an institution based view of international business strategy a focus on emerging economies leveraging the recent research interest in emerging economies this perspective paper argues that an institution based view of international business ib strategy has emerged it is positioned as one leg that helps sustain the strategy tripod the other two legs consisting of the industry and resource based views we then review four diverse areas of substantive research 1 antidumping as entry barriers 2 competing in and out of india 3 growing the firm in china and 4 governing the corporation in emerging economies overall we argue that an institution based view of ib strategy in combination with industry and resource based views will not only help sustain a strategy tripod but also shed significant light on the most fundamental questions confronting ib such as what drives firm strategy and performance in ib

positioning jibs as an interdisciplinary journal journal of international business studies 2011 42 1 9 doi 10 1057 jibs 2010 50 it is with great honor and pleasure as well as in keen anticipation of what we are confident can be achieved by the journal that we begin this three year term as the new editors of the journal of international business studies we are both long term members of the academy of international business aib and readers of jibs for almost as long as we can remember over the years we have watched the ever more promising development of jibs of which we now enjoy more issues per year and in which the gradual progression in the depth and breadth of its content has laid the foundations for what we hope and believe will be a new phase in the flourishing of the journal in the period that now lies ahead in this respect we must begin by paying tribute to all the editorsin chief of the journal that have preceded us whose conscientious efforts have not gone unrewarded naturally enough we owe a debt of gratitude especially to our two most recent predecessors arie lewin and lorraine eden before arie jibs was the long established leading specialist journal within the field of international business ib studies a partially hidden gem for those of us in the know after arie it was recognized much more widely as a top a journal among scholars of business and management even outside the ib field arie raised the stature of jibs in business schools as a whole an achievement that was crucial not just for the journal but for the continued vitality of our field before lorraine if we are brutally honest jibs had remained a rather shambolic affair in terms of its administrative structure and procedures in fact it is a credit to the earlier editors that they managed to achieve so much with such limited resources and systems of support most of which were concentrated in a single office that used to hold responsibility for everything after lorraine jibs has become an exemplar of efficient organizational systems and well managed and clearly understood procedures for conduct including a pioneering code of ethics we should also acknowledge here with warm appreciation the critical contributions that have been made by the aib executive secretariat and especially by managing editor anne hoekman as well as by david bull and his wonderful staff at palgrave whose degree of commitment to the journal and support for it has been second to none when we look at how radically jibs has been transformed under arie s and lorraine s leadership suffice to say that but for the sea changes which they have brought about we would have had to think very hard before offering our services as editors but with the firm foundation that they have given us and with the resulting opportunities that the journal now has in front of it stepping forward as editors is a decision we have made with ease as well as pride journal of international business studies 2011 42 1 9 2011 academy of international business all rights reserved 0047 2506

racing to the bottom and racing to the top the crucial role of firm characteristics in foreign direct investment choices this study builds on the pollution haven and induced innovation arguments as explanations for firm behavior with regard to international environmental management and argues both need to be integrated this implies that foreign direct investment is capable of facilitating a race to the bottom and a race to the top simultaneously using novel and detailed data we test whether environmental capabilities and weaknesses and other characteristics affect us firms foreign direct investment choices in chinese provinces with more or less stringent environmental regulation this enables a more detailed analysis by allowing country regulation to vary spatially and over time our study finds that heterogeneity in capabilities and firm size jointly determine foreign direct investment and in doing so shows the simultaneity of a race to the bottom and to the top specifically firms with environmental capabilities invest in more stringently regulated regions and firms with weaknesses are less likely to target such regions these diverging effects are both moderated by firm size which further amplifies each of them our findings underscore the need to integrate pollution haven and induced innovation arguments in a joint analysis they furthermore show the relevance of methodological choices when testing hypotheses integrating the above arguments empirically

factors affecting drivers willingness to pay for biofuels the case of italy biofuels represent a promising alternative to substitute fossil fuels and given the relevance of environmental impacts of the transport sector policy initiatives worldwide aim at supporting the shift towards such cleaner energy source acknowledging the crucial role that biofuels will play in years to come in the energetic paradigm the study aims at investigating key determinants of drivers willingness to pay for biofuels focusing on a sample of 260 individuals from northern italy n 260 in line with recent research on consumer behavior socio demographics are not good predictors of drivers willingness to pay surprisingly on the other hand knowledge of the topic is negatively correlated to willingness to pay so that the more people know about biofuels the less they are willing to pay a premium price moreover certification is not an effective tool to convince drivers of the eco friendliness of biofuels hence spurring willingness to pay possible explanations of the research findings as well as policy implications are discussed in detail along with suggestions for future research on the topic

