opening the grey box social communities knowledge and culture in acquisitions international acquisitions are today the most important foreign direct investment vehicle and the ensuing integration processes are notoriously fraught with problems we situate discuss and develop the main results of an early study in the knowledge based view tradition the award winning bresman birkinshaw and nobel 1999 article to enhance and develop the central contributions regarding social communities knowledge and culture we use the metaphor of unpacking the grey box we argue that heavy socialization is a rational learning strategy even if the acquirer aims at appropriating the target s technology or wishes to impose its dominant logic

control and performance of international joint ventures control is a critical concept for successful management and performance of international joint ventures ijvs this paper reviews and synthesizes prior studies addressing the conceptualization and operationalization of control within ijvs as well as the ijv control performance relationship the paper also presents a new conceptualization of ijv control as well as a conceptual frame work for studying control of ijvs

partner nationality and the structure performance relationship in strategic alliances the dramatic growth of global strategic alliances between firms is fundamentally reshaping the nature of international business indeed interfirm cooperation has become a crucial component of the pursuit of global competitive advantage yet such alliances are enormously complex to manage successfully in part because of the opportunity and incentive to cheat and profit at the partner s expense that is an inescapable part of these relationships consequently strategic alliances are frequently subject to high instability poor performance and premature dissolution thus an important question arises is it possible to promote more stable cooperation and higher alliance performance through a realignment of companies incentives this question is addressed empirically in the present paper using recent work in game theory which suggests that high performance is linked to specific elements of the alliance structure further this study applies insights from international business literature suggesting th

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

federal borrowing and short term interest rates this paper is an empirical study of the effects of federal government borrowing on short term interest rates it is often taken for granted that increases in federal borrowing cause higher short term rates but little empirical support exists for this assumption in fact this paper demonstrates that federal borrowing is a relatively unimportant and insignificant determinant of short term rates an implication of this result is that financial crowding out effects of government deficit spending may not be overly large postulates about interest rate behavior are the driving force behind many hypotheses of the crowding out literature however these interest rate effects have received relatively little direct attention in this literature this is surprising since as a general rule the stronger the interest rate effect is the stronger the crowding out effect will be an empirical determination of the size of the deficit spending interest rate effect gives some empirical content to the crowding out controversy in section ii of this paper the relationship between federal borrowing interest rates and crowding out is discussed and a loanable funds model of short term interest rates is developed in section iii the regression model is generated and tested the essential result is that variation in three month treasury bill rates is caused by expected inflation changes in the monetary base and by changes in the level of economic activity there is no statistically significant relation between short term interest rates and federal borrowing in section iv additional regression tests are performed which confirm the results in section iii and the problem of simultaneous equation bias is discussed the final part of the paper is a discussion of some implications of the results reported in sections iii and iv

an empirical investigation of the process of knowledge transfer in international strategic alliances this research proposes and tests a basic model of organizational learning that captures the process of knowledge transfer in international strategic alliances based on a cross sectional sample of 147 multinationals and a structural equation methodology this study empirically investigates the simultaneous effects of learning intent learning capacity lc knowledge ambiguity and its two key antecedents tacitness and partner protectiveness on technological knowledge transfer in the interest of expanding our understanding of the organizational mechanisms that both hinder and facilitate learning the concept of lc is refined into three distinct components resource incentive and cognitive based lc further the strength of the relationships between these theoretical constructs and knowledge transfer is examined in light of the possible moderating effects of organizational culture firm size and the form and competitive regime of the alliance consistently learning intent as a driver and knowledge ambiguity as an impediment emerge as the most significant determinants of knowledge transfer moreover the effects of partner protectiveness and lc on the learning outcome are moderated by the firm s own culture towards learning the size of the firm the structural form of the alliance and the fact that partners may or may not be competitors

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

competitive consequences of interfirm collaboration how joint ventures shape industry profitability recent international business research on international joint ventures focuses on how firms can use such ventures for knowledge access and learning to enhance their competitiveness thereby increasing competition in the industry by contrast research in industrial organization economics has observed that firms can also use joint ventures in various ways to attenuate competition in this paper we join these two streams of research to investigate the conditions under which joint ventures reduce or enhance competition by empirically testing the effects of different types of joint ventures on industry profitability our results suggest that joint ventures can be pro competitive or anti competitive depending on whether or not they are formed between competing firms represent foreign market entry and operate in relatively concentrated industries our paper shows the importance of adopting a contingent approach to evaluating the competitive implications of joint ventures and it also points to the value of reinvigorating international business research on the competitive context and consequences of interfirm collaboration

phasing the operation mode of foreign subsidiaries reaping the benefits of multinationality through internal capital markets the lifetime of foreign equity partnerships is often limited research suggests that mncs abandon their local partners when the need for sharing ownership in foreign subsidiaries has diminished this study shows that mncs may abandon their local equity partners to reap the benefits of multinationality as mncs gain a competitive advantage from leveraging resources across borders they will initially benefit from sharing ownership with a local firm to embed their foreign subsidiaries in the local environment and access local resources more effectively later they will benefit from taking over the local partner s equity share to better embed their subsidiaries in the parent organization and transfer locally accessed resources to the mnc s other locations moderated mediation regressions provide evidence of such practice in the context of cross border transfers of capital resources this strategy seems to work as a corollary of our model panel regressions suggest that sharing ownership with local firms in a host country with a capital resource advantage is associated with appropriating more capital resources from the local debt market while abandoning these partner firms later is associated with transferring more capital resources from this host country via internal capital markets to other parts of the mnc

