates the empirical findings of bartlett and ghoshal s work to do so requires that we make a new distinction between location bound and non location bound firm specific advantages in addition three possible uses of country specific advantages by multinational enterprises need to be identified while the transnational solution as proposed by bartlett and ghoshal is not itself a new theory of multinational strategic management it is compatible with the transaction cost based model of multinational strategic management

the fable of fisher body abstract general motors s gm s acquisition of fisher body is the classic example of market failure in the literature on contracts and the theory of the firm according to the standard account in 1926 gm merged vertically with fisher body a maker of auto bodies because of concerns over transaction specific investment and contractual holdup that account exhibits errors of historical fact and interpretation general motors acquired a 60 percent interest in fisher body in 1919 moreover the contractual arrangements and working relationship prior to the 1926 merger exhibited trust rather than opportunism fisher body s production technology did not exhibit asset specificity the merger reflected economic considerations specific to that time not some immutable market failure we demonstrate that vertical integration was directed at improving coordination of production and inventories assuring gm of adequate supplies of auto bodies and providing gm with access to the executive talents of the fisher bro

is property crime caused by drug use or by drug enforcement policy the relationships among drug offenses prorperty crime and the allocation of police resources are investigated in a structural model using data from florida countries law enforcement resources are scarce and as efforts to combat drug crime increase the amount of these resources allocated to property crime is reduced this reallocation of police resources results in reduced deterrence for property crime and as a result an increase in these crimes the evidence presented suggests that rising property crimes in florida are at least partially the result of drug enforcement policy

use esteem and profit in voluntary provision toll roads in california 1850 1902 i introduction sometimes individuals form an enterprise not in anticipation of handsome residual returns but rather for their own use if the user group is large and the project requires numerous contributors there may be an incentive to free ride the group might overcome the free rider problem by virtue of social pressure reputational incentives participatory impulses philanthropy and so on in brief out of some form of esteem especially the reciprocal esteem of neighbors during the nineteenth century americans undertook many improvement projects not primarily for residual returns but rather for use and esteem voluntary action helped to finance schools libraries hospitals churches canals dredging companies wharves water companies railroads highways and so on goodrich 1948 1 we call the set of motivations behind such efforts use and esteem in contradistinction to the quest for residual returns in studying the history of toll road companies in california we see motives of both use and esteem and residual returns some road companies were initiated as business enterprises aiming squarely at dividends for other road companies use and esteem motivations inspired a large number of community members to contribute this we call community enterprise also there are the cases of use and esteem motives inducing a small number of wealthy parties to finance a road which we call coterie enterprise in comparison to the earlier toll road movements in the eastern united states the california toll road experience showed less of the community enterprise model and more of the business enterprise and coterie enterprise models why should an enterprise ever be undertaken in the manner of use and esteem rather than organized as a business use and esteem methods must stand in for the normal profit motive when an enterprise is unable to exclude nonpayers or charge appropriate prices bruce benson 1994 examines the private provision of policing and highways in old england and argues that obstacles to private provision stemmed from government policy rather than underlying technological conditions for example by barring toll taking on highways the government created a free access common pool benson further argues that even once government policy has blocked the business enterprise there still may be potency in the use and esteem methods of voluntary provision this paper presents a historical typology of voluntary organizations taking the stock corporation form in our study of toll roads we indeed see the business enterprise hamstrung by government policy but the road companies even though often unprofitable and motivated by use and esteem still operated with the possibility of positive residual returns thus the road companies took advantage both of financing appeals from use and esteem and of organizational efficiencies due to residual claimant incentives this is a potent combination that today s law has eliminated by the legal bifurcation of not for profit and for profit enterprises ii the toll road heritage in the 1790s americans began building turnpikes toll roads surfaced with gravel or earth and over the next half century easterners built more than 600 of them most with private funds exclusively turnpikes were popular throughout the middle west and to a lesser extent the south later the toll road returned as plank road fever swept the nation between 1847 and 1853 private initiative built better than 1 000 wooden roads not ideology but pragmatics led americans to privatize town county and state governments were strapped for cash and bad at building roads and the spirit of development led all states to release private initiative to the task compared to government road care the turnpike company offered numerous organizational advantages turnpikes connected multiple towns or counties so management transcended local government limitations and organizers could appeal to prospective contributors along the entire route

