sequential formation of coalitions in games with externalities and fixed payoff division this paper analyzes a sequential game of coalition formation when the division of the coalitional surplus is fixed and the payoffs are defined relative to the whole coalition structure gains from cooperation are represented by a valuation which maps coalition structures into payoff vectors i show that any core stable coalition structure can be attained as a stationary perfect equilibrium of the game if stationary perfect equilibria may fail to exist in general games a simple condition is provided under which they exist in symmetric games furthermore symmetric stationary perfect equilibria of symmetric games generate a coalition structure which is generically unique up to a permutation of the players a general method for the characterization of equilibria in symmetric games is proposed and applied to the formation of cartels in oligopolies and coalitions in symmetric majority games journal of economic literatureclassification numbers c78 c71 1996 academic press inc

the limits of explanation testing the internalization theory of the multinationial enterprise the paper explores the difficulties of testing the internalization approach in the modern theory of the multinational enterprise the structure of the theory is elaborated and the conclusion drawn that testing cannot occur at the most general theoretical level but that the theory requires careful restricting assumptions to be placed on it to allow rigorous testing several empirical circumstances would constitute refutation if they could be shown to hold however the use of unconventional cases or outliers does not constitute disproof more rigour is required in formulating and testing the theory but the current verdict on the theory must be not disproven

the attention stimulus of cultural differences in global services sourcing contrasting with extant research centred on the organizational challenges of sourcing services in culturally distant countries we show that cultural differences between home and host countries do not prevent firms from achieving their cost savings targets instead the effect is positive both for the captive and outsourcing governance models using insight from social psychology research and the theory of organizations we build the argument that the positive effect is due to cultural differences providing an attention stimulus for decision makers to thoroughly gather and process information on the costs and benefits of global sourcing thereby reducing the risk of cost estimation errors the empirical validation uses a data set of 624 global services sourcing initiatives obtained from the offshoring research network complemented with multiple external sources of cross country data on cultural differences languages geographic distance and education levels the main contribution of the article is to add much needed nuance to the otherwise monotonic negative view of cultural differences in extant global sourcing literature moreover the original theoretical framework and resulting attention stimulus argument we develop open new avenues for research on the consequences of cultural differences in international business operations more broadly

explaining the international intensity and global diversity of early stage technology based firms abstract early stage technology based firms are confronted with the complexity of foreign markets and global competition from their earliest stages of development not only must technology entrepreneurs keep pace with ever changing technology based product offerings but they must also simultaneously stay abreast of competitors and industry trends in multiple countries we surveyed 75 small technology based firms in ontario to evaluate their international activities and try to explain both the intensity of their foreign sales the percent of total sales coming from foreign sources as well as the global diversity of the markets in which they operate the number of major regional areas from which they derive revenue our findings suggest that resources necessary to pursue international sales have an important impact on both foreign market intensity and diversity in contrast however attitudes towards foreign markets helped to explain international intensity but not global diversity additionally firm age was positively associated with global diversity but not international intensity these findings support the notion of small technology firms being instant internationals but suggest that proceeding to the next step achieving global diversity requires significantly greater time and resources in line with prior empirical research these firms tended to increase their international intensity and diversity as they became larger in contrast with what the literature suggests however firms utilizing strategic alliances were no more active internationally than those not using strategic alliances finally government assistance helped to explain the international intensity of these firms but not the global diversity these results help managers researchers and shapers of public policy better understand the international activities of early stage technology firms given the relationship between attitudes and international intensity there appears to be some opportunity associated with trying to influence the attitudes of ceos regarding initial expansion into international markets for firms to become globally diverse however there is a greater dependency on the availability of resources as well as accumulated business experience managers should recognize the pattern this suggests and perhaps be leery of becoming too globally diverse too quickly overall the relationship between size and foreign activities suggests that growth opportunities are linked to international markets although some broad relationships are suggested regarding the need for collaboration and government support further research is necessary to understand the use of strategic alliances as well as government assistance in both international market intensity and global diversity

multinationality and firm performance the moderating role of r d and marketing capabilities researchers in international business have long been interested in understanding the relationship between the multinationality of a firm and its market performance this article contributes to this research stream by incorporating firm heterogeneity in examining the multinationality performance relationship the findings based on a time series cross sectional analysis of firms from 12 different industries over a seven year period indicate that the impact of multinationality on both financial and operational performance is moderated by firm s r d and marketing capabilities

new venture internationalization strategic change and performance a follow up study abstract although many scholars business experts and government agencies enthusiastically advise all firms including new and small ventures to internationalize such advice does not appear to be based on empirical evidence few researchers have empirically examined the link between new venture performance and the internationalization of new ventures at best the evidence suggests that there is no significant relationship we used a sample of 62 u s new venture manufacturers in the computer and communications equipment industries during the late 1980s these industries were purportedly globalizing and may have been leading other industries into increased international operations we found that higher levels of internationalization percentage of foreign sales to total venture sales were associated with higher relative market share two years later however there was no significant direct relationship between percentage of international sales and subsequent return on investment roi perhaps international operations simply cost more than expected or perhaps as macmillan and day 1987 found in their study of corporate ventures over a 4 year time period increases in market share may be a prelude to higher roi as scale benefits translate into higher profitability however the 2 year time period of our study may simply not be long enough for investments in higher market shares to produce improved profits during the 2 year study period many of the ventures changed their level of internationalization of the 36 ventures who were domestic no international sales in the prior study 10 expanded into international markets over the 2 years of the 26 originally international ventures international sales of at least 5 half increased their percentage of international sales nine reduced it and four stayed the same whereas the average change in international sales percentage of the ventures was only 2 9 percentage points the large standard deviation of 13 0 percentage points and the leptokurtic distribution 9 2 reflected the dramatic changes made by some of the ventures using subgroup analysis we examined these changes in percentage of international sales in conjunction with changes in strategies and performance ventures that had increased international sales relative to those that had not exhibited more positive associations between the degree of strategic change and performance as measured in terms of both relative market share and roi increased international sales in technology based new ventures seems to require simultaneous strategic changes in order to positively impact venture performance this study is a follow up to mcdougall s 1989 finding that technology based new ventures that had sales in foreign markets had significantly different strategies than similar ventures that sold their products only domestically the current study enriches the previous findings by adding consideration of 1 changes in degree of internationalization 2 changes in strategy and 3 venture performance although we found no performance penalty associated with increasing international sales alone indiscriminant advice for new ventures to sell in foreign markets without other supporting strategic actions is inconsistent with our findings internationalization alone did not lead to increased profitability entrepreneurs of young technology based firms who are considering internationalization should take heed of our results internationalization of sales does not appear to be a simple matter of applying established strategies and procedures developed for a domestic arena successful internationalization appears to require changes in the venture s strategy as well