absorptive capacity socially enabling mechanisms and the role of learning from trial and error experiments a tribute to dan levinthal s contribution to international business research the concept of absorptive capacity ac of firms cohen and levinthal 1989 and 1990 is a foundational feature of organizational learning and adaptation that has had enormous influence in international business ib and innovation studies and management research in general in this tribute to dan levinthal we discuss the close connection between ac and learning two areas central to dan levinthal s research in relation to different contexts where ac comes into play in extant ib research we discuss four specific aspects of the nexus of ac and learning in the context of ib 1 bridging between intra and inter firm learning 2 a routine based framing of ac that emphasizes processes and capabilities underlying seeking assimilating and innovation in a global setting 3 the role of socially enabling mechanisms and 4 the logic of learning through trial and error experiments within firms and countries

budget deficits and interest rates in the united states in this paper an attempt has been made to reexamine the effect of budget deficits in the united states on interest rates unlike the previous studies which use only one definition of the dependent variable we have used all three namely the nominal and the ex post and the ex ante real interest rate further unlike previous studies we considered both short term and long term interest rates our results provide absolutely no support for the proposition that federal deficits affect interest rates and thus contradict the recent findings by cebula 1987 and kolluri and giannaros 1987 finally the paper provides some further support for the inverted fisher hypothesis proposed by carmichael and stebbing 1983

deficit announcements and interest rates despite the fact that the most theoretical analyses with the notable exception of the ricardian equivalence approach indicate that increased deficits cause interest rates to rise the empirical evidence is at best inconclusive 1 in this note the relationship between interest rates and deficits is examined with the announcement effect methodology which has not previously been used in this context we find evidence of a positive relationship between unanticipated announcements of the projected federal government deficit and interest rates in an efficient market information about any determinant of interest rates should be quickly incorporated into observed rates thus when information about the size of the deficits is released a relatively quick impact on interest rates can be anticipated more specifically if an increase in the deficit is in fact associated with higher interest rates then an unanticipated announcement of a larger deficit should lead to a response in financial markets which increases interest rates this paper provides evidence on the announcement effects of information on the deficit the advantage of the announcement effect approach is that it precludes the necessity of specifying a structural model for interest rates 2 projections of current and future federal government deficits are made on a regular basis by both the office of managementand budget omb and the congressional budget office cbo and receive wide attention in the financial press these projections provide data that are related to the change in interest rate on government securities from the day before the announcement to the end of the announcement day the macroeconomic hypothesis underlying this investigation is simply that an increase in the current or future deficit leads to an increase in yields on government securities in anticipation of higher levels of debt financing in a rational expectations framework an announcement of higher future deficits will lead to a current increase in interest rates in anticipation of future financing thus the examination of announcement effects enables us to substantiate a relationship between interest rates and deficits without encountering the econometric problems of reduced form modeling section i begins with a description of the data this is followed by a discussion of the methodology in section ii section iii presents the empirical results this is followed by our conclusions in section iv

transfer of marketing know how in international strategic alliances an empirical investigation of the role and antecedents of knowledge ambiguity the competitive nature of knowledge transfer and the process of organizational learning between partners constitute a fundamental challenge for both academics and practitioners alike by focusing on one type of competency marketing know how this research examines the role of knowledge ambiguity pertaining to the process of knowledge transfer in international strategic alliances based on a cross sectional sample of 151 multinationals and a structural equation methodology this study empirically investigates the antecedents of knowledge ambiguity tacitness asset specificity complexity experience partner protectiveness cultural distance and organizational distance further the strength of the relationships between these theoretical constructs and ambiguity is examined in light of the possible moderating effects of collaborative experience firm size and the duration of the alliance entered consistently tacitness emerges as the most significant determinant of knowledge transferability moreover the effects of cultural distance asset specificity and prior experience are moderated respectively by the firm s level of collaborative experience the duration of the alliance and the firm s size

once bitten not necessarily shy determinants of foreign market re entry commitment strategies we investigate foreign market re entry commitment strategies namely the changes in the modes of operation commitment undertaken by multinational enterprises mnes as they return to foreign markets from which they had previously exited we combine organisational learning theory with the institutional change literature to examine the antecedents of re entry commitment strategies from an analysis of 1020 re entry events between 1980 and 2016 we find that operation mode prior to exit is a strong predictor of subsequent re entry mode contrary to the predictions of learning theory we did not find support for the effect of experience accumulated during the initial market endeavour on the re entry commitment strategies of mnes in turn exit motives significantly impact on the re entrants decision to re enter via a different mode of operation by either increasing or decreasing their commitment to the market we show that re entrants do not replicate unsuccessful operation mode strategies if they had previously underperformed in the market when favourable host institutional changes occur during the time out period re entrants tend to increase commitment in the host market irrespective of the degree of prior experience accumulated in the market

performance effects of added cultural distance in the path of international expansion the case of german multinational enterprises this paper contributes to the debate on the performance impact of added cultural distance in the multinational enterprise s mne s expansion path our research focuses on the ability of mnes to handle complexity associated with added cultural distance in international expansion and on the effect this may have on profitability we hypothesise that firms that make expansion moves involving a high level of added cultural distance per unit of time and those that expand in culturally distant countries in an irregular fashion that is with a higher variability will be less profitable we test these hypothesised relationships using detailed data on 2404 expansion moves undertaken by our panel of 91 german mnes whose expansion paths we tracked during periods ranging between 5 and 20 years

