national animosity and cross border alliances we extend the cross border strategic alliance knowledge base by introducing dyad specific antagonism animosity between nation pairs and hold that the formation and the type of firm level cross border alliances are nontrivially impacted by conflicting relations and animosity between their home nations we examine the formation of alliances between firms among nation dyads with and without a history of conflicts the frequency and magnitude of conflicts increase the perception of likelihood of opportunism and dyad specific risks materially affect the context in which firms make alliance decisions as animosity between two nations increases the number and the probability of forming alliances within the dyad the nations form decreases conditional on the expected number of alliances increased antagonistic actions of nations outside the dyad and dissimilarity in the historical conflicts that each nation has engaged in outside the dyad i increase the number of equity alliances and ii decrease the number of nonequity alliances as a proportion of total alliances we find positive main effects of learning to contract through prior experience only for equity vs nonequity alliances the reputation effects of antagonism based on relationships with nations outside of the dyad negatively moderate the positive learning effects of prior equity alliance experience abstract from author

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

environmental influences on mne subsidiary roles economic integration and the nordic countries we seek to examine the importance of environmental factors in determining mne subsidiary roles in particular we examine the environmental factors associated with deep integration schemes such as the eu such schemes require a convergence of economic structure due to the establishment of common regional institutions regulations and policies specifically we distinguish between the scope of activities performed by subsidiaries and the level of competence of those subsidiaries the empirical analysis is based on a large scale survey of foreign owned units in denmark finland and norway these nordic countries differ with regard to their eu membership status norway being the outsider while the others are members but are very similar to each other in most other respects our data show that subsidiaries in norway report significantly lower scores for both scope of activities and levels of competence the effects remain strong even when we are controlling for other potentially influential factors the findings indicate that being on the outside of the eu may indeed carry the price of becoming less attractive to mne activity

the political economy of inflation bargaining structure or central bank independence the causes of inflation are commonly analyzed as the function of either the organization of wage bargaining or the independence of the central bank although these explanations are widely treated as competing recent evidence suggests that there may be merit to both arguments this paper presents a game theoretic model of wage bargaining and monetary policy making that shows why the two institutional causes are not only complementary but elements of a more encompassing logic the empirical superiority of this synthesizing model is demonstrated by reanalyzing data used in al marhubi and willett 1995 and by presenting new evidence

developing acquired foreign subsidiaries the experience of mnes in transition economies drawing on subsidiary evolution and dynamic capabilities research i test how development and growth of subsidiaries recently acquired in transition economies are affected by multinational enterprise mne and target capabilities these subsidiaries often lack important resources their cross border transfer enhancement and exploitation are problematic however data on 170 acquisitions in central and eastern europe confirmed the importance of the pre acquisition experiences of both target and mne for subsidiary growth although cultural differences moderated the predicted effects notably

price instability and inflation some tests based on rational expectations models abstract we test for a group of fourteen latin american countries the hypothesis that as inflation accelerates it also becomes more volatile our analysis uses time series data a less arbitrary measure of inflation volatility rational expectations models and seemingly unrelated regressions the empirical evidence supports the above hypothesis and strengthens the case against inflationary policies in latin america

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

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

cost value and foreign market entry mode the transaction and the firm this paper compares and contrasts the mode of foreign market entry decision from the transaction cost internalization and organizational capability perspectives each of these perspectives operates at a different level of analysis respectively the transaction and the firm and consequently differs in the primary arena of attention namely transaction characteristics and the capabilities of firms in making the comparison a key distinction is made between the cost and the value aspects in the management of know how based on which issues pertaining to the transfer of knowledge within and across firm boundaries and the exploitation and enhancement of competitive advantage are closely examined the main purpose of this paper is to demonstrate the implications of a shift in frame from cost to value in the analysis of decisions related to firm boundaries entry into foreign markets is used primarily as a vehicle for the accomplishment of this purpose the paper shows how the value based framework of the organizational capability perspective radically and fundamentally shifts the approach towards the governance of firm boundaries and argues that even though tc internalization theory raises some valid concerns the organizational capability framework may be more in tune with today s business context some of the assumptions of the tc internalization perspective both direct opportunism exploitation of existing advantage and indirect preservation of the value of know how across locational contexts asymmetry between bounded rationality for transaction and production purposes are critically examined and questioned implications of a shift from a cost to a value based framework are discussed and the need for a shift in research focus is emphasized