regulatory environments and the location decision evidence from the early foreign market entries of new technology based firms new technology based firms ntbfs embarking on a strategy of rapid internationalisation choose foreign market entries that minimise transaction costs and the related risks of failure means to reduce the young firms vulnerability to the appropriation of intellectual capital are particularly important influences on early foreign market choices we explore the effect of the institutional dimension specifically the national regulatory environment on the location choices and the speed of internationalisation by british and german ntbfs we provide evidence that entrepreneurial young firms choose to enter country markets offering better regulatory protection for their intellectual property this decision is moderated by a home regulatory regime bias in contrast we observe that the speed of internationalisation is influenced less by the foreign regulatory regime and more by industry and firm characteristics we also observe that managerial experience influences the location choices of ntbfs facing regulatory hazards

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

a theory of endogenous coalition structures consider an environment with widespread externalities and suppose that bind ing agreements can be written we study coalition formation in such a setting our analysis proceeds by defining on a partition function an extensive form bargaining game we establish the existence of a stationary subgame perfect equilibrium for such a game our main results are concerned with the characterization of equilib rium coalition structures we develop an algorithm that generates under certain conditions an equilibrium coalition structure our characterization results are especially sharp for symmetric partition functions in particular we provide a uniqueness theorem and apply our results to a cournot oligopoly journal of economic literature classification numbers c71 c72 c78 d62 q 1999 academic press

impact of ownership on the international involvement of smes this paper analyses the relationship between the internationalisation strategies of smes and types of ownership different types of ownership affect firms and this in turn will influence the internationalisation strategy adopted using a sample of spanish smes our results show that internationalisation is negatively related to family ownership and positively related to corporate ownership we have also observed that the presence of a corporate blockholder in family firms encourages internationalisation these results support the idea that ownership type influences the decision to internationalise

internationalisation conceptualising an entrepreneurial process of behaviour in time this paper presents a three stage process of conceptual development in response to the call for a unifying direction for research in the emergent field of international entrepreneurship drawing on classic approaches to internationalisation and importing insight from entrepreneurship as a separate and distinct field of study the paper develops three potential models of internationalisation as a time based process of entrepreneurial behaviour the models evolve from the simple through general to precise levels of conceptualisation research implications are discussed

prior conditions and early international commitment the mediating role of domestic mindset our study investigates why some firms engage in low international commitments such as exports in the early phases of internationalization whereas others leapfrog the internationalization process and start with high international commitments in the form of foreign direct investment fdi process models of internationalization propose that firms start with low commitment activities and gradually increase their commitments to international markets however recent empirical evidence has shown that many firms make high international commitments from the start our findings suggest that domestic resources and competitive action propensity affect early international commitments indirectly through domestic mindsets a domestic mindset refers to the knowledge structures of the top management team prior to starting international activities based on their managerial experience and learning in domestic markets our results suggest that knowledge and learning gained in domestic markets through diverse resource and competitive activities may be crucial in early international commitments

is there a relationship between a geocentric mind set and multinational strategy this paper operationalizes and tests relationships between a geocentric managerial mind set geographic scope and the structural and strategic characteristics of firms and industries relationships are tested using data from a survey of senior corporate international hrm managers of large u s based manufacturing multinationals an index of a geocentric mind set is found to correlate with geographic scope and various aspects of ihrm policy and practice however no relationship is found with measures of multinational strategy or organizational structure the paper concludes with a speculative hypothesis development of a geocentric mind set may relate to the information or knowledge intensity of the firm rather than its position on the strategic continuum

the relationship between firm size and export behavior revisited many academic studies and government leaders are asking small and medium sized firms to become more involved in exports unfortunately the role that can be played by smaller firms is unclear despite the vast number of studies on size and export behavior discrepancies in study findings and the absence of variance statistics prevent researchers from understanding the importance of size this study has sought to examine the direct and indirect effects of firm size by examining three dimensions of export behavior propensity of export countries exporting to and export attitudes for 14 072 canadian manufacturers the results indicate that while firm size is positively related to all dimensions of export behavior its importance is limited as the amount of variance explained is modest

the internationalization of small and medium sized firms this paper contributes to the existing research by integrating the notions of organizational learning and entrepreneurial orientation into the body of international entrepreneurship our primary framework combines learning theory and the new venture theory of internationalization to study the extent to which small and medium sized companies engage in international activities we found that the firms international learning effort and entrepreneurial orientation are positively associated with internationalization intent whereas domestic learning effort is negatively related with internationalization intent overall our results suggest 1 that intensive knowledge renewal and exploitation regarding foreign markets and the internationalization process itself may increase internationalization by affecting the perceptions of opportunities offered by further international expansion and 2 that firms with an entrepreneurial mindset may be more likely to develop a long term substantial presence in the international arena compared to firms that are more reactive or conservative

on the relationship between firm size and export intensity export marketing literature supports the view that firm size is positively related to export intensity although the empirical findings have been mixed a number of theoretical arguments are used to support this proposition i e international marketing economies of scale limited managerial and financial resources of small firms decisionmaker s risk perception based on a large survey of the italian manufacturing industry the article falsifies the proposition and challenges some widely held assumptions in export marketing literature

on dynamic efficiency in a growth model with increasing returns abstract the production externality at the heart of the knowledge based growth literature reverses the standard analysis of efficient capital accumulation if the competitive equilibrium involves underinvestment relative to the social optimum moving to the social optimum requires sacrifice by some in the standard decreasing returns case but requires no such sacrifice when there are knowledge spillovers

