the interplay of national distances and regional networks private equity investments in emerging markets integrating social network theory with the literature on national distance we examine how the investment strategy followed by a private equity pe firm in an emerging market is affected by the interplay between two important types of national distances institutional and geographic and the firm s centrality in the regional syndication network covering over 5 000 investment transactions we use a dataset of more than 500 pe firms based in both developed and emerging markets targeting three emerging market regions latin america southeast asia and eastern europe from 1996 to 2011 the results show that depending on the level of centrality of pe firms in regional syndication networks institutional and geographic distances can have differing effects both in magnitude and direction on their investment strategies in emerging markets moreover these effects are contingent on whether the pe firm is from a developed market or an emerging market we conclude that different types of national distances can operate in dissimilar ways depending on 1 firm level factors defined at the regional level such as centrality in the regional syndication network and 2 the developed market or emerging market nature of the pe firm

national cultural distance and cross border acquisition performance previous theoretical research has argued that national cultural distance hinders cross border acquisition performance by increasing the costs of integration this article tests the alternative hypothesis that national cultural distance enhances cross border acquisition performance by providing access to the target s and or the acquirer s diverse set of routines and repertoires embedded in national culture using a multi dimensional measure of national cultural distance and controlling for other effects we examine a sample of 52 cross border acquisitions that took place between 1987 and 1992 and find a positive association between national cultural distance and cross border acquisition performance

national and organizational culture differences and international joint venture performance this study examines the effect of dimensions of national and organizational culture differences on international joint venture ijv performance based on data from a survey of executives from joint ventures between indian partners and partners from other countries we found that the presumed negative effect from culture distance on ijv performance originates more from differences in organizational culture than from differences in national culture

conceptualizing and measuring cultures and their consequences a comparative review of globe s and hofstede s approaches this paper explains why globe used a set of cultural values and practices to measure national cultures we show why there is no theoretical or empirical basis for hofstede s criticism that globe measures of values are too abstract or for his contention that national and organizational cultures are phenomena of different order we also show why hofstede has a limited understanding of the relationship between national wealth and culture furthermore we explain why hofstede s reanalysis of the globe data is inappropriate and produces incomprehensible results we also show the validity of managerial samples in studying leadership finally we explain why hofstede s claim that globe instruments reflect researchers psycho logic reveals ignorance of psychometric methodologies designed to ensure scale reliability and construct validity

an empirical test of the effect of excess capacity in price setting capacity constrained supergames abstract in a multi period game industry excess capacity may act to deter firms from cheating on a non cooperative oligopoly price a model is developed that translates the deterrrent influence of excess capacity into predictions about the relationship between excess capacity and oligopoly price cost margins the model is tested with time series data from the u s aluminum industry results are consistent with those predicted by the model

do venture capital firms benefit from international syndicates this paper examines the benefits of syndicating with foreign venture capital vc firms for domestic vc firms in emerging markets we find that the vc firms that are domestic to their invested companies and previously syndicated with foreign partners invest proportionately more frequently in riskier ventures after gaining syndication experience with foreign vc firms a larger number of their portfolio companies are successfully exited thereby suggesting improved performance we hypothesize that this outcome is due to the organizational learning effects while the previous research has shown benefits for foreign vc firms our results show that domestic vc firms also benefit from international syndication through improved investments

uncertain outcomes of foreign investment determinants of the dispersion of profits after large acquisitions when u s firms make large international acquisitions the unpredicted component of their profits over the next five years increases with the relative size of the acquired firm degree of product diversification and reliance on r d assets the unpredicted component declines with the acquirer s size experience and previous profits transitory and longer run unpredicted components are distinguished

prices and production cost in aluminium smelting in the short and the long run the main objective of this study is to reflect the institutional changes that have characterized the aluminium industry as a result of the introduction of london s metal exchange lme trading in doing this it is shown that product prices are taken exogenously and linked to input prices via risk sharing agreements this forces producers in a competitive environment to minimize costs the latter is completed with a description of their investment decision making mechanism in which investment is determined by cost and a measure of tobin s q as it is noted by figuerola ferretti 2002 the crude oil industry has been subject to similar structural changes it was highly concentrated up to the 1980s when the opec discipline broke down resulting in the introduction of crude oil futures on the new york mercantile exchange nymex in 1983 and the international petroleum exchange ipe in 1988 the main contributions of this study are the use of a proprietary and complete industry data set that allows one