resources transactions and rents managing value through interfirm collaborative relationships this paper offers a theoretical explanation for why interfirm collaborations form yet fail and further suggests how firms might manage them for a more positive outcome based on a perspective of value we explain how a more inclusive and integrative perspective one which combines elements from transaction costs and resource based theory provides more robust insight into collaboration formation management and instability in doing so we differentiate rent yielding firm specific assets at the core of the resource based view from the transaction specific assets at the core of transaction cost theory the paper makes a crucial distinction between the potential value attainable through collaborations and its actual realization the crux of our argument is that firms enter into collaborative relationships because these are expected to yield superior value relative to alternate organizational forms in certain situations offering potentially synergistic combinations of complementary resources and capabilities yet such relationships are frequently prone to failure because the partner firms tend not to recognize ex ante the nature and extent of transaction specific investment that is required in the collaborative relationship to attain these synergies in our argument critically the relationship between organizations is seen not simply as a governance structure of a hybrid nature but more importantly as a productive resource for value creation and realization in this light transaction specific investment in what we term relational specificity becomes imperative in the search for value we explain why the transaction costs incurred in the exchange of resources are not independent of the nature of resources to be transacted and similarly why the returns realized from these resources are not independent of the relationship and transaction specific expenditures incurred in effectively combining them and maintaining the combination the interdependence between the two mediated by the quality of the relationship has direct implications for the earning of rents through collaborations these relationship specific expenditures can be of an internally generated nature endogenous to the alliance form itself and need not exceed alternative forms while the associated benefits have the capacity to potentially exceed the alternatives this translates into potentially superior value the paper contributes in three key related ways a the explicit recognition of the relationship as a value bearing asset embedded in a larger and endogenous institutional context namely a system of resource relationships both intraorganizational and inter organizational among partner firms and the collaboration b the recognition of the evolving relationship between production and exchange which at the level of the collaboration is directly dependent on the nature evolution and dynamics of the relationship among the parties to the transaction and c the provision of a nontrust explanation for why firms might knowingly forego opportunities to take advantage of their partners drawing from this the paper occasions a a shift in focus from the form to the process of governance which has direct implications for value creation and realization and b a shift in the primary identity of transaction specific and relationship specific expenditures from cost to investment in future value

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

impact of information technology capital on firm scope and performance the role of asset characteristics this research draws on transaction cost and resource based theory to examine how information technology it capital moderates the relationship between different types of assets and firm scope both vertical integration and diversification the analysis suggests that it capital enables firms with narrowly valuable assets to be less vertically integrated and less diversified and enables firms with broadly valuable assets to be more vertically integrated and more diversified the moderating influence of it capital on the relationship between different types of assets and firms vertical and product market scope is consistent with transaction cost as well as resource based traditions abstract from author

modal choice in a world of alliances analyzing organizational forms in the international hotel sector in the new management landscape where interfirm collaborations are common international companies today have fully owned operations and equity joint ventures as well as non equity alliances which in the service sector include franchising and management service agreements what determines the optimum choice of organizational mode the new syncretic theory developed in this paper combines concepts from transaction costs theory agency theory corporate knowledge and organizational capability theories to answer this question the paper then tests these concepts to explain the incidence of these modes in the international hotel business using canonical discriminant analysis as well as logistical regression using a generalized logit model the choice of entry mode is shown to be determined by both country or environmental variables as well as firm specific variables

towards more realistic conceptualisations of foreign operation modes we address a long standing discrepancy between theory and practice regarding how firms choose use and modify their modes of operation in foreign markets theory typically treats foreign operation modes as choices between well specified discrete alternatives observation of business practice reveals a messier reality we commonly observe mode packages within mode adjustments and mode role changes yet by and large these aspects of international business development have been relatively ignored in the literature and in theoretical and empirical research we propose richer and more realistic conceptualisations of foreign operation modes and look at their implications for theory and practice