the transition from decentralized to network based mnc structures an evolutionary perspective this paper investigates and models the transition process within established multinational corporations mncs in moving from decentralized toward network based structures whereas there has been substantial research on various mnc models there has been little longitudinal research on the movement toward projected network based models this paper develops an evolutionary perspective of this transition distinguishing adjustments altering how the mnc defines its global strategy where it locates key resources and how it structures and manages operations it argues that rather then being a planned process each phase represents a viable strategic response to then existing challenges and opportunities the paper also argues that the focus of the process shifts over time initially focusing on building organizational linkages and adjusting the quantity and nature of resources within dispersed units and later shifting toward reallocating resources and roles across units

what goes around comes around effects of offshore outsourcing on the export performance of firms we examine the effect of offshore outsourcing on the export performance of firms building on the theories of international business the resource based view and transaction cost economics we argue that offshore outsourcing helps firms directly or indirectly to export more it may reduce their production costs and enhance their flexibility it may also provide them with new resources and market knowledge however the impact of offshore outsourcing depends on the resources and capabilities of firms to manage a network of foreign suppliers and to absorb foreign knowledge using a database of around 2000 manufacturing mnes in france in 1999 we find that offshore outsourcing increases export performance the effects being stronger in the export markets where firms import intermediate goods we also show that the firm size the organization of intra firm imports and the export experience moderate the effects of offshore outsourcing positively these findings have implications for firms and policymakers journal of international business studies 2011 42 334 344 doi 10 1057 jibs 2010 26

measuring globalization of industries using a national industry approach empirical evidence across five countries and over time this paper presents an objective measurement of industry globalization although crucial in understanding firm strategies industry globalization has been largely subjectively measured consisting of mostly case studies this research develops a two pronged measure of industry globalization based on a the extent of an industry s international linkages lit and b the integration of value added activities within the industry iit in addition of providing a quantitative equivalent to porter 1986 and bartlett and ghoshal s 1989 conceptual industry categorizations this measure permits the examination of important but previously untested notions regarding globalization using data for chemical and manufacturing industries for five major trading nations we find that 1 chemical industries are less global than manufacturing industries despite high levels of fdi found in chemical industries 2 u s globalization frequently assumed to be representative of worldwide globalization of industries is less than that of other major industrial countries and 3 industries in both sectors are globalizing over time consistent with the literature

resource dependency and institutional theory perspectives on direct and indirect export choices this article develops and tests resource dependency and institutional theory arguments to explain two choices facing sme owner managers 1 the decision whether to export or not and 2 if the firm exports the choice between a direct to customers abroad and an indirect using another firm as intermediary export mode binomial logistic regressions on our sample of 871 dutch smes suggest that institutional theory perspectives owner managers perception of the increased international presence of their domestic competitors customers and suppliers and perceptions of increased use of foreign suppliers explain the decision to export while resource dependency theory arguments owner managers perception of the favorability of access to knowledge and technology of production costs and of access to capital in the home market guide the choice between direct and indirect export modes

organizational entrainment and international new ventures from emerging markets organizational entrainment captures the temporal fit in the activity cycles between exchange partners we argue that organizational entrainment between international new ventures invs and their most important international customers positively moderates the relationship between the degree scope and speed of internationalization and performance of invs we test our hypotheses on invs from china india and south africa the results support the contingent role of entrainment for degree and scope of internationalization but not for speed findings suggest that when invs attain temporal fit with their most important international customers they can implement their strategic goals in international markets more effectively

the labour market effects of offshoring of small and medium sized firms micro level evidence for germany small and medium sized enterprises smes are the economic powerhouse of many oecd countries perhaps most prominently so in germany yet the labour market dynamics caused by the internationaliza

entrepreneurial proclivity capability upgrading and performance advantage of newness among international new ventures in spite of a notable interest surrounding the learning advantages of newness lan centered on the emergent international entrepreneurship literature we have only limited understanding of how young international new ventures invs acquire learning advantages and avoid the liabilities of newness and foreignness in order to achieve lan related performance from early internationalization in this article two related but conceptually distinct capability upgrading constructs knowledge capability upgrading and network capability upgrading are identified to serve as mediating mechanisms that link entrepreneurial proclivity and lan related performance our findings from a sample of 436 young invs from china provide supporting evidence for the mediating effect of capability upgrading particularly among relatively larger new ventures and those operating with cost price advantages in the international marketplace this study fills a gap in the under researched area of literature surrounding invs from emerging economies and demonstrates how young international venturing firms can leverage the entrepreneurial dynamics of learning to achieve growth opportunities from early internationalization

extending renegotiation proofness to infinite horizon games abstract this paper extends the concept of a pareto perfect equilibrium to infinite horizon games and offers a definition that covers both finitely and infinitely repeated games an equilibrium is said to be pareto perfect if admitted by a pareto perfect social norm a pareto perfect norm admits an equilibrium if and only if it cannot be profitably renegotiated in a norm observing manner at a future contingency the defined concept is compared to concepts that other writers have proposed it departs from other concepts by insisting that nonviable equilibria be defeated through renegotiation by viable ones and by not imposing a stationarity assumption

the relationship between offshore sourcing and innovativeness of u s multinational firms an empirical investigation in increasingly complex global competition u s multinational firms have stepped up imports under items 806 30 and 807 00 of the tariff schedules of the united states as a part of offshore sourcing of components and finished products to serve the u s market

capabilities as a mediator linking resources and the international performance of entrepreneurial firms in an emerging economy this study investigates an under researched topic the relationships between capabilities resources and international performance among entrepreneurial firms in an emerging economy we combine the resource based view of the firm and the capability building perspective of rent creation to shed light on the crucial role of firm specific capabilities that transform key resources into performance outcomes employing a large sample of chinese entrepreneurial firms our investigation demonstrates that while the resources of institutional capital and managerial ties are important in the internationalization effort their effects on international performance are channeled through each firm s adaptive capability this adaptive capability is the firm s ability to coordinate recombine and allocate resources to meet the different requirements of foreign markets specifically our research is able to demonstrate support for the mediating role of capabilities in the relationship between resources and international performance the implications of these findings for theoretical development and future research are discussed

