the replacement problem abstract a prototypical vintage capital model of economic growth is developed where the decision to replace old technologies with new ones is modeled explicitly technological change is investment specific depreciation in this environment is an economic not a physical concept the vintage capital economy s balanced growth paths and transitional dynamics are analyzed the transitional dynamics are markedly different from the standard neoclassical growth model

going the distance the pros and cons of expanding employees global knowledge reach while some scholars have suggested mnes to be superior to markets for managing knowledge across geographically distant boundaries how they actually accomplish this has not been fully considered we address this void by developing and testing a model that highlights the critical role of organizational incentives in enhancing employees internal search and use of knowledge data from 166 knowledge intensive projects support our argument that in contrast to process based incentives that influence more local search outcome based incentives motivate employee teams to reach well beyond their immediate location which in turn enhances performance at the same time we demonstrate that expanded reach also increases the likelihood of accessing more codifiable knowledge which can hurt performance our model examines the contradictory and previously unknown effects of global knowledge reach

design and analysis of simulated consumer choice or allocation experiments an approach based on aggregate data the authors integrate concepts in conjoint analysis and discrete choice theory in econometrics to develop a new approach to the design and analysis of controlled consumer choice or resource allocat

equipment investment and growth in developing countries abstract differences in equipment investment or equipment prices account for large variations in growth rates across countries an important task is to understand the economic mechanism underlying the equipment growth nexus and its policy implications in order to study this issue this paper develops a model in which growth is driven by the adoption of technologies that are embodied in equipment i show that this model can quantitatively account for the observed cross country relationships between equipment investment equipment prices and growth i find that the competitive equilibrium is characterized by inefficiently low levels of learning and too slow growth and study which policies are able to remedy this inefficiency

entry mode deviation a behavioral approach to internalization theory we explore when and why decision makers choose international entry modes e g hierarchies or markets that deviate from internalization theory s predictions by applying a cognitive perspective on entry mode decision making we propose that the performance of prior international activities influences decision makers behavior in different ways than assumed in internalization theory more specifically due to a representativeness bias underperforming overperforming past ventures influence the decision to change continue using the previous entry mode choice which may result in an entry mode deviation in addition the propensity to deviate from theoretical predictions is stronger when the experience is recent and or salient due to an availability bias in conclusion we argue that internalization theory can benefit from incorporating more systematically important behavioral assumptions on how firms enter international markets in so doing we contribute to the recent conversation on how variations in human behavior influence internalization theory

cognitive tendencies in international business research implications of a narrow vision some scholars have suggested that international business ib research suffers from a narrow vision this paper tests this thesis by extending principles of the cognitive sciences to study the ontological and epistemological features of ib research from 1970 through 1997 operationally ib scholars schematic representation of their logic of interpretation as indicated by 159 figures including 60 models conceptualization and frameworks culled from 27 years of jibs publication profiling these data by absolute and relative indicators of time shows that analog reasoning dominates present logics of interpretation in ib research the longitudinal profile and time series analysis of the structural features of schematic representations in jibs spotlights significantly decreasing comprehensiveness connectedness and complexity i close by nothing the intellectual merit of scholars call for dialectic inquiry and the task this imposes on the community of ib researchers particularly so within the academy of international business

the expansion of foreign direct investments discrete rational location choices or a cultural learning process it is recognized in the literature that experience may affect the cost and the uncertainty of operating in foreign markets and experience and market knowledge may therefore influence the location decisions of fdis economic theory does not however predict a general expansion pattern of fdis across industries on the other hand the theory associated with the internationalization process approach highlights the importance of cultural distance and predicts a movement from close to more distant markets as more experience is acquired by the firm the internationalization process approach is rooted in a behavioral theory of the firm

stickiness and the adaptation of organizational practices in cross border knowledge transfers the reuse of organizational practices in multiple locations is a fundamental way in which mncs leverage knowledge to seek competitive advantage scholars approaching the issue of adaptation from both a market and an institutional perspective argue that in order to achieve fit with the local environment some degree of adaptation is advisable and the need for adaptation increases as the institutional distance between source and recipient locations increases however arguments to date have examined the effect of adaptation primarily on a subsidiary s long term performance a necessary precursor is to understand the effect of adaptation on the transfer process itself as transfer difficulty or stickiness may preclude the reuse of an organizational practice in the first place in this paper we explore how the adaptation of organizational practices affects the stickiness of cross border transfers we use structural equation modeling to analyze data from 122 internal transfers of best practice contrary to expectation we find that adaptation significantly increases rather than decreases the stickiness of cross border knowledge transfer

