institutional exceptions on global projects a process model this inductive study offers an examination of 23 cases in which informants from firms engaged in large scale global projects reported unforeseen costs after failing to comprehend cognitive cultural normative and or regulative institutions in an unfamiliar host societal context the study builds on the conceptual framework of institutional theory the findings which include propositions and a generic narrative model contribute to theoretical knowledge of how institutional exceptions arise how they are resolved and how they typically involve three general phases ignorance sensemaking and response the findings also articulate the kinds of institutional transaction costs that an entrant incurs in each of the three phases and the conditions that lead to the growth of these costs

angel investors around the world we document that the choice between disintermediated individual angel investments and intermediated private equity and venture capital investments depends on legal economic and cultural differences we find evidence of this using pitchbook s comprehensive data on more than 5000 angel and 80 000 private equity and venture capital investments in 96 countries from 1977 to 2012 the data further indicate that investee firms funded by angels are less likely to successfully exit through either an ipo or an acquisition these findings are robust to propensity score matching methods as well as to clustering standard errors and excluding u s observations among other approaches

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

reconciling the advantages and liabilities of foreignness towards an identity based framework this article leverages identity theory to address the question of when and how foreignness acts as an advantage and liability for the mne subsidiary applying an organizational identity lens i delineate how subsidiaries manage their foreignness by accentuating and attenuating internal and external organizational attributes drawing on this conceptualization i theorize how an accentuated foreign identity moderates context specific advantages and liabilities in offering a more nuanced understanding of how subsidiaries actively manage their foreignness and its contextual implications an identity based framework helps to both explain and reconcile the advantages and liabilities of foreignness

revealed social preferences of dutch political parties we measure the redistributive preferences of dutch political parties using unique detailed information from their election proposals by employing the inverse optimal tax method we calculate the political weights across the income distribution for each political party we find that all dutch political parties give a higher political weight to middle incomes than to the poor moreover the political weights of the rich are close to zero furthermore we detect a strong political status quo bias as the political weights of all political parties hardly deviate from the weights implied by the pre existing tax system we argue that political economy considerations are key in understanding these results

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

tax planning of married couples and intra household income inequality abstract this paper examines tax planning of married couples under separate taxation it shows that concerns about the intra household income distribution prevent couples from minimizing tax payments the empirical analysis exploits a specific feature of the german tax system which allows married couples to save taxes by deviating from the default symmetric payroll tax treatment and assigning favorable tax treatment to the primary earner and unfavorable tax treatment to the secondary earner based on a representative random sample of individual tax files we find that a couple is less likely to choose the tax minimizing treatment if tax planning is associated with a larger decline of the net of tax income of the secondary earner this applies regardless of whether the husband or the wife is the main earner however couples where the wife is the main earner are generally more reluctant to assign the more favorable tax treatment to the wife

acquisition or greenfield start up institutional cultural and transaction cost influences in this paper we develop and test a model of diversification mode choice how firms decide between acquisitions and greenfield start up ventures which includes institutional cultural and transaction cost variables using a sample of japanese firms entering western europe our results show the model correctly predicts over eighty seven percent of the mode choices thus we provide strong initial evidence to support using institutional cultural and transaction cost variables to predict firms choices between acquisitions and greenfield start ups in international expansion our findings also suggest that organizations which have developed strong intangible capabilities may be able to more readily leverage these capabilities through greenfield start ups copyright 2000 john wiley sons ltd

the liability of localness in innovation i analyze differences in the innovativeness of domestic firms and subsidiaries of foreign firms operating in the same country i argue that domestic firms suffer a liability of localness in innovation or a competitive disadvantage in product innovation relative to subsidiaries of foreign firms i propose that this liability of localness is driven by the relatively lower levels of multiculturalism in employees of domestic firms in comparison with subsidiaries which limit the identification transfer and integration of a large diversity of knowledge that supports product innovation i also propose that managers of domestic firms can compensate for this liability of localness in two ways by investing in the training of their employees and by exporting training modifies the mindsets and abilities of employees and enables them to become more cognitively multicultural which facilitates product innovation exporting changes employees mindsets as they become exposed to new ideas available abroad which also facilitates product innovation i test these arguments on a sample of manufacturing firms and find that although domestic firms introduce fewer new products than subsidiaries of foreign firms they introduce more new products than subsidiaries at the same level of investment in language training and of exports

individual versus joint taxation in models with household production in a recent paper piggott and whalley 1996 challenge the conventional wisdom that says that the individual rather than the household should be the unit of taxation and argue instead for joint taxation their point of departure is a point well taken the literature on which this wisdom is based in particular boskin and sheshinski 1983 ignores the existence of household production the general argument is a nice one in the theory of the second best in the absence of taxation of market wage income the marginal rates of technical substitution between primary and secondary labor in market and in household production would be equal to each other and the marginal rate of substitution between the market and household good would be equal to the marginal rate of transformation between them thus achieving pareto efficiency introduction of income taxation leads to a distortion of the relation between the marginal rate of substitution and the marginal rate of transformation which is the focus of concern in the literature 2 and given the differing econo

pigou meets ramsey gender based taxation with non cooperative couples abstract this paper explores the implications of gender based income taxation in a non cooperative model of household behavior in a first step we show how gender based taxes can act as pigou taxes and correct the externality induced by a non cooperative household equilibrium we find that the first best pigou tax rules are solely determined by spouses relative marginal rates of substitution between the public household good and private consumption breaking down this general rule into the primitives of the model the spouse with a comparative advantage in home production should be taxed at a higher rate in a second step we embed our non cooperative framework in a standard second best planning problem in which taxes serve a revenue raising purpose in this case the optimal structure of differential taxation by gender is partly determined by a ramsey type inverse elasticity rule and partly by a pigouvian tax element we show that these two forces work in opposite directions in determining whether men or women should be taxed at a higher rate and that either one could be dominant depending on the revenue raising position of the government this result is robust to the introduction of two groups of households that differ in their mode of decision making which can be either cooperative or non cooperative