financing new venture exporters this paper investigates the demand for and access to financing for young small and medium sized enterprises smes the work compares theoretically and empirically two sets of new firms those that export and those that do not export as to the frequency with which they seek and obtain external financing the work hypothesizes that new growth firms and new exporter firms are especially likely to seek external financing yet less likely to obtain financing empirical findings confirm these expectations demonstrating that young growth firms were more likely than non growth firms to seek all forms of capital and exporters were particularly likely to apply for equity and trade credit commercial lenders were less likely to approve loan applications from early stage growth firms and especially so for applications from young growth oriented sme exporters the implications of these results for research and public policy are discussed

cross national comparison of export promotion services the views of canadian and austrian companies export promotion systems in canada and austria are contrasted and their services evaluated from a company perspective the canadian system is government based while the austrian one operates in the private sector apart from the philosophy under which these export support systems operate they differ also in strategic orientation a survey of stratified samples of exporters in canada 271 and austria 312 shows significant differences in perceived usefulness of services given similar exporter needs companies desire more tailored support as well as greater involvement of private sector institutions which are not currently providing export support overall austrian companies appear more inclined to use export support and generally seem more willing to acquire exporting know how externally compared to canadian firms conclusions are offered with respect to improving the respective export promotion systems

offshore outsourcing as a source of international competitiveness for smes scholars typically view offshore outsourcing as a means of reducing the cost of manufacturing activities for large corporations yet offshore outsourcing may entail administrative and technical services and may include activities outsourced by small and medium sized enterprises smes drawing on research in international entrepreneurship and services we hypothesize and find evidence that offshore outsourcing of administrative and technical services by smes is associated with greater extent and scope of internationalization of sales offshore outsourcing enhances international competitiveness by enabling smes to reduce costs expand relational ties serve customers more effectively free up scarce resources and leverage capabilities of foreign partners

ready to export the role of export readiness for superior export performance of small and medium sized enterprises drawing on the entrepreneurship perspective and the network based view on internationalisation this exploratory study contributes to our understanding of why some exporters succeed while others do not through an empirical examination of export readiness factors the paper provides an operationalisation of export readiness for small and medium sized enterprises smes based on a sample of 96 new zealand smes we find that export readiness is a complex construct involving finance trade and exchange and marketing the study provides evidence that internal export stimuli are important antecedents of export readiness while factors traditionally assumed to be critical to export success such as importing and pre export domestic expansion may not be prerequisites to being export ready finally the study examines the link between export readiness and subsequent initial export performance and finds a strong positive relationship our study contributes to the export literature by providing a deeper and more integrated understanding of the antecedents of export readiness in a small open economy smopec and its implications for subsequent export performance

measuring the degree of internationalization of a firm in spite of both positivistic and instrumental research the reliability of measuring the degree of internationalization of a firm remains speculative we collected data on nine attributes of seventy four american manufacturing mncs alpha factor and frequency analyses revealed a linear combination of five variables with a reliability coefficient of 79 as a measure of the degree of internationalization of a firm we discuss the statistical and conceptual properties of the scale and their implications for content and construct validity

international versus domestic entrepreneurship new venture strategic behavior and industry structure abstract international entrepreneurship is defined in this study as the development of international new ventures or start ups that from their inception engage in international business thus viewing their operating domain as international from the initial stages of the firm s operation one hundred and eighty eight new venture firms in the computer and communications equipment manufacturing industries are classified according to the percentage of their sales in the international market ventures with no sales derived from international activities are considered domestic new ventures and ventures with sales from international activities comprising greater than 5 of total sales are considered international new ventures the strategy and industry structure profiles of international new ventures are significantly different from domestic new ventures the internationals pursue much broader market based strategies seeking a strategy of broad market coverage through developing and controlling numerous distribution channels serving numerous customers in diverse market segments and developing high market or product visibility the internationals also emphasize a more aggressive entry strategy building on outside financial and production resources to enter numerous geographical markets on a large scale securing patent technology is also an important component of their strategy this suggests that the internationals compete by entering the industry on a large scale seeking to penetrate multiple markets with the recognition that external resources are necessary to support such an entry whereas both the domestics and the internationals characterize domestic competition as being relatively intense the international new ventures compete in industries with higher levels of international competition it is not clear from this research whether the new venture selects an industry with a high degree of international competition and therefore responds with an international orientation or because the new venture has an international orientation it perceives or recognizes a higher degree of international competition another industry structure difference is the internationals perceived higher degree of restrictiveness due to government regulation it is unclear whether this restrictiveness motivates new ventures to seek less regulated international environments or if it indicates that when competing internationally the new venture is confronted with increased regulatory requirements domestic new ventures are distinguished by their emphasis on a production expansion strategy and customer specialization strategy the production specialization strategy consists of focusing on limited geographical markets maintaining excess capacity and pursuing forward integration the customer specialization strategy incorporates the production of a specialty product that is purchased infrequently thus for both of the domestic strategies a consistent closeness between the producer and consumer is implied this may be an important basis underlining the new venture s decision to compete in an exclusive domestic context this study offers initial support for the notion of international entrepreneurship by its findings that there are significant differences between new venture firms competing domestically and new ventures choosing to also enter international markets

the implications of knowledge based growth for the optimality of open capital markets this paper re examines the view that opening capital markets must have long run benefits the analysis shows that the desirability of opening a country s capital markets depends on the nature of the technology assumed models of knowledge based growth predict that changes that alter the economy s level of production will also affect the economy s growth rate and hence the welfare of future generations standard neoclassical growth models imply no such effects on growth or welfare if production does involve an important element of learning by doing inference from the standard models may be seriously misleading in particular opening capital markets does not necessarily improve welfare for the nation or for the world as a whole