criteria for useful targeting money versus the base and other variables the problem of targeting variables numerically by means of monetary policy has acquired general interest as it has become increasingly clear that an all too flexible conduct of policy has led to very undesirable results in general such flexibility is apt to accommodate inflationary price expectations in order to avoid the temporary depressive effects of nonaccommodation and once the markets figure this out the inflationary price expectations and cost trends tend to steepen in the event of continuous accommodation of the resultant steepening the process would soon get out of hand on the other hand occasional temporary discontinuation of full accommodation produces an environment of substantial uncertainty and inefficiency there has therefore developed growing awareness of the fact that price expectations and cost trends need to be anchored to a consistent course of demand policy in specifiable aspects of its behavior such a policy should

antecedents and performance implications of channel integration in foreign markets this study enhances our understanding of channel integration in foreign markets on two fronts first the eclectic approach to foreign entry mode proposed by hill hwang and kim 1990 and kim and hwang 1992 is used to examine transaction specific organizational capability and strategic factors that influence channel choices in foreign markets empirical results based on survey of u s firms support the combined relevance of these factors in predicting the degree of channel integration second the study empirically examines the performance consequences of channel integration the results suggest that although the degree of channel integration does not have a direct influence on channel performance a contingency model based on the fit between the contextual factors and the actual channel choice is significantly related to performance in foreign markets

mixed signals central bank independence coordinated wage bargaining and european monetary union plans for the european monetary union emu are based on the conventional postulate that increasing the independence of the central bank can reduce inflation without any real economic effects however the theoretical and empirical bases for this claim rest on models of the economy that make unrealistic information assumptions and omit institutional variables other than the central bank when signaling problems between the central bank and other actors in the political economy are considered we find that the character of wage bargaining conditions the impact of central bank independence by rendering the signals between the bank and the bargainers more or less effective greater central bank independence can reduce inflation without major employment effects where bargaining is coordinated but it can bring higher levels of unemployment where bargaining is less coordinated thus currency unions like the emu may require higher levels of unemployment to control inflation than their proponents envisage they will have costs as well as benefits and these will be unevenly distributed among and within the member nations depending on the changes they induce in the status of the bank and of wage coordination

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

monetary institutions monopolistic competition unionized labor markets and economic performance recent literature on the interactions between labor unions and monetary institutions features either a supply or a demand channel of monetary policy but not both this leads to two opposing views about the effects of central bank conservativeness we evaluate the relative merits of those conflicting views by developing a unified framework we find that i the effect of conservativeness on employment depends on unions relative aversion to unemployment versus inflation and ii for plausible values of this relative aversion and more than one union social welfare is maximized under a highly conservative central bank we also evaluate the effects of centralization of wage bargaining and product market competition on unemployment and inflation

the impact of order and mode of market entry on profitability and market share market share performance and profitability of overseas business activities has long been an important issue in international business in this study we explore the impact of order and mode of market entry into an overseas market we find that early entrants have significantly higher market shares and profitability than late followers we also find that equity joint ventures have a higher profitability than either wholly owned operations or contractual joint ventures a significant interaction exists between order and mode of market entry as expected firm efficiency and size affect the performance of firms these results are based on the business activities of a sample of 14 466 foreign firms in china in 1995

broadening the foreign market entry mode decision separating ownership and control this paper argues that the ownership and control dimensions of foreign market entry mode choice should be separated and that foreign market entry mode decisions should be expanded to business activities beyond production and distribution empirical results from the global hotel industry indicate that the transferability of the entrant s competitive advantages the local market s absorptive capacity and the availability of trustworthy local partners differentially affect the ownership and control dimensions of the entry mode decision