decomposing learning by doing in new plants the paper examines learning by doing in the context of a production function in which the other arguments are labor human capital physical capital and vintage as a proxy for embodied technical c

technological expectations and adoption of improved technology abstract attention is focused upon the adoption demand rather than the creation supply of new technology which improves from time to time based on the expected flow of technological progress over which the firm demander has no control it must decide either to adopt the current best available technology or to postpone adoption the distinguishing features of the model are that more than one technological innovation is anticipated and expectations about the likelihood of such innovations are revised as time passes since the last innovation our analysis shows that the firm will adopt the current best practice if its technological lag exceeds a certain threshold moreover as time passes without new technological advances it may become profitable to purchase a technology that has been available even though it was not profitable to do so in the past

technology adoption learning by doing and economic growth abstract we develop a model in which firms choose which technologies to adopt as well as the timing of such adoptions in between adoptions a firm accumulates expertise in its technology which allows it to operate the technology more efficiently thus there is firm specific learning by doing for certain parameterizations of the model and appropriate initial distributions of technologies and expertise equilibria are characterized by positive and constant growth of per capita output and positive but nonconstant growth of each firm s output we find firms adoption decisions and output growth depend upon the efficiency of capital markets journal of economic literature classification numbers o41 o33

can a well fitted equilibrium asset pricing model produce mean reversion in recent papers cecchetti et al 1990 and kandel and stambaugh 1990 showed that negative serial correlation in long horizon returns was consistent with an equilibrium model of asset pricing in this paper we show that their results rely on misspecified markov switching models for the endowment process once the proper markov specification is chosen for the endowment process the model does not produce mean reversion of the magnitude detected in the data furthermore the small amount of mean reversion produced by the model is due only to small sample bias we also show that this model is unable to predict negative excess returns contrary to empirical evidence

explaining stakeholder evaluations of hrm capabilities in mnc subsidiaries this paper examines how functional and line management stakeholders evaluate operational human resource management capabilities in multinational corporation mnc subsidiaries we suggest that such evaluations are a function of two key structural factors 1 that focal subsidiary human resource hr departments respond differentially to the expectations of differently located stakeholders and 2 that the structural position of the stakeholder determines what cues he or she relies upon to construct the evaluation our findings show that the focal hr subsidiary department is likely to exert more effort towards meeting the expectations of line management stakeholders and we suggest that this is a function of line management s co location with the focal hr department second we find that co located line management stakeholders are more likely to rely on experience based cues when constructing evaluations whereas headquarters located functional stakeholders tend to rely on cognition based evaluation driven by their ability to compare across different subsidiary hr departments we contribute to the literature by going beyond existing research that has tended to focus on evaluation from the perspective of organizational behavior by providing a structural perspective on capability evaluation in mncs that combines the insights of role theory and cognitive choice heuristics

the effects of absorptive and joint learning on the instability of international joint ventures in emerging economies the objective of this study is to advance a theoretical framework pertaining to how interpartner learning in international joint ventures ijv may affect ijv instability in emerging economies the proposed framework expands the interpartner learning theory of ijv instability in the current literature which is focused on absorptive learning of ijv partners by incorporating ijv partners joint learning using longitudinal dyadic data from ijvs in china we found that local and foreign ijv parties absorptive learning capacity decreases one party s dependence on the other while joint learning capacity in ijv increases both parties dependence on each other in addition an ijv partner s absorptive learning capacity positively moderates the effect of joint learning capacity on its dependence on another partner these findings lend support to the expanded interpartner learning perspective of ijv instability and have important theoretical and managerial implications for ijvs in emerging economies the results underscore the importance of the ijv actively developing organizational rules procedures and structures to create and embed new knowledge in order to maintain the stability of the ijv finally we found that ijv partners dependence asymmetry increases ijv instability whereas their total dependence decreases ijv instability

