the nature of diversified business groups a research design and two case studies diversified business groups dominate the private sectors of most of the world s economies several of these economies have undergone sudden policy changes that significantly increase domestic competitive intensity the authors demonstrate how the changes in corporate scope that accompany such competitive shocks can be used to weigh the importance of different explanations for the existence of diversified business groups the authors illustrate their reasoning by studying the restructuring of two of india s largest business groups following a comprehensive post 1991 package of policy reforms the case studies also elucidate aspects of the restructuring process that should inform larger sample empirical analyses copyright 1998 by blackwell publishing ltd

limit cycles in intertemporal adjustment models theory and applications this paper starts from well behaved i e concave one state variable optimal control models the crucial feature is that indigenous growth is present the replacement of the control by an adjustment process and presumably penalizing these adjustments may convert stable and only stable fixed point equilibria into limit cycles indeed given positive growth and proper externalities such that discounting exceeds growth one can generate stable limit cycles with ease e g for a separable framework examples from such diverse fields as renewable resources optimal saving and public choice highlight the economic applicability

what s theoretically novel about emerging market multinationals we review the classic theory of the mne and past attempts to use it to understand the internationalization of firms from emerging markets we offer two criteria to determine whether emnes modify classic theory or not 1 establishing appropriate theoretical reference points and 2 distinguishing between theoretical constructs and empirical variables we suggest that the literature can benefit from moving beyond comparing emnes to dmnes and focusing instead on more fruitful issues specifically emerging markets offer the opportunity to observe the origin of the capabilities of mnes in general and the development of the institutional ecosystem that supports internationalization

country of origin effects on product evaluations this article reviews the literature regarding the effect of country of origin on buyer evaluations of products the issue is important for countries especially resource poor developing countries that need to increase manufactured exports and for firms that source products in countries different from where sold marketing inferences are drawn and implications for future research are developed

can multinational enterprises light up developing countries evidences from the access to electricity in sub saharan africa summary this paper examines the role that multinational enterprises mnes and foreign direct investments fdi can have in enhancing the access to electricity for local communities in developing countries based on the quality of home and host institutions access to electricity is a marker for development but it is far from being universal in developing countries the shortage of electricity is mainly the consequence of inability of governments in planning financing and developing necessary electricity infrastructure in this context investments from other actors can be essential particularly we focus on the role of fdi and mnes we claim that when mnes invest in developing countries they are incentivized to solve the lack of electricity infrastructure mainly for two reasons to guarantee their business activities and to gain legitimacy with their local stakeholders in addition we argue that mnes and fdi from institutionally underdeveloped countries will be more prone to develop infrastructure for the provision of electricity to local population as generally they suffer from a negative stereotype for this study we rely on 1 547 observations composed of pairs of 83 home countries and 15 host countries in sub saharan africa observed from 2005 to 2011 due to the nature of the database we adopt panel data techniques i e system gmm and corrected least square dummy variable estimators we find that fdi promotes access to electricity in developing countries with weak institutions and this is more likely true when fdi come from institutionally underdeveloped countries these results are far from obvious as they controvert common idea among institutional scholars that a regulatory authority is essential in the provision of infrastructure in conclusion with this paper we partially rehabilitate the image of mnes investing in developing countries by demonstrating that under certain conditions they could contribute to energy poverty alleviation of local population

regional competitive advantage based on pioneering economic reforms the case of chilean fdi foreign affiliates of chilean companies operating in latin america were more profitable than similar local firms but this difference in profitability has been decreasing over time two case studies of chilean multinationals illustrate our hypothesis that one source of competitive advantage for chilean firms was their know how of business strategy during economic liberalization using empirical and theoretical considerations we analyze whether this hypothesis is valid for other firms and industries

multinationals and the developing countries in multinational enterprise and economic analysis caves provides a summary of economic research on multinationals and developing countries yet for policy makers major questions remain unanswered the gaps can be grouped into four categories the impact of the widespread change in development strategies on multinationals the net impact of foreign direct investment on host countries the causes of declining tensions between developing countries and foreign investors and links between our economic knowledge and the decisions that face private and government managers