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

internationalization and the performance of born global smes the mediating role of social networks this paper offers a social network explanation for the purported relationship between internationalization and firm performance in the context of born global small and medium enterprises smes we argue that home based social networks play a mediating role in the relationship between inward and outward internationalization and firm performance the mediating mechanism is attributed to three information benefits of social networks 1 knowledge of foreign market opportunities 2 advice and experiential learning and 3 referral trust and solidarity using survey data from smes in the largest emerging economy of china we found some support for this mediating role of social networks in the form of guanxi the results imply that international business managers should consider social networks as an efficient means of helping internationally oriented smes to go international more rapidly and profitably

coalition proof nash equilibria and the core in three player games abstract we study 3 person noncooperative games of coalition formation where the underlying situation is represented by a game in coalitional form without side payments we look at coalition proof nash equilibria and we show that if the underlying game is balanced in the sense of scarf then except for indifferences the grand coalition forms and the payoff is in the core if the underlying game has an empty core then only a two player coalition can form and the payoff to its members is given by the respective coordinates of a unique outside options vector if the underlying game is not balanced but has a nonempty core then either one of the two mentioned cases may hold

monopolistic competition dynamic inefficiency and asset bubbles abstract we emphasise the importance of the market structure to determine whether dynamic inefficiency is possible in a closed economy we analyse alternative monopolistic competition frameworks where the existence of pure profit involves the presence of an asset market when entry is blockaded dynamic inefficiency is prevented as each firm uses a discount rate higher than the output growth rate in evaluating future profits when entry is free but involves sunk costs we need to distinguish between the possibility of asset bubbles and dynamic inefficiency the condition for the latter being more stringent if entry costs increase with per capita output dynamically inefficient equilibria are possible only when population grows

implementing global strategy characteristics of global subsidiary mandates implementing a global strategy requires coordinating subsidiary activities across country locations the assumption often made is that such coordination must be managed at headquarters however an alternate approach is decentralized centralized responsibilities in which different subsidiaries within the multinational are given worldwide mandates to manage specific products or products lines this study identifies subsidiary characteristics that are associated with receiving a global mandate by examining foreign subsidiaries located in france germany japan u k u s and canada

emerging high tech firms how durable are their comparative start up advantages abstract successful high tech entrepreneurial firms have been shown to have several common founder characteristics and start up conditions this paper presents a study of the duration of the effect of these characteristics and conditions on a firm s early growth do they have a permanent effect or does the early comparative advantage that they confer to the firm fade away after a few years successful firms being better able to adapt to changing conditions than the others the study is based on the longitudinal analysis of the first 8 years of operations of 73 high tech firms located in various parts of canada founded between 1965 and 1980 by one or several entrepreneurs in microelectronics communications and related fields the sample includes only survivors and manufacturers all the firms being still active and doing some manufacturing at data collection time in terms of firm size start up capital and sources of financing this sample is comparable to other samples of high tech start ups described in the literature and can therefore be assumed to be representative of the industry the importance of the government sector in canada resulted in a very high government orientation of the firms at start up an average 32 of first year sales being to the public sector similar market and firm behaviors may develop in other industrial economies some having very important government sectors e g france italy or high tech markets indirectly driven by governments through major defense and space contractors in the united states the analysis confirms the positive short and medium term impact of such start up characteristics as initial size start up capital past experience in marketing finance and government contracting founder s age market structure and similarity with the market served by a previous employer however except for initial size sales initial government orientation percentage sales to the public sector year i and previous experience in government contracting which tend to be excellent predictors of medium to long term success measured in terms of sales level other start up characteristics show only short term direct effects 3 years for past experience in marketing and finance 1 to 2 years for market structure and similarity of the market served with that of a previous employer they are however indirectly related to success through their effect on initial size and government orientation past experience in government contracting is strongly linked with initial government orientation whereas initial size and initial government orientation are independent of each other initial size and initial government orientation are therefore two independent start up traits that show the longest global direct effect on sales level 8 years the time horizon of this study when regrouping firms by initial size and government orientation other long term at least 8 years effects appear for all the firms size of the previous employer and similarity of technology with that of a previous employer for smaller start ups similarity of their market with that of a previous employer for government oriented firms amount of start up capital past government employment past experience in rd and for non government oriented firms past government employment and past r d experience from a practical point of view these results illustrate the importance of start up conditions behaviors and strategies can evolve as a firm matures but some initial characteristics seem to be clearly associated with sustained comparative advantage either because they lead to larger initial size or good government contracts or because they impact on the general orientation and strategy of the firm considering these start up conditions is therefore useful to the entrepreneur when planning a start up to the venture capitalist when analyzing a start up and to the public sector planner when developing support policies

union rent seeking intangible capital and market value of the firm abstract this study considers the effect of unions on intangi ble capital investment and profitability within the context of a market value rather than a more traditional accounting based approach theory is provided suggesting unions are able to affect profitability by sharing in the economic returns to firm specific intangible capital in support of this hypothesis we find unionization reduces the returns to r d and produces a corresponding limiting influence on r d investment at the firm level i introduction a n extensive literature in economics has ex amined the determinants of profitability with much of the focus centering on the role of market structure only recently however have the effects of labor unions on profitability been analyzed ths is surprising since labor economists long have emphasized union influences on wages and productivity that in turn may affect profitabil ity in recent studies freeman 1983 and karier 1985 report a significant limiting influence of unions on price cost margins in high concentra tion manufacturing industries using firm level data and the market based tobin s

effects of consumer preferences for foreign sourced products when deciding on overseas production locations the manager must take into account not only resource and cost benefits but the effect that country of origin may have on consumer evaluations an experiment conducted by a telephone survey procedure examined country of origin perceptions of twelve countries and eight products using both perceived quality and choice measures as hypothesized preferences were found to be more product specific for industrialized than less developed countries in addition hypotheses that performance risk and brand moderate the effects of country were upheld under most conditions

funding for innovation in small firms the role of government abstract this paper examines some of the issues facing innovative small firms the shortage of enterprise funding for such small firms can be explained by the uncertainty associated with such ventures uncertainty which is magnified in the case of hightechnology firms we characterise the uncertainty as an information gap both technological and commercial which is exacerbated by an asymmetry of interest between the founders of a firm and private sector sources of finance we explore the sources of this uncertainty and examine the effect that one government scheme the small firms merit awards for research and technology smart has had in offsetting such problems some suggestions for improvements in policy in the light of the experience of smart are put forward

sourcing strategies of european and japanese multinationals a comparison based on a typology of sourcing strategies this study identifies various sourcing patterns adopted by european and japanese multinational manufacturing firms in serving the u s market the study has found that the product s market performance is not at all related to its life cycle stage in world trade or to production location but is positively related to the internal components sourcing and negatively related to the product adaptation the findings strongly support levitt s call for a global product