overcoming export manufacturers dilemma in international expansion learning and acquiring local market knowledge from foreign distributors are central to manufacturers export market performance drawing from the resource based view we propose that manufacturers need to develop stronger local market competence while simultaneously minimizing the costs of distributor opportunism in order to compete successfully in the export market cultural distance and other barriers however may hinder the development of local market competence for the manufacturer while contributing to the occurrence of distributor opportunism in order to overcome these barriers we examine the impact of three alternative forms of manufacturer governance trust knowledge sharing and contract based relationship in export channels findings suggest that all three governance mechanisms contribute to enhancing the manufacturer s competence to exploit local market opportunity however of the three trust seems to be the only effective way to curtail distributor opportunism

labour markets and monetary union a strategic analysis this paper shows that the effects of a monetary union depend on several labour market features in particular the switch from national monetary policies to a common monetary policy usually affects both inflation and unemployment even when all structural parameters of the economy and of unions and policymakers preferences remain the same the benchmark case of a monetary union between identical countries suggests that the switch to a monetary union is likely to make labour unions more aggressive increasing unemployment qualifications to this result are provided under alternative institutional scenarios like cross country asymmetries pre union erm membership and wage leadership

causality cointegration and control abstract the first sections of the paper show that causality tests can be relevant when considering the effectiveness of a control mechanism rejecting some results in earlier papers the relevance comes from a more careful consideration of what information is available to whom and when compared to previous work the final section of the paper extends this analysis to cointegrated variables when causality is a necessary consequence

is there a european wage leader wage spillovers in the european monetary union the introduction of the euro had been accompanied by expectations of increased inflationary pressures due to a de coordination shock to national wage bargaining systems though if anything systematically happened after the introduction of the euro wage restraint increased this paper argues that an interdependency of wage setting under german dominance has emerged in europe which fuelled the transmission of mutual wage restraint we will investigate wage and nominal unit labour cost spillovers in the european monetary union emu exploring a panel of 13 manufacturing sectors from 1992 to 2005 and quantify the effects of different countries strong interdependencies across emu member countries with regard to nominal wage growth are found a leading role accrues to germany which is responsible for a cumulative reduction of trans european wage growth rates of 0 62 by conservative estimates remarkably the influence of germany is strongest on southern europe with regard to wage growth interdependencies however the situation is inverted with regard to the development of nominal unit labour costs where the german influence on southern europe is substantially weaker than on neighbouring economies copyright the author 2012 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

transaction cost determinants and ownership based entry mode choice a meta analytical review entry mode choice is a critical ingredient of international entry strategies and has been voluminously examined in the field the findings however are very mixed especially with respect to transaction cost related factors in determining the ownership based entry mode choice this study conducted a meta analysis to quantitatively summarize the literature and empirically generalize more conclusive findings based on the 106 effect sizes of 38 empirical studies the meta analysis shows that the findings of the existing studies are moderated to varying degrees by both study setting factors and statistical artifacts although the combined overall effects of transaction cost based determinants are consistent with the predictions of transaction cost economics we extensively discuss the implications of meta analytical results especially moderating effects of location country of origin industry type and statistical artifacts highlight the measurement adequacy equivalence and multidimensionality of transaction cost determinants and present our suggestions to improve theoretical inquiries and empirical verifications on entry mode choice

how much does ownership really matter equity and trust relations in joint venture relationships in this paper i reaffirm the role of trust in interfirm relations and make an appeal for more cross disciplinary work to further our insights into the functioning of important phenomena of interest such as international joint ventures i also pose a couple of fundamental questions 1 is ownership over rated that is should we and our scholarship be so consumed with issues of ownership 2 is trust under rated in what way might we and our scholarship change if we assumed trust rather than opportunism in what way might it change firms attitudes and behavior towards their partnership relations

autoregressive modelling and money income causality detection abstract a step wise procedure based on granger s concept of causality and abaike s final prediction error criterion is suggested as a practical means to identify the order of lags of each variable in a multivariate autoregressive process the model seems useful because it can serve as a reduced form formulation to avoid imposing often spurious or false restrictions of the model it also provides a reasonably powerful test of causality the idea is applied to u s postwar money and income data it is found that between m1 and gnp a bivariate feedback model fits the data best between m2 and gnp a one way causal model from money to income performs better diagnostic checks applied to our model seem to indicate the adequacy of our approach