the voluntary provision of public goods the turnpike companies of early america the voluntary provision of public goods the turnpike companies of early america i the heroic role of the agent called government in the simple public goods model is clear enough but the relevance of the model is still in dispute a long history of doubters has challenged the premises that the government has the needed information acts efficiently and acts in the public interest also doubters have contended that the free rider problem of many social services is not as ineluctable as others often seem to suggest historical studies have shown the potency of voluntary association in such fields as lighthouse provision coase 1974 education high ellig 1988 bee pollination cheung 1973 law and order anderson hill 1979 benson forthcoming neighborhood infrastructure beito 1990 agricultural research majewski 1989 among others see cowen 1988 wooldridge 1970 to help weigh the relevance of the simple public goods model i discuss the american experience of private turnpike roads the turnpike companies got started in the 1790s and were in sharp decline in the 1830s though many turnpikes were operating at the turn of our century 1 i treat turnpikes in new england new york pennsylvania new jersey and maryland the last four are called the middle atlantic states except in pennsylvania 2 the turnpikes were almost entirely financed by private subscription to stock 3 while those in most other states were mixed enterprises 4 extreme publicness marked the turnpikes both in jointness of consumption and in nonexcludability 5 the excludability problem was partly the result of legal restrictions on toll collection these restrictions were one cause of turnpike unprofitability which was discovered quickly the turnpikes afforded enormous indirect and external benefits however to the nearby farms landholdings and businesses since unprofitability was usually foreseen stock subscription necessary to construct the road was essentially a means of paying for road benefits there were two excludability problems people could use the road without paying a toll and people could indirectly benefit from the road without buying stock though related the latter is the crux of the public goods problem at hand 6 ii turnpike creation and operation the end of the 18th century saw a transition in road management until then the roads were built and maintained poorly by towns and counties as settlement expanded and the large eastern centers sought improved trade routes pressure for road improvement brought forth a radical alternative turnpikes a pay as you go means of financing a number of publicly operated turnpikes were organized patterned after the british turnpike trusts of the day 7 but even this method of road improvement demanded too much from the existing public administration states turned to private initiative 8 the turnpike companies were legally organized like corporate businesses of the day the first connecting philadelphia and lancaster was chartered in 1792 opened in 1794 and proved a significant advantage in the competition for trade regional rivalries led state legislatures to take a favorable view toward petitions to establish turnpikes by 1800 sixty nine companies had been chartered in the states under investigation 9 while legislators readily sanctioned road provision by private associations they wrote extensive regulation into company charters charters usually specified the company s total stock but this merely reflected the company s recommendation and could be changed easily powers of eminent domain were stipulated existing trails or public roadbeds were usually granted to the companies and monopoly assurance against new parallel routes was sometimes granted details for construction were given and of course toll rates and toll collection were tightly controlled

the theory and practice of regional strategy a response to osegowitsch and sammartino we are grateful to osegowitsch and sammartino for their critical analysis of our work on the regional and global strategies of multinational enterprises mnes in this response we demonstrate that changing the quantitative thresholds for classifying mnes as global vs non global has no bearing on our earlier conclusions first very few global firms exist second scholarly reflection on regional vs global mne strategy requires substantive extensions of extant international business theory

criminal justice institutions as a common pool the 19th century analysis of edwin chadwick abstract modern research into criminal justice focuses on optimal enforcement and on changes including forms of privatization that could bring efficiency into the system edwin chadwick 19th century economist and utilitarian reformer analyzed received anglo saxon justice circa 1829 1841 as an evolved publicly provided good with open access common pool characteristics with an aim of crime prevention and the reduction of type i and ii errors contemporary goals as well and while neglecting the possibilities contained in private solutions chadwick developed clear recommendations for interrelated incentive alterations to both the enforcement and penal systems the system described by chadwick is fundamentally the one that exists in the us today and his exceedingly modern analysis speaks to contemporary problems and has implications for possible reforms