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

micro processes of translation in the transfer of practices from mne headquarters to foreign subsidiaries the role of subsidiary translators recent research has increasingly emphasized the micro foundations of knowledge transformation in multi national enterprises mnes although the literature has provided ample evidence of the enablers of and barriers to the translation of practices less is known about the activities and efforts of translators that lead to specific types of translation in the context of the transfer of practices initiated at a mne s headquarters hq to foreign subsidiaries we apply a scandinavian institutionalist approach to examine the translation of corporate social responsibility reporting an hq initiated practice that is transferred to five foreign subsidiaries of a uk based mne our paper builds from a preliminary framework based on extant research to develop an extended framework of the micro processes of translation by theorizing the sequence of the micro processes undertaken by translators identifying the conditions under which they occur and connecting them to the three types of translation we provide a deep understanding of the micro foundations of translation when transferring practices from hq to subsidiaries our paper shows that translation is an evolving phenomenon and illuminates the importance of attending to the social spatial and temporal situatedness of translators it also brings insights into the individual experience of institutional distance and its effects on translation

does altruism undermine existence value abstract the debate over the use of contingent valuation for existence values or passive use values has failed to explore the validity of motives for such values one potential motive altruism has conflicting implications for benefit cost analysis depending on whether the altruist is paternalistic this paper constructs models of three types of altruism and shows how benefit cost analysis responds to each type of altruism how damage assessment and restoration depend on each type and the implications of a population of heterogeneous altruists

comparing capitalisms and taking institutional context seriously a major limitation of existing international business ib research remains the rather thin view of institutional context in this retrospective we reflect upon and highlight different strategies for overcoming de contextualized perspectives and developing thicker conceptions of institutions drawing on comparative research institutions shape firm behavior not only through their direct or additive effects but have more complex influences by moderating relationships between firm level variables or having interactive or configurational effects related to wider sets of institutions these views can each be extended by adopting a dynamic perspective examining how multinational enterprise mne agency contributes to processes of institutional change ultimately a large gap remains in taking institutions seriously that ib scholars could fill by developing middle range theories that link and compare how particular kinds of institutions or institutional configurations influence particular kinds of mne activities

legitimacy and multi level institutional environments implications for foreign subsidiary ownership structure in this study we examine from an institutional perspective the legitimacy rationale behind the choice of subsidiary ownership structure among multinational corporations mncs we suggest that when under a strong pressure to conform at the host country and local industry levels of their institutional environment mncs are likely to take a lower ownership stake in exchange for external legitimacy in the host country or local industry that their foreign subsidiaries are entering we also suggest that mncs are likely to take a higher ownership stake in response to strong internal pressure to sustain their internal legitimacy at the corporate level of their institutional environment we also propose that mncs are more likely to exchange ownership for legitimacy in local industries than in host countries and in local markets with a high level of political instability than in those with a low level of political instability these propositions are generally supported by our analysis of 4451 subsidiaries established by 898 japanese mncs that operated in 39 countries across 52 industries two digit sic between 1988 and 1999

foreign influence control and indirect ownership implications for productivity spillovers how does the presence of controlled foreign firms affect the productivity of domestic firms in the same industry we revisit the historical distinction between control and influence by the foreign owner and define controlled foreign firms as those with a foreign ultimate owner holding 50 or more of voting shares connecting insights from new internalization theory with knowledge based views of the mne we posit that controlled foreign firms will generate larger productivity spillovers than non controlled foreign firms we use a firm level panel dataset of 575 844 manufacturing firms 2 343 495 observations across 20 european countries to test our proposition we pay careful attention to how firms are categorized as foreign taking into account both direct and indirect ownership links allowing for indirect ownership turns out to be pivotal there are just as many indirectly controlled foreign firms as foreign firms captured with direct ownership data we find positive horizontal spillovers from controlled foreign firms and zero spillovers from non controlled foreign firms interestingly the strongest positive spillovers come from the indirectly controlled foreign firms the implications of our study extend beyond productivity spillovers to areas such as cross border m as joint ventures mne strategies of legitimation and corporate groups

mne institutional advantage how subunits shape transpose and evade host country institutions scholars increasingly emphasize the impact of institutions on multinational enterprises mnes but the opposite relationship has attracted less research that is mne agency in relation to institutions based on a comparative case study of six mnes from the united states and sweden this paper remedies this it explores and explicates mne subunits strategic responses to host country institutional constraints and opportunities in five different regions a new institutional approach is adopted which allows for an investigation of mne subunit agency in relation to normative and cognitive institutions as well as regulative ones this fine grained analysis reveals not only what kinds of responses mne subunits invoke but why and how they are able to respond we identify four strategic responses by which subunits shape transpose and evade institutions in the pursuit of competitive advantage innovation arbitrage circumvention and adaptation these responses are driven by three key enablers multinationality foreignness and institutional ambiguity that serve to enhance and heighten three mechanisms reflexivity role expectations and resources by linking the enablers and the mechanisms to specific types of strategic responses in a framework and typology the paper not only contributes to emerging research on the interplay between mnes institutions and strategy but to strategy practice

optimal taxation of business and individual incomes abstract this paper applies the optimal taxation approach to two versions of fisher s consumption and investment model it then shows that eliminating the business or corporation income tax through full integration of this tax with the individual income tax is non optimal by both efficiency and equity standards in the case where business investment is financed completely by borrowing the business income tax should be assigned to the goal of raising revenue efficiently and the individual tax is associated only with the equity objective

the tax unit and household production comment in a recent paper published in this journal piggott and whalley 1996 challenge the conventional wisdom that taxing individuals rather than households is preferred from an efficiency point of view p 398 they argue that once household production is taken into account things are more complicated since tax design should also not distort the input of family members time in household production they support their view by providing computational results these results seem to demonstrate that welfare can indeed be enhanced if households are taxed as a unit and not as individuals this comment sets out to show however that their analysis contains some quite critical points in our opinion if piggott and whalley s approach is followed through to its end it only enforces the conventional view piggott and whalley work with an extended family labor supply model the extension concerns household production expressed by some function n there are two model variants with different degrees of complexity in the first variant a representative household is considered and producer prices are held constant the model serves to demonstrate piggott and whalley s basic line of argumentation within a simple framework the second variant extends the first one in several respects its functional specification is more complex and it is a general equilibrium model with two household types the model is parameterized using australian tax rates and data it is shown that aggregate welfare gains can occur under well designed income tax reforms the reforms are such that the individual tax base is replaced with a household tax base additionally average and marginal tax rates are proportionally adjusted to preserve revenue

