Showing papers in "Journal of International Business Studies in 1993"
TL;DR: The authors empirically examined the decision to transfer the capability to manufacture new products to wholly owned subsidiaries or to other parties and found that the less codifiable and the harder to teach is the technology, the more likely the transfer will be to wholly-owned operations.
Abstract: Firms are social communities that specialize in the creation and internal transfer of knowledge. The multinational corporation arises not out of the failure of markets for the buying and selling of knowledge, but out of its superior efficiency as an organizational vehicle by which to transfer this knowledge across borders. We test the claim that firms specialize in the internal transfer of tacit knowledge by empirically examining the decision to transfer the capability to manufacture new products to wholly owned subsidiaries or to other parties. The empirical results show that the less codifiable and the harder to teach is the technology, the more likely the transfer will be to wholly owned operations. This result implies that the choice of transfer mode is determined by the efficiency of the multinational corporation in transferring knowledge relative to other firms, not relative to an abstract market transaction. The notion of the firm as specializing in the transfer and recombination of knowledge is the foundation to an evolutionary theory of the multinational corporation
3,376 citations
TL;DR: In this article, the authors examined two types of models addressing the individual firm's internationalization process, one based on the explanation and the falsification criteria, and the other based on theory evaluation.
Abstract: Even though international marketing has been challenged because of theoretical and methodological shortcomings, very few researchers have actually attempted to analyze the weaknesses based on principles of theory evaluation. In this article, the author examines two types of models addressing the individual firm's internationalization process. A theory evaluation is performed based on the explanation and the falsification criteria. In order to improve the internationalization models, some measures are proposed.
1,633 citations
TL;DR: In this article, a conceptual framework of product and promotion adaptation in export ventures is proposed to integrate the diverse perspectives on the issue of standardization versus adaptation, and the results support the contingency perspective recently emerging in the standardization literature, and suggest that the degree of various aspects of product adaptation (i.e., positioning, packaging/labeling, and promotional approach) are significantly influenced by company, product/industry and export market characteristics.
Abstract: While the desirability of marketing adaptation vs. standardization has long been debated within both academic and business circles, empirical studies investigating the conditions under which each strategy becomes appropriate have been rare. This article provides a formal investigation of the correlates of product and promotion adaptation in export ventures. A conceptual framework of product and promotion adaptation in export ventures is proposed to integrate the diverse perspectives on the issue of standardization versus adaptation. The conceptual framework is further specified in a testable form and tested via data collected by a series of in-depth personal interviews with export marketing managers. The results support the contingency perspective recently emerging in the standardization literature, and suggest that the degree of the various aspects of product adaptation (i.e., upon and after entry) and promotion adaptation (i.e., positioning, packaging/labeling, and promotional approach) are significantly influenced by company, product/industry, and export market characteristics. However, the profile of the correlates varies across the various aspects of product and promotion adaptation.
564 citations
TL;DR: In this article, a study of convergence/divergence of managerial values, four Western-developed measures (Machiavellianism, locus of control, intolerance of ambiguity and dogmatism) and four dimensions of the Eastern-developed Chinese Value Survey (Confucian dynamism, human-heartedness, integration, and moral discipline) were used.
Abstract: In this study of convergence/divergence of managerial values, four Western-developed measures (Machiavellianism, locus of control, intolerance of ambiguity and dogmatism) and the four dimensions of the Eastern-developed Chinese Value Survey (Confucian dynamism, human-heartedness, integration, and moral discipline) were the measures used. The findings indicate that often times both culture and the business environment interact to create a unique set of managerial values in a country.
538 citations
TL;DR: This article pointed out that complex products involving multiple country affiliations have become much more common in the US automobile and numerous other consumer product industries and pointed out an important area of research that has not received enough attention in the literature.
Abstract: Recent cases in strategic alliances observed in the US automobile and numerous other consumer product industries point up an important area of research that has not received enough attention in the literature Complex products involving multiple country affiliations have become much more common
458 citations
TL;DR: In this paper, the reliability of an instrument for measuring managers' uncertainly perceptions was tested using an international sample of managers' perceptions of different environmental uncertainties, and the authors provided insights into the relative importance of country and industry factors for explaining managers' perception of environmental uncertainties.