the evolution of research on coordination mechanisms in multinational corporations the mechanisms of coordination used by multinational corporations mncs are studied through an exhaustive literature review a pattern of evolution is found as time has passed researchers have concentrated more on subtler and informal mechanisms abandoning their unidimensional focus on structural issues it is suggested that the increase in the study of those mechanisms may be due among other reasons to the fact that mncs are indeed making more use of them that could be explained by changes in the international competitive environment which force firms to adjust their strategies requiring ever more multidimensional coordination

legitimizing leveraging and launching developing dynamic capabilities in the mne multinational enterprises mnes face simultaneous pressures for global integration and local responsiveness while the extant literature acknowledges that most mnes are neither entirely geared towards achieving global integration nor local responsiveness scarce attention is given to how mnes develop organizational flexibility to address multiple and shifting strategy pressures over time in this paper we draw on the dynamic capabilities literature to explore how the mne develops the capabilities needed to achieve this flexibility through a qualitative longitudinal case study spanning 12 years we identify three recombination capabilities legitimizing leveraging and launching capabilities through which the mne develops organizational flexibility we find that these recombination capabilities improve the mnes ability to sense and seize new opportunities and enable the mne to overcome organizational impediments to achieve flexibility our study offers a process perspective that shows how the three capabilities together nourish the mnes resilience to continuously balance between global integration and local responsiveness our findings have managerial implications illustrating that launching new strategic initiatives may fail if the mne does not have the capabilities to legitimize the new initiatives and to ensure that existing organizational strengths are properly leveraged to support the new initiatives

a normative approach to industrial performance evaluation and concentration indices abstract in this paper we present a normative theory of industrial evaluation our framework provides a foundation for the notion of the equivalent number of equal sized firms which is an inverse measure of concentration from an axiomatic basis we develop a particular functional form for the evaluation of industry performance a cobb douglas function of the equivalent number of equal sized firms and total output

adapting the uppsala model to a modern world macro context and microfoundations vahlne and johanson 2017 present the multinational business enterprise mbe as a new form of cross border organization that supersedes the multinational enterprise mne they offer a general model of the evolution of the mbe arguing that the mbe evolves through ongoing internationalization processes by proactively and entrepreneurially engaging in business exchange rather than production in this counterpoint we focus on two critical dimensions absent from vahlne and johanson s 2017 arguments the impact of the digital context as a defining macro level feature of our modern world and the role of the individual as a core microfoundation of the internationalization process we argue that a robust theory of the evolution of the modern firm must necessarily account for these dimensions to explicate these impacts we draw from a range of complementary research streams across international business entrepreneurship and international entrepreneurship we identify research implications for scholars seeking to further advance the uppsala model of internationalization and those who will use the revised model to study the modern multinational

managerial governance adaptation in the multinational enterprise in honour of mira wilkins we propose an analytical business history approach informed by new internalisation theory to study managerial governance adaptation in the multinational enterprise mne we shed new light on the timing and the scale of managerial governance adaptation these two issues have remained largely unaddressed in mainstream international business theory we uncover the importance of delayed larger scale governance adaptation as a response to cumulative localised commitment failures we illustrate our new perspective on managerial governance adaptation by providing a short retrospective of wilkins and hill s american business abroad ford on six continents cambridge university press cambridge 1964 classic historical account of ford motor company s expansion across six continents between 1903 and 1963 our brief retrospective highlights the value of in depth historical analysis informed by umbrella behavioural assumptions such as those adopted in new internalisation theory based research to gain improved understanding of international strategy and governance trajectories of large mnes