danish and norwegian wind industry the relationship between policy instruments innovation and diffusion this article compares the role of policy instruments in stimulating long term technological change in danish and norwegian wind industry it concludes that although predictability has periodically been low denmark s broad portfolio of policies and measures has been well adapted to the different stages in the development of its wind industry this has contributed to a high degree of innovation successful establishment in niche markets high degree of diffusion and establishment of domestic and international mass markets and in recent years an increasingly successful replacement of senescent technology with new the motivation of norway s wind energy policies and measures at least up until the late 1990s has been to increase power supply rather than to stimulate industrial development and technological change policies and measures have been weaker than in denmark have been less stable over time and stimulated the demand side much less they have not sufficiently covered the wind industry s perceived needs on different stages in the development of new technology and have not sufficiently stimulated continuous improvement learning and new product development dynamic efficiency in industry this has been part of the reason why there has been only a limited extent of innovation and diffusion of wind technology in norway

gratitude nostalgia and what now knowledge acquisition and learning a decade later we look at the development of absorptive capacity organizational learning and ijv research literatures since 1996 using our 1996 jibs paper as our centering point taking stock of the timing and patterns of citations to this paper opened up a unique window across time venues and topics this permitted us to more clearly position the paper vis a vis the contemporary corpus of the different literatures that provided the original context and impetus for us in the early 1990s the paper has been embraced and carried forward by the burgeoning community of international business ib scholars on transitional economies and on ijvs although the hungarian setting circa 1989 early 1990s was one we tended to view as a context to address and test theory based issues and assumptions from a broader management literature most indications of outward diffusion of our ideas beyond the ib community have been recent indeed over half the citations have occurred after 2003 we project our take on the current landscape toward the future providing suggestions about research opportunities

the evolving value of foreign partnerships in transitioning economies through studying joint ventures during the early 1993 and late phases 2001 of hungary s economic transition to market economy we demonstrate how institutional and economic transformation alter

building a wave energy policy focusing on innovation manufacturing and deployment abstract the irish government has set a goal to make ireland a world leader for research development and deployment of ocean energy technologies ireland has a wave energy resource of 21 twh and an ambition is to achieve at least 500 mw installed generating capacity from ocean energy by 2020 this paper investigates what is required to move from ambition to delivery a successful wave energy strategy will require focused policies that will stimulate innovation to develop the technologies manufacturing to produce the devices and deployment to build the required wave power plants the paper draws on the successful policies in ireland that have stimulated each of these dimensions albeit for different sectors from 2004 to 2008 successful policies in ict and biotech innovation led to an increase in ireland s innovation index score from 0 48 to 0 53 the policy focus on food and pharmaceuticals manufacturing in ireland resulted in high levels of economic growth over the period 1998 2002 reaching 10 gdp growth levels per annum and full employment successful wind energy policies deployment has accelerated rapidly since 2003 and reached 1 2 gw installed capacity in 2009 representing 15 of ireland s total installed capacity the paper draws on appropriate elements of these policies to build a successful wave energy policy for ireland it also draws on the successful policies adopted in denmark for innovation manufacturing and deployment of wind energy the danish wind turbine manufacturers hold a world market share of approximately 40 the paper proposes establishing a wave energy strategy group to develop an action plan to deliver the 500 mw it also proposes a novel extension of corporate tax specifically for wave energy companies an initial 30 capital grant scheme for wave energy developers a grid code for wave energy devices and fast tracking of planning decisions through an amended approach to strategic infrastructure

probing theoretically into central and eastern europe transactions resources and institutions since the 1990s central and eastern europe cee has provided unique societal quasi experiments which represent opportunities to test the applicability of existing theories in international business and management studies and to develop new ones specifically three lines of theorising have been advanced 1 organisational economics theories 2 resource based theories and 3 institutional theories for each of these theories we discuss how they contribute to the understanding of key issues such as entry strategies of foreign investors restructuring strategies of local incumbents and entry and growth strategies of entrepreneurs on this basis we assess how cee research has influenced the overall trajectories of theory development cee research has in particular highlighted the importance of contextual influences such as institutions thus scholars have aimed at incorporating institutions into theories such as organisational economics theories and resource based theories and advancing an institution based view of business strategy as a complementary perspective we outline how future research in cee and other emerging economies may advance this research agenda further

cultural differences mne learning abilities and the effect of experience on subsidiary mortality in a dissimilar culture evidence from korean mnes in a departure from prior studies presuming a beneficial experience effect in foreign direct investment fdi the present paper examines the conditions under which fdi experience may actually harm subsequent subsidiaries we argue that multinational enterprises mnes may draw erroneous inferences and learn incorrectly from their early expansions when new to a dissimilar culture because their learning abilities are eroded by cultural differences we posit that the characteristics of an mne s international expansion including scope pace rhythm and entry mode moderate this negative experience effect by influencing the mne s learning ability in foreign cultures using a data set of fdis by south korean mnes between 1990 and 2006 we find a positive relationship between subsidiary mortality and experience when an mne has a low level of experience in a dissimilar culture this relationship is weaker if the mne s prior fdi has been dispersed across different cultures is stronger if it expanded internationally at a fast pace and becomes negative once the mne has accumulated a high level of experience in the host culture we conclude that when expanding into dissimilar cultures mnes must establish mechanisms to mitigate incorrect learning and reexamine the correctness of inferences drawn from past experience before applying them

a model of cultural differences and international alliance performance we propose a model of cultural differences and international alliance performance to explain the ambiguous findings regarding the influence of national culture differences on alliance performance building on research on national organizational and professional cultures we argue that the closer the domain of a social group is to the value creating activities of an alliance the more disruptive cultural differences between the partners members of that social group will be organizational culture differences will tend to be more disruptive than national culture differences and differences in the professional culture most relevant to alliance value creation typically will be the most disruptive implications for research and managerial practice are discussed and the model s relevance for international r d alliances is highlighted

explaining ijv survival in a transitional economy through social exchange and knowledge based perspectives in this study we combine social exchange and knowledge based perspectives to develop a general path model of ijv survival we further refine our expectations by considering the transitional economic context of our study and the somewhat unique managerial values resulting from the legacy of marxist ideology results from structural equation modeling suggest that an imbalance in the management control structure between the parents leads to parental conflict and an increased likelihood of ijv failure an imbalance in the ownership control structure however had no influence on conflict or survival in general support from the foreign parent is positively related to ijv learning and ijv survival however higher levels of technical support provided by the foreign parent to the ijv reduced the level of parental conflict whereas management support had no effect on conflict our results suggest some dilemmas for firms pursuing ijvs in transitional economies although the foreign parent often contributes critical resources to the ijv providing it with bargaining power and a high level of influence an imbalance in management control between the partners may ultimately be detrimental to ijv survival copyright 2000 john wiley sons ltd