towards a more balanced treatment of culture in international business studies the need for positive cross cultural scholarship the results of a content analysis of 1141 articles published in the journal of international business studies over a 24 year time period 1989 2012 reveal that a pervasive tendency exists in the international business ib literature towards emphasizing the adverse outcomes associated with cultural differences more than the positive effects we argue that this imbalance is not an accurate reflection of the reality of cross cultural contact in ib and that it has hindered our understanding of the processes and conditions that help organizations leverage the benefits of cultural differences in a wide range of contexts we offer several explanations for the predominance of the negative over the positive in theory and research on culture in ib and using a positive organizational scholarship lens couched in the context of march s 1991 exploration vs exploitation organizational learning framework highlight a complementary perspective namely the idea that cultural differences can be an asset not just a liability in a range of ib contexts we conclude by offering an integrative framework within which both positive and negative effects of cultural differences can be understood and provide a road map for future research on culture in ib

mnc knowledge transfer subsidiary absorptive capacity and hrm based on a sample of 169 subsidiaries of multinational corporations mncs operating in the usa russia and finland this paper investigates the relationship between mnc subsidiary human resource management hrm practices absorptive capacity and knowledge transfer first we examine the relationship between the application of specific hrm practices and the level of the absorptive capacity second we suggest that absorptive capacity should be conceptualized as being comprised of both employees ability and motivation further results indicate that both ability and motivation absorptive capacity are needed to facilitate the transfer of knowledge from other parts of the mnc

asset exploitation versus asset seeking implications for location choice of foreign direct investment from newly industrialized economies this study examined several hypotheses regarding the location choice of foreign direct investment from newly industrialized economies nies using a sample of 328 taiwanese firms in the analysis this study found that the firms motivations had a significant impact on the choice of their investment location developed countries vs less developed countries yet this impact was moderated by the capabilities that the firms possessed the results suggest that both asset exploitation and asset seeking aspects of investments are predictive of the nie firms location choice of investment

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

u s canada trade liberalization and mnc production location using confidential firm level panel data from the bureau of economic analysis we examine how the bilateral trade flows of u s multinational corporations mncs and their canadian affiliates responded to u s canadian tariff reductions from 1983 to 1992 we find that canadian affiliate sales to the united states are negatively correlated with canadian tariffs but u s parent sales to canadian affiliates have little association with canadian tariffs these results contradict the notion that canadian tariff reductions would lead to a hollowing out of canadian manufacturing we also find substantial heterogeneity in mnc responses to tariff changes within narrowly defined manufacturing industries overall bilateral trade liberalization is trade creating as u s mncs integrated their north american production such that canadian affiliates increased sales to the united states and reduced domestic sales

a simple method of testing for cointegration subject to multiple regime changes abstract in this paper we propose a simple method of testing for cointegration in models that allow for multiple shifts in the long run relationship the procedure consists of carrying out conventional residual based tests with standardized residuals from an appropriate markov switching model our monte carlo results show that standard tests work well even though their asymptotic validity can be questioned because they are not based on least squares residuals an empirical application to the present value model of stock prices is also discussed

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

innovation in multinational subsidiaries the role of knowledge assimilation and subsidiary capabilities subsidiaries of multinational firms play an important role in the globalization of innovation yet we have an incomplete idea of the influences on their innovative activity drawing on prior research in international business and strategy we identify two sets of factors that influence the absorption and utilization of knowledge in multinational corporation subsidiaries a the range of external and internal knowledge sources available and b the subsidiary capabilities associated with knowledge absorption and utilization we find that knowledge absorbed from the host country is useful to subsidiary innovation we also find support for the role of subsidiary capabilities both sourcing capability and combinative capability have a significant influence on the scale and quality of innovation

the role of path dependency and managerial intentionality a perspective on international business research several decades of research in the field of international business have advanced various theories and studies on the internationalization of firms our assessment of the literature on internationalization shows that the focus has been primarily on path dependency and learning based aspects of internationalization while managerial intentionality and the possibility of managers making deliberate strategic choices towards further internationalization have not been very prominent in the ib literature we argue that internationalization paths and processes should be approached as a joint outcome of management intentionality and experience based learning in other words managers are assumed to have the ability and the intention to influence the evolutionary paths of the firm we derive a future research agenda that calls for the pursuit of this promising and emergent research stream moreover we develop a model integrating managerial intentionality knowledge experience and other factors institutional and selection forces to explain heterogeneous outcomes of internationalization positions paths and processes