small firm internationalisation unveiled through phenomenography phenomenography is proposed here as a qualitative methodology for investigating how owner managers practise internationalisation in small firms and it is applied in an empirical study of internationalising owner managed small australian wineries the findings show a common internationalisation activity cycle but four qualitatively different ways in which these owner managers practise internationalisation we reveal that this variation in owner manager internationalisation practices is determined by their understandings of internationalisation which produce differences in the ways activities within their internationalisation activity cycle are orchestrated in particular phenomenography has enabled new insights into the multiplicity of firm internationalisation practices not able to be captured through other qualitative methodologies such as ethnography or semiotics as they are not designed to capture such variation based on our findings we propose an understanding based theory to explain the idiosyncratic nature of owner managed small firm internationalisation furthermore we suggest that phenomenography used independently or in conjunction with other qualitative methodologies also has potential to reveal the varying practices of internationalising large mnes by enabling an investigation of the collective or shared understanding of firm internationalisation within mnes finally we point out how phenomenography can be extended beyond firm internationalisation practices to investigate other topics within international business

linking product and process innovations and modes of international sourcing in global competition a case of foreign multinational firms in increasingly complex global competition multinational firms u s and foreign alike have stepped up international sourcing of components and finished products to serve various markets since an increasing portion of global competition is shaped by european and japanese multinational firms with due emphasis on product quality and manufacturing it is an opportune time to examine the like among their product development manufacturing and sourcing activities those european and japanese multinational firms marketing products in the united states are chosen as subjects of this study

factories or warehouses a welsh perspective on japanese transplant manufacturing munday m morris j and wilkinson b 1995 factories or warehouses a welsh perspective on japanese transplant manufacturing reg studies 29 1 17 critics of japanese direct manufacturing investment have argued that the japanese transplant manufacturing sector tms represents an attempt to circumvent trade barriers rather than a genuine globalization of japanese capital and that host regions will find themselves with warehouses or low value added final assembly plants rather than fully integrated manufacturing operations which will contribute significantly to the development of the local economy this paper presents a detailed study of the economic impact of japanese manufacturing in wales a region within the uk which has one of the highest concentrations of japanese manufacturing investment in europe it finds that there are some problems with japanese investment but although japanese companies do appear to operate their businesses in different ways to other inward investors many of these are be

the correlates of entrepreneurship in three types of firms the objective of the research was to discover the chief determinants of entrepreneurship the process by which organizations renew themselves and their markets by pioneering innovation and risk taking some authors have argued that personality factors of the leader are what determine entrepreneurship others have highlighted the role played by the structure of the organization while a final group have pointed to the importance of strategy making we believed that the manner and extent to which entrepreneurship would be influenced by all of these factors would in large measure depend upon the nature of the organization based upon the work of a number of authors we derived a crude typology of firms simple firms are small and their power is centralized at the top planning firms are bigger their goal being smooth and efficient operation through the use of formal controls and plans organic firms strive to be adaptive to their environments emphasizing expertise based power and open communications the predictiveness of the typology was established upon a sample of 52 firms using hypothesis testing and analysis of variance techniques we conjectured that in simple firms entrepreneurship would be determined by the characteristics of the leader in planning firms it would be facilitated by explicit and well integrated product market strategies and in organic firms it would be a function of environment and structure these hypotheses were largely borne out by correlational and multiple regression analyses any programs which aim to stimulate entrepreneurship would benefit greatly from tailoring recommendations to the nature of the target firms

the effects of communication on the partnership solution to the commons organizing individual appropriators into output sharing groups has been found to effectively solve the tragedy of the commons problem we experimentally investigate the robustness of this solution by introducing different channels of communication that naturally arise from group competitions in the absence of communication we confirm that output sharing can introduce sufficient free riding to offset over harvesting and results in full efficiency allowing local communication within output sharing groups substantially decreases this efficiency enhancement because it reduces free riding and boosts between group competition yet the efficiency level is still significantly higher than that achieved when global communication is allowed among all appropriators in a conventional common pool resource without output sharing the efficiency reducing effect of local communication is mitigated when random partners instead of fixed partners are sharing output over time and is nearly eliminated when random partners are formed with users who belong to different communication groups

developing countries and mnes extending and enriching the research agenda foreign direct investment fdi through multinational enterprises mnes has emerged in the last decade as the principal source of foreign capital for developing countries meyer this issue underlines the need for international business ib scholars to understand the impact of these investments on host developing countries he offers a useful assessment of the literature and proposes a rich set of questions for further research however his research agenda can be extended and enriched in two ways first ib scholars must study as they always have causation in the opposite direction namely the impact of developing country context on mne behavior and the co evolution of these two variables over time in doing so they must incorporate into their models contemporary issues such as the continued inadequacy of rules for fdi in infrastructure sectors or the clever means by which mnes are rewriting the global rules under which they operate in developing countries e g on intellectual property rights second ib scholars must pay more attention to topics that are not mainstream within the field but are of great importance to developing countries examples include the behavior and performance of a new generation of home grown mnes the role of diaspora in homeland fdi in countries like china and india and the implications of global outsourcing of services

offshoring of r d looking abroad to improve innovation performance the offshoring of knowledge services has become a phenomenon of increasing importance for firms but many of its implications are yet to be discussed thoroughly this paper analyzes whether r d offshoring contributes to enhancing firms innovation capabilities specifically the study distinguishes between two governance models of offshoring captive offshoring and offshore outsourcing and two types of innovation outcomes product and process innovations we suggest that r d offshoring has different impacts depending on the innovation results and governance models considered the study empirically tests these relationships using the spanish technological innovation panel this survey contains information on a large sample of firms from diverse sectors for the period 2004 2007 the empirical findings allow us confirm our hypotheses and highlight the strategic importance of r d offshoring the empirical evidence reveals a positive relation between offshoring and innovation performance with a greater effect on product than on process innovations the results for different governance models show that captive offshoring has a greater effect on innovation outcomes than offshore outsourcing these findings lead us to conclude that firms that look overseas can benefit from location specific and specialization advantages to improve innovation performance