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

when and where does foreign direct investment generate positive spillovers a meta analysis local firms may attract productivity spillovers from foreign investors yet these vary with local firms awareness capability and motivation to react to foreign entry in consequence spillovers vary across countries at different levels of economic development we apply competitive dynamics theory to analyze these contextual moderators of spillovers and test hypotheses thus derived in a meta analysis of the empirical literature on spillovers our analysis suggests a curvilinear relationship between spillovers and the host country s level of development in terms of income institutional framework and human capital

modelling the economic impacts of 500 mw of wave power in ireland this paper investigates the impacts of including 500 mw of wave power into ireland s electricity generation portfolio in the year 2020 one year of detailed market simulations are undertaken to determine the impact on wholesale electricity prices system operation costs and co2 emissions with and without this installed wave power under a number carbon prices assumptions in both scenarios with and without wave energy ireland s installed renewable capacity is fixed such that 40 of ireland s electricity in 2020 is from renewable source the likely revenue a wave energy device would earn in the market is also investigated and compared with what is required to achieve 500 mw installed capacity it is shown that in general the inclusion of wave energy has a negligible effect on wholesale electricity prices reduces total system cost in ireland and can increase co2 emissions on the island of ireland under certain carbon price assumptions it is also shown the current refit for wave energy is adequate

performance and survival of joint ventures with non conventional ownership structures the international joint venture jv literature has focused on two parent jvs formed between one foreign and one local firm yet other types of jvs exist this paper identifies four distinct forms of jvs based on the jv partners nationality and equity affiliation these are i jvs that are formed between affiliated home country based firms ii jvs that are formed between unaffiliated home country based firmsl iii jvs that are formed between home country based and local firms and iv jvs that are formed between home country and third country based firms our analysis of 737 japanese jvs in asia demonstrates that the conventionally assumed form of jv represented only 30 percent of the total further each of the four jv forms significantly differed in terms of incidence performance and survival likelihood

contextualising organisational learning lyles and salk in the context of their research hungary has been the focus of lyles and salk 1996 because their research interest organisational learning was of particular concern in joint ventures in that country at that time this allowed them to investigate in greater depth what drives knowledge acquisition and how it influences the performance of joint ventures this commentary reviews the contribution by lyles and salk as reflected in the subsequent literature the setting of the study in hungary 1993 raises the challenging question of how this particular context may have influenced the research outcomes i argue that the national context of radical environmental change and the organisational context of joint ventures incorporating privatised state firms crucially influence processes of organisational learning the importance of context suggests modifying future research agendas in international business and in organisational learning in particular i thus suggest that future research should incorporate context more explicitly to establish boundary conditions for theory and to develop managerially relevant insights

budget deficits and interest rates a fresh perspective we extend the literature on budget deficits and interest rates in three ways we examine both advanced and emerging economies and for the first time a large emerging market panel explore interactions to explain some of the heterogeneity in the literature and apply system gmm there is overall a highly significant positive effect of budget deficits on interest rates but the effect depends on interaction terms and is only significant under one of several conditions deficits are high mostly domestically financed or interact with high domestic debt financial openness is low interest rates are liberalized or financial depth is low

managing tacit and explicit knowledge transfer in ijvs the role of relational embeddedness and the impact on performance drawing on organizational learning and economic sociology we address how relational embeddedness between the foreign parent and international joint venture ijv managers influences the type of knowledge i e tacit and explicit transferred to the ijv and how the importance of relational embeddedness varies between young and mature ijvs we also examine the influence of tacit and explicit knowledge on ijv performance our results show the importance that tie strength trust and shared values and systems play in the transfer of tacit knowledge especially for mature ijvs our findings are consistent with uzzi s tenets tacit learning is accumulative assists in explaining explicit knowledge and is enhanced by social embeddedness we also find that the influence of transferred tacit knowledge on ijv performance stems principally from its indirect effect on the learning of explicit knowledge

structural federal deficits and interest rates some causality and co integration tests the relationship between federal budget deficits and interest rates has been the focus of extensive research recently cebula 4 examined this relationship empirically and concluded that the federal budget deficit does in fact exercise a positive and significant impact upon the nominal moody s aaa rated corporate bond rate 4 208 such a finding is at odds with the great majority of recent empirical studies in this area if valid this finding assigns to large deficits significant adverse effects on both private investment crowding out and on trade balance via an overvalued dollar given these profound public policy implications cebula s finding warrants further examination

on the future of international joint venture research international joint ventures ijvs are an important type of international strategic alliance isa and have been studied by scholars for decades resulting in a plethora of empirical studies publications and reviews yet an inadequate accumulation of knowledge exists as a closer look reveals much more than providing a summary and critical assessment of past contributions this paper develops an expansive research agenda based upon a deep understanding of past research and comprehensive frameworks that distill this research we identify a number of research opportunities that would not only advance ijv research but also closely related literatures and disciplines such as isas theories of the multinational firm international business research and strategic management

