building international business theory a grounded theory approach the field of international business ib is in need of more theory development as such the main focus of our manuscript was to provide guidance on how to build ib specific theory using grounded theory gt moreover we contribute to future theory development by identifying areas within ib where gt can be applied and the type of research issues that can be addressed using this methodology finally we make a noteworthy contribution by discussing some of gt s caveats and limitations particularly those relevant to ib this effort is intended to spur further interest in the development of ib theory

a study of collusion in first price auctions this paper examines the bidding for school milk contracts in florida and texas during the 1980s in both states firms were convicted of bid rigging the data and legal evidence suggest that the cartels in the two states allocate contracts in different ways one cartel divides the market among members while the other cartel also uses side payments to compensate members for refraining from bidding we show that both forms of cartel agreements are almost optimal provided the number of contracts is sufficiently large in the auction the cartel bidder may face competition from non cartel bidders the presence of an optimal cartel induces an asymmetry in the auction the selected cartel bidder is bidding as a representative of a group and has on average a lower cost than a non cartel bidder the data support the predicted equilibrium bidding behaviour in asymmetric auctions in accordance with optimal cartels

the internalisation theory of the multinational enterprise a review of the progress of a research agenda after 30 years this paper reviews the progress of the research agenda initiated by the future of the multinational enterprise 1976 focusing initially on the problem of explaining the existence of the multinational enterprise the agenda soon broadened to encompass the analysis of alternative modes of foreign market entry the role of international joint ventures the impact of innovation on corporate growth and the role of culture in international business the core philosophy based on the coasian nature of the firm and on rational action modelling has remained constant while the widening range of applications has encouraged synthesis with theories developed in other fields of research success in answering any one question invariably generates new questions which must in turn be answered through a further extension of the theory and this dynamic continues to drive the development of the theory today internalisation theory has retained its validity and its vitality over the past 30 years and is currently being extended into new fields of international business research

catching up by hiring the case of huawei hiring experts in centers of state of the art technology is an important way in which a multinational enterprise mne can gain competitive advantage and yet use of this mechanism remains under researched this study uses the case of a chinese mne that recently achieved a leading position in the telecommunications market huawei technologies taking the perspective of huawei s offshore hires i find that greenfield investments contributed to overcoming liabilities of origin and outsidership in the global telecommunications industry nevertheless even now that huawei has caught up with industry incumbents its output capabilities remain dependent on the innovation capabilities of its offshore experts

from the editors can i trust your findings ruling out alternative explanations in international business research the complex nature of international business research with its cross country and multilevel nature complicates the empirical identification of relationships among theoretical constructs the objective of this editorial is to provide guidance to help international business scholars navigate this complexity and ensure that readers can trust their findings we provide suggestions for how to rule out alternative explanations explaining key considerations not only in empirical analyses but also in theory building and in research design our discussion covers both qualitative and quantitative studies because we believe that it is imperative to understand how trustworthiness is established in both traditions even for international business researchers who self identify with only one this enables scholars to have a broader scope of knowledge when interpreting past research in the field and to be more adept at explaining their design choices to a diverse audience

dynamic capabilities and internationalization of authentic firms role of heritage assets administrative heritage and signature processes we study mnes that tie their long lasting competitiveness and internationalization to the deployment of their heritage assets administrative heritage and signature processes built in their home markets when faced with changes these authentic firms scan for and buffer against threats to their signature processes use their heritage endowment to focus on their capacity to maintain and defend their niches and preserve their capacity for stability we complement the traditional dynamic capabilities perspective by redefining its boundary conditions furthermore authentic firms resist and limit local adaptation of process and products and internationalize only if opportune by deploying preservation capabilities