Abstract: International management research highlights political, government policy, and macroeconomic uncertainties. Strategy studies focus on input supply, product market, and competitive uncertainties. This study develops and tests the reliability of an instrument for measuring managers' uncertainly perceptions. Data analyses using an international sample provide insights into the relative importance of country and industry factors for explaining managers' perceptions of different environmental uncertainties.
293 citations
TL;DR: In this article, the effects of government policies on market imperfections and foreign direct investment (FDI) are examined. But the analysis of the impact of these policies on FDI is limited.
Abstract: The internalization/eclectic theory of foreign direct investment includes the important insight that government policies create market imperfections, which make foreign direct investment an economically rational strategic alternative for firms. This paper reexamines the effects of government policies on market imperfections and foreign direct investment (FDI). It broadens and refines the analysis of the impact of government policies by developing the following arguments: (1) There is a wide range of government policies that affect firms' FDI decisions via their effects on market imperfections. (2) There are numerous dimensions of variability in government policies that need to be identified in order to understand fully the effects of government policies on market imperfections and hence FDI flows. (3) Some of the effects of government policies on market imperfections and FDI are the opposite of those previously noted in the FDI literature. (4) The effects of government policies vary across the several individual components of FDI flows. The paper thus examines the following variables and relationships more extensively and precisely than has the previous literature: government policy variables as causal factors affecting FDI; market imperfection variables as intervening factors in the causal connections between government policies and FDI; and the multiple indicators of the various dimensions of FDI as dependent variables.
277 citations
TL;DR: This article examined whether the extent of economic and financial market integration between a firm's home country and listing country influences stock price reaction by examining the case of two “similar” countries: the U.S. and Canada.
Abstract: The globalization of financial markets has seen ever-increasing numbers of firms choosing to list their stocks on foreign exchanges. We examine whether the extent of economic and financial market integration (or segmentation) between a firm's home country and listing country influences stock price reaction by examining the case of two “similar” countries: the U.S. and Canada. During the 100 days before the week of interlisting in the U.S., (risk-adjusted) stock prices of Canadian firms rise (on average) by over 9.4%, rise by an additional 2% around the interlisting date, but follow with a corresponding drop of 9.7% in the 100 days after interlisting. We interpret this evidence to be consistent with the financial market segmentation between Canada and the U.S. However, a subsample of Canadian resource firms does not exhibit these stock price effects, suggesting industry-related factors may also be an important determinant of integration. We also find average trading volume in interlisted stocks more than doubles in the months following interlisting.
267 citations
TL;DR: The authors examined the relative impact of six sets of factors on multiple indices of adjustment to new job assignments, including demographic variables, indices of the "internationalness" of the job change (e.g., whether the job changer is an expatriate, repatriate, or domestic geographical relocator), job characteristics variables, types and amount of career development assistance, degree of change between successive job assignments.
Abstract: This research examines the relative impact of six sets of factors on multiple indices of adjustment to new job assignments. These six sets of factors include demographic variables, indices of the “internationalness” of the job change (e.g., whether the job changer is an expatriate, repatriate, or domestic geographical relocator), job characteristics variables, types and amount of career development assistance, degree of change between successive job assignments, and types of individual coping strategies employed by job changers. Data were collected from 459 job changers from twenty-six countries. The results highlight both the commonalities among expatriates, repatriates, and domestic geographical relocators in adjusting to new job assignments as well as the differences among them.
243 citations
TL;DR: In this article, the authors compared Indonesian firms that have invested abroad and those that have not and with Third World Multinationals and other MNEs and found that the performance of Indonesian firms who invested abroad improved dramatically after their investment in terms of management expertise, exports, quality, and costs relative to their past performance and relative to the other firms in the sample.
Abstract: As part of Indonesia's opening to the world economy, over the past several years Indonesian firms have begun to invest abroad. This study compares Indonesian firms that have invested abroad and those that have not and with Third World Multinationals and other MNEs. It found that the performance of Indonesian firms that invested abroad improved dramatically after their investment in terms of management expertise, exports, quality, and costs relative to their past performance and relative to the other firms in the sample. These results support a conclusion that Indonesian multinationals have gone abroad not only to exploit their ownership advantages but also to access and develop ownership advantages they did not previously possess.
243 citations
TL;DR: In this paper, the authors analyzed the location of export-oriented manufacturing investment in the Caribbean Basin, using micro data for all reported manufacturing plant openings from 1984-87, and compared the results with the existing literature on foreign direct investment in less-developed countries.