interest rates and budget deficits revisited evidence from the g7 countries this article revisits whether budget deficits affect interest rates and broadens the literature by examining whether financial globalization has changed this relationship a structural model of interest determination is extended to account for the fact that official capital flows are determined differently than private flows and is estimated for a 1960 2005 g7 panel we find that deficits have a significant but small effect on long term rates but that this result depends on the fiscal concept used moreover we find no evidence of structural change in interest rate determination in the recent decades with the exception of an increased impact of insurance related capital inflows in recent years

customer involvement and service firm internationalization performance an integrative framework to overcome the costs of doing business abroad researchers have suggested either legitimacy or efficiency based solutions however both types of solutions still treat host country customers as external to the theory we highlight the role of customers in the international professional business service setting and argue that customer involvement is positively related to the perceived internationalization performance of multinational corporations mncs mncs with managers who perceive higher legitimacy pressures and greater needs for local knowledge tend to undertake greater efforts to build customer involvement furthermore we develop a configuration framework between perceived strategic needs and mncs capabilities specifically mncs that match relational capability with legitimacy needs and absorptive capacity with knowledge needs are more likely to engage in customer involvement our survey of 175 chinese mncs provides evidence that customer involvement is positively related to perceived internationalization performance when mncs relational capabilities are stronger the positive relationship between legitimacy pressure and customer involvement increases by contrast mncs with greater perceived market ambiguity improve customer involvement only when they have stronger absorptive capacity we conclude that mncs may simultaneously reduce legitimacy and efficiency costs through customer involvement after considering the fit between perceived environmental pressures and firm capabilities

government debt government spending and private sector behavior a current period tax reduction financed by issuing government debt shifts the timing of tax collection from the current period to the future if the future taxes implied by government debt are not fully perceived and discounted by the private sector there will be a net wealth effect that increases private sector consumption thus reducing capital accumulation and growth if on the other hand the implied future taxes are perceived and discounted by the private sector the current period tax reduction will be used to increase private saving to pay for the future taxes and government debt will be absorbed without any real effects on the economy the effects of government spending financed by current period taxation also depend upon private sector perceptions 2 if the benefits of government spending are ignored private sector consumption will decrease in accordance with the reduction in permanent disposable income to the extent that government spending is on consumption type goods that are perceived as substitutes for privately provided consumption goods there will be a relatively greater reduction in private sector consumption to the extent that government spending is on investment type goods yielding future goods and services that are perceived as substitutes for future privately provided consumption goods there will be a relatively smaller reduction in private sector consumption the standard approach to modeling private sector consumption saving behavior involves a rather asymmetric set of assumptions as to how the private sector perceives the various elements of government fiscal policy 3 current period taxes are assumed to be fully perceived but current period government spending is implicitly assumed to be completely ignored by the private sector in considering permanent personal disposable income the private sector is assumed to be forward looking in its assessment of income and taxation the stock of government debt is nevertheless included as part of the stock of private wealth the implicit assumption associate professor of economics graduate school of business university of chicago 1101 east 58th street chicago il 60637 i thank eugene fama levis kochin michael mussa paul evans and an anonymous referee for helpful comments i am particularly grateful to daniel benjamin for contributing many hours of discussion and laura lahaye who was a research assistant and valuable adviser on earlier drafts the theoretical debate on the burden of the debt has been long standing gerald o driscoll 1977 documents ricardo s nineteenth century position robert barro 1974 reopened the debate by introducing the fundamental issue of intergenerational transfers also discussed in merton miller and charles upton 1974 the empirical side of the debate was initiated by levis kochin s 1974 attempt to test for the effects of deficits on consumption and by martin feldstein s 1974 attempt to test for the effects of social security wealth on consumption other empirical contributions include jess yawitz and laurence meyer 1976 myself 1978 and j earnest tanner 1978 1979 with respect to the effects of government deficits and debt and barro 1978 michael darby 1979 and dean leimer and selig lesnoy 1982 with respect to social security wealth see also interesting recent papers by john seater 1982 who generates detailed tests of the effects of deficits and debt on consumption charles plosser 1982 who explores the effects of government spending and debt shocks on interest rates and feldstein 1982 who attempts tests similar to some in this paper see fn 29 2martin bailey s 1962 1971 development of the effects of government spending on private consumption and aggregate economic activity is the seminal contribution paul david and john scadding 1974 extend bailey s ideas and provide some supporting empirical evidence more recently willem buiter 1977 and myself 1978 developed models based on bailey s earlier work barro 1981 has an interesting paper on related issues see also david aschauer 1982 3the standard approach incorporates fiscal policy through the concept of personal disposable income and by including the stock of government debt as part of personal wealth see for example the empirical specification of albert ando and franco modigliani 1963 which has been the basis of most empirical consumption studies since and feldstein 1974 for one of the more influential papers based on the ando modigliani specification

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

can market based contracts substitute for alliances in high technology markets most current research on technology alliances assumes that trading partners are free to select an optimal governance structure however for international scientific research centers working with advanced technologies the choices for industrial collaboration are often limited to short term contracts this research investigates whether in high technology settings such short term contracts can substitute for longer term cooperative alliances while the short term transaction costs are high the results suggest that similar to alliances certain market based contracts do result in long term learning and transferable firm specific advantages

a cointegrating approach to budget deficits and long term interest rates a cointegrating approach is undertaken in this study to determine if there is a long run equilibrium relationship between budget deficits and long term interest rates for the united states and nine european countries the cointegration approach consists of conducting cointegration tests and then testing several hypothesized values for the deficit and price expectations variables the cointegration results suggest the existence of several significant cointegrating vectors for each of the ten countries which would seem to appeal to the view of budget deficits having a positive impact on long term interest rates the hypothesized values for the deficit and price expectations variables are found to be too strict since the hypotheses are rejected in every case but one