public s willingness to pay a premium for bioethanol in korea a contingent valuation study abstract bioethanol be a renewable energy is well known to mitigate the greenhouse gas emissions compared with conventional gasoline thus the korean government is considering the introduction of a be mandate in which the legal blend is 5 be and 95 gasoline e5 until 2020 in order to expand be use we should examine the public acceptability of the introduction which incurs a rise in the fuel price this study attempts to assess the public s willingness to pay wtp a premium for introducing the e5 program in korea to this end a contingent valuation cv survey of 1000 randomly selected consumers was conducted in 2014 across the nation we used a one and one half bound dichotomous choice question in the cv survey and applied the spike model to handle the wtp data with zeros the mean wtp a premium for the e5 per liter is estimated to be krw 290 usd 0 27 which is statistically meaningful at the 1 level this value amounts to 15 6 of the gasoline retail price in 2014 krw 1856 or usd 1 70 and can be interpreted as the external benefit of be we can conclude that gasoline consumers in korea are ready to pay a significant premium for the e5

forms of trust and conditions for their stability of the three principal approaches to trust we decided to investigate in greater detail the one in which trust is regarded as a belief that the individuals involved hold about a relationship trust was defined as a delegatory relationship based on anticipation of the delegatee s behaviour we reached four main conclusions first the solution to the problem posed by the indeterminacy of trust lies in the differentiation and hierarchisation of the various forms of trust contractual organisational and tacit on the basis of their degree of irreversibility and stability second contractual trust is unstable because it comes up against the problem of guarantees of individual intentions this leads to the third conclusion rational evaluation by individuals cannot by itself establish trust which is based on collective beliefs practices and rules fourth we identified two conditions for the stability of trust the creation of irreversibilities through adherence to a rule and the creation of a confidence interval within which different interpretations of contradictory individual strategies are tolerated thus the viability of the various forms of trust depends on the ability of institutions and organisations to create rules that are likely when applied to produce an interval in which tolerance of mutual intentions is the norm these analyses of trust hence highlight the role of time and period of time in the notion of trust

agglomeration adjustment and state policies in the location of foreign direct investment in the united states abstract using u s state level data we show that agglomeration externalities influence the level of foreign invested capital in a location our empirical model allows the separation of agglomeration effects from the rate of capital stock adjustment two forces that previous research has conflated we estimate an agglomeration elasticity of investment of 0 11 to 0 15 with respect to same source country investment lower than previous estimates we also investigate the influence of state policies and find that although general investment incentives do not affect the location of fdi targeted policies such as unitary taxation and state foreign offices influence investment

the pace of mnes sequential entries cumulative entry experience and the dynamic process this study examines the pace with which multinational enterprises undertake sequential entries in a foreign market we focus on learning effects from cumulative entry experience of different modes within a host market moreover we investigate the dynamic process of entry mode switch and how cumulative entry experience reduces the expansion constraint using a dataset of sequential entries by us firms in china during 1979 2002 we find that the impact of cumulative entry experience on the pace of sequential entries varies across different modes further firms with more cumulative entry experience can cope with the constraint of entry mode switch

willingness to pay for e85 from corn switchgrass and wood residues abstract willingness to pay wtp for e85 automotive fuel blend of 85 ethanol and 15 gasoline was estimated from a contingent choice exercise contained in a national survey of consumers the choice exercise included e85 blends from three different feedstock sources corn grain switchgrass and wood wastes and an e10 blend 10 ethanol and 90 gasoline with corn grain as the ethanol feedstock results from the study indicate willingness to pay a premium for e85 from switchgrass compared with e10 from corn concerns about land use for food versus fuel had a negative impact on wtp for e85 from corn grain while greater concerns about fuel security relative to the environment had a positive impact

international connectedness and local disconnectedness mne strategy city regions and disruption much of the rising international connectedness of city regions has developed from mnes replacing local connections with superior international ones this often creates local disconnectedness that energizes the current populist backlash against mne activities we develop approaches to new ib theory addressing the interdependencies of mnes and city regions that we propose as a crucial avenue for future research we contrast two generic mne strategies the first is the traditional one the global orchestration of resources and markets we argue that it exacerbates local disconnectedness the second that we call local spawning involves engaging with the local entrepreneurial eco system to create and renew local connectedness diffusing populist responses some mnes are better able to implement a local spawning strategy due to industry factors like innovation clock speed and firm characteristics like organizational path dependency finally we distinguish between disconnection which is an outcome of mne strategy and global disruptions like the coronavirus covid 19 pandemic which are primarily stochastic events addressing disconnections requires mnes to re orient their strategies while dealing with disruptions requires undertaking risk mitigation we present empirical evidence from city regions around the world to illustrate our theory