Abstract: This paper analyzes the location of export-oriented manufacturing investment. The analysis focuses on direct investment in the Caribbean Basin, using micro data for all reported manufacturing plant openings from 1984–87. We test a broad range of influences on country selection and compare the results with the existing literature on foreign direct investment in less-developed countries. The probability of country selection was estimated with a conditional logit model. The estimates were then used to predict the location of Caribbean Basin investments made in 1988 and 1989. Twelve independent variables were tested. Six variables had a statistically significant, positive relationship with plant location: per capita GNP, exchange rate devaluation, the length of income tax holidays, the size of free trade zones, political stability, and manufacturing concentration. Negative relationships were found for the wage rate, inflation rate, transportation cost, and profit repatriation restrictions.
TL;DR: In this paper, the role of culture in the negative influence of formalization on role stress, organizational commitment, and work alienation of salespersons in the United States is discussed.
Abstract: Organizations rely on formalization to coordinate the efforts of employees; however, this practice has been found to have a negative influence on role stress, organizational commitment, and work alienation of salespersons. Though the negative influence of formalization in the United States has been known for some time, we still cannot predict if similar relationships would/should be observed in other countries because the rationale developed to explain these relationships in the United States did not consider the cultural factors that influence them. With such knowledge, it would become possible to anticipate the nature of the relationship in different cultural environments. Such an approach to developing cross-national models has been often suggested but seldom implemented. By emphasizing the role of culture, this study generates practical guidelines for both practitioners and theorists.
TL;DR: In this paper, the authors examine the key contributing factors to increased foreign R&D investments among multinationals and present a research agenda to provide a foundation and stimulus for future investigations.
Abstract: Despite the growing involvement of multinational firms in foreign-based R&D during the past fifteen years, little research has been done on why and how firms internationalize their R&D and what effects it might have on firm competitiveness. The present paper calls attention to this neglect and seeks to advance the management of multinational R&D as an area of study for international business scholars. To this end, the paper first examines the key contributing factors to increased foreign R&D investments among multinationals. It then reviews the research literature to find out what we presently know about the management of multinational R&D. Finally, a research agenda is proposed to provide a foundation and stimulus for future investigations. Seven research directions are recommended, with an emphasis on interdisciplinary inquiry and a focus on issues that have both theoretical and practical significance.
TL;DR: In this article, the authors identify three patterns of performance among Central American firms engaged in non-traditional exports: low involvement-low volume-low content, price-cost-volume, and product-service quality oriented.
Abstract: The success of export-led development initiatives in LDCs depends heavily on export diversification. This paper identifies three patterns of performance among Central American firms engaged in non-traditional exports. Each pattern is associated with a distinct strategy: low involvement-low volume-low content, price-cost-volume, and product-service quality oriented. The discussion emphasizes keys to exporter success and priority areas for public policy.
TL;DR: In this article, the authors empirically classify current national financial reporting systems and test the validity of a hierarchical classification proposed by Nobes [1983] and extended by Berry [1987].
Abstract: The main objectives of this study were to (1) empirically classify current national financial reporting systems and (2) test the validity of a hierarchical classification proposed by Nobes [1983] and extended by Berry [1987]. Data on accounting practices were obtained for fifty countries and used as input into a hierarchical cluster analysis. The resulting classification bears significant similarity to the aforementioned taxonomies and provides several additional insights.
TL;DR: In this paper, the authors attempted to identify the factors under the control of the organization that may predict expatriate job satisfaction and found that both job/task and organization characteristics are significantly related to both intrinsic and extrinsic job satisfaction.
Abstract: The study presented here attempted to identify the factors under the control of the organization that may predict expatriate job satisfaction. The results indicate that both job/task and organization characteristics are significantly related to both intrinsic and extrinsic job satisfaction. The results appear to have both managerial and research implications.
TL;DR: In this article, an empirical test of the Bartlett and Ghoshal organizational typology was conducted with 131 senior executives of multinational, global, international, or transnational corporations.