the critical role of informed political direction for advancing technology the case of swedish marine energy marine energy technologies can contribute to meeting sustainability challenges but they are still immature and dependent on public support this paper employs the technological innovation systems tis framework to analyze the development and diffusion of swedish marine energy up until 2014 while there were promising device developers relevant industrial capabilities and world class research the system suffered from weaknesses in several important innovation processes finally the analysis identifies the lack of informed political direction as a critical blocking factor and highlights its connection to domestic market potential

perspectives on multinational enterprises in emerging economies multinational enterprises mnes play a pivotal role in the development of many emerging economies in consequence they became the focus of scholarly research by economists and policy analysts in contrast international business scholars have been comparatively uninterested in analysing this role of mnes yet they could make important contributions to these debates first studies taking the individual firms as starting point would enhance understanding of the interaction between mnes and the local environment second theories and research methodologies developed in international business research could provide new insights into the dynamics of mnes in emerging economies the objective of this paper is to motivate more international business scholars to engage in research on positive and negative spillovers from foreign direct investment fdi in emerging economy societies to advance this research agenda scholars need to analyse the specific activities and capabilities of the firms involved and the impact of fdi on the broader social and environmental context for management this agenda raises the ethical question to what extent ought businesses to care about their local stakeholders

translating theoretical logics across borders organizational characteristics structural mechanisms and contextual factors in international alliances in this essay i critically review the 2006 jibs decade award article by lyles and salk knowledge acquisition from foreign parents in international joint ventures ijvs an empirical examination in the hungarian context this article develops theoretical arguments and empirically tests a two stage research question 1 what are the organizational characteristics and structural mechanisms between ijv parents that influence knowledge acquisition from the foreign parent and 2 what is the relationship between knowledge acquisition and performance in hungarian ijvs the most important contribution is the focus on both the antecedents and the consequences of knowledge acquisition in ijvs i also discuss subsequent research that draws heavily on the conceptual or empirical findings of the 2006 jibs decade award paper i conclude by suggesting areas of future research in the field of knowledge transfer organizational learning and international strategic alliances

a note on federal budget deficits and the term structure of real interest rates in the united states using quarterly data and dealing with the ex post real rates on three month u s treasury bills and 20 year u s treasury bonds this empirical note has estimated an is lm based regression by 2sls the results indicate that the budget deficit raises the slope of the yield curve furthermore to the extent that private sector capital formation is sensitive to longer term real interest rates in the united states federal budget deficits lead to crowding out of private investment and hence to slower economic growth over the longer run

measuring performance of international joint ventures international joint ventures ijvs are increasing in frequency and strategic importance however efforts to identify variables associated with ijv performance have been constrained by disagreements regarding the comparability and reliability of alternative performance measures and methods this study tests several hypotheses regarding the reliability and comparability of a range of objective and subjective measures of ijv performance as well as evaluating the relative utility of different data collection approaches

social ties and partner identification in sino hong kong international joint ventures partner identification is an important and under studied precursor to selection and eventual performance of international joint ventures ijvs the mechanics of the identification process were investigated in depth across a sample of eighteen sino hong kong ijvs using the case study research method the cross case findings of this exploratory investigation support the idea that social networks provide a valuable resource for reducing ijv partner search costs specifically the findings reveal that while weakly linked bridge ties are valuable in identifying potential partners searches based on strong ties tend to be shorter and provide a more robust basis for inter partner cooperation

intellectual capital configurations and organizational capability an empirical examination of human resource subunits in the multinational enterprise building on the organizational capabilities literature and theories of the multinational enterprise this paper develops and tests a framework that examines the relationship between intellectual capital configurations and organizational capabilities in human resource hr subunits looking at 187 subunits from 20 mnes findings show that intellectual capital dimensions vary in their usefulness for generating sharing and implementing hr management practices in particular while certain resources may help in the development of one capability they may harm the development of another implications are that an organization s intellectual capital investments will differ depending on the desired capability

economic and socio economic assessment methods for ocean renewable energy public and private perspectives this paper provides a comprehensive review of the current state of the art of the economics and socio economics of ocean renewable energy ore the many ways in which the viability and impacts of an ore project are assessed and an analysis of the current weaknesses issues or inappropriateness of the metrics and methodologies used in their definition and presentation the outcomes of this paper are anticipated to benefit the ore and wider renewable sector as a whole the review revealed that for the most part the current study of economics and socio economics of ore remain separate and discrete areas of research the economic methods utilised appear to be comprehensive but are limited to project or private investor level the methods identified for socioeconomic assessment fall between traditional and now routine environmental assessment approaches and more novel holistic approaches such as ecosystem services and life cycle assessment the novel section of the paper explored the connectivity between the economics and socio economics of ore in relation to project developments and policy planning a visualisation method was created of concentric rings intersected by related axis of economic socio economic and environment and enabled the examination of the benefits arising from the connectivity between the two spheres the concept of sustainable development process and the integration of environmental assessment for ore was also explored and how it responds to differing stakeholder aspirations and interpretations the analysis revealed that there was a divergence between public and private economic and socioeconomic assessments for ore environmental assessment is primarily a public responsibility but with significant inputs from the private developer involved while economic assessments are conducted primarily by the developer and or investor at their own behest however the two spheres of economic and socio economic for ore are highly connected and synergistic and must be examined in a holistic manner