conjoint effect of environmental labeling disclosure of forest of origin and price on consumer preferences for wood products in the us and uk abstract a study that conjointly analyzed the effects of environmental labeling disclosure of forest of origin and price on consumer preferences for wood products was conducted in the us and the uk a choice based elicitation tool was used to mimic a real life situation where a single product was selected over a set of options data collected were analyzed using a conditional logit model certification issued by a government agency or an environmental non government organization both had a favorable effect on consumer preference over a non certified option the most relevant implication of our findings was the negative effect that disclosing information about a product coming from tropical forests had on consumer preferences even compared to a product of unknown origin a decline in product preference was observed along higher price premiums as expected the degree of sensitivity to price changes was affected by demographic characteristics model coefficients were used to estimate market shares of tropical wood products under different scenarios in both countries scenarios explored the effect of environmental certification and price premiums on product market shares

platform investments and volatile exchange rates direct investment in the u s by japanese electronic companies this study examines the effects of previous entry on the subsequent decisions of japanese electronics companies to invest in the united states by gathering data at the firm level the empirical analysis provides a fine grain sorting out of firm and industry effects on foreign direct investment decisions the findings show that investment behavior is highly heterogeneous across firms and reflects their individual technological capabilities and their history of previous investments in the united states real exchange rate levels are also important the results suggest that initial investments serve as platforms for subsequent entry with the timing of entry triggered by movements in real exchange rates copyright 1996 by mit press

embeddedness and contractual relationships in china s transitional economy interfirm contracts represent common economic relations in the marketplace they are also deeply embedded in social relations and social institutions in the context of china s transitional economy this study examines how three mechanisms economizing transaction costs network based social relations and institutional links affect interfirm contractual relationships in 1 the choice of search channels for contractual partners 2 the formality and provisions in a contract and 3 the intensity of social interaction in contract implementation empirical evidence is drawn from information collected on 877 contracts from 620 firms in two chinese cities beijing and guangzhou the authors find distinct roles of social relations institutional links and regulatory environments in the initiation of contractual partners and the forms of contracts adopted whereas transaction specific factors play a significant role in the intensity of social interaction in contract implementation these findings suggest the interplay among economic calculativeness social networks and institutional links and the complementarity in the underlying theoretical ideas

public support for reducing us reliance on fossil fuels investigating household willingness to pay for energy research and development abstract in order to reduce future dependence on foreign oil and emissions of co2 how much would us households be willing to pay annually to support increased energy research and development r d activities designed to replace fossil fuels does it matter whether the r d includes nuclear energy options we explore these questions using data from a unique set of national telephone and internet surveys using a national advisory referendum format the contingent valuation method is applied to estimate annual household willingness to pay wtp for us household support of a national energy research and development fund erdf for investments in energy sources not reliant on fossil fuels while accounting for the level of un certainty in voting responses the wtp modeling includes a comparison of both classic maximum likelihood estimation mle and bayesian analysis evidence indicates that mle and bayesian analysis achieve similar statistical inference while the bayesian analysis provides a narrower confidence interval around estimated wtp

a comment on price dispersion inflation and welfare by a head and a kumar the principal results of head and kumar s article are derived under the natural assumption that the number of price offers received per period by buyers is distributed poisson this case is of interest for two reasons first because the infinite sums and integrals that enter the equilibrium conditions can be solved in closed form the derivations of the model s implications are straightforward second by regarding the arrival rate as the relevant measure of search intensity the analysis of endogenous search effort is simplified the empirical relationship between the rate of inflation and cross seller variation in prices has a long history however it is primarily empirical work without a theory the article by head and kumar 2005 provides an insightful theoretical foundation for the relationship with empirical content the primary purpose of this comment is to derive the principal results of the article using a special but natural assumption about the distribution of the number of price quotes received by buyers wherever possible the authors notation is utilized any new variables are introduced in the text 2 the model the model studied is a synthesis of the monetary exchange model proposed by shi on one hand and the price setting model of burdett and judd on the other in the burdett judd model each sellers sets its price to maximize expected profit given those of others the set of prices are described by a price offer c d f f p and each buyer observes a random sample of offers from this distribution each period the number of offers k i sitself a random variable let qk represent the probability that k offers will be received by any buyer in the article the authors assume that at least one price offer is always received it will be useful to extend the analysis here slightly by assuming that receiving no offer is a possibility i e q0 0

sticky prices a new monetarist approach why do some sellers set nominal prices that apparently do not respond to changes in the aggregate price level in many models prices are sticky by assumption here it is a result we use search theory with two consequences prices are set in dollars since money is the medium of exchange and equilibrium implies a nondegenerate price distribution when the money supply increases some sellers may keep prices constant earning less per unit but making it up on volume so profit stays constant the calibrated model matches price change data well but in contrast to typical sticky price models money is neutral jel e52 e31 e42