job matching with finite horizon and risk aversion the consequences of introducing risk averse workers with a known finite retirement age into a simple job matching framework are explored the job matching model includes two jobs in the primary job workers and firms learn about the worker s productivity by observing his output over time in the secondary job productivity of any worker is known with certainty at the outset workers start off in the primary job but based on their observed performance may choose to switch to the secondary job the model is developed in two stages first the finite retirement age is introduced while the usual assumption of risk neutral workers is retained in this model it is shown that all workers who achieve at least a certain cumulative output record denoted r by a certain age denoted t will thereafter remain in the primary job until retirement those who do not achieve r by age t switch to the secondary job at or before age t and remain there second risk aversion is introduced along with finite retireme

internationalising in small incremental or larger steps we argue that companies may enter foreign environments either incrementally as suggested by long established theory or by taking larger steps that may result in lower initial performance but through learning and experience lead to increased performance in future expansions this idea is corroborated by the experience of dutch companies entering into central and eastern europe we also find that expansion steps may be too large thereby limiting the exploration of foreign environments our study suggests that sequential internationalisation strategies do still matter and that companies have to balance exploitation and exploration in internationalisation

intrinsic bubbles and regime switching abstract froot and obstfeld 1991 allow for an intrinsic bubble in stock prices using approximately a century of annual data for the us in an attempt to model the widely documented deviations from the prices predicted by present values or fundamentals however they assume that the log of real dividends follows a constant random walk with drift over the whole period we show that this assumption is invalid and that a markov switching model is a more appropriate representation of dividends we then generalise the formulation of stock prices including the intrinsic bubble to allow for this and show that regime switching provides a better explanation for stock prices than the bubble we show that when allowance is made both for the bubble and for regime switching in the dividend process the incremental explanatory contribution of the bubble is low

fortune favors the prepared firm a critical factor in industrial competitiveness is the ability of firms to exploit new technological developments we term this ability a firm s absorptive capacity and argue that such a capability not only enables a firm to exploit new extramural knowledge but to predict more accurately the nature of future technological advances we develop a stylized model in which we focus exclusively on firms decisions to invest in their absorptive capacities we first examine a monopolist s investment decision analyzing the path dependence of its investment and the effect of uncertainty we then consider the effect of competition by modeling the impact of entry on an incumbent s investment behavior implications for management and public policy are then discussed

managerial cognition and internationalization how do the senior decision makers within a multinational enterprise mne think through and determine an internationalization decision despite the cognitive foundations of several key constructs standard internationalization models do not explicitly incorporate managerial cognition we argue that the boundedly rational decision maker is underspecified in international business models and this oversight contributes to weak empirical findings on experience learning internationalization strategy and mne performance drawing on these extant models we identify seven knowledge domains and interdependencies that may make up decision makers mental models granted rare access to senior executives and board members engaged in a foreign direct investment decision we find substantial heterogeneity in the mental models these individuals used to make sense of the opportunity this variance aligns with differences in individuals experience along four dimensions international breadth depth diversity and prior strategic decision making we argue these cognitive processes how individuals exercise judgment about information search parameters assessment and decision integration and how decision teams coalesce in their thinking are crucial microfoundations for modeling heterogeneity in firm level internationalization strategies and performance

nonlinear dynamical model of regime switching between conventions and business cycles abstract we introduce and study a non equilibrium continuous time dynamical model of the price of a single asset traded by a population of heterogeneous interacting agents in the presence of uncertainty and regulatory constraints the model takes into account i the price formation delay between decision and investment by the second order nature of the dynamical equations ii the linear and nonlinear mean reversal or their contrarian in the form of speculative price trading iii market friction iv uncertainty in the fundamental value that controls the amplitude of mispricing v nonlinear speculative momentum effects and vi market regulations that may limit large mispricing drifts we find markets with coexisting equilibrium conventions and business cycles that depend on a the relative strength of value investing versus momentum investing b the level of uncertainty on the fundamental value and c the degree of market regulation the stochastic dynamics is characterized by nonlinear geometric random walk like processes with spontaneous regime shifts between different conventions or business cycles this model provides a natural dynamical framework to model regime shifts between different market phases that may result from the interplay between the effects i vi