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

reply to apps rees and gottried richter in our earlier paper in this journal 1996 we argued that in a model with both market and household production each of which has two factor inputs primary and secondary worker labor individualbased taxation will distort the factor input ratio whereas household or joint taxation which has similar tax rates for the two workers will not there is an added distortion of household production under individual taxation that does not appear in a model with only consumption of goods and leisure and in which ramsey labor supply elasticity considerations point toward individual taxation we used 1974 australian data to analyze a possible move from an existing individual based income tax to an alternative household based tax a move from a status quo separate tax regime to joint taxation we suggested that the added distortion of household production under individual taxation made such a move more likely to be welfareimproving we considered pairwise comparisons of model solutions under prevailing nonoptimal individual tax rates and common household member rates calculated in various ways our results showed that if the dispersion in individual tax rates is large enough the tax induced distortion of household production can be the dominant consideration in the comparison we neither computed nor characterized optimal tax rate configurations in this application the lessons from optimal tax design seemed uninteresting and rather trivial a de novo design of an optimal tax structure across household members would almost certainly

optimal tax treatment of the family married couples abstract this paper examines the appropriate tax treatment of the family in a series of analytical models and numerical examples for a population of taxpaying couples which differ in earning capacity we drive the optimal tax rates for each potential earner these rates depend crucially upon own and cross labor supply elasticities and the joint distribution of wage rates our results suggest that the current system of income splitting in the united states under which husbands and wives face equal marginal tax rates is nonoptimal using results from recent econometric studies and allowing for a sensitivity analysis the optimal tax rates on secondary workers in the family are much lower than those on primary earners indeed our best estimate is that the secondary earner would face tax rates only one half as high as primary earners

household bargaining and the design of couples income taxation this paper studies the design of couples income taxation when consumption and labor supply decisions within the couple are made by maximizing a weighted sum of the spouses utilities bargaining weights are given but specific to each couple information structure and labor supply decisions follow the mirrleesian tradition however while the household s total consumption is publicly observable the consumption levels of the individual spouses are not observable with a utilitarian social welfare function we show that the expression for a spouses marginal income tax rate includes a pigouvian paternalistic and an incentive term the pigouvian term favors a marginal subsidy tax for the high weight low weight spouse whose labor supply otherwise tends to be too low high the sign and the magnitude of the incentive term depends on the weight structure across couples in some cases both terms have the same sign and imply a positive marginal tax for the low weight spouse who may be female and a negative one for the high weight spouse possibly the male this is at odds with the traditional boskin and sheshinski results our conclusions can easily be generalized to more egalitarian welfare functions finally we present numerical simulations based on a calibrated specification of our model the calculations confirm that the male spouse may well have the lower and possibly even negative marginal tax rate

for love or money the impact of income taxes on marriage higher sometimes lower than their combined single income tax obligations in this paper we explore the impact of the federal individual income tax as well as other economic and demograplhic variables on the marriage decisionis of individuals using longitudinal data from the panel study on income dynamics for the period 1968 92 we estimate a discrete time hazard model of the time to first marriage we find that the probability of marriage is significantly affected by a range of economic and demographic variables importantly we find that an increase in total income taxes paid by married versus single women has a negative effect on the likelihood of marriage and that the change in the marginal tax rate is also a significant determinant of marriage in some cases in contrast the tax effects are rarely significant in determining marriage probabilities among men although there are some differential responses by race in general the impacts of the income tax variables even when statistically significant are small

configurations of strategy and structure in subsidiaries of multinational corporations a three fold typology of subsidiary roles world mandate specialized contributor local implementer was induced from the literature and its empirical validity was confirmed adopting a configurational approach we then explored the ways in which subsidiary structural context varies across subsidiary role types structural context characteristics were determined through a discussion of the underlying principles of the hierarchy and heterarchy models of multinational organization the key findings were a higher strategic autonomy in world mandates than in local implementers b a more internationally configured value chain in world mandates and specialized contributors than local implementers c lower levels of internal product flows in world mandates than the other two types and d a significantly lower performance in specialized contributors implications for a configurational model of subsidiary management and for heterarchy as a higher level conceptualization are discussed

overcoming distrust how state owned enterprises adapt their foreign entries to institutional pressures abroad state owned so enterprises are subject to more complex institutional pressures in host countries than private firms these institutional pressures arise from a weak legitimacy of state ownership in some countries which arises from a combination of ideological conflicts perceived threats to national security and claimed unfair competitive advantage due to support by the home country government these institutional pressures directed specifically at so firms induce them to adapt their foreign entry strategies to reduce potential conflicts and to enhance their legitimacy testing hypotheses derived from this theoretical argument for subsidiaries of listed chinese firms we find that so firms adapt mode and control decisions differently from private firms to the conditions in host countries and these differences are larger where pressures for legitimacy on so firms are stronger these findings not only extend institutional theory to better explain differential effects on different entrants to an organizational field but demonstrate how foreign investors of idiosyncratic origins may proactively build legitimacy in host societies

sustainable competitive advantage combining institutional and resource based views this article suggests that the context and process of resource selection have an important influence on firm heterogeneity and sustainable competitive advantage it is argued that a firm s sustainable advantage depends on its ability to manage the institutional context of its resource decisions a firm s institutional context includes its internal culture as well as broader influences from the state society and interfirm relations that define socially acceptable economic behavior a process model of firm heterogeneity is proposed that combines the insights of a resource based view with the institutional perspective from organization theory normative rationality institutional isolating mechanisms and institutional sources of firm homogeneity are proposed as determinants of rent potential that complement and extend resource based explanations of firm variation and sustainable competitive advantage the article suggests that both resource capital and institutional capital are indispensable to sustainable competitive advantage 1997 john wiley sons ltd

until taxes do us part tax penalties or bonuses and the marriage decision the tax regimes applied to couples in many countries including the us france and germany imply either a marriage penalty or a marriage bonus we study how they affect the decision to get married by considering two potential spouses who play a marriage proposal game at the end of the game they may get married live together without formal marriage or split up in this signaling game proposing or getting married is costly but can indicate strong love the striking property we obtain is that a marriage bonus may actually reduce the probability that a couple gets married if the bonus is sufficiently large the signaling mechanism breaks down and only a pooling equilibrium in which fewer couples get married remains similarly a marriage penalty may increase the marriage probability specifically the penalty may lead to a separating equilibrium with efficiency enhancing information transmission which was otherwise not possible our results also imply that marriage decisions in the laissez faire are not necessarily privately optimal in some cases a bonus or a penalty may effectively make the marriage decision more efficient it may increase the number of efficient marriages that otherwise may not be concluded