oligopoly supergames some empirical evidence on prices and margins this paper is a panel data study on the behavior of prices and margins of oligopolies involved in repeated games the authors examine two supergame models which generate very different predictions about the cyclical behavior of prices and margins evidence on the levels of price cost margins indicates that oligopolies achieve equilibria that more closely resemble a one shot cournot nash outcome than monopoly the authors find however that industries with high price cost margins exhibit cyclical price behavior which is quite different from that of unconcentrated industries little evidence of price wars during either recessions or booms is found copyright 1987 by blackwell publishing ltd

managers gender role attitudes a country institutional profile approach in this paper we use the country institutional profile to investigate how selected cognitive normative and regulative aspects of various countries relate to traditional gender role attitudes of managers from these countries our cross level analyses using hierarchical linear modeling control for a number of individual characteristics i e age education gender and social class results support our hypotheses that managers traditional gender role attitudes relate positively to nation level uncertainty avoidance and power distance moreover the results support our predictions that gender egalitarian normative institutions degree of regulation and degree of educational development are negatively related to managers traditional gender role attitudes however results reject our hypotheses regarding nation level religiosity assertiveness and masculinity not showing the proposed relationship with managers traditional gender role attitudes implications for research and practice are discussed

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

the determinants and consequences of abandoned takeovers takeover activity has attracted a great deal of academic attention over the past three decades much of this interest has focused on the study of completed takeovers with a particular interest in seeking to understand the impact of takeover activity on the wealth of both shareholders in acquired and bidding firms unlike their completed counterparts abandoned takeovers have received relatively little academic attention this is surprising since a significant proportion of takeover bids are unsuccessful this paper seeks to address the imbalance by providing a comprehensive survey of the takeover failure literature the paper focuses on two aspects of the literature first we discuss and review the factors likely to influence takeover outcome second we examine the consequences of takeover abandonment from the perspective of targets and bidders we also identify a number of areas where future research may seek to improve further our understanding of the causes and consequences of takeover abandonment copyright 2001 by blackwell publishers ltd

informal institutions and absorptive capacity a cross country meta analytic study the informal institutions construct has not been well understood in prior research we contribute to the informal institutions literature by developing a generalized two by two conceptualization of institutions that juxtapose the dimension of behavioral uncertainty versus environmental uncertainty and the dimension of informal institutions versus formal institutions in particular we theorize informal institutions based on the extent to which they reduce behavioral uncertainty or environmental uncertainty as well as their alignment with the formal institutional environment with respect to the two types of uncertainty leveraging this fourfold typology we shed new light on the importance of informal institutional conditions in theories of firms absorptive capacity and performance using a cross country meta analytical approach we find that a firm s absorptive capacity is more positively related to performance outcomes in countries with informal institutions that reduce behavioral uncertainty and environmental uncertainty furthermore the misalignment between informal and formal institutions with respect to behavioral uncertainty and environmental uncertainty weakens the relationship between absorptive capacity and performance outcomes overall by re emphasizing the fundamental role of informal institutions in reducing behavioral and environmental uncertainties our typology offers a fine grained perspective to conceptualize informal institutions and constitutes an opportunity to advance theory in informal institutions and international business

formal and informal institutional legacies and inward foreign direct investment into firms evidence from china this paper explores the influence of informal institutional legacy on contemporary foreign direct investment fdi this study is situated in the context of china s treaty port era 1842 1943 hypotheses are posited and tested related to how the treaty port policies and overseas chinese communities of cities established during that period created formal and informal institutional legacies that positively influence the likelihood and volume of contemporary inward fdi firms receive this research suggests that despite and because of the cultural revolution s traumatic shock informal institutions helped formal institutions morph into informal rules and thus created a lingering legacy effect drawing on a longitudinal sample of chinese firms data and historical materials that provide information about treaty ports and overseas chinese communities this study finds supporting evidence that informal institutional legacy is important for contemporary fdi and brings history back into the international business literature this study provides practical implications by suggesting that given the increasing turbulence and uncertainties in emerging markets and transnational economies building and maintaining connections with transnational community actors of these countries could take advantage of the informal institutions to mitigate risks and sustain international business activities international investors could also benefit by investing in locales with rich transnational community connections

referendum design quorum rules and turnout in this article we focus on the consequences of quorum requirements for turnout in referendums we use a rational choice decision theoretic voting model to demonstrate that participation quorums change the incentives some electors face inducing those who oppose changes in the status quo and expect to be in the minority to abstain as a result paradoxically participation quorums decrease electoral participation we test our model s predictions using data for all referendums held in current european union countries from 1970 until 2007 and show that the existence of a participation quorums increases abstention by more than ten percentage points