routine microprocesses and capability learning in international new ventures drawing on the distinction between the ostensive aspects abstract patterns and performative aspects specific actions of organizational routines the paper offers a micro level explanation of capability learning in international new ventures invs that is firms that internationalize actively from inception the paper argues that variability in the performative aspects of internationalization routines is associated with improvisational learning and new capability development whereas variability in the ostensive aspects is associated with trial and error learning and existing capability improvement furthermore psychic distance moderates these relationships low psychic distance facilitates both improvisation and trial and error learning high psychic distance frustrates learning of both types moderate psychic distance makes the success of both learning forms more likely but only for more experienced invs the paper also argues that social capital may mitigate the negative effects of high psychic distance it contributes to the extant literature by providing a micro level explanation of how invs accomplish capability learning and avoid wasteful learning efforts and by theorizing the moderating effects of psychic distance on the relationships between routine microprocesses and capability learning

the role of duration in multinational investment strategies the location of investment by multinational enterprises has been investigated from many perspectives it has been suggested that investment may be motivated by experience of a particular location represented by tenure of operations in contrast portfolio considerations suggest that increased investment in a given location increases risk exposure in this paper the question of whether a multinational with a longer duration of operations at a particular location is more likely to invest further is addressed after taking portfolio risk into account a conceptual model of multinational investment strategy is developed and empirically tested using data from a survey of multinational enterprises operating in the west midlands region of the united kingdom two innovative non parametric tests for duration dependence are applied after normalising for portfolio considerations it is found that multinational investment is significantly duration dependent i e firms with a longer tenure of operations are significantly more likely to invest in any given period this finding has important implications for the strategy of inward investment agencies in particular an investment agency is short sighted if it seeks to attract new investors if that is at the expense of neglecting multinationals with current operations in its jurisdiction

learning regime switches and equilibrium asset pricing dynamics abstract we examine the autocorrelation properties of equilibrium returns when the growth rate of dividends consumption or gnp follows a markov switching process in contrast to earlier studies we assume that the agent learns the current growth state using observed dividends and bayes rule for the model with switching in the mean growth rate we find that learning significantly alters the pattern of returns often generating positive rather than negative autocorrelation for the model calibrated to gnp with switching in the variance of the growth rate we show that learning induces negative autocorrelation

perspective absorbing the concept of absorptive capacity how to realize its potential in the organization field the purpose of this perspective paper is to advance understanding of absorptive capacity its underlying dimensions its multilevel antecedents its impact on firm performance and the contextual factors that affect absorptive capacity twenty years after the cohen and levinthal 1990 paper the field is characterized by a wide array of theoretical perspectives and a wealth of empirical evidence in this paper we first review these underlying theories and empirical studies of absorptive capacity given the size and diversity of the absorptive capacity literature we subsequently map the existing terrain of research through a bibliometric analysis the resulting bibliometric cartography shows the major discrepancies in the organization field namely that 1 most attention so far has been focused on the tangible outcomes of absorptive capacity 2 organizational design and individual level antecedents have been relatively neglected in the absorptive capacity literature and 3 the emergence of absorptive capacity from the actions and interactions of individual organizational and interorganizational antecedents remains unclear building on the bibliometric analysis we develop an integrative model that identifies the multilevel antecedents process dimensions and outcomes of absorptive capacity as well as the contextual factors that affect absorptive capacity we argue that realizing the potential of the absorptive capacity concept requires more research that shows how micro antecedents and macro antecedents influence future outcomes such as competitive advantage innovation and firm performance in particular we identify conceptual gaps that may guide future research to fully exploit the absorptive capacity concept in the organization field and to explore future fruitful extensions of the concept

the location of export oriented foreign direct investment in the caribbean basin this paper analyzes the location of export oriented manufacturing investment the analysis focuses on direct investment in the caribbean basin using micro data for all reported manufacturing plant openings from 1984 87 we test a broad range of influences on country selection and compare the results with the existing literature on foreign direct investment in less developed countries the probability of country selection was estimated with a conditional logit model the estimates were then used to predict the location of caribbean basin investments made in 1988 and 1989 twelve independent variables were tested six variables had a statistically significant positive relationship with plant location per capita gnp exchange rate devaluation the length of income tax holidays the size of free trade zones political stability and manufacturing concentration negative relationships were found for the wage rate inflation rate transportation cost and profit repatriation restrictions