institutional theory and the cross national transfer of employment policy the case of workforce diversity in us multinationals this paper uses a comparative institutionalist approach combined with a power interests perspective to examine the processes whereby diversity policy is internationalised by us multinational companies it argues that the process of policy transfer to uk subsidiaries is complicated by incomplete and contested institutionalisation of diversity within the us itself and by differing conceptions of diversity between the us and the uk the ability of actors within the uk subsidiaries to mobilise and deploy specific power resources allows them to resist the full implementation of corporate diversity policy leading to a range of compromise accommodations it is argued that the findings have more general implications for analysing the transfer of hr practices between national business systems

drivers of institutional change around the world the case of ifrs today more than ever it is crucial to understand the dynamic and intricate institutional landscape that mnes operate in however the drivers of institutional change are still little understood we focus on a recent fundamental institutional change the worldwide switch to international financial reporting standards ifrs the switch to ifrs was unexpected and not particularly welcomed by mnes given that most national accounting systems in the pre ifrs period were considered to be well aligned to the local cultural and environmental characteristics of each country we test the drivers of this institutional change in a sample of 168 countries between 2002 and 2012 using empirical constructs from policy diffusion theory our findings show that the country level decisions to adopt ifrs are not driven by local determinants but instead by adoption decisions by other neighbouring countries and influential organizations we find evidence for competition learning and emulation as driving forces for the international spread of ifrs we conclude that the switch to ifrs was not driven by an economic rationale only and diffused beyond the influence and interest of mnes understanding these drivers is essential because it enables management to anticipate and respond to institutional changes and consequently enhance performance and create competitive advantage

theorising from case studies towards a pluralist future for international business research the literature on case studies both in the field of international business ib and in the social sciences more generally has tended to focus on the methods of data production and analysis suited to this research strategy in contrast in this paper we investigate methods of theorising from case studies we seek to understand how case researchers theorise and how future ib research might utilise case studies for theorising by means of a qualitative content analysis of case studies published in journal of international business studies academy of management journal and journal of management studies we construct a typology of theorising from case studies two dimensions of the case study namely causal explanation and contextualisation form the basis for our typology we distinguish four methods of theorising inductive theory building interpretive sensemaking natural experiment and contextualised explanation only the first of which has been widely used in jibs in the period that we investigate on the basis of our own qualitative analysis we show the limitations of inductive theory building and argue that greater utilisation of the other methods of theorising would enhance the case study s explanatory power and potential for contextualisation we argue for a more pluralist future for ib research

unraveling the mne wage premium whereas ib has extensively studied mnes generic positive impact on host economies but rarely on employee wages economics research has only shown an overall mne wage premium we unravel this premium considering multiple levels of analysis and accounting for host country contextual contingencies to unveil mnes different positive or negative distributional effects using unique micro level data from over 40 000 employees in 13 countries we examine mnes distributional effects for employees gender experience and immigrant status the influence of host country property rights protection and labor regulation and interplays with region and industry effects mnes distributional effects show marked differences that largely depend on the host country context and that are positive for experienced and foreign born employees in developed countries but negative for females working in developing countries whereas in developed countries the gender wage gap is smaller in mnes than in domestic firms as hypothesized we find evidence of a larger wage gap in developing countries the analysis also reveals that the higher host countries level of property rights protection the lower the mne wage premium our study points at the need to reassess statements about the generic positive impact of mnes in host countries particularly in developing countries and discusses further research implications

intra and inter organizational imitative behavior institutional influences on japanese firms entry mode choice this paper compares the predictions of transaction cost and institutional theories in an empirical study of the entry mode choice for 1 194 japanese foreign subsidiaries the findings indicate the institutional model adds significant explanatory power over and above the predictions of the transaction cost model using the concepts of frequency based trait based and outcome based imitation i find support for institutional isomorphism as later entrants tended to follow the entry mode patterns established by earlier entrants isomorphic behavior was also present within a firm as firms exhibited consistency in entry mode choices across time further a firm s investment experience moderated institutional influences on entry mode choice

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

income splitting among the self employed under individual taxation with progressive marginal tax rates households in which the distribution of income is unequal benefit from attributing income to the lower income household member self employment provides greater potential to split income in this way because of the absence of a third party reporting income using the canadian experience as a case study this paper develops a unique estimator of the incidence of illegal income splitting among self employed couples the results suggest that the incidence of income splitting among self employed men in canada is non trivial but no evidence is found that self employed women attribute income to their spouses jel classification h26 h21 h31 j22 le fractionnement du revenu chez les travailleurs autonomes dans un regime fiscal qui a des taux marginaux d imposition progressive des revenus les membres d un menage dans lequel la repartition des revenus n est pas g rien n indique que les femmes qui sont travailleurs autonomes attribuent une portion de leurs revenus a leur epoux

flat income taxation redistribution and labour market performance a flat tax rate on labour income has gained popularity in european countries this article assesses the attractiveness of such a flat tax in achieving redistributive objectives with the smallest distortions to employment we do so by using a detailed applied general equilibrium model for the netherlands the model is empirically grounded in the data and encompasses decisions on hours worked labour force participation skill formation wage bargaining between unions and firms and a wide variety of institutional details the simulations suggest that the replacement of the current tax system in the netherlands by a flat rate will harm labour market performance if aggregate income inequality is contained only flat tax reforms that reduce redistribution will raise employment this finding bolsters the notions from optimal tax literature regarding the equity efficiency trade off and the superiority of nonlinear taxes to obtain redistributive goals in an efficient way

the social discount rate what discount rate should be applied to social investments it is standard to use the market interest rate thereby respecting private preferences we show that application of this revealed preference criterion rests on faith not on logic it is justified only if preferences over all choices including past choices are time invariant the conditions for this to be true are stringent under more reasonable conditions policy makers should be more patient than private citizens whose choices define the most short sighted pareto optimum