extending the internationalization process model increases and decreases of mne commitment in emerging economies the internationalization process model suggests that firms internationalize by building positions in foreign markets and networks following iterative cycles of learning and changes in commitment however as subsidiaries evolve commitments may be decreased as well as increased a phenomenon that has rarely been studied moreover it remains an open question why strategic intentions at the outset of an investment project differ from the actual operations established we address these questions by extending the model and combining it with mintzberg and waters framework of strategy formation specifically we suggest that commitment decisions correspond to statements of intended strategy while network positions correspond to realized strategies the processes of learning opportunity creation and trust building triggered by commitment decisions are however moderated by institutional influences that lead to divergences between realized and intended strategies we test propositions derived from this framework on a survey data set of subsidiaries of multinational enterprises in hungary lithuania and poland and find that institutional voids and institutional uncertainty affect subsidiary strategy implementation but in opposing directions under high institutional uncertainty investors prefer low commitment but flexible modes that enable later commitment increases whereas institutional voids increase up front information search and adaptation costs that reduce the likelihood of early post entry adjustments our analysis reinforces the need for more differentiated theoretical analyses of how institutions affect business strategies over time

market structure and innovation a survey economics we all recite deals with allocation of limited resources towards satisfaction of unlimited wants resources are typically identified as land labor and capital plus a technology that determines their transformation into consumer goods disparity between the available goods and services and the desired gives rise to scarcity and the question of what how and for whom to produce the focus then shifts to description and evaluation of alternative resource allocation mechanisms for making the choices the pareto criterion by which an allocation of resources is deemed efficient if any reallocation improving the position of some individual worsens the position of others is a commonly employed gauge of a mechanism s performance in the absence of externalities increasing returns to scale and uncertainty a perfectly competitive market system yields a pareto optimal allocation of resources this underlies the view that individual self interest is compatible with society s interest the further conclusion that pareto optimality may not be achieved via the market system in the presence of monopoly elements provides an economic rationale for antitrust laws the objective of a resource allocation mechanism appears to be according to the analysis described above to make the best of available resources the alternative objective of relaxing constraints through expanding the resource base or developing new technology seems to be beyond its scope thus until rather recently technical advance had been regarded in the mainstream of economic theory as unmotivated by the quest for profits and substantially unaffected by resource allocation instead as j schmookler observed technology had been viewed as a parameter like the weather affecting the outcome of resource allocations but itself unaffected by them 84 1965 evidence that technological progress has significantly contributed to growth in productivity together with a substantial increase in research and development activity largely financed by government and carried out by industry see f machlup 51 1962 may have spurred reconsideration of this view once technical advance is regarded as an economic variable it is natural to in

foreign direct investment the role of institutional and cultural determinants abstractusing panel data for 29 source and 65 host countries in the period 1995 2009 we examine the determinants of bilateral fdi stocks focusing on institutional and cultural factors the results reveal that institutional and cultural distance is important and that fdi has a predominantly regional aspect fdi to developing countries is positively affected by better institutions in the host country while foreign investors prefer to invest in developed countries that are more corrupt and politically unstable compared to home the results indicate that foreign investors prefer to invest in countries with less diverse societies than their own

a noncooperative theory of coalitional bargaining the authors explore a sequential offers model of n person coalitional bargaining with transferable utility and with time discounting their focus is on the efficiency properties of stationary equilibria of strictly superadditive games when the discount factor delta is sufficiently large it is shown that delay and the formation of inefficient subcoalitions can occur in equilibrium the latter for some or all orders of proposer however efficient stationary equilibrium payoffs converge to a point in the core as delta approaches one strict convexity is a sufficient condition for there to exist an efficient stationary equilibrium payoff vector for sufficiently high delta

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

offshore sourcing reaction maturation and consolidation of u s multinationals the authors conducted a quasi longitudinal investigation of u s multinationals r d manufacturing offshore sourcing strategies and resultant global market performance implications utilizing comprehensive data collected by the 1977 1982 and 1989 benchmark surveys of u s direct investment abroad hypotheses were tested in a path analytic framework despite increased competition at home and abroad causing their global market share positions to weaken in recent years u s multinationals have maintained and even may have improved their global consolidated profitability levels by skillfully exploiting their technological prowess through technology transfer and off shore sourcing rapidly changing roles of u s parent firms and their foreign affiliates in technology development and global sourcing relationships portend a maturing yet arduous shift toward a global rationalization

explaining the formation of international new ventures the limits of theories from international business research abstract international new ventures invs represent a growing and important type of start up an inv is defined as a business organization that from inception seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries oviatt and mcdougall 1994 their increasing prevalence and important role in international competition indicates a need for greater understanding of these new ventures oviatt and mcdougall 1994 logitech as described in a case study by alahuhta 1990 is a vivid example of an inv its founders were from two different countries and had a global vision for the company from its inception the venture which produces peripheral devices for personal computers established headquarters in both switzerland and the u s manufacturing and r d were split between the u s and switzerland and then quickly spread to taiwan and ireland the venture s first commercial contract was with a japanese company using 24 case studies of invs we found that their formation process is not explained by existing theories from the field of international business specifically neither monopolistic advantage theory product cycle theory stage theory of internationalization oligopolistic reaction theory nor internalization theory can explain the formation process of invs these theories fail because they assume that firms become international long after they have been formed and they therefore highlight large mature firms they also focus too much on the firm level and largely ignore the individual and small group level of analysis i e the entrepreneur and his or her network of business alliances we propose that an explanation for the formation process of invs must answer three questions 1 who are the founders of invs 2 why do these entrepreneurs choose to compete internationally rather than just in their home countries and 3 what form do their international business activities take who are the founders of invs we argue that founders of invs are individuals who see opportunities from establishing ventures that operate across national borders they are alert to the possibilities of combining resources from different national markets because of the competencies networks knowledge and background that they have developed from their earlier activities following the logic of the resource based view of the firm we argue that the possession of these competencies is not matched by other entrepreneurs only the entrepreneur possessing these competencies is able to combine a particular set of resources across national borders and form a given inv why do these entrepreneurs choose to compete internationally rather than just in their home countries the founders of invs recognize they must create international business competencies from the time of venture formation otherwise the venture may become path dependent on the development of domestic competencies and the entrepreneur will find it difficult to change strategic direction when international expansion eventually becomes necessary as the founder of one inv explained the advantage of starting internationally is that you establish an international spirit from the very beginning mamis 1989 38 what form do their international business activities take founders of invs prefer to use hybrid structures i e strategic alliances and networks for their international activities as a way to overcome the usual poverty of resources at the time of start up this study has important implications for the practice of management in financing decisions relating to invs venture capitalists and other venture financiers should look for entrepreneurs who have a global vision international business competence and an established international network when entrepreneurs start invs they should create hybrid structures to preserve scarce resources finally given the path dependence of competence development founders of new ventures should consider whether establishing a domestic new venture with plans to later internationalize will be as successful a strategy as establishing a new venture that is international from inception