litigation and settlement in patent infringement cases a patent grants its owner the right to sue intruders that have been identified the patentholder must then supervise the market and react in case of infringement his reaction may be to go to court to settle or to accept entry we investigate how intensive the monitoring effort should be and how it will influence the entry decision in a simultaneous game even if the penalty paid by the infringer in case of a finding of liability is high the patentholder may prefer a settlement to a trial the likelihood of entry may increase with the penalty in sequential games regardless who plays first entry occurs comparatively less often than in the simultaneous game

tilting the table the use of preliminary injunctions abstract this paper examines the economic role of preliminary injunctions in legal disputes we present a model in which differences in financing costs drive the use of preliminary injunction and explore the implications of this legal remedy for ex post efficiency and ex ante incentives controlling for the nature of the dispute we examine the relationships between the financial status of litigating parties and whether a preliminary injunction is requested the empirical analysis uses detailed data compiled for a sample of 252 patent suits and reveals patterns generally consistent with those suggested by the model

experiential knowledge and cost in the internationalization process using a behavioral approach this study identifies and delineates components of experiential knowledge in the internationalization process three hypotheses are developed and tested they center ar

comparing virtue consequentialist and deontological ethics based corporate social responsibility mitigating microfinance risk in institutional voids due to the nature of lending practices and support services offered to the poor in developing countries portfolio risk is a growing concern for the microfinance industry though previous research highlights the importance of risk for microfinance organizations not much is known about how microfinance organizations can mitigate risks incurred from providing loans to the poor in developing countries further though many microfinance organizations practice corporate social responsibility csr to help create economic and social wealth in developing countries the impact of such csr practices remains an underdeveloped area of inquiry we use a normative ethics lens to develop an ethics based csr theory that differentiates between three forms of ethics based csr virtue consequentialist and deontological we argue that while all three forms can help mitigate risk virtue ethics based csr is potentially the most useful form of csr toward mitigating microfinance portfolio risk we test our hypotheses using a sample of microfinance organizations from across the world our findings suggest that virtue ethics based csr is not just an important philosophical paradigm it can actually help mitigate microfinance portfolio risk when implemented in practice

land use dynamics and the environment we build a benchmark framework to study optimal land use encompassing land use activities and environmental degradation we focus on the spatial externalities of land use as drivers of spatial patterns even if land is immobile by nature location s actions affect the whole space through pollution which flows across locations resulting in both local and global damages in contrast to the previous literature on spatial dynamics we prove that the social optimum problem is well posed i e the solution exists and is unique taking advantage of this result we illustrate the richness of our model by means of a numerical analysis considering a global dynamic algorithm we find that our model reproduces a great variety of spatial patterns related to the interaction between land use activities and the environment in particular we identify the central role of abatement technology as pollution stabilizer allowing the economy to achieve stable steady states that are spatially heterogeneous

patents as negotiating assets patenting versus secrecy for startups we analyse a sequential innovation model and show that relatively narrow patent rights can facilitate a market in which startups patents are traded as negotiating assets in this market the trade of patents on top of monopoly profits conveys an extra surplus from the patents capacity to affect future tech transfer negotiations this surplus which stems from a patent s potential ability to exclude infringers and the corresponding enforcement spillovers that patents confer may incentivise innovations that would not have been possible under trade secrecy improving social welfare this article is protected by copyright all rights reserved

protecting intellectual property rights are small firms handicapped this paper studies the determinants of patent suits and settlements during 1978 99 by linking information from the u s patent office the federal courts and industry sources we find that litigation risk is much higher for patents that are owned by individuals and firms with small patent portfolios patentees with a large portfolio of patents to trade or other characteristics that facilitate cooperative resolution of disputes are much less likely to prosecute infringement suits however postsuit outcomes do not depend on these characteristics these findings show that small patentees are at a significant disadvantage in protecting their patent rights because their greater litigation risk is not offset by more rapid resolution of their suits our empirical estimates of the heterogeneity in litigation risk can help in developing private patent litigation insurance to mitigate the adverse affects of high enforcement costs