the contingent valuation debate why economists should care t he contingent valuation method involves the use of sample surveys questionnaires to elicit the willingness of respondents to pay for generally hypothetical projects or programs the name of the method refers to the fact that the values revealed by respondents are contingent upon the constructed or simulated market presented in the survey a spirited and occasionally mean spirited battle over such methods is currently being waged involving competing factions within the federal government economists and lawyers representing business and environmental groups and interested academics as well at issue is a seemingly quite specific question should environmental regulations currently under development at both the department of the interior and the department of commerce sanction the use of the contingent valuation method in estimating the damage done by spills of oil chemicals or other substances covered by federal law more generally the debate raises broad questions about what economists have to say about the values that individuals place on public or private goods the two papers that follow this one make cases for and against the use of the contingent valuation method my aim here is to provide an overview of the technique and the debate surrounding it i also want to suggest why this debate should matter to economists both professionally and in their roles as citizens and consumers

mode of international entry an isomorphism perspective the determination of entry modes is examined using an institutional theory framework two sources of isomorphic pressures affect a strategic business unit s sbu entry mode choice 1 host country institutional environment and 2 internal institutional environment the parent organization sbus were hypothesized to adopt similar organizational forms structures policies and practices thus becoming isomorphic based on felt pressures to conform to behavioral norms within the environments the results indicated that sbus using wholly owned entry modes demonstrated high levels of internal parent isomorphism those using exporting joint ventures or licensing agreements demonstrated external isomorphism and those using multiple or mixed entry mode demonstrated low levels of isomorphic pressures

comparing capitalisms understanding institutional diversity and its implications for international business this paper examines the role of institutional analysis within the field of international business ib studies within ib institutions matter but the view of institutions tends to be thin utilizing summary indicators rather than detailed description and thus approaches institutions as unidimensional variables that impact on particular facets of business activity this paper argues that ib research would be usefully advanced by greater attention to comparing the topography of institutional landscapes and understanding their diversity a number of alternative case based approaches are outlined that draw on a growing comparative capitalisms literature in sociology and political science the paper develops a number of empirical examples to show the utility and limits of these approaches for ib scholars

altruism in cost benefit analysis it has recently been argued that altruistic motives for paying for a public sector project should be ignored in a cost benefit analysis the reason is that including altruism would mean a kind of double counting of the project s benefits this paper takes a look at these arguments and derives cost benefit rules which cover different kinds of altruism the paper also provides some recommendations for the treatment of altruism in studies using the contingent valuation method

family specific investments and divorce with dynamically inconsistent households marital contracts and policy abstract this paper bridges two distinct areas of inquiry the economic theory of the family and behavioral research on time inconsistent preferences motivated by anecdotal and survey evidence suggesting that present bias plays a role in intra household decision making we propose a model in which hyperbolic discounting couples engage in home production activities thereby accumulating family specific capital over time at any given point in time the gains to continued marriage depend on the accumulated stock of this capital and a temporary random shock to match quality couples whose match quality deteriorates may choose to divorce and this is more likely to happen if past investments in family specific capital have been low we obtain three main sets of results first present biased preferences induce couples to underinvest in family specific capital and to overdivorce second sophisticated couples but not naive ones may choose to enter marriage on terms which make divorce more costly to obtain third the inefficiencies in the behavior of time inconsistent couples can be completely undone by means of earnings and divorce taxes that vary over the marital life cycle

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

taxation and the earnings of husbands and wives evidence from sweden i examine the response of husbands and wives earnings to a tax reform in which husbands and wives tax rates changed independently allowing me to examine the effect of both spouses incentives on each spouse s behavior i analyze the large swedish tax reform of 1990 1991 and find that in response to a compensated fall in one spouse s tax rate each spouse s earnings rise i compare these results to those of simplified econometric models used in the typical setting in which independent variation in each spouse s tax rate is unavailable i find that standard econometric specifications may produce substantially biased estimates

bringing institutions into performance persistence research exploring the impact of product financial and labor market institutions this study challenges the implicit assumption of homogeneity in national institutional environments made in past studies of firm performance persistence we propose that home country institutions matter we focus on the impact of formal institutions in the product financial and labor markets arguing that they affect the size of pools of exchange partners and the types of exchanges allowed and condoned ultimately these restrictions affect competitive intensity among firms and firm performance persistence using data for over 10 000 firms from 33 countries over a 10 year time frame we show that antitrust law strength a product market institution designed to prevent collusion among firms is associated with decreases in performance persistence unskilled labor market flexibility a labor market institution that reduces legal constraints imposed on residual claimants managers and owners to take necessary actions to maintain or enhance profitability is associated with increases in performance persistence product liability law effectiveness another product market institution and corporate control market development a financial market institution are positively associated with performance persistence only in the case of mnes the two remaining financial and labor market institutions public equity market development respectively skilled labor market availability have a positive respectively negative impact for domestic firms only

the optimal income taxation of couples this paper analyzes the general nonlinear optimal income tax for couples a multidimensional screening problem each couple consists of a primary earner who always participates in the labor market but makes an hours of work choice and a secondary earner who chooses whether or not to work if second earner participation is a signal of the couple being better worse off we prove that optimal tax schemes display a positive tax subsidy on secondary earnings and that the tax subsidy on secondary earnings decreases with primary earnings and converges to zero asymptotically we present calibrated microsimulations for the united kingdom showing that decreasing tax rates on secondary earnings is quantitatively significant and consistent with actual income tax and transfer programs

strategy complexity and economic rent this paper discusses important friction forces that future theories of strategy must incorporate some of these are technological and environmental but the most important ones it is argued are psychological the view is developed that strategy at its core concerns the development and testing of heuristics for high stake decisions in environments too unstable and complex to be optimized the paper especially highlights the behavioral dimension in the belief that strategies should incorporate both the rational and suboptimal aspects of human behavior the rational approach is in many ways the easier as there may be only one way to be right yet the great variety in which people and companies can err gives strategy its creative and real world challenge the tension between the rational and behavioral components is what the field of strategy should seek to exploit

strategies of legitimation mnes and the adoption of csr in response to host country institutions drawing on institutional theory this study examines the question of how host country institutions affect corporate social responsibility csr adoption by multinational enterprises mnes i propose that csr encompasses a set of practices that mnes draw on to signal legitimacy in different kinds of institutional contexts contexts that vary in how they shape issue salience and stakeholder power in a given issue field building on ideas related to field opacity and the managerial implications of csr i study why mnes adopt two distinct types of csr policies standards based csr in response to contexts marked by issue salience and rights based csr in response to contexts marked by stakeholder power to test these hypotheses i use subsidiary and firm level data from a sample of 540 western european mnes in the issue field of labor rights results show that mnes strategically adopt these csr policies related to their presence in distinct institutional contexts the study offers implications for how mnes manage the legitimacy of their global operations and how csr as a form of private governance can emerge as both a substitute and complement to regulatory institutions