a dynamic capabilities based entrepreneurial theory of the multinational enterprise this paper develops a dynamic capabilities based theory of the multinational enterprise mne it first reviews scholarship on the mne with a focus on what has come to be known as internalization theory one prong of this theory develops contractual transaction cost informed governance perspectives and another develops technology transfer and capabilities perspectives in this paper it is suggested that the latter has been somewhat neglected however if fully integrated as part of a more complete approach it can buttress transaction cost governance issues and expand the range of phenomena that can be explained in this more integrated framework dynamic capabilities coupled with good strategy are seen as necessary to sustain superior enterprise performance especially in fast moving global environments entrepreneurial management and transformational leadership are incorporated into a capabilities theory of the mne the framework is then used to explain how strategy and dynamic capabilities together determine firm level sustained competitive advantage in global environments it is suggested that this framework complements contract based perspectives on the mne and can help integrate international management and international business perspectives

the effect of specificity of experience on a firm s perceived importance of institutional knowledge in an ongoing business we study how three types of firm experience ranging from the specific to the general influence the perceived importance of institutional knowledge in the ongoing business of internationalising firms based on a sample of 101 small to medium sized firms the three types of firm experiences are international country and ongoing business the results show that firm experience within the ongoing business and the experience from multiple past business deals in various countries develop institutional knowledge whereas experience from multiple past business deals in a specific country does not the theoretical contribution of this paper is that it establishes a link between different kinds of experience and managerial cognition in terms of institutional knowledge in addition it emphasises that firms develop institutional knowledge from multiple diverse country experiences and experience in the specific ongoing business rather than experiences at the level of the country

entrepreneurship in the global firm introduction and overview types of subsidiary initiative fighting the corporate immune system how the initiative process works the consequences of initiative perspectives on the theory of entrepreneurship mapping the process of subsidiary evolution perspectives on theory of the multinational firm an internal market model of the multinational firm implications for management practice

the influence of customer scope on supplier learning and performance in the japanese automobile industry most studies of japanese supplier automaker relationships have focused on the nature of the dyadic interfirm relationship and the performance of the assembler we examine the relationship from the point of view of the supplier and argue that a broad customer scope strategy i e number of customers leads to superior performance primarily because of learning opportunities in addressing these learning opportunities we draw attention to the important distinction between relation specific and re deployable knowledge and the complementary relationship between them our analysis of 125 japanese suppliers supports the key argument that less exclusive ties may be a superior strategy the argument has important implications for vertical integration and the structure of buyer supplier relations

the effects of monetary targeting on business activity and financial market stability in the united kingdom abstract this paper utilizes a vector autoregressive modelling technique to test which of the uk monetary aggregates m0 m1 or m3 is more appropriate as an intermediate target for the bank of england the empirical results suggest that m0 is the most suitable choice and that m3 is not as to m1 the results are less straightforward and imply that m1 may be useful for addressing policy concerns over the external balance other implications of the results are distilled and analyzed in the paper

are wages and productivity converging simultaneously in euro area countries a convergence analysis is applied to wages and productivity for euro area countries in the period from 1981 to 2001 the results show a reduction in the dispersion of wages and unit labour costs but not in productivity different patterns are found for real and nominal wages higher levels of inflation in countries with higher growth rates of unit labour costs have caused nominal wages to move towards equalization moreover disparities in all the variables have remained more or less the same since 1997 suggesting that the establishment of a single currency area has not accelerated the process of wage equalization

how unstable is the demand for money in the united kingdom the ratio of money to income was once described by lawrence klein 1962 as one of the five great ratios of economics and its determinants the arguments of the demand for money function were thoroughly investigated in the united kingdom and elsewhere in the late 1960s and early 1970s the success of these investigations and the associated rise of monetarism hardly needs retelling except to note that a markedly different attitude exists now as evidenced by laidler 1981