adaptation as information restriction the hot stove effect individuals and social systems are often portrayed as risk averse and resistant to change such propensities are characteristically attributed to individual organizational and cultural traits such as risk aversion uncertainty avoidance discounting and an unwillingness to change this paper explores an alternative interpretation of such phenomena we show how the reproduction of successful actions inherent in adaptive processes such as learning and competitive selection and reproduction results in a bias against alternatives that initially may appear to be worse than they actually are in particular learning and selection are biased against both risky and novel alternatives because the biases are products of the tendency to reproduce success that is inherent in the sequential sampling of adaptation they are reduced whenever the reproduction of success is attenuated in particular when adaptation is slowed made imprecise or recalled less reliably the propensity to engage in risky and new activities is increased these protections against the error of rejecting potentially good alternatives on inadequate experiential evidence are costly however they increase the likelihood of persisting with alternatives that are poor in the long run as well as in the short run

learning by doing and the choice of technology the role of patience if agents learn by doing and are myopic less advanced firms might adopt new technologies while more advanced firms would stick with the old technology this kind of overtaking can also occur if agents are forward looking and have high discount rates however overtaking never occurs if agents are sufficiently patient a finite discount rate increases the set of states at which agents adopt new technologies so more patient agents tend to upgrade their technology more frequently journal of economic literature classification numbers d92 o14 o33

the effect of cultural distance on entry mode choice international diversification and mne performance a meta analysis although a growing literature indicates that cultural distance that is differences between national cultures is an important determinant of organizational actions and performance both empirical and theoretical concerns abound in this study the relationships of cultural distance with entry mode choice international diversification and mne performance are examined by meta analyzing data from 66 independent samples with cumulative sample sizes ranging from 2 255 to 24 152 regression results failed to provide statistical evidence of significant relationships between cultural distance and entry mode choice international diversification and mne performance the examination of moderator effects however yielded important results we found a strong negative association between cultural distance and entry mode choice for us based mnes the cultural distance international diversification relationship was negative for high technology industries while it was positive for other industries cultural distance also had a strong positive effect on mne performance for developed country investments a similar strong positive relationship was found between cultural distance and international diversification in studies with more recent samples results of this study indicate that substantial additional research is needed before the role of cultural distance is fully understood

the effects of mnc parent effort and social structure on subsidiary absorptive capacity although the literature provides ample evidence that the global transfer and local implementation of knowledge represents a key advantage for multinational corporations mncs we lack comparable understanding as to whether knowledge creating mnc parents can actively expand the absorptive capacity of their subsidiaries using a teacher student lens this study examines the combined impact of specific structural mechanisms and motivational processes by mnc parents on the ability of 216 subsidiaries to absorb parent initiated marketing strategies the findings reveal that mnc parents can indeed cultivate subsidiaries ability to appropriate marketing knowledge through a combination of adopting specific social structures and investing in particular efforts however the effect of social structure on subsidiary absorptive capacity is indirect and accounted for by the parents intensity of effort a number of theoretical implications emerge from the findings for research on absorptive capacity in relation to the role of the knowledge source the need to examine organizational influences in relation to one another and validating the original absorptive capacity dimensions for managers in the global marketplace the findings lead to the suggestion that mncs devote attention to nurturing the absorptive capacities at different organizational levels in order to optimize the global transfer of knowledge

international expansion of telecommunication carriers the influence of market structure network characteristics and entry imperfections this paper examines the internationalization process of telecommunication carriers in this industry early entrants gain substantial first mover advantages due to the transient nature of the windows of market opportunity and the potential to influence the regulatory process as an incumbent to capture these strategic and economic advantages firms follow a strategy of preemption both of markets and partners the authors argue for the need to augment prevailing theory with contextual idiosyncrasies that characterize specific industries

modes of foreign entry a transaction cost analysis and propositions a frontier issue in international marketing is the appropriate choice of entry mode in foreign markets the objective of this paper is to offer a transaction cost framework for investigating the entry mode decision this framework provides 1 a theoretical basis for systematically interrelating the literature into propositions 2 propositions about interactions which resolve the apparently contradictory arguments advanced to date specifically the paper illustrates the feasibility of clustering 17 entry modes into the degree of control the mode provides the entrant proposes that the most appropriate i e most efficient entry mode is a function of the tradeoff between control and the cost of resource commitment advances testable propositions delimiting the circumstances under which each mode maximizes long term efficiency