pattern formation spatial externalities and regulation in coupled economic ecological systems abstract we study the management of ecosystems in which interacting state variables that are affected by management decisions diffuse in space we study pattern formation first in a setting where economic agents maximize myopic profits and ignore spillovers onto agents at other sites and second in the context of a social planner who internalizes these spillovers we compare patterns under these two institutions and study how the differences in the patterns generated by these two institutions impact the design of regulatory schemes to internalize the externalities at the same time we introduce new methods based on fourier series type decompositions that enable us to turn an intractable infinite dimensional optimal control problem into a countable number of finite dimensional optimal control problems as far as we know these methods are new to the economics literature our theory is applied to the management and regulation of a semi arid system

diffusion induced instability and pattern formation in infinite horizon recursive optimal control this paper develops local stability analysis for deterministic optimal control theory for recursive infinite horizon intertemporal optimization problems where there is a continuum of spatial sites and the state variable can diffuse over these sites we identify sufficient conditions for a type of local instability which emerges from the interaction of the discount rate on the future the curvature of the hamiltonian and the spatial features of the problem we call this phenomenon optimal diffusion induced instability odi we illustrate our analytical methods with three stylized applications the first application is the optimal management of spatially connected human dominated ecosystems the second and third applications are harvesting of spatially interconnected renewable resources jel classification c6 q2

patents imitation and licensing in an asymmetric dynamic r d race abstract rd some may have an advantage in early stages of the r d process while others may have advantages in other stages of the process this paper uses a two firm asymmetric ability multistage r d race model to analyze the effect of patents imitations and licensing arrangements on the speed of innovation firm value and consumers surplus by using numerical analyses to study the mpe of the r d race the paper demonstrates the circumstances under which a weak patent protection regime that facilitates free imitation of any intermediate technology may yield a higher consumers surplus and total surplus than a regime that awards a patent for the final innovation the advantage of imitation may hold even when we allow for voluntary licensing of intermediate technologies

international expansion of emerging market enterprises a springboard perspective in this article we present a springboard perspective to describe the internationalization of emerging market multinational corporations em mnes em mnes use international expansion as a springboard to acquire strategic resources and reduce their institutional and market constraints at home in so doing they overcome their latecomer disadvantage in the global stage via a series of aggressive risk taking measures by aggressively acquiring or buying critical assets from mature mnes to compensate for their competitive weaknesses we discuss unique traits that characterize the international expansion of em mnes and the unique motivations that steer them toward internationalization we further delineate peculiar strategies and activities undertaken by these firms in pursuit of international expansion as well as internal and external forces that might compel or facilitate their propulsion into the global scene we finally explain the risks and remedies associated with this international springboarding strategy and highlight major issues meriting further investigation

keeping it within bounds regression analysis of proportions in international business international business researchers commonly estimate proportions percentages rates or fractions so called proportional dependent variables in this paper we posit that two regression strategies are particularly pertinent to the international business field tobit and fractional regression reviewing recent international business research we find that while fractional regression is rarely used analyses from tobit regression are often incomplete or erroneously interpreted with consequences for the validity of the reported results accordingly we clarify how researchers should choose between tobit and fractional regression and interpret their results we present insights based on simple simulations and data examples with associated stata code and a decision tree for choosing between types of models for use with proportional dependent variables

optimal harvesting of stochastic spatial resources abstract we characterize the optimal harvest of a renewable resource in a generalized stochastic spatially explicit model despite the complexity of the model we are able to obtain sharp analytical results we find that the optimal harvest rule in general depends upon dispersal patterns of the resource across space and only in special circumstances do we find a modified golden rule of growth that is independent of dispersal patterns we also find that the optimal harvest rule may include closure of some areas to harvest either on a temporary or permanent basis biological reserves reserves alone cannot correct open access but may under sufficient spatial heterogeneity and connectivity increase profits if appropriate harvest controls are in place outside of reserves

pro market institutions and global strategy the pendulum of pro market reforms and reversals we review the literature analyzing the impact of pro market institutions on firms global strategy we propose that the ideological tension between whether the government or the market should drive economic development results in a pendulum of pro market reforms and reversals that drive changes in firm strategy and performance much progress has been made in the analyses of pro market reforms and their impact on firms international strategies and performance however there is a need to further learn about four areas 1 the concept of pro market institutions in particular the variety of institutional dimensions the measures and the influence of informal institutions on firm strategies 2 the drivers of changes in pro market institutions especially firms influences and the co evolution of firm strategies and institutional changes 3 the implications of changes in pro market reforms for the interactions among integration diversification and internationalization strategies the causality chains connecting institutions and strategies and the reconfiguration of activities globally and 4 the non traditional moderators that alter the impact of pro market institutional dynamics on firms strategies such as country level political systems industry level competitor reactions and individual level managerial capabilities and perceptions