exploring the drivers side of the blend wall u s consumer preferences for ethanol blend fuels abstract analysis of stated preferences from over 2300 u s respondents shows that general attitudes nationwide favor the use of ethanol as a motor fuel but a sizeable segment 20 indicated strong unwillingness to buy ethanol blend fuels results from a discrete choice experiment analyzed using mixed logit regressions show that all else constant price per gallon and miles per gallon dominated preferences for fuel attributes but ethanol content made the average consumer more likely to choose a blend fuel findings provide strong evidence of heterogeneity in preferences driven by attitudes but also affected by age and income at a point of price per mile equivalence for ethanol and gasoline in a market where gasoline e20 and e85 were available with no regulatory supply or technological constraints e85 would dominate market share in this case ethanol would account for 56 of volume of motor fuels consumed our results show a high level of consumer substitutability of gasoline with ethanol and willingness to choose high ethanol blend fuels which could help expand ethanol use beyond the current regulatory and technological limits of the blend wall

whole country of origin network development abroad the support that networks offer during the internationalization process is well documented in the international business literature however this work has primarily focused on firm level networks while underappreciating the cooperative behaviors that may emerge among organizations in the pursuit of common network level goals to better understand these concerted and coordinated actions we engaged in a qualitative examination of two clusters of italian organizations abroad we observed that goal directed and governed networks emerged in these clusters bounded by their common desire to support italian firms internationalization this insight underlies our contributions to the international business and whole network literatures we offer a process model outlining the emergence of a particular type of whole network the country of origin network this process is much more distributed emergent and context dependent than previously theorized our model illustrates that network development involves the active and coordinated efforts of diverse actors working to create infrastructure that can be accessed by and shared between new and existing organizations our finding that both networks were governed utilizing a distinct but context appropriate governance structure provides new insight into how networks support internationalization furthermore it illustrates that whole network level support is distinct from but complementary to the firm to firm support highlighted in previous studies

social capital geography and survival gujarati immigrant entrepreneurs in the u s lodging industry immigrant entrepreneurs often rely on their groups local social capital in their new home market to establish and maintain their businesses in particular immigrant entrepreneurs with few resources of their own receive help from those possessing more resources supporting these arguments using the empirical setting of gujarati immigrant entrepreneurs in the lodging industry we find that the likelihood of survival of an immigrant entrepreneurs hotel increases when surrounded by higher counts of branded hotels representing high resource establishments owned by individuals from their ethnic group but is unaffected by unbranded motels representing low resource establishments owned by members of their ethnic group or by branded hotels owned by individuals from other ethnic groups these results isolate and reinforce the importance of social capital not only for immigrant entrepreneurs but also more generally for any entrepreneurs belonging to ethnic professional religious or social groups

domestic alliance network to attract foreign partners evidence from international joint ventures in china partner selection is a critical issue in building international joint ventures ijvs we argue that foreign firms are more likely to select local firms with unique network structural advantages within a local alliance network we frame structural advantages as two network position traits centrality and brokerage specifically network centrality acts as a stronger network trait than brokerage in attracting foreign ijv partners however such a relationship may be moderated by foreign firms local experience and perceived capabilities we contend that when foreign firms have a high level of local market experience and perceived capabilities they may prefer a local broker over a centrally located local firm data on the domestic alliance network in china s electronics and information technology it industries largely support our hypotheses we conclude that as foreign investors become strategic insiders they may not only seek a local partner s capability attributes but also more critically pay attention to a local partner s domestic network

competing technologies the learning curve and rational expectations abstract the problem of choice between several variants of a technology subject to dynamic learning economies is examined in a rational expectations model with overlapping adopters it is shown that even with rational expectations the long term market outcome depends sensitively on the pattern of early chance events and that only one variant of the technology will come to dominate the market in the long run this variant need not be the one which is socially optimal or most promising technically

a new approach to data access and research transparency dart recent debates on transparency and replicability suggest that jibs needs to update its approach on data access and research transparency dart we propose a series of initiatives knowing well that there is a balance to be struck there are clear benefits on the one hand chief among these the potential for learning and knowledge accumulation and equally manifest challenges on the other the imperative to respect privacy confidentiality and intellectual property rights without addressing these challenges will there be the high quality data on which the benefits depend we present access and transparency objectives and set out how an actionable and effective approach towards dart will be implemented but also address ethical legal and organizational challenges of concern to us as a scholarly community

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

policy uncertainty and the sequence of entry by japanese firms 1980 1998 we extend the stages model of internationalization to incorporate a sophisticated consideration of temporal and cross national variation in the uncertainty of the policy environment using a sample of 6465 international expansions of 665 japanese manufacturing firms in 49 countries we develop arguments from internationalization and bargaining power perspectives to show how japanese firms manage policy uncertainty in host country environments through the within country sequencing of investments although a distribution to manufacturing entry sequence tends to prevail in countries with low levels of policy uncertainty as uncertainty in the policy environment increases initial entry by distribution is increasingly likely to be eschewed in favor of an initial entry by a joint venture manufacturing plant we suggest that this change in investment sequence occurs as firms shift from an emphasis on developing knowledge about local markets and consumers in low hazards markets to an international expansion strategy in uncertain policy environments that places knowledge development of the policy environment at the forefront of a firm s strategy