trans specialization understanding in international technology alliances the influence of cultural distance in the information age the firm s performance hinges on combining partners specialist knowledge to achieve value co creation combining knowledge from different specialties could be a costly process in the international technology alliances itas context we argue that the combination of different specializations requires the development of trans specialization understanding tsu instead of the internalization of partners specialist knowledge this article examines the extent to which inter firm governance in itas shapes tsu and whether the development of tsu is endangered by cultural distance we hypothesize that relational governance product modularity and cultural distance influence tsu development which in turn influences firm performance we collected data from 110 non equity itas between software and hardware firms participating in the mobile device sector we analyzed the data using partial least squares path modeling our findings suggest that tsu largely depends on product modularity and relational governance in alliances however while cultural distance negatively moderates the path from relational governance to tsu it has no effect on the relationship between product modularity and tsu based on this we conclude that product modularity can substitute for relational governance when strong relational norms are not well developed in international alliances thus cultural distance does not invariably amount to a liability in itas

a retrospective on mnc knowledge transfer subsidiary absorptive capacity and hrm in this retrospective we revisit the goals of the original paper and we review the studies that have used our paper to discuss the concept and the development of absorptive capacity we also propose directions for future research stressing the need to develop thorough theoretical and empirical models of absorptive capacity as a multi level and dynamic construct that is contingent on the context in which it is embedded

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

the economics of wave energy a review abstract wave energy is arguably one of the most promising renewables less developed at present than other renewables the existing models to estimate the costs of a wave energy project are often oversimplified and the resulting scatter in the economic assessments weighs on the confidence of potential investors and constitutes therefore an impediment to the development of wave energy indeed understanding the costs of wave energy is one of the main fields of research in marine renewable energy in this context the main objective of this paper is to review all the factors that must be considered in an economic analysis of wave energy including a number of elements that are usually overlooked in the process we characterise the direct and indirect costs of a wave farm preliminary costs construction operation and maintenance and decommissioning cost as well as its prospective incomes for each of them a reference value is presented together with a generic formula for its calculation moreover the levelised cost i e the production cost of an energy unit 1 kw h is compared between various energy sources and on these grounds conclusions on the profitability and competitiveness of wave energy are drawn in sum this work reviews the state of the art and sets the basis for a thorough economic analysis of wave energy

partnering with leviathan the politics of innovation in foreign host state joint ventures forming international joint ventures ijvs with political institutions in emerging economies involves both benefits and risks for multinational enterprises mnes while political partners can provide ijvs with various resources their political status equips them with a strong position to appropriate rents in ijvs we address this tension by examining how host state ownership affects both innovation inputs and outputs in china based ijvs over 2008 2013 despite the potential government opportunism we find more r d investment innovation inputs made in ijvs with state partners than in those with private ones thus r d investment can be politically motivated and symbolically managed to ensure continued resource exchanges with the host state this political pressure is mitigated when foreign parents directly transfer home country based technology to ijvs when the host market dependence of ijv is weak and when ijvs are located in a deregulated region moreover we find foreign host state jvs deliver fewer innovation outputs measured by patent data than foreign private jvs which implies the failure of state partners to adequately absorb foreign technologies these findings highlight both the state partners powerfulness to boost ijv innovation investment and their limits in shaping ijv innovation outcomes and bear rich implications for the management of mne host government relationships

developed country mnes investing in developing economies progress and prospect this study reviews research from 1970 through 2016 on developed country multinational enterprises dmnes entering and competing in developing economies to identify the current state of knowledge of this research and push it further we review the literature using bibliometric and qualitative content analyses covering leading journals and books we articulate frontier issues that are understudied yet critical to both theorization and practice of dmnes in developing economies we discuss the findings and conclusions from prior research along five key areas 1 entering developing economies 2 organizing local activities 3 managing alliances and joint ventures 4 competing in dynamic environments and 5 dealing with institutions governments and society we offer prospective insights into future agenda that have important implications for mne strategies and decisions and propose frontier directions that encompass strategic localization reverse transfer and adaptation co evolution with local business ecosystems reorganizing and restructuring and strategic responses to institutional and market complexity

new evidence on deficits and interest rates it is generally assumed on theoretical grounds that increases in government borrowing cause interest rates to rise 1 but empirical support for this proposition has been weak at best several recent papers have uncovered no strong relationship between deficits and short terrn interest rates however the research reported here indicates that although the relationship between deficits and short terrn interest rates may be tenuous there is strong evidence that larger deficits are associated with higher long terrn interest rates much of the debate about whether there is a strong relationship between federal borrowing and interest rates concerns the crowding out question this controversy centers on the direct and indirect eilffects of government fiscal actions on private spending these effects have been well documented in the theoretical literature e g buiter 1977 carlson and spencer 1975 blinder and solow 1973 many of the crowding out effects studied in this literature depend on the connection between government borrowing and high interest rates friedman 1978 meyer 1975 silber 1970 this is called short run indirect crowding out and may occur when increases in government spending and borrowing cause interest rates to rise which then may cause private spending to be reduced buiter 1977 pp 310 13

a tale of three countries italian spanish and swiss manufacturing operations in china in this paper the choice of joint venture versus wholly foreign owned enterprise wfoe made by italian spanish and swiss multinationals in china as shaped by the risk of dissipation of intangible assets is investigated probit estimates based on an entirely new firm level dataset constructed by the author show that wfoe is more likely to emerge when know how easily spills over namely for firms endowed with more intangible assets or belonging to high tech sectors in line with the theoretical expectations