do managers behave the way theory suggests a choice theoretic examination of foreign direct investment location decision making many empirical examinations of foreign direct investment location choice have relied on the use of secondary data and surveys on the choices made by firms about the form and location of overseas investment these studies have two inherent and related problems first they rely solely on the location choices made by different firms and assume that the domains of possible options considered were the same second there is an assumption about the rules used by firms to make these decisions yet the decisions are made by boundedly rational managers after reviewing the literature this study examines managers choices about foreign investment location through the use of structured experimentation the results show that in creating sets of investments to consider managers appear to follow fairly rational rules however the choice of actual investments appears less aligned to traditional models

knowledge acquisition from foreign parents in international joint ventures an empirical examination in the hungarian context in this paper we examine organizational characteristics structural mechanisms and contextual factors that influence knowledge acquisition from the foreign parent in international joint ventures ijvs we in turn relate assessments of knowledge acquisition to ijv performance the data come from a survey of ijvs in the hungarian context where learning and knowledge acquisition from the foreign parent is thought to be particularly critical adaptation mechanisms such as capacity to learn articulated goals and structural mechanisms such as the provision of training technology and managerial assistance by foreign parents all were positively associated with the degree to which ijvs reported acquiring knowledge from their foreign parents we also found limited support for the belief that cultural conflicts can impede knowledge acquisition but only for two party joint ventures with 50 50 equity arrangements we also looked at the relationship between knowledge acquisition and different dimensions for evaluating ijv performance the relationship between knowledge acquisition and performance was significant for all indicators of performance through knowledge acquisition from the foreign parent and the organizational characteristics hypothesized to enhance ijv knowledge acquisition affected assessments of some dimensions of performance more than others our findings contribute to advancing knowledge about the relationship between organizational characteristics and organizational knowledge acquisition in ijvs as well as the relationships between knowledge acquisition and different dimensions of ijv performance

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

towards a renaissance in international business research big questions grand challenges and the future of ib scholarship in this article we review critiques of international business ib research with a focus on whether ib scholarship tackles big questions we identify three major areas where ib scholars have addressed important global phenomena but find that they have had little influence outside of ib and only limited effects on business or government policy we propose a redirection of ib research towards grand challenges in global business and the use of interdisciplinary research methods multilevel approaches and phenomena driven perspectives to address those questions we argue that ib can play a more constructive and vital role by tackling expansive topics at the business societal interface

on the internationalization process of firms a critical analysis even though international marketing has been challenged because of theoretical and methodological shortcomings very few researchers have actually attempted to analyze the weaknesses based on principles of theory evaluation in this article the author examines two types of models addressing the individual firm s internationalization process a theory evaluation is performed based on the explanation and the falsification criteria in order to improve the internationalization models some measures are proposed

experiential knowledge and costs in the internationalization process using a behavioral approach this study identifies and delineates components of experiential knowledge in the internationalization process three hypotheses are developed and tested they center around the lack of knowledge in the areas of foreign business foreign institutions and firm internationalization as well as the effect that this lack of knowledge has on managers perceived cost in the internationalization process with the help of a lisrel based structural model the three hypotheses are tested on a sample of 362 service firms the analysis shows that lack of internationalization knowledge has a strong impact on the lack of both business and institutionalization but there is no direct effect of lack of internationalization knowledge on perceived cost of internationalization

global cities and multinational enterprise location strategy we combine the concept of location derived by economic geographers with theories of the multinational enterprise mne and the liability of foreignness developed by international business scholars to examine the factors that propel mnes toward or away from global cities we argue that three distinctive characteristics of global cities global interconnectedness cosmopolitanism and abundance of advanced producer services help mnes overcome the costs of doing business abroad and we identify the contingencies under which these characteristics combine with firm attributes to exert their strongest influence consistent with these arguments our analysis of a large sample of mne location decisions using a multilevel multinomial model suggests not only that mnes have a strong propensity to locate within global cities but also that these choices are associated with a nuanced interplay of firm and subsidiary level factors including investment motives proprietary capabilities and business strategy our study provides important insights for international business scholars by shedding new light on mne location choices and also contributes to our understanding of economic geography by examining the heterogeneous strategies and capabilities of mnes the primary agents of economic globalization that shape the nature of global cities