economic impacts of marine reserves the importance of spatial behavior abstract marine biologists have shown virtually unqualified support for managing fisheries with marine reserves signifying a new resource management paradigm that recognizes the importance of spatial processes in exploited systems most modeling of reserves employs simplifying assumptions about the behavior of fishermen in response to spatial closures we show that a realistic depiction of fishermen behavior dramatically alters the conclusions about reserves we develop estimate and calibrate an integrated bioeconomic model of the sea urchin fishery in northern california and use it to simulate reserve policies our behavioral model shows how economic incentives determine both participation and location choices of fishermen we compare simulations with behavioral response to biological modeling that presumes that effort is spatially uniform and unresponsive to economic incentives we demonstrate that optimistic conclusions about reserves may be an artifact of simplifying assumptions that ignore economic behavior

capital market development and firm restructuring during an economic shock we conceptualize capital markets in terms of resource access and governance and argue that more developed capital markets facilitate firm restructuring through more effective provision of capital and governance of transactions we then develop a contingency model that specifies that the effects of capital market development on restructuring vary by 1 types of restructuring 2 the nature of the economic environments and 3 firms access to resources we evaluate a broad range of restructuring actions among independent firms and business group affiliates in singapore and south korea before and during the economic shock of 1998 1999 results support our predictions of the impact of capital market development and of contingencies and highlight the value of incorporating an external capital markets perspective to complement internally focused theoretical explanations for firm restructuring

the dynamics of the liability of foreignness a global study of survival in financial services we study the impact of foreignness on survival in interbank currency trading worldwide over the period 1974 93 in particular we develop hypotheses on the behavior of the liability of foreignness over time and on the consequences of evolving sources of firm level competitive advantage on this liability we test these hypotheses on the population of 2667 market making trading rooms located in 47 countries worldwide that either existed in 1974 or entered the industry between 1974 and 1993 the results show that there is a liability of foreignness and that it changes over time further strategic and organizational factors such as the adoption of technology by these firms and their mode of internal control significantly influenced survival as did location related factors such as the intensity of local and foreign competition 1997 by john wiley sons ltd

optimal harvesting of a spatial renewable resource abstract in this paper we investigate the optimal harvesting of a renewable natural resource while in most standard approaches the resource is located at a single point we allow the resource to be distributed spatially consequently an agent who exploits the resource has to travel from one location to another for a fixed planning horizon we investigate the speed and the path of harvesting chosen by the agent we show that the agent adjusts this speed so as to visit each location only once even in the absence of travelling cost since the agent does not return to any location for a second harvest it is optimal to fully deplete the resource upon arrival a similar type of bang bang solution results when we drop the assumption of a constant harvesting rate allowing for a variable harvesting rate the agent chooses to fully exploit the resource either in the last or in the first travelling period a society interested in conserving some of the resource thus has to take measures to limit the exploitative behaviour of the agent

secrecy versus patenting we develop an equilibrium search model of innovation with the possibility of multiple independent discovery we distinguish innovations from ideas and we view patents as probabilistic property rights that are constrained by the innovators option to keep the innovation secret we find that the patent system can simultaneously stimulate innovation information disclosure and welfare an optimal patent may provide more or less protection than secrecy and in many cases it provides less suggesting that its main function is information spreading rather than rewarding the costs of the innovative activity

chinese multinationals fast internationalization financial performance advantage in one region disadvantage in another our study reveals the financial performance implications of the speed at which chinese multinational enterprises cmnes expand into intra regional versus inter regional host countries in doing so we propose a framework that integrates internationalization speed and home regionalization literatures using data from 767 publicly listed cmnes from the years 2002 to 2014 we discover that the faster the intra regional internationalization the better the firm s financial performance whereas faster inter regional internationalization demonstrates a poorer financial performance we also find that fast mover cmnes technological and marketing resources are valuable in intra regional host countries but vulnerable in inter regional host countries we discuss the implications of these findings for studies of the uppsala internationalization process model and regional mnes