core or periphery the effects of country of origin agglomerations on the within country expansion of mnes we show how the initial subnational entry location of foreign multinational enterprises mnes in china influences their subsequent within country location choices and expansion speed we distinguish between mnes that establish their first subsidiary in co ethnic cores dense agglomerations of other firms from the same country of origin and mnes that locate their first subsidiary in the periphery i e outside of these co ethnic cores to identify co ethnic cores in china we employ a geo visualization methodology which draws the boundaries of cores organically and dynamically over time we contrast our findings with the prevailing approach of using static administrative boundaries for identifying agglomerations our results provide evidence of path dependency in that a entry through subnational locations with strong co ethnic communities is followed by expansion into other locations where co ethnic communities are present and that b entry through co ethnic communities accelerates the pace at which mnes establish additional subsidiaries in china we also find that co ethnic community effects continue to influence within country mne activities over time despite a host of economic institutional and investment developments

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

filling institutional voids in emerging economies the impact of capital market development and business groups on m a deal abandonment business groups may fill institutional voids in emerging economies but empirical research is lacking as to when and how institutional voids affect economic behavior of individual firms we examine the effect of institutional voids in capital markets on individual transactions in emerging economies focusing on m a deals that were abandoned after being publicly announced m a deals may fall through when unexpected information is brought to light or financing difficulties arise at the country level capital market development can lower the probability of m a deal abandonment by facilitating the flow of information and capital at the firm level when acquirers are affiliated with business groups development of internal capital markets can also lower this probability facilitating completion of the transaction and the flow of information this effect of business groups however decreases as the external capital market the institution replaced by their internal markets develops and its benefits become widely available to non business groups the results of our empirical analyses on m a transactions in nine emerging economies over 21 years support our arguments

choice modelling approaches a superior alternative for environmental valuation in this paper we examine some popular choice modelling approaches to environmental valuation which can be considered as alternatives to more familiar valuation techniques based on stated preferences such as the contingent valuation method a number of choice modelling methods are consistent with consumer theory and its focus on an attribute based theory of value permits a superior representation of many environmental management contexts however choice modelling surveys can place a severe cognitive burden upon respondents and induce satisficing rather than maximising behavioural patterns in this framework we seek to identify the best available choice modelling alternative and investigate its potential to solve some of the major biases associated with standard contingent valuation we then discuss its use in the light of policy appraisal needs within the eu an application to the demand for rock climbing in scotland is provided as an illustration

diplomatic and corporate networks bridges to foreign locations firms and governments operate in broad networks in which the home government and its diplomatic service are a critical node or a referral point between firms and potential partners in foreign locations thus diplomatic relations between countries matter for the choice of foreign investment location using a network perspective we argue that the extent to which good diplomatic relations induce firms to invest in friendly host countries depends on their political connections to home governments those with stronger ties to home governments can better access and leverage intergovernmental diplomatic connections thus benefiting potentially from enhanced access to information reduced political risks and increased legitimacy such ability of politically connected firms is more useful where weak institutional impartiality in the host country inhibits neutral treatment of foreign investors empirically using overseas investment location decisions by chinese firms we find that the types of home government ties i e whether they are organizational or personal and whether those relationships are with central or local goverments and the impartiality of host institutions are both important contingencies affecting firms utilization of diplomatic relations we discuss the implications of our study to research on network theory political ties and internationalization of emerging market firms

national capital city location and subsidiary portfolio expansion the negative effect of geographic distance to the capital city at inception on the speed of subsequent investments a multinational enterprise develops its subsidiary portfolio by investing in new foreign markets and subsequently pursuing further investments within these host countries we find that firms which locate their first equity investment closer to the national capital city can subsequently expand their subsidiary portfolio within the host country at a higher speed this effect is particularly strong in emerging economies further analyses of various contingencies support the robustness of our findings we discuss different theoretical mechanisms which could cause these effects in particular face to face interactions with governmental actors and opportunities to develop political connections our research contributes to the literature on internationalization processes by analyzing how the initial location choice affects the development of the subsidiary portfolio

securing access to lower cost talent globally the dynamics of active embedding and field structuration manning s sydow j and windeler a securing access to lower cost talent globally the dynamics of active embedding and field structuration regional studies this article examines how multinational corporations shape institutional conditions in emerging economies to secure access to high skilled yet lower cost science and engineering talent two in depth case studies of engineering offshoring projects of german automotive suppliers in romania and china illustrate how multinational corporations engage in active embedding by aligning local institutional conditions with global offshoring strategies and operational needs multinational corporations thereby contribute to the structuration of field relations and practices of sourcing knowledge intensive work from globally dispersed locations the findings stress the importance of institutional processes across geographic boundaries that regulate and are shaped by multinational corporation activities manning s sydow j and windeler a