the spontaneous evolution of commercial law jeremy bentham contended that property and state made law are born and must die together before the state s law there was no property take away the law all property ceases 4 309 most economists have taken this argument to heart clearly some system of defining and then protecting and enforcing property rights property law and rules of exchange contract law is needed for a market system to develop but does the state have to develop and enforce property and contract law one purpose of the following presentation is to demonstrate that the commercial sector is completely capable of establishing and enforcing its own laws a second purpose is to illustrate that modern commercial law is in fact largely made by the merchant community despite governmental efforts to take over provision of such law commerce is an evolving process of interaction and reciprocity which is simultaneously facilitated by and leads to an evolving system of commercial law carl menger 17 proposed that the origin formulation and the ultimate process of all social institutions including law is essentially the same as the spontaneous order adam smith 20 described for markets markets guided by smith s invisible hand coordinate interactions and so does customary law 6 7 these systems develop because perhaps through a process of trial and error it is found that the actions they are intended to coordinate are performed more effectively under one institutional arrangement or process than under another the more effective institutions and practices replace the less effective in the case of customary commercial law traditions and practice evolve to produce the observed spontaneous order as hayek explained however while smith s and menger s insights are firmly established in economics the study of jurisprudence has been almost completely unaffected by their arguments 9 101 one reason of course is that the invisible hand explanation for the emergence of market order is highly plausible because there is an obvious mechanism the mechanics of individual but interrelated market prices which provides the necessary coordination we call the price system the mechanism of evolution for a legal order is much less obvious thus the legal positivist view which holds that law is the product of deliberate design has a strong following among economists another major purpose of this discussion of commercial law therefore is to demonstrate that the rules of property and contract necessary for a market economy which most economists and legal scholars feel must be imposed have evolved without the

the dubious role of institutions in international business a road forward our commentary returns to the conundrum of how institutions matter in international business ib by revisiting the 2018 jibs decade award article by jackson and deeg 2008 on comparing capitalisms we first synthesize their main insights around institutional diversity and track its significant impact within ib and other management fields we then suggest three main takeaways that could move jackson and deeg s agenda further in terms of developing a more nuanced approach to institutions in ib we close with suggestions for future research and urge ib scholars to be more cautious when drawing on different strands of institutions theory

are public goods really common pools considerations of the evolution of policing and highways in england figures omitted a series of property rights alterations made by the english government undermined individuals incentives to cooperate in the production of both policing and road maintenance ultimately leading to government production the result is more accurately characterized as a free access common pool than as a public good common pool analysis suggests an array of possible policy prescriptions involving the internalization of costs and benefits through privatization of rights in contrast the public goods concept appears to be simply an ex post justification for claiming that the only efficient policy is public provision of these services at zero money prices i introduction policing and highways are frequently cited as important examples of production of public goods and it is often contended that private provision of these public goods will not occur as in samuelson and nordhaus 1985 48 49 and 713 according to tullock 1970 83 84 and samuelson and nordhaus 1985 49 for instance private sector production of policing and or highways generates non exclusionary external benefits for which private suppliers are unable to charge thus creating free rider incentives and non cooperative behavior i offer an alternative explanation for this lack of cooperation however which fits the historical evolution of public policing and highways in england the fact is that public policing and highways evolved because of changes in property rights which undermined private incentives to cooperate in the provision these services indeed these services are like the television signals discussed by minasian 1964 in that different institutional arrangements create different incentives for the allocation of resources 1 however my presentation goes beyond simply providing two supporting examples for minasian s 1964 77 contention that the public goods concept is misleading by proposing a more appropriate analytical tool for at least some allocation issues labeled as public good free rider problems in the case of policing for example before english kings began to concentrate and centralize power individuals had rights to a very important private benefit arising from successful pursuit and prosecution victims received restitution effective collection of restitution required the cooperation of witnesses and of neighbors to aid in pursuit but anyone who did not cooperate with victims could not obtain similar support when victimized and therefore could be excluded from this very important benefit of law enforcement policing was carried out by neighborhood associations and free riding did not appear to be a problem because anyone who did not cooperate was ostracized by the group in other words policing was not a public good in medieval england the primary benefits were private and or internal to small groups and non contributors were excluded one consequence of the development of monarchical government was the creation of criminal law as a source of royal revenues criminalization took away the private right to restitution and significantly reduced the incentives to voluntarily cooperate in law enforcement a very different set of institutions evolved as a consequence today rights to many attributes of public policing can be accessed by anyone as in a common pool although effective public policing still requires a substantial commitment of private resources including victim and witness cooperation 2 incentives for individuals to underinvest in the commons are substantial relative to incentives to invest in the production of any private benefits that remain in other words policing is not a public good today either its publicly produced aspects are generally treated as free access common pools and private individuals underinvest in their maintenance as demonstrated below the same is true of highways it might be argued that non excludable public goods and free access common pools are simply two terms for the same concept