free entry and social inefficiency our goal is to provide a simple yet general exposition of the conditions under which the number of entrants in a free entry equilibrium is excessive insufficient or optimal our analysis compares the number of firms that enter a market when there is free entry with the number that would be desired by a social planner who is unable to control the behavior of firms once they are in the market that is we consider the second best problem of choosing the welfare maximizing number of firms while we take as given their noncompetitive behavior after entry we demonstrate that the crucial conditions for establishing the presence of an entry bias can be stated quite simply in terms of the outcome of the postentry game played by entrants in contrast to previous work we do not need to model this postentry game explicitly

state ownership effect on firms fdi ownership decisions under institutional pressure a study of chinese outward investing firms this study investigates the effect of state ownership on chinese firms foreign direct investment fdi ownership decisions it adopts a political perspective to extend the application of institutional theory in international business research specifically it examines firms heterogeneous responses to external institutional processes during foreign market entry while taking into consideration the political affiliation of firms with the external institutions we argue that state ownership creates the political affiliation of a firm with its home country government which increases the firm s resource dependence on home country institutions while at the same time influencing its image as perceived by host country institutional constituents such resource dependence and political perception increase firms tendency to conform to rather than resist isomorphic institutional pressures we tested our hypotheses using primary data for 132 fdi entries made by chinese firms during 2000 2006 and we found that the effects of home regulatory host regulatory and host normative pressures on a firm to choose a joint ownership structure were stronger when the share of equity held by state entities in the firm was high

storytelling the internationalization of the multinational enterprise internationalization deals with expansion across space and time researchers have framed internationalization as market growth and expansion through foreign direct investment fdi we use narrative theory to frame a bigger richer picture using mikhail bakhtin s typology of nine space time conceptions and directed observations of mcdonald s corporation we show how multinational enterprises mnes create narratives of internationalization to mitigate the risks of fdi competing space time conceptions in consumers authors and societies stories interact with managerial narratives to affect international product and task environments we increase awareness of mnes storytelling by offering a typology of stakeholders stories across space and time

cartel price announcements the vitamins industry abstract the primary manufacturers of vitamins admitted to participating in international market share agreement cartels for several years during the 1990s their announced price increases appeared in leading trade journals we show that price announcements during the cartel period and the lead times before these prices took effect were fundamentally different in character from price announcements when explicit collusion was less likely these differences are consistent with our model of price announcements where we account for the importance to the cartel of buyer acceptance of or resistance to a price increase acceptance avoids costly market share reallocations among members of an explicit cartel logit estimates show that after 1985 the likelihood of a price announcement is largely driven by the length of time between announcements rather than cost or demand factors suggesting that the price announcements after 1985 stem from cartel meetings

is the international business research agenda running out of steam this research note challenges international business researchers to think of their future work in terms of the past achievements of their discipline it identifies three key research areas corresponding to attempts to tackle crucial empirical questions the explanation of foreign direct investment the multinational firm and the globalization of business it ends by considering the future research agenda

strategic leniency and cartel enforcement the cornerstone of cartel enforcement in the united states and elsewhere is a commitment to the lenient prosecution of early confessors a burgeoning game theoretical literature is ambiguous regarding the impacts of leniency i develop a theoretical model of cartel behavior that provides empirical predictions and moment conditions and apply the model to the complete set of indictments and information reports issued over a 20 year span statistical tests are consistent with the notion that leniency enhances deterrence and detection capabilities the results have implications for market efficiency and enforcement efforts against cartels and other forms of organized crime jel d43 l12 l13 k21 in 1993 the department of justice doj introduced a new leniency program with the intent of destabilizing existing cartels and deterring new cartels the program commits the doj to the lenient prosecution of early confessors in particular it guarantees complete amnesty from federal prosecution to the first confessor from each cartel provided that an investigation into the confes sor s cartel is not already underway it also offers discretionary penalty reductions to conspirators who confess when an investigation is already ongoing the new leniency program has become the cornerstone of cartel enforcement efforts in the united states e g scott d hammond 2004 and recently has inspired antitrust authorities in australia canada the european union japan south korea and elsewhere to introduce similar programs oecd 2002 2003 this paper tests the efficacy of the new leniency program the results have implications for market efficiency and enforcement efforts against cartels and other forms of organized crime a burgeoning game theoretical literature is ambiguous regarding the impacts of leniency a common finding is that leniency may destabilize cartels because conspirators can simultane