the role of global dynamic managerial capability in the pursuit of international strategy and superior performance we develop the construct of global dynamic managerial capability gdmc and identify its underlying sources 1 international human capital 2 international social capital and 3 international managerial cognitions consistent with dynamic capabilities view and upper echelons theory we suggest that gdmc leads to global asset orchestration which in turn results in superior company performance in a two stage process first gdmc leads companies to adopt global strategies that spread the risk of internationalizations across different entry modes and geographic regions second the re configuration of global assets positively influences subsequent firm performance and thus mediates the relationship between gdmc and performance recognizing the triad of factors that form global dynamic managerial capability is crucial when selecting future managers of multinational corporations hence firms with increasing international exposure both domestically via foreign competition and internationally via foreign market presence may seek to compose their upper echelons with a suitable combination of international human and social capital as well as internationally diverse cognitions in the pursuit of sustained competitive advantage

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

crossroads the organization of economic activity transaction costs firm capabilities and the nature of governance in a recent 1993 paper in organization science hennart discussed the underlying logic based on transaction cost and agency theory for explaining the choice between firms and markets and the reason why most transactions have both firm like and market like properties relying on williamson s comparative institutional approach which studies economic organization from a transaction cost minimizing point of view under the assumption of opportunism the argument was made that transaction cost tc logic provides a complete theory of the organization of economic activity in this paper i argue that with its purely incentive based logic governed by assumptions of opportunism tc economics is fundamentally incapable of being a complete theory of economic organization the notion of the firm as a bundle of transactions or contracts is an inadequate and shallow basis for a theory of the firm since it basically ignores the essential notion of the firm as a bundle of knowledge and the underlying processes there

on interest rate innovations and anticipated monetary policy abstract in this note i investigate whether anticipated money matters by following mccallum s 1983 suggestion that nominal interest rates be included in a var system estimated on data spanned by a policy of interest rate targeting the evidence is in favour of gordon s 1982 natural rate hypothesis gradual price adjustent model of policy ineffectiveness ambler and phaneuf 1988 have shown the results can be interpreted as evidence in favour of contract based models of the business cycle

speed of the internationalization process the role of diversity and depth in experiential learning by analyzing internationalization as a dynamic process we attempt to explain the speed of international operations in terms of learning acquired in the course of past international activities we consider that the speed of the internationalization process depends on the type of experiential learning that results from decisions implicit in the internationalization process choice of location and modes of operation firms develop two types of learning activities with respect to the selection of foreign markets and modes of operation diversity and depth of accumulated international activities we propose that depth of international activities has an inverted u shaped impact on the speed of the internationalization process while diversity of international activities has a u shaped influence on the speed of internationalization process the results of our longitudinal study of 889 firms over 23 years 1986 2008 suggest that diversity of international activities promotes long term learning by exposing the firm to richer experiences although such learning only takes place over time depth of international activities may accelerate the internationalization process in the short term but it eventually restrains its potential for development in the long term our research highlights the short term vs long term consequences of different types of decisions related to the internationalization process

governance and uncertainty the trade off between administrative control and commitment this study elaborates upon the motives for initiating equity based collaborations vs acquisition of another firm already having a desired technology we characterize both minority direct investments and joint ventures as options to defer either internal development or acquisition of a target firm in domains where learning about growth opportunities dominates investment activity this incremental mode of governance economizes on the cost of committing resources to a technology with an uncertain value using a sample of 402 transactions in the biotechnology industry we find strong support for the theoretical model the findings suggest that the cost of commitment in the face of technological uncertainty may offset the administrative benefits of hierarchical governance 1998 john wiley sons ltd