mnes as border crossing multi location enterprises the role of discontinuities in geographic space spurred by the classic work of dunning mne location has become the focus of a growing body of research in the field in this paper we argue that international business ib research examining the spatial dimension has serious weaknesses stemming from its traditional assumption of the country as the location unit of analysis while border crossing remains the key research context of ib placing it within a general spatial framework that recognizes both international and subnational spatial heterogeneity opens up vast new vistas for research analyzing mnes as border crossing multi location enterprises allows the researcher to distinguish between discrete border effects and continuous distance effects and undertake a more fine grained analysis of location within such analysis national borders may appear as qualitative discontinuities in space that is points at which spatial heterogeneity changes abruptly however subnational spatial heterogeneity is often the characteristic that drives firm strategy as mnes decide to locate in particular agglomerations and not at random locations within a country the complex firms that ib scholars study typically include multiple units within the same country so that a complete analysis requires considering both subnational distance effects as well as international border effects

price dispersion inflation and welfare we examine the implications of inflation for both price dispersion and welfare in a monetary search economy in our economy if the degree of buyers incomplete information about prices is fixed both price dispersion and real prices are increasing in inflation as the inflation rate approaches the friedman rule both price dispersion and welfare losses vanish if households choose the number of prices to observe then the optimal inflation rate may exceed the friedman rule as inflation induces search and up to a point raises welfare by eroding market power

instability of endogenous price dispersion equilibria a simulation models of price posting by firms and search by consumers such as burdett and judd 1983 often feature equilibria with endogenous price dispersion however such equilibria are strategically fragile in order to investigate how robust they are in the absence of an external coordination mechanism i simulate various protocols firms may use to update their prices despite firms being myopic some protocols yield results close to the benchmark model if firms rush to update before observing competitors actions profits are higher on average but volatile and cyclical with cost dispersion prices become more stable as they are more closely tied to costs all results are robust to moderate menu costs

adapting and sustaining operations in weak institutional environments a business ecosystem assessment of a chinese mne in central africa multinational enterprises mnes sometimes pursue opportunities in largely uncharted distinctive institutional environments how do these firms sustain operations in such settings we explore how mnes tailor and maintain operations in institutionally weak precarious and challenging host country environments such as those devastated by conflicts we draw on the business ecosystem framework and analyze a qualitative longitudinal case study of a chinese state owned mne that entered and developed its operations in the democratic republic of congo drc in central africa our findings indicate that after entry the mne sustained its operations in the drc by engaging in collective actions and coevolving with key stakeholders within its business ecosystem these stakeholders included the home and host governments state owned enterprises privately owned enterprises and local communities our qualitative data further suggest that the mne s business ecosystem evolved through three stages exploring establishing and embedding and that within this ecosystem the key stakeholders also coevolved with the mne by adopting new roles over time

monetized value of the environmental health and resource externalities of soy biodiesel abstract this study monetizes the life cycle environmental damage human health risk and resource depletion externalities associated with the production and use of biodiesel fuels from soybean feedstock applying a framework that couples life cycle damage measurements with social preferences elicited from a conjoint choice experiment allows for comparison of petrodiesel and biodiesel s external damages the results of the study reveal that production and consumption of soybean based biodiesels produce improvements in environmental health and resource impacts of 0 27 per gallon relative to petrodiesel for a 20 blend and 3 14 per gallon for a 100 blend

inefficient standard adoption inertia and momentum revisited i introduction since the establishment of the theory of network effects economists have been concerned with the question of whether a market with network effects will tend to settle on the socially optimal standard it has been postulated that markets may exhibit excess inertia once a technological standard is in place a new superior standard may not displace it because of installed base effects alternatively markets may exhibit excess momentum consumers may adopt a new standard too quickly ignoring the stranding effect they are having on previous users similar issues arise in the adoption of language and social norms the literature has investigated various conditions under which one of these inefficiencies arises such inefficiencies are of particular concern for open technologies such as the qwerty and dvorak keyboards 1 the situation is somewhat different when individual firms own standards in that case a simple argument seems to indicate that there is no possibility that an inefficient standard will persist if a new standard is superior in any objective sense there are gains to be made from switching to it once the standard has been adopted the firm can appropriate these gains therefore the firm has incentive to lower the initial price enough to induce adoption of the standard the preceding argument is made in liebowitz and margolis 1999 and repeated in spulber 2002 spulber expresses a general skepticism about the likelihood of inefficiencies when property rights are defined and markets exist critics might claim that previous models that imply inefficient standard adoption are unrealistic in some way and that if such models were modified slightly the inefficiency would disappear i reconsider the issue of inefficient standard adoption using a parsimonious yet compelling model assuming only that there are successive generations of finitely lived consumers that preferences are heterogeneous and that there are network effects among users adoption decisions can be inefficient this is true even if consumers can coordinate efficiently within a generation and a firm can act as a coordinating device across generations the model presented here generates some of the same results found in other papers collectively but in a more general setting and with more robust results if there is an established standard and a superior alternative emerges no single generation of consumers will be willing to switch to the new standard if the switching cost the loss of network benefit from breaking with past users is too high it may be that the benefits to future generations of consumers are large enough that from a social standpoint it would be efficient for one generation to adopt the new standard even if it is privately optimal for that generation to retain the old standard on the other hand the current generation considers only its own switching cost and not the cost it imposes on the previous generation leading to potential overadoption of new technology even for proprietary standards it is not clear that the incentive of the firm to induce adoption matches the social incentive in particular if consumer preferences are heterogeneous the firm will not be able to price in such a way to extract all of the additional surplus gained from the new standard on the other hand the firm will be able to appropriate some of the surplus generated by the network effect itself which is present for any standard and thus does not affect the social incentive to change standards it is not possible to address this issue with a two period model as in some of the previous literature see for example choi 1994 choi and thum 1998 katz and shapiro 1986 if a new technology is introduced in the second period but then the game ends the welfare of future generations of consumers is neglected 2 this article also differs from previous infinite horizon models of technology adoption