what are the most promising conduits for foreign knowledge inflows innovation networks in the chinese pharmaceutical industry we study innovation networks in emerging markets where foreign actors have been identified as key sources of knowledge spillovers as well as progenitors of industry clusters focusing on connectivity as a channel for international knowledge sourcing we widen our lens beyond mnes to include critical innovative actors such as research institutions i e universities and research centers we examine the geographic dispersion of co inventor networks generated by us patents associated with the chinese pharmaceutical industry previous research has highlighted the role of organizationally driven mne networks as enablers of foreign knowledge inflows to less developed countries however our results emphasize the critical role of individually motivated networks arising from advanced economy research institutions in connecting china to global knowledge networks

the dynamics of spatial pollution the case of phosphorus runoff from agricultural land abstract the paper analyzes based on a land classification system the optimal management of negative production externalities while taking into account the intertemporal and spatial aspects of the problem to incorporate both aspects simultaneously a two stage modeling approach is proposed where the solution of the spatial problem first stage is optimized over time second stage as a result it is possible to relate long run and short run supply and input demand functions attention is given to runoffs from agricultural land leading to the contamination of a water body in particular the one of phosphorus and the eutrophication of lakes the employment of a land classification system supports a full information approach and allows to address the optimal management of mineral fertilizer and manure based on zonal taxes zonal permits and zonal standards which all vary over time

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

outward direct investment by indonesian firms motivation and effects as part of indonesia s opening to the world economy over the past several years indonesian firms have begun to invest abroad this study compares indonesian firms that have invested abroad and those that have not and with third world multinationals and other mnes it found that the performance of indonesian firms that invested abroad improved dramatically after their investment in terms of management expertise exports quality and costs relative to their past performance and relative to the other firms in the sample these results support a conclusion that indonesian multinationals have gone abroad not only to exploit their ownership advantages but also to access and develop ownership advantages they did not previously possess

transforming disadvantages into advantages developing country mnes in the least developed countries we analyze the advantages and disadvantages of developing country multinational enterprises mnes in comparison with developed country mnes developing country mnes tend to be less competitive than their developed country counterparts partly because they suffer the disadvantage of operating in home countries with underdeveloped institutions we argue that this disadvantage can become an advantage when both types of mne operate in countries with difficult governance conditions because developing country mnes are used to operating in such conditions the empirical analysis shows that although developing country mnes rarely appear among the largest mnes in the world they are more prevalent among the largest foreign firms in the least developed countries ldcs especially in ldcs with poorer regulatory quality and lower control of corruption

spatial heterogeneity and the choice of instruments to control nonpoint pollution because it is difficult to monitor emissions and to implement differentialtaxes and standards uniform taxes and standards on agricultural chemicaluse are often proposed and used to control nonpoint source pollution thisarticle analyzes the relative efficiency of these uniform instruments in thepresence of spatial heterogeneity we show that the relative slopes of themarginal pollution cost and marginal profit of chemical use are only one ofthe factors that affect the relative efficiency other factors includecorrelation between marginal pollution costs and marginal profits and theslope and variability of marginal profits in addition a uniform tax mayresult in some farmers not using the chemical and a uniform standard mayhave no effect on low input land we show empirically that the presence ofcorner solutions can reverse a conventional finding of tax or standardsuperiority based on the relative slop rule

causes of the difficulties in internationalization we study the causes of the difficulties faced by firms when they internationalize in search of new markets we build on the resource based theory to argue that the difficulties in internationalization can be separated into three main sets based on their relationship to advantage loss of advantage provided by resources transferred abroad creation of a disadvantage by resources transferred abroad and lack of complementary resources required to operate abroad in each set we further distinguish difficulties that are specific to a firm from those that are common to a set of firms we argue that only a few of the resulting types of difficulties of internationalization are exclusive to the cross border expansion and propose solutions that address the root cause of each type