the influence of hymer s dissertation on the theory of foreign derect investment the great contribution of stephen hymer s seminal dissertation 1960 was to escape from the intellectual straightjacket of neoclassical type trade and financial theory and move us towards an analysis of the multinational enterprise mne based upon industrial organization theory the magnitude of this breakthrough can be put into perspective by considering the state of the art when hymer wrote twenty five years ago in 1960 the prevailing explanation of international capital movements relied exclusively upon a neoclassical financial theory of portfolio flows in this frictionless world of perfect competition with no transaction costs capital moves in response to changes in interest rate or profit differentials see carl iversen 1936 according to this arbitrage theory capital is assumed to be transacted between independent buyers and sellers that is there is no role for the mne at the time there was no separate theory of foreign direct investment fdi the work did not even ask the question of why is there fdi despite the evidence of sectoral cross investments and the existence of large mnes with intra industry trade if anything the early work on fdi focused upon the where of investment in a particular nation or industry for example dunning 1958 was chiefly interested in explaining u s fdi in britain there was little interest in understanding the reasons for the mne or the nature of its operations the pioneering conceptual insight of hymer was to break out of the arid mold of international trade and investment theory and focus attention upon the mne per se this permits us to treat fdi as a modality by which firms extend their territorial horizons abroad the unique feature of fdi is a mechanism by which the mne maintains control over productive activities outside its national boundaries that is fdi means international production in this view fdi is more than a process by which assets or claims are exchanged internationally see robert aliber 1970 1983 hymer s great insight was in focusing attention upon the mne as the institution for international production rather than international exchange until hymer articulated the process of fdi as an international extension of industrial organization theory it was not possible to understand why the mne transfers intermediate products such as knowledge or technology among its units across different nations while still retaining property rights over such assets today it is widely recognized that the theory of fdi i e international production is primarily about the transfer of nonfinancial and ownershipspecific intangible assets by the mne which needs to appropriate and control the rate of use of its internalized advantage s see rugman 1981 david teece 1981 1982 richard caves 1982 and mark casson 1983 in this paper we first acknowledge hymer s contribution to the theory of fdi and then move on to reinterpret his dissertation in the light of the modern theory of the mne we tdiscussants raymond vernon harvard university robert z aliber university of chicago paul streeten boston university

the end of the opportunism vs trust debate bounded reliability as a new envelope concept in research on mne governance modern transaction cost economics tce thinking has developed into a key intellectual foundation of international business ib research but the williamsonian version has faced substantial criticism for adopting the behavioral assumption of opportunism in this paper we assess both the opportunism concept and existing alternatives such as trust within the context of ib research especially work on multinational enterprise mne governance case analyses of nine global mnes illustrate an alternative to the opportunism assumption that captures more fully the mechanisms underlying failed commitments inside the mne as a substitute for the often criticized assumption of opportunism we propose the envelope concept of bounded reliability brel an assumption that represents more accurately and more completely the reasons for failed commitments without invalidating the other critical assumption in conventional tce and internalization theory thinking namely the widely accepted envelope concept of bounded rationality brat bounded reliability as an envelope concept includes two main components within the context of global mne management opportunism as intentional deceit and benevolent preference reversal the implications for ib research of adopting the bounded reliability concept are far reaching as this concept may increase the legitimacy of comparative institutional analysis in the social sciences