impact of historical conflict on fdi location and performance japanese investment in china historical relations between countries bring important explanatory power for foreign direct investment fdi decisions yet little is known on whether a home host country relation exhibits heterogeneous effects on fdi across the country s subnational regions in this study we examine the long term impact of historical conflict on fdi location choices and performance using a sample of 8 646 japanese fdi in china we show that civilian casualties in different provinces of china during the second sino japanese war exert deterring effects on japanese fdi location choices furthermore we demonstrate that civilian casualties negatively affect japanese fdi performance and political capital accumulation strategies in the forms of excessive tax payment and local employment can reduce this negative effect this study contributes to the discussion on how within country differences of historical factors affect fdi location decisions and performance the findings on firms political capital accumulation strategies also provide important implications for fdi operation in an environment characterized by historical animosity

balancing subsidiary influence in the federative mnc a business network view the contest for intra organisational power in the multinational corporation mnc has gradually become a prominent issue on the research agenda as long as 25 years ago hedlund 1980 investigated the strategic roles of subsidiaries in mncs and doz and prahalad 1981 raised the issue of how difficult it is for headquarters to remain in control of its subsidiaries and to influence their strategies over time since then several researchers have suggested that mncs can be considered to be dispersed structures of power in which the top management s authority does not necessarily result in hierarchical power being the ultimate control mechanism hedlund 1986 forsgren 1989 ghoshal and bartlett 1990 doz and prahalad 1993 ferner and edwards 1995 kristensen and zeitlin 2001 morgan and whitley 2003 birkinshaw and hood 1998 examined the evolution of capabilities at the subsidiary level and recognised that in most corporations there is an internal competition for charter that implies a process of change in subsidiary roles birkinshaw and hood 1998 782 case research has also indicated that changes in the charters of divisions or subsidiaries in mncs constitute a strong feature of horizontal or vertical competition in the corporate marketplace galunic and eisenhardt 1996 birkinshaw and fry 1998 the tension between the headquarters and overseas laboratories caused by the laboratories desire for autonomy and influence is an example of such a competition asaka wa 2001

on the optimal rate structure of an individual income tax what is the optimal rate structure of a personal income tax in the literature on optimal taxation this important question has been approached by introducing a linear income tax formula into a revised ramseyian model which takes into account both efficiency and equity objectives of taxation the assumption of a linear tax enables us to examine the degree of tax progression through the behavior of the average rate but it does not throw light on how the marginal rate should vary with income 1 lecture 13 a classic paper by mirrlees 7 which was later expounded on by atkinson and stiglitz 1 412 22 solves this problem by explicitly considering a general income tax schedule however both linear and general tax formulae provide little guide for policy making since in practice the tax rates are graduated by a bracket system that is the income scale is divided into segments or brackets and rates are applied only to the income in each bracket rates increase or decrease by small percentage points from one bracket to the next in order to avoid large and abrupt changes in tax burden as income rises the present paper attempts to demonstrate how we can easily transform a segment graduated tax system into a multiple linear system and then incorporate it into the standard optimum taxation model we then proceed to derive the conditions governing the optimal value of an upper or lower limit of a tax bracket and the marginal tax rate applied to the bracket combining these conditions together will enable us to infer what the optimal rate structure should be

environmental scanning in korean firms organizational isomorphism in action this paper reports some of the findings of a study on environmental scanning practices in six large korean firms and compares the results with those of previous studies on scanning conducted in the united states such comparisons are made for both the scanning behaviors of individual managers and the structures roles and systems of formal environmental scanning units the overall conclusion that emerges is that while scanning behaviors of american and korean firms are quite similar on average they differ significantly in the extents of inter organizational variances in the two societies scanning practices of u s firms are diverse while those of korean firms are remarkably similar

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

adjustment costs firm responses and micro vs macro labor supply elasticities evidence from danish tax records we show that the effects of taxes on labor supply are shaped by interactions between adjustment costs for workers and hours constraints set by firms we develop a model in which firms post job offers characterized by an hours requirement and workers pay search costs to find jobs we present evidence supporting three predictions of this model by analyzing bunching at kinks using danish tax records first larger kinks generate larger taxable income elasticities second kinks that apply to a larger group of workers generate larger elasticities third the distribution of job offers is tailored to match workers aggregate tax preferences in equilibrium our results suggest that macro elasticities may be substantially larger than the estimates obtained using standard microeconometric methods

partial tax reform an optimal taxation perspective this paper presents a framework for evaluating partial tax reform proposals based on the theory of optimal taxation which is complementary to an analysis based on the theory of equitable taxation developed by walter hettich in this journal the analysis focuses on the fundamentally different perspectives on tax reform of the two schools of thought never theless the two approaches are complementary in that first they require decision makers to state explicitly their views on horizontal and vertical equity and second they then provide a systematic means of evaluating partial tax reforms based on those criteria

influences on human resource management practices in multinational corporations a study of human resource management practices in 249 u s affiliates of foreign based multinational corporations mncs shows that in general affiliate hrm practices closely follow local practices with differences among specific practices the degree of similarity of local practices is significantly influenced by the method of founding dependence on local inputs the presence of expatriates and the extent of communication with the parent in addition sharp differences are revealed among affiliates of canadian japanese and european mncs suggesting strong country effects together these findings support the view of mncs as composed of differentiated practices which in turn are shaped by forces for local isomorphism and for internal consistency

international entrepreneurship the pursuit of entrepreneurial opportunities across national borders in this editorial for the special issue on international entrepreneurship we inter relate key concepts about the pursuit of opportunities from the entrepreneurship and international business literatures in doing so we consider the assessment of opportunities as an individual level cognitive activity the construction of opportunity as a firm level innovative activity and the shaping of opportunity as an institutional level structuring activity we then extend the discussion to explore the notion of a distributed global ecosystem of opportunities and opportunity seekers which we believe may provide a platform for valuable future research

an aggregate measure for benefit cost analysis the kaldor hicks kh criterion has long been the standard for benefit cost analyses but it has also been widely criticized as ignoring equity and arguably moral sentiments in general we suggest the use of an aggregate measure khm instead of kh where m stands for moral sentiments khm simply adds to the traditional kh criterion the requirement that all goods for which there is a willingness to pay or accept count as economic goods this addition however runs up against objections to counting moral sentiments in general and non paternalistic altruism in particular we show these concerns are unwarranted and suggest that the khm criterion is superior to kh because it provides better information