a note on the transnational solution and the transaction cost theory of multinational strategic management this article assesses the extent to which the results of bartlett and ghoshal s 1989 work can be incorporated in what has now become one of the core explanations of multinational strategic management i e the transaction cost based theory of international production we demonstrate that the transaction cost approach fully incorporates the empirical findings of bartlett and ghoshal s work to do so requires that we make a new distinction between location bound and non location bound firm specific advantages in addition three possible uses of country specific advantages by multinational enterprises need to be identified while the transnational solution as proposed by bartlett and ghoshal is not itself a new theory of multinational strategic management it is compatible with the transaction cost based model of multinational strategic management

the patent paradox revisited an empirical study of patenting in the u s semiconductor industry 1979 1995 we examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation recent survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate returns to r d yet the propensity of semiconductor firms to patent has risen dramatically since the mid1980s we explore this apparent paradox by conducting interviews with industry representatives and analyzing the patenting behavior of 95 u s semiconductor firms during 1979 1995 the results suggest that the 1980s strengthening of u s patent rights spawned patent portfolio races among capital intensive firms but it also facilitated entry by specialized design firms

bioeconomics of spatial exploitation in a patchy environment abstract this paper presents a model of renewable resource exploitation that incorporates both intertemporal dynamics and spatial movement the model combines the h s gordon vernon smith hypothesis of a rent dissipation process with ricardian notions that resources are exploited across space in a pattern dependent upon relative profitabilities the population structure is characterized in a manner consistent with modern biological ideas that stress patchiness heterogeneity and interconnections among and between patches generally we find the equilibrium patterns of biomass and effort across the system to be dependent upon bioeconomic conditions within each patch and the nature of the biological dispersal mechanism between patches we use simple examples to illustrate how the distribution of effort throughout the system reflects the heterogeneity and the spatial biological linkages

risk propensity in the foreign direct investment location decision of emerging multinationals a distinguishing feature of emerging economy multinationals is their apparent tolerance for host country institutional risk employing behavioral decision theory and quasi experimental data we find that managers domestic experience satisfaction increases their relative risk propensity regarding controllable risk legally protectable loss but decreases their tendency to accept noncontrollable risk e g political instability in contrast firms potential slack reduces relative risk propensity regarding controllable risk yet amplifies the tendency to take noncontrollable risk we suggest that these counterbalancing effects might help explain prior ambiguous findings on the relationship between experience slack and fdi decisions the study provides a new understanding of why firms exhibit heterogeneous responses to host country risks and the varying effects of institutions

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

simultaneous model of innovation secrecy and patent policy multiple innovators can and do come up with the same invention independently a famous case is the telephone two hours after alexander graham bell filed a patent application for it another application for the same invention arrived at the patent office many scholars such as ilkka rahnasto 2003 and hal r varian et al 2004 argue that since bell s time simultaneous innovation has become increasingly common we feel and our discussions with industry practitioners confirm that the simultaneous model of innovation characterizes especially network industries such as consumer electronics the internet software telecommunications and payment systems where standardization limits the possible paths for future technologies and so firms concentrate their r d activities on the same fields we suggest that simultaneous or independent invention has major implications for intellectual property ip policy in particular the possibility of simultaneous innovation changes the patenting decision firms tap patents for a defensive purpose since the choice is no longer between patenting or resorting to trade secrecy but between patenting or letting competitors patent by exploiting the vulnerability of innovative firms to rival innovation it is possible to design a welfareimproving patent system that induces innovators to patent rather than keep their innovations secret taking the simultaneous nature of innovation seriously also changes the way one should think about the relationship between ip and competition policies

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

spatial externalities and agglomeration in a competitive industry abstract we introduce spatial spillovers as an externality in the production function of competitive firms operating within a finite spatial domain under adjustment costs spillovers may attenuate with distance and the overall externality could contain positive and negative components with the overall effect being positive we show that when the spatial externality is not internalized by firms spatial agglomerations may emerge endogenously in a competitive equilibrium the result does not require increasing returns at the private or the social level increasing marginal productivity of private capital with respect to the externality or location advantages in fact agglomerations may emerge with decreasing returns to scale declining marginal productivity of private capital with respect to the externality and no location advantage the result depends on the interactions between the structures of production technology and spatial effects as shown in the paper no agglomerations emerge at the social optimum when spillovers are internalized and diminishing returns both from the private and the social point of view prevail numerical experiments with cobb douglas and ces technologies and an isoelastic demand confirm our theoretical predictions