organizational innovation in the multinational enterprise internalization theory and business history this article engages in a methodological experiment by using historical evidence to challenge a common misperception about internalization theory the theory has often been criticized for maintaining that it assumes a hierarchically organized mne based on knowledge flowing from the home country this is not an accurate description of how global firms operate in recent decades but this article shows it has never been true historically using longitudinal data on individual firms from the nineteenth century onwards it reveals evidence of how entrepreneurs and firms with multinational activity faced with market imperfections changed the design of their headquarters and their organizational structures

do multinationals really prefer to enter culturally distant countries through greenfields rather than through acquisitions the role of parent experience and subsidiary autonomy prior research has argued that multinational enterprises mnes prefer to enter culturally distant countries through greenfields rather than through acquisitions since acquisitions in such countries are costlier to manage this argument contains two hidden assumptions 1 the additional costs of acquisitions in culturally distant countries are the same for all mnes and 2 such acquisitions have no benefits over their greenfield counterparts in this paper we relax these two assumptions by arguing that an mne s preference for greenfields in culturally distant countries depends on its international and host country experience and on the level of autonomy it plans to grant the focal subsidiary analyzing 171 wholly owned greenfield investments and full acquisitions made by dutch mnes in 35 countries we find that these mnes prefer to enter culturally distant countries through greenfields but that this preference is lower when they have little international experience or plan to grant the focal subsidiary considerable autonomy in marketing

limits to international entry mode learning in smes despite extensive research the literature is unclear about the circumstances under which a firm learns from its past foreign entry modes and how this experiential learning is related to future mode choices building on the internationalization process ip model and the idea that some experiential learning is location bound while other learning is non location bound we develop and test theory to explain how experiential learning about foreign operation modes and markets impact future mode choices in new foreign markets overall we argue that mode based experiential learning is limited through the repeated use of a specific operation mode firms develop routines and processes that are non location bound and can be replicated in new foreign markets leading to the use of this same mode type in new locations but when complemented by experiential learning about a target market region firms opt for operation modes with greater commitment in new foreign markets drawing on a sample of german smes and examining four different types of entry modes we find some support however we also identify a number of notable exceptions to our theory in this way we help provide unique new insights informing future ip model experiential learning and international entry mode research

the uppsala internationalization process model revisited from liability of foreignness to liability of outsidership the uppsala internationalization process model is revisited in the light of changes in business practices and theoretical advances that have been made since 1977 now the business environment is viewed as a web of relationships a network rather than as a neoclassical market with many independent suppliers and customers outsidership in relation to the relevant network more than psychic distance is the root of uncertainty the change mechanisms in the revised model are essentially the same as those in the original version although we add trust building and knowledge creation the latter to recognize the fact that new knowledge is developed in relationships

a review of research on the growth of multinational enterprises a penrosean lens abstract we provide a comprehensive review of the growth of multinational enterprises mnes based on a quarter century 25 years of scholarly international business publications we synthesize research insights on the determinants of the growth of mnes through the lens of penrose s theory of firm growth which is the most influential theoretical perspective on firm growth the review takes stock of the research findings on the facilitators constraints and the trajectory of growth of mnes and elaborates on the commonalities and differences between research on the growth of mnes that draws on penrose s theory and research that does not this comparison highlights the opportunity to build an internally coherent theory of the growth of mnes that is a theory that connects what an mne is to what determines an mne s growth it also indicates that past research placed a strong emphasis on exogenous factors e g cross country distances as key constraints on growth even though the penrosean lens suggests a close consideration of endogenous factors that drive international growth as well as endogenizing the ostensibly exogenous growth determinants the review highlights the importance of firm specific managerial knowledge and learning which shapes the direction of the growth of mnes and ensures its administrative coherence

intangible resources as a key factor in the internationalisation of spanish firms abstract in this paper we analyse the effect of the availability of intangible resources measured by way of tobin s q on the probability of spanish firms increasing their international diversification we find that this impact is positive and statistically significant we also discover that firms with a higher endowment of intangible resources increase their presence in their current markets concentration and that those with a multinational status also expand to new markets scope