the evolutionary view of the mne and the future of internalization theory kogut and zander s 1993 jibs article which developed an evolutionary perspective on the multinational enterprise mne has had three critical impacts on mne research first it has stimulated scholars to conduct more eclectic empirical analyses which should include both transaction cost related parameters and broader learning competence related variables second it has usefully argued that the rigorous study of mne behavior does not need to reply upon the williamsonian behavioral assumption of opportunism third it has implicitly suggested a new path to be followed by internalization theory scholars in order to remain relevant to the field of international business the transaction cost economics lens adopted in internalization theory clearly remains critical to any analysis of mne strategy with impacts on the boundaries of the firm in addition the co evolution of the mne s governance structure and its technological competences determines present and future strategy choices here both transaction cost considerations and learning effects influence strategy selection

revisiting multinational firms tolerance for joint ventures a trust based approach in spite of the increasing popularity of international joint ventures managers express a high level of dissatisfaction with them this paper argues that overemphasis on the outcome has resulted in a neglect of the social processes underlying the outcome the paper elaborates upon the rationale for a cooperative approach towards interorganizational collaborative relationships based on trust and discusses it in the context of joint ventures this is then applied towards understanding multinational ownership preferences and tolerance for joint ventures it is argued that trust centered logic is largely consistent with approaches that emphasize the issue of ownership and deepens and enriches the insights provided by the latter a shift in focus from ownership to relational dynamics is encouraged

financial performance and survival of multinational corporations in china this study investigates the impact of entry timing mode of entry market focus and location advantages on the financial performance and survival of multinational corporations mncs in china three major results were found first mncs that entered china in an earlier year had a higher level of profit than those that entered in a later year second equity joint ventures ejvs had a higher profit level than cooperative operations or wholly foreign owned subsidiaries third mncs that utilized well the location advantages in china had a higher profit we also found that ejvs were more likely to survive compared to cooperative operations while wholly owned subsidiaries did not differ from ejvs the findings are based on a 2 year study of about 1000 mnc operations in china copyright 1999 john wiley sons ltd

international venturing by emerging economy firms the effects of firm capabilities home country networks and corporate entrepreneurship past literature on foreign direct investment generally supports an economics perspective that there is a direct relationship between firm specific ownership advantages and international expansion however in emerging economies with their institutional environment context characterized by low resource munificence and continuous economic liberalization a theoretical extension of the current perspective is needed this paper introduces new parameters by focusing on specific ownership advantages and strategic actions that firms have to develop in response to the institutional characteristics of the emerging economies when they decide to pursue outward fdi the focus here is on international venturing that requires a firm to engage in activities for new business creation in a foreign country rather than simply seek to distribute a product in another nation it is shown empirically that the relationship between firm specific ownership advantages and international venturing is moderated by the degree of home industry competition and export intensity in addition such a relationship is mediated by the intensity of corporate entrepreneurial transformation in the form of innovation new business creation and strategic renewal

the conduct of monetary policy nowadays the central bank of a country is the monopoly supplier of legal tender currency the commercial banks are committed to making their deposits convertible at par into such currency so the banks need to keep reserves in the form of currency and deposits at the central bank the central bank primarily conducts its policy by buying and selling financial securities e g treasury bills or foreign exchange in exchange for its own liabilities i e open market operations academic economists generally regard such operations as adjusting the quantitative volume of the banks reserve base and hence of the money stock with rates prices in such markets simultaneously determined by the interplay of demand and supply central bank practitioners almost always view themselves as unable to deny the banks the reserve base that the banking system requires and see themselves as setting the level of interest rates at which such reserve requirements are met with the quantity of money then simultaneously determined by the portfolio preferences of private sector banks and non banks this difference in perceptions is discussed again in section iii whether the monetary policy operations of central banks should be viewed primarily in terms of quantity or rate setting actions though of course one is the dual of the other these had allowed inflation and inflationary expectations to become entrenched by the end of the i970s a selection of representative statistics for a number of the leading industrialised countries is given in table i below this table indicates a common pattern among the countries of interaction between interest rates inflation and the growth of output the first period i969 78 is marked by high inflation negative real interest rates and slightly above average growth the second period i979 82 by very high nominal and high real interest rates high but falling inflation and very low output growth the final period i983 7 is marked by much lower inflation lower nominal but still high real interest rates and a recovery in output growth in some cases to above average rates in contrast the relationship in these countries between the growth of their chosen key monetary aggregate and nominal incomes appears much weaker also see clinton and chouraqui i987 especially p 7 whether measured in terms of monetary growth or in terms of real interest rates i e after adjustment for prospective future inflation policy during the