unraveling the mne wage premium whereas ib has extensively studied mnes generic positive impact on host economies but rarely on employee wages economics research has only shown an overall mne wage premium we unravel this premium considering multiple levels of analysis and accounting for host country contextual contingencies to unveil mnes different positive or negative distributional effects using unique micro level data from over 40 000 employees in 13 countries we examine mnes distributional effects for employees gender experience and immigrant status the influence of host country property rights protection and labor regulation and interplays with region and industry effects mnes distributional effects show marked differences that largely depend on the host country context and that are positive for experienced and foreign born employees in developed countries but negative for females working in developing countries whereas in developed countries the gender wage gap is smaller in mnes than in domestic firms as hypothesized we find evidence of a larger wage gap in developing countries the analysis also reveals that the higher host countries level of property rights protection the lower the mne wage premium our study points at the need to reassess statements about the generic positive impact of mnes in host countries particularly in developing countries and discusses further research implications

how the electoral college influences campaigns and policy the probability of being florida this paper analyzes how us presidential candidates should allocate resources across states to maximize the probability of winning the election by developing and estimating a probabilistic voting model of political competition under the electoral college system actual campaigns act in close agreement with the model there is a 0 9 correlation between equilibrium and actual presidential campaign visits across states both in 2000 and 2004 the paper shows how presidential candidate attention is affected by the states number of electoral votes forecasted state election outcomes and forecast uncertainty it also analyzes the effects of a direct national popular vote for president

interpreting empirical findings journal of international business studies 2006 doi i0 1057 palgrave jibs 8400217 in my role of department editor at jibs i have seen over 100 empirical manuscripts overall i have been impressed with the degree to which tests match the theory and the choice of statistical technique given the nature of the data however there is a systematic behavior that i would encourage us as a field to remedy we should reconsider how we interpret empirical findings in our work the current norm for interpreting empirical results rests almost exclusively on highlighting the number of s next to coefficient estimates in the tables

cross border acquisition abandonment and completion the effect of institutional differences and organizational learning in the international business service industry 1981 2001 based on the concepts of north s 1990 political economy of national institutions and economic behavior we investigate how formal and informal institutional features influence the likelihood that a cross border acquisition deal will be completed as well as the time taken for its completion after announcement additionally we study how past experience with completed acquisition deals moderates the effects of institutional differences we focus on a relatively new context the pre completion stage of acquisition processes we test our hypotheses using data from 2389 announced cross border acquisition deals in the international business service industry 1981 2001 we find that differences in national formal and informal institutions explain part of the variation in the likelihood that an announced cross border acquisition deal will be completed as well as the duration of the deal making in addition organizational learning moderates the effects of institutional distance past experience with completed cross border acquisition deals increases the likelihood of a subsequent deal completion in institutionally closer environments but shortens the deal duration in institutionally distant environments

the costs of antimerger lawsuits abstract this paper presents tests of the hypothesis that the relief imposed in antimerger cases is costly for defendant firms stockholders previous research on this subject suggests that defendants case related losses are due entirely to legal expenses and the disruption of productive activity in this paper it is shown that two out of five portfolios of defendant firms earn abnormal losses when final decisions in antimerger cases are announced these losses are consistent with the imposition of costly constraints on some defendants by government antitrust enforcers the tests also show that when acquisitions are canceled following antimerger complaints the losses to the target firms are substantial and completely offset the gains generated when the acquisitions are proposed

long run competition in the u s aluminum industry abstract a methodology for examining dynamic structure performance relationships in a single industry is proposed and illustrated implications of long run competitive behavior for a simple simultaneous equations model of structure and performance are derived and tested using recently developed methods for the interpretation of economic time series it is concluded that the structure and performance in the u s aluminum industry in the postwar period conform well with the hypothesis that the primary aluminum market was competitive in the long run

on the design of citizens initiatives in a union of states the paper studies the design of popular initiatives in unions of states we analyze the effect of state specific threshold requirements on the incentives of a rational campaign organizer who decides which constituencies to target if the heterogeneity of preferences in a population increases with its size degressively proportional thresholds satisfy the normative objective of neutrality between individuals from different states in contrast thresholds which are linear in population size are neutral if a priori no differences between states are acknowledged

quorum and turnout in referenda we analyze the effect of turnout requirements in referenda in the context of a group turnout model we show that a participation quorum requirement may reduce the turnout so severely that it generates a quorum paradox in equilibrium the expected turnout exceeds the participation quorum only if this requirement is not imposed furthermore a participation quorum does not necessarily imply a bias for the status quo we also show that in order to induce a given expected turnout and avoid the quorum paradox the quorum should be set at a level that is lower than half the target finally we argue that a super majority requirement to overturn the status quo is never equivalent to a participation quorum jel d72