why governments should invest more to educate girls abstract women and men often receive the same percentage increase in their wage rates with advances in schooling because these returns decline with more schooling the marginal returns for women will tend to exceed those for men especially in countries where women are much less educated the health and schooling of children are more closely related to their mother s education than father s more educated women work more hours in the market labor force broadening the tax base and thereby potentially reducing tax distortions these three conditions it is argued justify the disproportionate allocation of public expenditures toward women s education

navigating identity duality in multinational subsidiaries a paradox lens on identity claims at hindustan unilever 1959 2015 multinational subsidiaries do not merely seek legitimacy within their dual institutional contexts they also strive to articulate an organizational identity by drawing on institutional resources embedded in these dual contexts we draw attention to the subsidiary s identity duality and conceptualize it as a paradox i e as the juxtaposition of the contradictory interdependent and persistent characteristics of the global and the local in the subsidiary s identity using 57 years of archival data from hindustan unilever the indian subsidiary of anglo dutch multinational unilever we observe changing patterns in the articulation of identity claims by subsidiary leaders and develop a process model of how subsidiaries navigate identity duality over time we find that subsidiary leaders may use two modes of organizational identity work for this purpose logic ordering the articulation of identity claims that respond to contradictory institutional demands by privileging one and subordinating the other and logic bridging the articulation of identity claims that respond to contradictory institutional demands by effecting a janusian integration of the said demands over time and employing these modes of identity work leaders at hindustan unilever sustained a dynamic balance between the dual cores of the subsidiary s espoused identity

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

institutions transaction costs and entry mode choice in eastern europe the process of change from a centrally planned system to a market economy generates an institutional framework that is only partially reformed and therefore inconsistent and unstable this leads to high transaction costs for economic agents multinational enterprises entering transition countries have to adapt their strategies to the local institutions and reduce exposure to highly imperfect markets this paper analyzes how the costs of organizing business in transition environments influence entry mode choice the empirical results show that host country institutions in transition economies have an impact on the choice of entry modes moreover different mechanisms determine the internalization of managerial and technological knowledge

mnc response to superstitious practice in myanmar ijvs understanding contested legitimacy formal informal legitimacy thresholds and institutional disguise superstition is a pervasive informal institution affecting the decision making of organizational actors yet remains under studied and ill understood in international business research we address this lacuna through examining how western mncs affect and are affected by the use of superstition among local subsidiary managers in an emerging asian economy based on interviews archival documents and observation our inductive investigation reveals a complex changing and surreptitious relationship between mnc practice and an informal institution which while widely practiced remains forbidden according to its formal institutional counterpart buddhism and illegal according to myanmar state law initial findings showed how mncs endorsed acquiesced or rejected superstitious practice based on a configuration of construed reputational risk corporate values adherence degree of formal institution approval and perceived local performance impact subsequent mnc engagement then shifted from accommodation to resistance to manipulation in response to local managers disguising their superstitious practices as buddhism blurring the formal informal institution divide in the process to secure mnc public approval together our findings serve to refine and deepen existing theory into how the mnc subunit can manage its legitimacy through balancing the incompatible demands of formal and informal constituents within a contested institutional dyad

an institutional logics approach to liability of foreignness the case of mining mnes in sub saharan africa prior research on firms liability of foreignness lof has emphasized the role of isomorphic behavior in overcoming lof however the literature has not adequately considered how firms can overcome lof under conditions of institutional complexity when fundamental differences in firms home and host country values beliefs and rules may make isomorphic behaviors impossible or undesirable in this article we use the emerging research on institutional logics and institutional entrepreneurship to address this important issue by examining case studies of eight foreign mining mnes experiencing lof in sub saharan africa based upon our qualitative analysis we find that mnes can overcome lof by co creating new institutional logics rather than conforming to existing ones yet our data show that this is a difficult process one that may not be capable of being done unilaterally by the mne instead we find that local employees embedded in both sets of competing institutional logics acted as key intermediaries who facilitated institutional entrepreneurship moreover we found that firms implementation strategy matters as well in some cases institutional entrepreneurship mitigated lof in others friction returned to varying degrees

from a distance and generalizable to up close and grounded reclaiming a place for qualitative methods in international business research journal of international business studies 2011 42 573 581 doi 10 1057 jibs 2011 19 it is exhilarating to write the introduction to this special issue as it presents an important opportunity for qualitative research to reclaim its position as an integral part of international business ib research the field of ib was founded on a rich qualitative research legacy e g bartlett 1979 crozier 1965 fayerweather 1969 johanson vahlne 1977 kindleberger 1956 prahalad 1975 wilkins 1970 1974 over time however such methods have been progressively marginalized in our field as quantitative methods have become the norm this shift in emphasis has mirrored the broader trend toward more positivistic empirical methods in the social sciences the field of ib is multidisciplinary in scope and interdisciplinary in content and methodology statement of jibs editorial policy however as our respective home disciplines came under growing pressure to solidify their legitimacy as scientific endeavors that merit scholarly attention it is not surprising that we began to take on the norms propagated within our own academic communities that typically equated quantitative data with hard science while there are clear merits associated with quantitative methods the multi cultural multi dimensional and dynamic nature of the field of ib lends itself to a broad range of research methodologies qualitative methods being one of them in order to understand the complexities of emergent and evolving phenomena scattered over distance and the differentiated contexts typical to many topics under investigation in ib it is often inappropriate to engage in large scale cross sectional studies or reductionist methods in the absence of well developed theory rather thick description exploratory research and comparative case analysis that focus on inductive theory building and hypotheses generation may be more suitable

optimal tax and transfer programs for couples with extensive labor supply responses this paper analyzes the optimal design of general nonlinear tax transfer schedules for couples under unitary and collective approaches to family decision making we consider a double extensive model of labor supply where each spouse makes a labor force participation choice for given hours of work we present simple and intuitive optimal tax rules that generalize existing findings on the optimal taxation of single person households with extensive responses saez 2002 to the case of two person households with double extensive responses without income effects on labor supply optimal tax rules as a function of sufficient statistics are the same under the unitary and collective approaches with income effects on labor supply optimal tax rules under the two approaches continue to depend on the same sufficient statistics but the collective model features an additional pigouvian term arising from a within family participation externality finally we present microsimulations of tax reform for 15 european countries suggesting that a reduction of tax rates on secondary earners relative to primary earners is associated with strong welfare gains in all countries