wage setting and inflation targets in emu although the operation of national coordinated wage bargaining systems in emu has produced low inflation rates emu wide inflation has been above the ecb target rate for the last 3 years by contrast under the erm inflation rates declined steadily after 1992 to below 2 per cent in both the last 2 years of the regime it is argued that this was the consequence of two low inflation incentives under erm i the maastricht inflation condition for emu entry and ii the combination of the bundesbank threat to raise interest rates if german wage and price inflation rose above acceptable limits linked to the need for other erm members to follow low german inflation to stay within the exchange rate bands these incentives no longer operate under emu where individual economies do not have an incentive to contribute to low emu wide inflation we suggest that inflation coordination between the large emu member states might contribute to a solution while permitting the continuation of real exchange rate adjustments of smaller economies

licensing duration in foreign markets a real options perspective licensing can be considered an initial trial of a foreign market before a firm fully commits to it through other investment modes the length of trial has great importance because licensing duration represents part of the licensing agreement when it is too short the firm may not acquire the necessary experience and knowledge of the foreign market but if it is too long the firm misses optimal expansion timing arguing that licensing can be considered as a european style real option with a fixed holding period we develop and test a model of the determinants of licensing duration in foreign markets empirical results based on a sample of firms in various countries show that uncertainty and threat of competitive pre emption in the foreign market are related to shorter duration of the technology licensing agreements we also find that irreversibility of the impending investment moderates the relationships between uncertainty and duration specifically market and technology uncertainties in the foreign market induce shorter contracts under low levels of irreversibility

split management control and international joint venture performance a framework is presented to characterize four different ways in which management control is partitioned between a multinational enterprise mne and local partners within international joint ventures jvs split control management shared management mne partner dominant management and local partner dominant management the framework was tested using a sample of international jvs in korea we found that jvs following the split control management performed better than any other approach no performance differences were found among the remaining three types of management control this suggests that mnes and local partners should split control that is choose the activities to control so that those chosen activities can be matched with their respective firm specific advantages

sequencing the expansion of geographic scope and foreign operations by born global firms born global firms are not actually born global but rather internationalize rapidly from their inception by expanding their geographic scope and extent of foreign operations however it remains unclear whether such firms 1 simultaneously expand along both dimensions 2 focus on expanding along a single dimension at a given time and switch interchangeably between expanding geographic scope and extent of foreign operations in subsequent periods or 3 stick solely to a specific internationalization path over several subsequent periods this study theorizes and empirically demonstrates that born global firms stick to a dominant internationalization path over subsequent periods arguably this phenomenon reflects managerial efforts to reduce the perceived risk of internationalization and their preference to develop and leverage capabilities that are specific to either of the internationalization paths until the economies of further expanding this path are exhausted

the hierarchical model of market entry modes in this study we propose and test a hierarchical model of market entry modes entry modes can first be viewed as equity based versus non equity based within equity based modes the choice is between wholly owned operations and equity joint ventures while within non equity based modes the choice is between contractual agreements and export empirically we demonstrate that there are factors that exert substantial influences at the equity versus non equity level but rather weak influences at the lower level of choice hierarchy the empirical results are based on a sample of over 10 000 foreign entry activities into china between 1979 to 1998 the findings provide supportive evidence for the hierarchical model of market entry modes

timing of entry in international market an empirical study of u s fortune 500 firms in china this study attempts to explain the timing of entry of firms in international markets based on the existing literature we propose a framework that consists of firm specific factors industry market factors and host country factors empirical results based on the entry information of u s fortune 500 firms in china between 1979 and 1996 show that larger firms with greater level of internalization and scope economies are likely to enter this foreign market earlier in addition non equity modes competitors behavior in the product market and lower levels of country risk are significantly associated with early entry