changing ib scholarship via rhetoric or bloody knuckles a case study in the boundary conditions for persuasion papers challenging institutionalized fields to change are rare and those not extinguished by neglect are rarer shenkar understands his target audience those in that target community of ib scholars studying cultural distance s cd associations with foreign direct investment fdi might read this paper as relatively radical culture scholars sometimes interpret the discussion of cultural friction cf as competing with even slighting by omission their corpus of work on contact and interaction both readings are false and forced comparison with two later papers reveals retrospective bias at work it further reveals cf as a metaphor not theory it is not a research agenda assigned to the field even if it becomes a personal project for the author rhetorical theory is the basis to compare the reasoning of appeals and emotion the discussion considers whether academic change agents might consider more use of emotion bringing shenkar into focus enriches our appreciation for its impressive craftsmanship as well as its scholarship i discuss implications for impact as a concept currently stuck with looking for citation over substance and offer suggestions for reviewers and editors to lower the barriers for impact

manufacturer governance of foreign distributor relationships do relational norms enhance competitiveness in the export market research on international marketing channels accentuates the importance of relational norms and trust building activities between buyers and sellers indeed cultural and country differences may limit the use and effectiveness of traditional tools such as market incentives and authoritative control that govern the relationship between an exporting manufacturer and its foreign distributor consequently exporting manufacturers need to emphasize relationships with their foreign distributors this research finds evidence that supports both direct and indirect effects between the manufacturer s use of governance via relational norms and its competitiveness in the export market the indirect effect results from the mediating role of trust a finding that makes a key contribution to the understanding of the role of relational governance in cross border relationships

fostering a renewable energy technology industry an international comparison of wind industry policy support mechanisms this article examines the importance of national and sub national policies in supporting the development of successful global wind turbine manufacturing companies we explore the motivations behind establishing a local wind power industry and the paths that different countries have taken to develop indigenous large wind turbine manufacturing industries within their borders this is done through a cross country comparison of the policy support mechanisms that have been employed to directly and indirectly promote wind technology manufacturing in 12 countries we find that in many instances there is a clear relationship between a manufacturer s success in its home country market and its eventual success in the global wind power market whether new wind turbine manufacturing entrants are able to succeed will likely depend in part on the utilization of their turbines in their own domestic market which in turn will be influenced by the annual size and stability of that market consequently policies that support a sizable stable market for wind power in conjunction with policies that specifically provide incentives for wind power technology to be manufactured locally are most likely to result in the establishment of an internationally competitive wind industry

fiscal deficits and long term interest rates further evidence from annual data much debate has recently centered on the popular view that large u s budget deficits financed by the sale of bonds cause high interest rates if valid this view implies that deficits crowd out efficient private investment and adversely affect economic growth however bailey 2 and barro 3 have challenged this conventional view on theoretical grounds based on the ricardian equivalence proposition bailey and barro contend that rational economic agents interpret government deficits as postponed tax liabilities and thus will have no effects on private wealth or interest rates such theoretical ambiguity in regards to the impact of budget deficits has also been matched by an equally conflicting empirical evidence for example barth iden and russek 4 deleeuw and holloway 8 hutchison and pyle 20 makin 24 makin and tanzi 25 and zahid 35 have found a positive and significant effect of deficits on interest rates on the other hand evans 11 12 13 hoelscher 17 motley 28 and plosser 29 30 have all failed to find any systematic support for a significant positive impact of deficits on interest rates it should be observed that the above empirical studies have employed either monthly or quarterly data however some researchers e g hoelscher 18 have recently charged that monthly or quarterly data bias the results in favor of finding no significant linkage between deficits and interest rates they reasoned that portfolio adjustment lags are too long for monthly or even quarterly observations to reflect the actual correlation between deficits and interest rates to eliminate this problem of periodicity annual data was instead advocated 2 using annual data hoelscher 18 concluded that deficits have caused positive and significant changes in long term interest rates in the united states

theoretical foundations of emerging economy business research in probing theoretically into central and eastern europe transactions resources and institutions we outlined the contributions of research in central and eastern europe cee to theoretical debates in business research in this retrospective we reflect upon the evolution of the field over the past decade with the fading impact of cee s distinct shared history we suggest that cee best be analyzed as emerging economies rather than as a distinct geographic entity emerging economy business research is converging on common themes and shared theoretical ideas while identifying critical variations that constrain generalizations among and beyond emerging economies this research thus highlights the need to develop a better understanding of the boundary conditions of scholarly theories of business knowledge over the past decade the institution based view has emerged from distinct intellectual traditions in institutional economics organizational theory and the analysis of business government bargaining research in these converging lines of theorizing places contextual variations at the center of explanations of business phenomena around the world we suggest that the institution based view is evolving toward a paradigm and offer suggestions on how to advance this research agenda further in particular by exploring how firms engage with different sets of potentially conflicting institutions at multiple levels and locations

do budget deficits raise nominal interest rates evidence from six countries abstract it is widely believed that budget deficits raise nominal interest rates this paper shows that the belief has no empirical support for six countries ricardian equivalence may explain the lack of a positive association between budget deficits and nominal interest rates

the evolution and internalization of international joint ventures in a transitioning economy although international joint ventures ijvs may mature over time and develop competitive viability they maintain some risk of instability owing to their shared ownership such instability can ultimately lead to their internalization by one of the partners in this study we consider factors that influence 1 whether ijvs evolve toward becoming a wholly owned subsidiary and 2 which parent foreign or local gains ownership of the venture we use a sample of hungarian joint ventures and find that only when there is both a power imbalance between the parents and high levels of conflict is the likelihood that the joint venture converts to a wholly owned subsidiary enhanced the extent to which the joint venture has learned from the foreign parent indirectly determines which parent gains full ownership extensive knowledge transfer to a joint venture in a transitioning economy combined with high levels of conflict increases the likelihood of the foreign parent gaining full ownership in contrast when there is extensive knowledge transfer and low conflict between the parents the local parent is more likely to internalize the venture our results suggest that the relationship between partner power and outcomes in ventures is more complex than originally believed and is contingent upon the level of conflict between the parents of the ijv