incompatible strategies in international mergers the failed merger between telia and telenor the aim of this paper is to explore the problems of incompatible strategies in international mergers studying a failed merger between the two state owned scandinavian telecom corporations we examine how the parties strategies were incompatible we find that the parties strategies were incompatible in three distinctive areas and study how the companies tried to resolve these incompatibilities owing to national governance structures established to protect national interests the parties were unable to resolve these strategic incompatibilities

extending the internationalization process model increases and decreases of mne commitment in emerging economies the internationalization process model suggests that firms internationalize by building positions in foreign markets and networks following iterative cycles of learning and changes in commitment however as subsidiaries evolve commitments may be decreased as well as increased a phenomenon that has rarely been studied moreover it remains an open question why strategic intentions at the outset of an investment project differ from the actual operations established we address these questions by extending the model and combining it with mintzberg and waters framework of strategy formation specifically we suggest that commitment decisions correspond to statements of intended strategy while network positions correspond to realized strategies the processes of learning opportunity creation and trust building triggered by commitment decisions are however moderated by institutional influences that lead to divergences between realized and intended strategies we test propositions derived from this framework on a survey data set of subsidiaries of multinational enterprises in hungary lithuania and poland and find that institutional voids and institutional uncertainty affect subsidiary strategy implementation but in opposing directions under high institutional uncertainty investors prefer low commitment but flexible modes that enable later commitment increases whereas institutional voids increase up front information search and adaptation costs that reduce the likelihood of early post entry adjustments our analysis reinforces the need for more differentiated theoretical analyses of how institutions affect business strategies over time

mitigating risk in international mergers and acquisitions the role of contingent payouts previous internationalization studies have focused on the entry modes employed by multinational firms but have not considered the contractual heterogeneity that underlies each mode it is important to examine these contractual details as the firm may be able to obtain some of the benefits typically associated with one entry mode while selecting another in the case of international mergers and acquisitions m as a key contractual variable is whether the parties agree to a performance contingent payout structure which can mitigate the risk of adverse selection in this paper we examine the antecedents of contingent payouts in the form of earnouts and stock payments the results indicate that firms lacking international and domestic acquisition experience turn to contingent payouts when purchasing targets in high tech and service industries firms tend to avoid contingent payouts in host countries with problems with investor protection and legal enforceability

conceptualizing and measuring distance in international business research recurring questions and best practice guidelines distance is a central concept in international business research yet there is debate about the construct as well as its operationalization in this editorial we address three of the most important recurring questions posed by authors editors and reviewers by examining the theory methods and data of distance research we discuss 1 how to theorize on distance and 2 what method and 3 what data to use when constructing a distance index we develop practical recommendations grounded in theory illustrating and supporting them by calculating cross country distance indices for all available country pairs and two of the most used distance indices cultural and institutional we show that whereas a specific method to calculate distance may matter to some extent the choice for a specific cultural or institutional framework to measure cultural or institutional distance has a major impact on country pair distances overall this editorial highlights the importance of matching data and method to the theoretical argument

the construct of institutional distance through the lens of different institutional perspectives review analysis and recommendations this paper presents a review and critique of the 20 year old literature on institutional distance which has greatly proliferated we start with a discussion of the three institutional perspectives that have served as a theoretical foundation for this construct organizational institutionalism institutional economics and comparative institutionalism we use this as an organizing framework to describe the different ways in which institutional distance has been conceptualized and measured and to analyze the most common organizational outcomes that have been linked to institutional distance as well as the proposed explanatory mechanisms of those effects we substantiate our qualitative review with a meta analysis which synthesizes the main findings in this area of research building on our review and previous critical work we note key ambiguities in the institutional distance literature related to underlying theoretical perspectives and associated mechanisms distance versus profile effects and measurement we conclude with actionable recommendations for improving institutional distance research

why are different services outsourced to different countries the tradability revolution in services has led to a dramatic expansion of offshore outsourcing of services allowing firms to take advantage of lower production costs in foreign countries however production costs alone cannot explain the location determinants of offshore outsourcing of services in this paper we argue that minimizing transaction costs is also an important determinant of the location of offshore outsourcing of services we empirically analyze characteristics of services and characteristics of foreign countries that may impact on transaction costs in an outsourcing relationship and hence determine where services will be outsourced offshore we derive measures of service characteristics routineness complexity and interactiveness based on the tasks required to provide them further we posit that there are interaction effects between service and country characteristics using bureau of economic analysis data on us service outsourcing across 11 types of services to 31 countries between 1992 and 2005 we find that 1 services that are more routine less complex or less interactive are outsourced more to foreign countries 2 services are outsourced more to countries with higher institutional quality and greater cultural proximity 3 non routine complex and interactive services are outsourced relatively more to countries with a better institutional quality