Abstract: This paper reports an empirical test of the Bartlett and Ghoshal [1989] organizational typology. Some 131 senior executives of corporations with worldwide operations classified their organizations as being multinational, global, international, or transnational in nature and evaluated their organizations' configuration of assets and capabilities, role of overseas operations, and development and diffusion of knowledge. Results provide partial support for the typology. As expected, transnational corporations were least frequently reported by the respondents. The hypothesized practices associated with multinational and global organizations were more consistent with the typology's predictions relative to those of the international and transnational types.
TL;DR: In this article, a sample of managers in a large textile factory in Russia used the same definitions, methodology and procedures as a stream of research conducted by Luthans and his colleagues on U.S. "Real Managers".
Abstract: Recent events have generated considerable interest, but little empirical evidence, in Russian management. This observation study of a sample of managers (N=66) in a large textile factory in Russia used the same definitions, methodology and procedures as a stream of research conducted by Luthans and his colleagues on U.S. "Real Managers" (see Luthans, Hodgetts and Rosenkrantz [1988]). Similar to American managers, the Russian managers in this factory were observed, in order, to perform traditional management, communication, human resources and networking activities. Also similar to the managers studied in the U.S., the Russian managers' networking activity generally related to their success. The relationship between the Russian managers' various activities and their effectiveness was less clear, but, like the American managers, the communication activity was a significant predictor across analysis techniques. The implications these findings have for Russia's transition to a market economy are discussed.
TL;DR: In this article, the authors address five recurring compensation problems reported by members of the Society for Human Resource Management International (SHRMI) in a recent survey and present a solution to each of them.
Abstract: The expansion of international business necessitates an increased number of employees based in foreign markets. These expatriates, nationals and third-country nationals represent unique and complex compensation problems. This article addresses five of the recurring compensation problems reported by members of the Society for Human Resource Management International (SHRMI) in a recent survey.
TL;DR: In this article, a conceptual framework was developed that identifies the major internal and external factors that may influence a firm's international manufacturing configuration (IMC) decisions, using sixteen companies drawn from four distinct industry sectors.
Abstract: Drawing upon complementary streams of research from the international production and manufacturing strategy literature a conceptual framework was developed that identifies the major internal and external factors that may influence a firm's international manufacturing configuration (IMC) decisions. The framework was then examined using sixteen companies drawn from four distinct industry sectors. The findings indicate that a firm's competitive priorities, expressed as the differential emphasis placed on four key manufacturing performance priorities, in addition to other key variables such as market orientation, experience, and product characteristics, play important roles in the development of IMC strategies.
TL;DR: In this article, managers of U.S. firms with operations in the Caribbean region evaluated the attractiveness of twenty host country incentives and found that incentive preferences depend on the type of investment, market orientation, size of investment and geographic location.
Abstract: In this study, managers of U.S. firms with operations in the Caribbean region evaluated the attractiveness of twenty host country incentives. Multivariate analysis of variance was employed to determine whether incentive preferences were a function of investment characteristics. The results indicate that incentive preferences depend on the type of investment, market orientation, size of investment, geographic location, year of investment, and type of product. Furthermore, exporters considered import duty concessions to be more desirable than did investors oriented toward the local markets. These results indicate that government programs waiving import duties, such as the free trade zones of the Dominican Republic and the maquiladora program of northern Mexico, are providing the incentive deemed most important by their targeted investors.
TL;DR: In this article, the authors examined five antecedent conditions of organizational commitment among groups of American, Dutch, Israeli and British managers in six multinational banking corporations, and found that role, nationality, age, seniority, and rank were correlated with organizational commitment.
Abstract: This exploratory study examines five antecedent conditions of organizational commitment among groups of American, Dutch, Israeli and British managers in six multinational banking corporations. Role, nationality, age, seniority, and rank are tested as correlates of the organizational commitment construct among three groups of managers: Headquarters (HQ) officials, expatriate managers, and host-country managers in foreign subsidiaries.
TL;DR: In this paper, a study of component sourcing decisions of European and Japanese manufacturers for supplying their manufacturing operations in their home countries for export to the U.S. was conducted. But the authors found support for the hypothesis that international sourcing could be explained using international plant location theory.
Abstract: This is a study of component sourcing decisions of European and Japanese manufacturers for supplying their manufacturing operations in their home countries for export to the U.S. as well as their operations in the United States. Specifically, employing data from seventy-one multinational manufacturers of European and Japanese origin operating in the U.S., the study investigated the determinants of international sourcing decisions. The authors found support for the hypothesis that international sourcing could be explained using international plant location theory. The significance of this finding is that it offers a new theoretical framework to spur much needed research on the topic of international sourcing.