how much does subnational region matter to foreign subsidiary performance evidence from fortune global 500 corporations investment in china what explains the heterogeneity of foreign subsidiary performance previous studies have emphasized the importance of industry corporate parent and home country effects on the variation of foreign subsidiary performance building on recent international business and economic geography research this study examines the extent to which subnational region effects can also explain such performance variation we empirically decompose the variance of the performance of fortune global 500 corporations subsidiaries in china during 1998 2006 results show that not only are subnational region effects statistically significant in explaining the variation of subsidiary performance but their interactions with industry corporate parent and home country effects are also significant and economically important we further show that subnational region effects tend to be stronger in the period prior to china s wto accession and in the country s less developed subnational regions our findings highlight the importance of considering both the direct and indirect roles of subnational region in shaping firms strategy and performance in international business research

a new suggestion for simplifying the theory of money we propose a new search theoretic model of monetary exchange with indivisible assets based on price posting instead of bargaining and incorporating noisy search this yields some familiar results plus a lot more the model admits multiple steady states due to the self referential nature of liquidity it admits cyclic chaotic and stochastic equilibria and compared to bargaining versions the dynamics are more general and have better microfoundations it generates price dispersion with interesting efficiency implications plus sticky prices and rational inattention parametric examples yield closed form solutions based on these results we suggest this should become a benchmark model in monetary economics

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

valuing climate protection through willingness to pay for biomass ethanol abstract this study uses a multi part split sample contingent valuation method cvm and fair share fs survey to better understand the public s valuation of mitigating global climate change through its willingness to pay for biomass or cellulosic ethanol in addition to a basic cvm question a related scenario was developed that asked half of the survey respondents to state their fair share cost to lessen a potential food shortage in the next decade also through the expanded use of cellulosic ethanol three alternative biomass feedstocks were assessed farming residues forestry residues and paper mill wastes and municipal solid wastes overall a slightly larger proportion of respondents were wtp extra for cellulosic ethanol in the basic cvm scenario than in the fs scenario though no significant differences were found in the wtp for the different feedstocks bid curve lognormal regression results for the two models were similar supporting the idea that asking a fs rather than a conventional wtp question may be justifiable in some circumstances such as in cases of a national emergency

recreation demand models with taste differences over people we estimate random parameter logit models of anglers choice of fishing site the models generalize logit by allowing coefficients to vary randomly over anglers rather than being fixed the models do not exhibit the restrictive independence from irrelevant alternatives property of logit and can represent any substitution pattern estimation explicitly accounts for the fact that the variation in coefficients over anglers induces correlation in unobserved utility over trips by the same angler willingness to pay for improved fish stock and the value to anglers of specific sites are calculated from the models and compared with the estimates obtained from a standard logit model

sticky prices and costly credit we develop a theory of money and credit as competing payment instruments then put it to work in applications agents use cash and credit because the former latter is subject to the inflation tax transaction costs frictions that make the choice of payment method interesting also imply equilibrium price dispersion we derive closed form solutions for money demand and show how to simultaneously account for the price change facts cash credit shares in micro data and money interest correlations in macro data the effects of inflation on welfare price dispersion and markups are discussed as are nonstationary equilibria with dynamics in the price distribution