microfoundations in international management research the case of knowledge sharing in multinational corporations microfoundations have become an important theme in recent macro management research however the international management im field is an exception to this we document the lack of attention on microfoundations in im research by focusing on knowledge sharing a key im research field which we investigate by means of a keyword based literature study of the leading im and general management journals we discuss possible reasons why microfoundations have so far met with less resonance in im research we point to the training and background of im scholars as possible reasons we also highlight the significance that im scholars place on context and structure in explanation these may be seen as contrary to a microfoundations perspective a view that we show is incorrect we end by identifying several microfoundational issues in im research calling for a sustained effort with respect to theory heuristics and empirics

a general theory of springboard mnes the springboard view has become one theoretic lens to analyze emerging market multinationals emnes in the past decade a decade after its first introduction in 2007 new developments offer keen insights on these firms and mnes in general that aggressively engage in critical asset seeking we compare this view with other ib theories highlighting their differences as well as complementarity we articulate unique strengths and weaknesses of emnes including their vulnerability and complexity caused in part by home country institutions we discuss amalgamation ambidexterity and adaptation advantages that differentiate springboard mnes from more established advanced country mnes and explain why and how springboard acts should be analyzed along with global competitiveness augmentation we introduce an upward spiral concept to advance our understanding of linkages between springboard and post springboard activities and explain some critical cross cultural and human resource management issues in the process to help continued research on springboard mnes we highlight macro and micro management issues that are particularly worth exploring

mean reversion in equilibrium asset prices this paper demonstrates that negative serial correlation in long horizon stock returns is consistent with an equilibrium model of asset pricing when investors display only a moderate desire to smooth their consumption commonly used measures of mean reversion in stock prices calculated from historical returns data nearly always lie within a 60 percent confidence interval of the median of the monte carlo distributions implied by the authors equilibrium model from this evidence the authors conclude that the degree of serial correlation in the data could plausibly have been generated by their model copyright 1990 by american economic association

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

searching locally and globally applying daniel levinthal s scholarship to international business daniel a levinthal has made several important contributions to the fields of strategy and management his research has been pivotal in enhancing our understanding of interactions between the internal and external contexts that organizations face as well as the roles of experience search and learning processes despite substantial overlap between the core issues in international business ib and levinthal s work the ib field has yet to fully embrace key tenets of his research we aim to bridge this gap by providing a number of concrete suggestions for areas in which ib research may benefit from levinthal s work and vice versa

creative tension the significance of ben oviatt s and patricia mcdougall s article toward a theory of international new ventures the article by oviatt and mcdougall threw the spotlight on international entrepreneurs on international new ventures and on their importance in the globalising world economy recognising the rich theoretical implications of this phenomenon they mounted a challenge to received internationalisation process theories and established a new and exciting research theme that of international entrepreneurship this article reviews the impact of their contribution and discusses new research themes raised by their challenge to the process theories of internationalisation

international diversification and firm performance the s curve hypothesis a proposed theoretical framework for the study of multinationality and performance includes both benefits and costs of geographic expansion over different phases of internationalization data on 1 489 japanese firms over 12 years show a consistent horizontal x s shaped x relationship between multinationality and performance further firms investing more heavily in intangible assets such as technology and advertising achieved greater profitability gains from growth in foreign direct investment our framework and findings highlight complexity and temporal dynamics

technology adoption with finite horizons the purpose of this paper is to study the relation between the age of an agent and her decisions about adopting new technologies to this end i analyze the optimal sequence of technology upgrades by an agent who lives for a finite period of time other characteristics of the environment are the existence of technology specific learning by doing technology growth and adoption costs a finite planning horizon implies that the technology adoption problem is non stationary and the frequency of adoptions changes over time this paper provides results for the computation of the optimal plan and explores numerically the life cycle pattern of technology switches adoptions may become more frequent as the agent grows older however the sign of the association between age and the adoption of new technologies is sensitive to variation in parameters this is not at odds with the findings of recent empirical studies