TL;DR: The authors knits several evolving trends in the area of import sourcing into a theoretical framework in order to facilitate research in this under-researched topic and expose to practitioners the increasing strategic value of Import sourcing.
Abstract: The character of import sourcing for manufacturing has changed beyond the reach of current explanatory schemes. This study knits several evolving trends in the area of import sourcing into a theoretical framework in order to facilitate research in this under-researched topic and expose to practitioners the increasing strategic value of import sourcing.
TL;DR: In this paper, the authors investigated the existence of country-of-origin effects occurring in foreign investments in the People's Republic of China (PRC) and found that the pattern of foreign investments should vary by country of origin.
Abstract: This paper investigates the existence of country-of-origin effects occurring in foreign investments in the People's Republic of China The eclectic theory of international production posits that the pattern of foreign investments should vary by country of origin This aspect of the eclectic theory is difficult to test directly, especially in developing countries, because of the relatively small numbers of foreign investment projects in a single country The data used in this research cover 1,665 Sino-foreign joint ventures (JVs) from 1979 to 1985, allowing a more reliable test of this aspect of the theory Statistical evidence suggests that country-of-origin effects are indeed present in foreign investment activities in China
TL;DR: In this article, an industry-wide, cross-sectional study concentrates on recent foreign exchange risk management practice and product usage of large Australian-based firms, using an empirical field study of seventytwo firms operating in Australia.
Abstract: This industry-wide, cross-sectional study concentrates on recent foreign exchange risk management practice and product usage of large Australian-based firms. Results are discussed from an empirical field study of seventy-two firms operating in Australia. Based on a statistical analysis of five firm-specific variables with six management-practice variables, conclusions are drawn on the foreign exchange risk management practices and financial product usage of firms operating in Australia.
TL;DR: In this article, the authors introduce the concept of procedural justice into the international management and explore the impact of process fairness on multinationals' ability to conceive and execute effective worldwide strategies, based on a two-phase longitudinal study of the decision-making dynamics of nineteen multinationals.
Abstract: This study addresses one of the most compelling questions in the field of international management: How can a multinational simultaneously pursue the double-ended objective of effectively conceiving and executing its worldwide strategy? Here we examine the ways in which the dynamics of the strategy-making process between head office and subsidiary units influence the multinational's ability to achieve these two objectives. Specifically, we introduce the concept of procedural justice, the intellectual root of which is grounded in social psychology and law, into the international management and explore the impact of process fairness on multinationals' ability to conceive and execute effective worldwide strategies. The results of this research are based on a two-phase longitudinal study of the decision making dynamics of nineteen multinationals. They provide support that the exercise of procedural justice is indeed a powerful way to organize the multinationals' strategy-making process. Procedural justice was found to significantly augment multinationals' ability to achieve this double-ended objective.
TL;DR: In this article, the authors developed a conceptual model of political risk based on the premise that host government intervention is related to specific objectives of the government vis-a-vis multinational firms.
Abstract: Two important aspects of political risk analysis that have not received much attention in the literature are (a) the reasons why multinational firms experience different types of intervention, and (b) the timing of intervention. In order to address these issues, this research develops a conceptual model of political risk based on the premise that host government intervention is related to specific objectives of the government vis-a-vis multinational firms. Information reflecting the attainment of objectives motivates the government to intervene in a given manner. The application of this model to the case of the Venezuelan petroleum industry from years 1947 to 1976 provides some support for this model and gives insight into the timing of specific types of intervention.
TL;DR: The authors compared samples of Canadian and Japanese MBA students using the Myers-Briggs Type Inventory (MBTI) and linked the findings to interaction difficulties reported in the literature, and found that the differences in cognitive style might also contribute to intercultural conflict.
Abstract: Many American and Canadian companies seeking to form joint ventures and alliances with Japanese companies, or to negotiate contracts with them, have discovered that the interaction can be difficult and frustrating. Value differences and preferences for different management practices have been identified that contribute to these interaction problems. However, little research has investigated potential differences in cognitive style that might also contribute to intercultural conflict. This study compares samples of Canadian and Japanese MBA students using the Myers-Briggs Type Inventory (MBTI) and links the findings to interaction difficulties reported in the literature.