international expansion through flexible replication learning from the internationalization experience of ikea business organizations may expand internationally by replicating a part of their value chain such as a sales and marketing format in other countries however little is known regarding how such international replicators build a format for replication or how they can adjust it in order to adapt to local environments and under the impact of new learning to illuminate these issues we draw on a longitudinal in depth study of swedish home furnishing giant ikea involving more than 70 interviews we find that ikea has developed organizational mechanisms that support an ongoing learning process aimed at frequent modification of the format for replication another finding is that ikea treats replication as hierarchical lower level features marketing efforts pricing etc are allowed to vary across ikea stores in response to market based learning while higher level features fundamental values vision etc are replicated in a uniform manner across stores and change only very slowly if at all in response to learning flexible replication we conclude by discussing the factors that influence the approach to replication adopted by an international replicator

merging without alienating interventions promoting cross cultural organizational integration and their limitations foreign direct investment particularly cross border mergers and acquisitions can spawn a range of individual level outcomes from cross cultural adjustment and synergistic learning on the positive side to work alienation on the negative unsuccessful navigation of these individual level outcomes leads to failed integration that can seriously affect the realization of desired organizational outcomes such as successful technology transfer knowledge sharing and the general realization of global growth by means of an iterative between methods triangulation the study surfaces cross cultural work alienation as a phenomenon that can limit the overall success of such ventures and identifies interventions that help to promote successful post merger integration

identifying the big question in international business research buckley 2002 argues that the international business ib research agenda may be running out of steam because no big research question has currently been identified buckley also asks whether the field needs a big question and if so challenges ib scholars to discover it buckley and ghauri 2004 elaborate on the third question of globalization discussed in buckley 2002 as a possible candidate for the big question in response this article is written to take up buckley s challenge and also to comment on buckley and ghauri s more recent work i agree that ib needs a big question the pursuit of which can serve to unite and energize scholars make scientific progress and enhance the status and prestige of the field toward that end i argue that what determines the international success and failure of firms has always served as a fundamental research question which has permeated ib research in the past and present and is likely to propel its progress in the future therefore i am of the opinion that the ib research agenda is not likely to run out of steam because focusing on this question will leverage ib s comparative advantage and keep the field engaged in generating exciting and disciplined theories and findings in the 21st century

qualified immigrants success exploring the motivation to migrate and to integrate high quality employees with international experience bring valuable advantages to internationally operating organizations the growing number and importance of immigrants and particularly qualified university educated immigrants deserves more attention from international business practitioners and scholars the market for highly qualified people within mncs is increasingly becoming international and ever more of them have migrated to a new country to advance their career such employees can be a source of competitive advantage for international firms we use qualitative research with qualified immigrants qis in france to argue that the success of qis depends in large part on their motivation to integrate into their host country which is largely explained by their motivation to migrate from the qualitative data we derive four different types of qualified migrant and suggest that the type will determine the success of the immigrant within and outside the organization the relationship between the motivation to migrate and the motivation to integrate is moderated by met expectations and organizational integration policies such that the effects of these in turn vary with type recognition of the types of qi and the moderating factors will be valuable for practitioners as well as opening up research avenues for scholars

qualitative research for international business qualitative research in international business has been rare the main research streams of the field relying more on quantitative methods this paper first outlines why qualitative research has been scant it then presents areas such as theory building where qualitative research could make a substantial contribution third it reviews approaches to high standards of qualitative research and criteria for evaluating qualitative research finally some possible research areas where qualitative research might prove fruitful are suggested