the dubious role of institutions in international business a road forward our commentary returns to the conundrum of how institutions matter in international business ib by revisiting the 2018 jibs decade award article by jackson and deeg 2008 on comparing capitalisms we first synthesize their main insights around institutional diversity and track its significant impact within ib and other management fields we then suggest three main takeaways that could move jackson and deeg s agenda further in terms of developing a more nuanced approach to institutions in ib we close with suggestions for future research and urge ib scholars to be more cautious when drawing on different strands of institutions theory

institutional cultural and transaction cost influences on entry mode choice and performance in this study we examine foreign market entry mode choice and firm performance for a sample of european union firms examining both financial and non financial performance measures we attempt to determine if firms that select their entry mode based on transaction cost institutional context and cultural context variables perform better than firms that make other mode choices we found that mode choice did matter firms whose mode choice could be predicted by the extended transaction cost model performed significantly better on both financial and non financial measures than did firms whose mode choice could not be predicted by the extended transaction cost model implications for future research are discussed

which model of capitalism best delivers both wealth and equality capitalism is the dominant economic system adopted throughout the global economy but there are many different models of capitalism practiced depending on what the society decides economic effectiveness is in this study we assert that an effective economy simultaneously achieves two seemingly divergent outcomes it 1 creates economic wealth efficiently and 2 shares that wealth equitably employing insights from whitley s national business systems framework and fuzzy set analysis we examine how national institutions collectively configure with respect to the overall level of equitable wealth creation within 48 developed and developing economies we find that three configurations are associated with relatively high levels of equitable wealth creation and another three are associated with relatively low levels as such our analysis supports the notion of equifinality that there is no one optimal model of capitalism furthermore we begin to demonstrate that these models of capitalism are constantly evolving but their evolution is generally slow even when considering the practice of capitalism before and after the 2008 global economic crisis we discuss the implications of these findings for the study of international business with a special emphasis on considering a more holistic context for exploring how multinational enterprises interact with their institutional environment s

multinationality and performance among british manufacturing companies over the period 1972 84 profitability among 304 large british manufacturing companies was positively related to their degree of multinationality moreover increases in overseas production were strongly associated with increases in sales and profitability the profitability of multinational growth over the whole period was independent of its destination supporting the view that the primary source of the superior performance of multinationals was competitive advantage rather than the higher rate of profit in the industries of other countries

deconstructing the liability of foreignness regulatory enforcement actions against foreign banks it is widely acknowledged that foreign firms are at an institutional disadvantage relative to domestic firms operating in the local market this liability of foreignness typically manifests as inferior performance for foreign firms relative to domestic competitors although myriad studies document the liability of foreignness few demonstrate how individual host country institutions generate specific liabilities in this study we explore the regulatory liabilities that foreign firms face using a sample of 189 foreign banks operating in the united states we find that regulators initiate more enforcement actions on average against foreign banks than they do against domestic banks the effects however vary by regulation type and firm characteristics for example foreign banks are no more likely to receive risk related sanctions but far more likely to receive stakeholder related sanctions foreign banks with higher quality of human capital and more host country experience are less likely to run afoul of all regulations foreign banks with more third country experience are less likely to receive risk related sanctions but more likely to receive stakeholder related sanctions the results highlight the contingent nature of regulatory liabilities the role of information asymmetry versus regulatory bias in enforcement outcomes and the liability reducing effects of resources and capabilities

adjusting to and learning from institutional diversity toward a capability building perspective this paper identifies two main dimensions institutional diversity and dynamism in the research stream that has substantively engaged with the important contribution of jackson and deeg j int bus stud 39 4 540 561 2008 taking into account their core criticism that institutional analysis in international business research is often de contextualized and building on these two dimensions we present two possible paths for institutional analysis that are sensitive to context the first is a methodological shift towards configurational analyses and specifically the analysis of counterfactual scenarios that could reveal new information about decision alternatives the second is a shift away from a focus on costs and towards the possibility of mnes building capabilities in an exploratory manner when confronted with institutional diversity both approaches build on an understanding of mnes as strategic actors that co evolve with their environments

are risk benefit tradeoffs possible in siting hazardous facilities ever since alfred marshall introduced the notion of consumer s surplus into the literature as a measure of well being economists have been interested in determining the amount of compensation required to leave individuals indifferent between the status quo and a new situation where less of a commodity can be consumed for example due to an increase in prices the hicksian and kaldor hicks criteria of specifying compensation variations may be appropriate for normal market goods where there is a wellspecified demand curve the analysis is less applicable for dealing with environmental resources where elements of risk are involved or there exist public good features that make it difficult to estimate people s values for different amenities v kerry smith 1989 this paper investigates the question of the appropriate role that providing benefits to a host community possibly in the form of compensation can play in improving the chances of siting a facility that is perceived to be potentially hazardous in section i we develop a simple twoperiod expected utility model to explain preferences for benefit packages the empirical analysis examining the predictive power of this model will be related to the following problem of current interest the u s congress is attempting to locate a site for storing high level radioactive waste from commercial nuclear power plants in the united states an underground repository is to be constructed 2000 feet below the earth s surface for the purpose of permanently storing nuclear waste shipped in casks from power plants around the country once filled to capacity the repository would be sealed to minimize any radiation leakage based on the results of a telephone survey of residents of nevada regarding their attitudes toward a high level nuclear waste repository we suggest ways that the expected utility model might be modified to take into account behavioral factors that are not normally considered part of individual models of choice under uncertainty these factors may be useful in determining when compensation will be a useful tool in facilitating the siting process

income taxation of couples spouses labor supplies and the gender wage gap abstract we study the taxation of couples when female wages do not reflect their true productivity we show that the expression for the marginal tax rates of the male spouses is the same as in a mirrleesian world where wages reflect true productivities marginal taxes for the female spouses are reduced because of a pigouvian correction consequently the wage discrimination pleads for a lower marginal tax on the female spouse furthermore the distortion of a couples tradeoff between male and female labor supply is the same as in a mirrleesian world without a gender wage gap it only depends on true productivities and not on wages in other words the tax system completely neutralizes the extra distortion introduced by the wedge between the female spouse s wage and her true productivity