the economics of convention c onventions regulate much of economic and social life yet they have received surprisingly little attention from economists by a convention we mean a pattern of behavior that is customary expected and self enforcing everyone conforms everyone expects others to conform and everyone has good reason to conform because conforming is in each person s best interest when everyone else plans to conform lewis 1969 familiar examples include following rules of the road adhering to conventional codes of dress and using words with their conventional meanings conventions with direct economic implications include species of money and credit industrial and technological standards accounting rules and forms of economic contracts indeed it would scarcely be an exaggeration to say that almost all economic and social institutions are governed to some extent by convention the main feature of a convention is that out of a host of conceivable choices only one is actually used this fact also explains why conventions are needed they resolve problems of indeterminacy in interactions that have multiple equilibria indeed from a formal point of view we may define a convention as an equilibrium that everyone expects in interactions that have more than one equilibrium the economic significance of conventions is that they reduce transaction costs imagine the inconvenience if whenever two vehicles approached one another the important exceptions are sugden 1986 and ullman margalit 1977 the interested reader might also refer to the symposium on social norms that appeared in the fall 1989 issue of this journal with articles by sugden 1989 and elster 1989

emerging spaces of neoliberal urbanism in china land commodification municipal finance and local economic growth in prefecture level cities this study examines the popular practices of chinese urbanism in which commodification of urban land has been actively pursued by municipal governments as a means of revenue generation in the era of neoliberalisation the research identifies a complex diverse and self conflicting internal dynamics that characterised the chinese state reveals the political and financial motives of local governments to engage in urbanism and maps out the emerging geography of neoliberal urbanism land commodification has become a main source of municipal finance accounting for over 30 of total municipal budgetary revenue and nearly 40 of the fund for urban maintenance and construction an inverse u shaped relationship is found between the importance of land commodification to municipal finance and the level of urban economic growth a similar relationship is identified for land based municipal finance and degree of openness

the neighbor effect simulating dynamics in consumer preferences for new vehicle technologies abstract understanding consumer behaviour is essential in designing policies that efficiently increase the uptake of clean technologies over the long run expert opinion or qualitative market analyses have tended to be the sources of this information however greater scrutiny on governments increasingly demands the use of reliable and credible evidence to support policy decisions while discrete choice research and modeling techniques have been applied to estimate consumer preferences for technologies these methods often assume static preferences this study builds on the application of discrete choice research and modeling to capture dynamics in consumer preferences we estimate canadians preferences for new vehicle technologies under different market assumptions using responses from two national surveys focused on hybrid gas electric vehicles and hydrogen fuel cell vehicles the results support the relevance of a range of vehicle attributes beyond the purchase price in shaping consumer preferences towards clean vehicle technologies they also corroborate our hypothesis that the degree of market penetration of clean vehicle technologies is an influence on people s preferences the neighbor effect finally our results provide behavioural parameters for the energy economy model cims which we use here to show the importance of including consumer preference dynamics when setting policies to encourage the uptake of clean technologies

knowledge connectivity an agenda for innovation research in international business the innovation driven multinational enterprise mne has dominated international business ib research for several decades now beginning with the award winning research of dunning there have been calls for ib researchers to rediscover the importance of locations recent work has emphasized that firms and locations co evolve with one another as knowledge is transferred and leveraged across space integrating insights from ib and economic geography we propose a research agenda for ib scholarship on spatially dispersed yet connected innovation processes this agenda is premised on the current reality of global value chains in which mobile mnes people and immobile locations factors interact the research perspective suggested recognizes that locations are host to increasingly fine sliced activities whose nature and composition are continuously changed by mne driven innovation processes as today s specialized activities become tomorrow s standardized ones the shifting distribution of global value creation depends on the pattern of international knowledge connectivity

zoom in zoom out geographic scale and multinational activity ib scholars have long studied the multinational enterprise mne and now recognize that its ability to capture value stems from its control of bottleneck assets in contrast economic geographers and regional scientists have largely focused their attention on the locations within which economic and business systems operate in this article we draw on both these literatures we emphasize that the mne s integration of upstream and downstream strategic considerations to maximize its control of bottleneck assets implies an optimal geographic footprint this optimal footprint is typically asymmetric with a spatial scale that varies dramatically across the different activities of the value chain upstream innovation processes are likely to be based on highly local considerations like the availability of specialized resources and collocation advantages in contrast downstream sales and marketing processes are likely to driven by imperatives of high volume and global reach further in the current fast clockspeed business environment the location and nature of bottleneck assets are likely to change rapidly and unpredictably making organizational flexibility a crucial mne capability

the lab and the plant offshore r d and co location with production activities the literature has highlighted that the propensity of mnes to co locate offshore r d labs with their production plants can vary substantially according to firm and industry characteristics in this paper we apply a novel two stage estimation procedure that allows us to tease out this heterogenous behavior and investigate the factors that are associated with a higher propensity to co locate production and r d activities abroad using data on 1483 greenfield international investments in r d activities made by 855 firms in 587 cities worldwide we uncover that the strength of the co location effect is indeed highly heterogenous across firms in particular it is higher among firms with less international experience and geographical dispersion of international activities as well as with a lower share of intangible assets these results are consistent with the idea that co location is a substitute for firms ability to coordinate complex and dispersed organizational structures and that firms relying relatively less on codified knowledge can use co location of offshore r d and production to facilitate knowledge transfer across activities

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

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