the impact of leniency and whistle blowing programs on cartels antitrust authorities have set up leniency programs for cartel members that denounce their collusive agreements these programs help prosecute participants and can thereby deter collusion we compare the impact of reduced fines and positive rewards and argue that rewarding individuals including firm employees can deter collusion in a more effective way we discuss possible adverse effects of whistle blowing programs on firms behavior and particularly on turnover incentives to innovate and cooperation we also explore explanations for the puzzling fact that managers keep incriminating evidence and argue reward programs actually provide additional incentives for keeping such evidence

regaining the edge for international business research the key to international business is that it approaches empirical phenomena at a variety of levels of analysis using a variety of theoretical frameworks the most important levels of analysis are the individual manager the firm the industry and the environment in each category there is vast heterogeneity figure 2 1 illustrates this interaction between issues and theories it has levels of analysis on the vertical axis and the basic social sciences on the horizontal axis as systems of thinking about the phenomena it would also be possible to replace fundamental disciplines by the primary management disciplines marketing finance strategy etc

a microfoundations approach to transnational capabilities the role of knowledge search in an ever changing world scholars seeking to understand the origin of dynamic capabilities have struggled to articulate specific capabilities and locate their source of variation within the firm we propose that the transnational imperative and a microfoundations approach to knowledge search can help to develop this topic adopting an engaged scholarship approach hypotheses are tested in a global consulting company counter to traditional capabilities arguments we find that drawing from globally dispersed colleagues will more strongly impact local responsiveness than drawing from locals outside the company though both may still be needed efficiency increases when teams draw upon codified knowledge but decreases when they draw upon embedded tacit knowledge finally through continual learning teams can change and re direct the composition of their responsiveness and efficiency activities in ways sensitive to an ever changing world

price fixing policy abstract the prohibition against price fixing is competition law s most important and least controversial provision yet there is far less consensus than meets the eye on what constitutes price fixing and prevalent understandings cannot be reconciled with principles of oligopoly theory this article 1 presents a fundamental reconceptualization of our understanding of horizontal agreements 2 develops a systematic analysis of price fixing policy that focuses on its deterrence benefits and chilling costs and 3 compares this direct approach to commentators favored formulations that typically involve some sort of formalistic communications based prohibition by targeting a subset of means rather than the illicit ends conventional formulations tend to impose liability in cases with lower deterrence benefits and greater chilling costs than those reached under a direct approach and to incur greater administrative costs as well

accessing vs sourcing knowledge a comparative study of r d internationalization between emerging and advanced economy firms research and development r d internationalization is on the rise for advanced economy multinationals amnes as well as emerging economy multinationals emnes we study emne r d internationalization by comparing it to that by amnes in the context of an emerging knowledge intensive industry we find that these two are fundamentally different processes while the internationalization of amnes r d activities can largely be explained in terms of the twin strategies of competence exploitation and competence creation emne r d internationalization is rooted in the firms overall catch up strategy to get on par with industry leaders an in depth comparison of knowledge flows reveals that within amnes headquarters often serves the primary source of knowledge for r d subsidiaries in contrast within emnes headquarters accesses knowledge from r d subsidiaries in advanced economies for innovation catch up within this dichotomy the innovative capabilities of emne headquarters develop more slowly and with greater difficulty than those of amne subsidiaries

a behavioral theory of market expansion based on the opportunity prospects rule what explains organizational search and choice when multiple opportunities are available to the decision makers drawing on the behavioral view of the firm and on the attention based view this study proposes a theoretical model centered on the opportunity prospects rule to explain market expansion defined as the extent how many and the selection which of multiple available opportunities that are actually pursued by competing firms we test our model using longitudinal fine grained data on commercial banks undertaking more than 1 300 opportunity choices the findings show that firms do use the opportunity prospects rule when exercising market expansion choices and that slack and performance feedback moderate the effects of opportunity prospects this paper contributes to organizational decision making research and to the behavioral view of the firm by showing the importance of considering an opportunity driven approach by demonstrating the relevance of simplifying rules to explain the search for the consequences of alternatives by extending recent efforts to provide a more forward looking perspective to model organization behavior and by showing when slack and performance feedback moderate the effects on market expansion of the opportunity prospects rule