an investigation into the overseas expansion of small asian owned u k firms this paper contributes to the growing body of knowledge in international entrepreneurship by reporting on a qualitative empirical investigation into the overseas expansion processes of small asian originating from the indian sub continent owned firms operating in the u k clothing industry the key decision makers within these firms frequently identified themselves as an active and important influence upon the actual activities of their firms as international operators for some firms though a more passive approach to internationalisation could be identified whereby the receipt of unsolicited orders had an effect on some firms timing of overseas market entry the balance between the nature of opportunities that frequently derived from cultural networks and the constraints of a limited resource base with which to exploit those opportunities also had a major impact on the direction and pace of certain firms overseas expansion the findings suggest a general tendency to adopt an incremental approach to internationalisation within this mature trade sector the cultural and business experience of managers however was found to have an effect on the pace and direction of the overseas expansion recommendations on the likely efficacy and effectiveness of public private sector interaction within the area of international entrepreneurship involving entrepreneurs from asian backgrounds are offered

the internationalization of small and medium sized enterprises a policy perspective small and medium sized firms play an impor tant role in the process of creative destruction the focus of the paper is on the international diffusion of small and medium sized firms innovations small and medium sized firms face two challenges in globalization property rights protection and barriers to entry we suggest that these barriers can frequently be circumvented by using existing multinationals as interna tional conduits for small and medium size firms innovations however such intermediated modes of expansion is adversely affected by transaction difficulties and intermediator s rent extraction we raise two categories of questions i is the private sector systematically making the wrong choice between the direct and intermediated mode of international expansion and ii what should be the policy guidelines to improve the overall rate of international diffusion of innova tion by small and medium sized enterprises

outsourcing in a global economy we study the determinants of the location of subcontracted activity in a general equilibrium model of outsourcing and trade we model outsourcing as an activity that requires search for a partner and relationship specific investments that are governed by incomplete contracts the extent of international outsourcing depends inter alia on the thickness of the domestic and foreign market for input suppliers the relative cost of searching in each market the relative cost of customizing inputs and the nature of the contracting environment in each country

globalization of smaller firms field notes on processes smaller firms have played a pivotal role in the present decade of globalization reduced barriers to international trade and investment coupled with the advances in information technology have accorded opportunities for smaller firms employing fewer than 500 persons to emerge as multinational the focus of this exploratory paper is on the how of their globalization or internationalization information from field studies of seven firms three dutch and four american obtained by means of personal interviews with senior managers constitutes the primary qualitative data considering the convenient choice of the firms and the subjective nature of the recall data the paper without claiming to draw any inferences offers three initial propositions for further refinement expansion and empirical testing

the power of international business research statistical power is the probability of accepting the null hypothesis when it is false type ii error this research note reports the results of a statistical power analysis of international business research published in the journal of international business studies management international review the academy of management journal and the strategic management journal from 1990 to 1999 the results show that although average statistical power is high compared with other disciplines it is sufficient only for large effect sizes ess only studies published in the journal of international business studies and the academy of management journal achieve average statistical power levels that are sufficient for both medium and large ess still the observed likelihood of committing type ii errors in international business research is very high for small ess 92 and high for medium ess 45 in addition statistical power is not explicitly mentioned or used by international business researchers a weakness that this note is designed to change

the impact of societal cultural values and individual social beliefs on the perceived effectiveness of managerial influence strategies a meso approach this paper reports the findings of a 12 nation study designed to test empirically the relationships between societal cultural values individual social beliefs and the perceived effectiveness of different influence strategies the relationships between three types of broad influence strategy persuasive assertive and relationship based and four dimensions of individual beliefs cynicism fate control reward for application and religiosity were examined three of project globe s cultural values in group collectivism uncertainty avoidance and future orientation were selected to investigate their direct effects on the rated effectiveness of influence strategies and their possible interaction with dimensions of individual beliefs results showed that different dimensions of individual social beliefs predict the perceived effectiveness of the three types of influence strategy and that cultural values can moderate the strength of the relationship between these dimensions of individual social beliefs and the perceived effectiveness of influence strategies

the influence of the management team s international experience on the internationalization behaviors of smes why are some small and medium sized enterprises smes more successful in selling outside their domestic markets than are other smes in the same industry although the traditional explanation is that firms can gain valuable knowledge and resources as they become older and larger small and young firms are not necessarily disadvantaged if they develop other mechanisms to acquire the requisite knowledge and resources we examine the role of the management team s international experience as such a mechanism for the internationalization of canadian software product firms we show that internationally experienced management teams have a greater propensity to develop foreign strategic partners and to delay less in obtaining foreign sales after start up and that these behaviors are associated with a higher degree of internationalization

mne sme cooperation an integrative framework although international business scholars have begun to recognize the division of entrepreneurial labor between mnes and smes there is a fragmented understanding of the different forms mne sme cooperation can take we develop a typology that takes into account not only complementarity of capabilities but also crucially the compatibility of intent between mnes exploration vs exploitation and smes international vs domestic orientation the framework offers a novel way to understand the forms and dynamics of mne sme cooperation we also show how it can be applied more broadly by considering its application to societal challenges such as achieving the united nations sustainable development goals

information internalization and hurdle rates in small and medium enterprise internationalization we investigate the role of information in the internationalization of small and medium enterprises smes information internalization is fundamentally antecedent to sme internationalization and is being facilitated increasingly by recent important trends we offer a conceptual explanation and related propositions on information internalization emphasizing hurdle rate theory for ascertaining the acceptability of firms internationalization projects