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

the effectiveness of laws against bribery abroad this paper analyzes the effectiveness of laws against bribery abroad in inducing foreign investors to reduce their investments in corrupt countries the laws are designed to reduce the supply of bribes by foreign investors by increasing the costs of bribing abroad such increase in costs will make foreign investors more sensitive to corruption and induce them to reduce their investments in corrupt countries however the paper argues that these laws need to be implemented and coordinated in multiple countries to become effective otherwise investors in a country will have incentives to bypass them when competitors from other countries are not bound by similar legal constrains the empirical analysis shows that investors from countries that implemented the oecd convention on combating bribery of foreign public officials in international business transactions of 1997 reduced their investments in corrupt countries investors from the us which were bound by the foreign corrupt practices act of 1977 also reduced investments in corrupt countries but only after the oecd anti bribery convention was in place

springboard internationalization by emerging market firms speed of first cross border acquisition according to the springboard perspective emerging market multinationals seek strategic assets aggressively from the outset in this paper we investigate the role of firms institutional embeddedness in terms of age and affiliation to business group on their aggressive internationalization pursuits an issue which has remained less explored in international business scholarship this study based on 8163 indian listed firms over 18 years identifies a trend that younger firms founded in the liberalized era post 1991 and unaffiliated firms are more likely to pursue aggressive internationalization by conducting their first cross border acquisition cba faster among affiliated firms younger ones are relatively faster in conducting their first cba furthermore the evidence signals a moderating impact of inter group heterogeneity in terms of group level assets and foreign investments on the relationship between firm age and aggressive internationalization

jurisdiction shopping and foreign location choice the role of market and nonmarket experience in the european solar energy industry several countries provide policy support to specific sectors in order to facilitate industry transitions while industry support policies stimulate the growth of their target sectors little is known about how such policies engender heterogeneous international strategies in this article we investigate how industry support policies influence foreign location choices we argue that firms engage in jurisdiction shopping choosing to invest in countries with more generous policy support but that this tendency varies markedly across firms specifically we suggest that firms nonmarket experience exacerbates the effect of policy support on location choice whereas market experience has less of an impact further we propose that some firms view generous policies more skeptically than others depending on the nature of their nonmarket experience we test and find support for our predictions using a longitudinal dataset of foreign investments of firms entering the solar energy industry in the european union our findings indicate that supportive policies stimulate the energy transition attracting in particular foreign entrants diversifying into renewables or having more policy experience at the same time they suggest that adverse policy changes in one country affect how firms assess policies in other countries highlighting the need for policy coordination at a supranational level

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

financial contagion and economic development an epidemiological approach abstract we develop an epidemiological approach to analyze how financial contagion may affect and be affected by economic activity we show that according to specific parameter values the economy may converge either to a non speculative or to a speculative equilibrium in the former situation the level of per capita income is maximal while in the latter it is reduced by financial contagion the presence of economic and financial feedback effects may also give rise to macroeconomic fluctuations during the transitional path clearly showing that such economic and financial links are an important driver of the short run macroeconomic performance by extending the analysis to a spatial dimension we also show that financial contagion in some specific region may propagate quickly also in regions far away from those in which the contagion initially occurs highlighting the role of regional policy coordination to avoid interregional contagion

international business responses to institutional voids for nearly two decades scholars in international business and management have explored the implications of institutional voids for firm strategy and structure although institutional voids offer both opportunities and challenges they have largely been associated with firms efforts to avoid or mitigate institutional deficiencies and reduce the transaction costs associated with operating in settings subject to those institutional shortcomings the goal of this special issue is to advance scholarship on this topic by a exploring institutional voids that are new to the literature b providing a deeper assessment of the different ways in which firms respond to these voids and c utilizing diverse disciplines and theoretical approaches to do so in this introduction we first review and synthesize extant research on institutional voids tracking the evolution of institutional void scholarship since the inception of the concept khanna palepu journal of economic literature 45 2 331 372 1997 and providing our perspective on its contributions and limitations we then summarize the contributions of the articles included in this special issue in addition to identifying an array of institutional voids economic and social the articles highlight four different strategies for responding to them internalization substitution borrowing and signaling drawing on these we develop new insights on the implications of institutional voids for firm behavior we conclude with suggestions for future research