Showing papers in "Journal of International Business Studies in 1995"
TL;DR: This paper examined factors influencing the voluntary disclosures of three types of information (strategic, non-financial, financial) contained in the annual reports of MNCs from the U.S., U.K. and Continental Europe.
Abstract: This study examines factors influencing the voluntary disclosures of three types of information (strategic, nonfinancial, financial) contained in the annual reports of MNCs from the U.S., U.K. and Continental Europe. While company size, country/region, listing status, and, to a lesser extent, industry are the most important factors explaining voluntary disclosures overall, the importance of the factors varies by information type.
1,394 citations
TL;DR: In this paper, the authors discuss the implications of the advent of alliance capitalism for our theorizing about the determinants of MNE activity, and argue that due to the increasing porosity of the boundaries of firms, countries and markets, the eclectic, or OLI, paradigm of international production needs to consider more explicitly the competitive advantages arising from the way firms organize their inter-firm transactions, the growing interdependencies of many intermediate product markets, and the widening of the portfolio of the assets of districts, regions and countries to embrace the external economies of interdependent activities.
Abstract: This article discusses the implications of the advent of alliance capitalism for our theorizing about the determinants of MNE activity. In particular, it argues that, due to the increasing porosity of the boundaries of firms, countries and markets, the eclectic, or OLI, paradigm of international production needs to consider more explicitly the competitive advantages arising from the way firms organize their inter-firm transactions, the growing interdependencies of many intermediate product markets, and the widening of the portfolio of the assets of districts, regions and countries to embrace the external economies of interdependent activities.
1,269 citations
TL;DR: A quantitative analysis of the country-of-origin effect on product perceptions and purchase intentions was conducted by as mentioned in this paper, who found that verbal product descriptions produced larger COO effect sizes than did the presence of actual products.
Abstract: This note reports a quantitative analysis of the country-of-origin (COO) effect. Based on fifty-two articles or papers containing sixty-nine independent studies and 1,520 effect sizes, an analysis of fifteen study characteristics revealed that country-of-origin effects are only somewhat generalizable. Using omega-squared as the measure of effect size, verbal product descriptions produced larger COO effect sizes than did the presence of an actual product. Likewise, single-cue studies produced larger COO effect sizes than did multiple-cue studies, and larger samples produced effect sizes that on average were greater than those produced by smaller samples. The size of an observed COO effect was a function of whether the dependent variables was a quality/reliability perception or a purchase intention; the average effect size of quality/reliability perceptions was .30, whereas the average effect size for purchase intentions was .19. Purchase intentions were most susceptible to methodological artifacts than were quality/reliability perceptions. Study findings selectively confirm and refute common beliefs regarding the impact of a country-of-origin cue on product perceptions and purchase intentions.
943 citations
TL;DR: In this paper, a three-fold typology of subsidiary roles (world mandate, specialized contributor, local implementer) was induced from the literature and its empirical validity was confirmed by adopting a configurational approach, and explored the ways in which subsidiary "structural context" varies across subsidiary role types.
Abstract: 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.
843 citations
TL;DR: In this paper, two recently developed empirical techniques, Multiple Group LISREL and Optimal Scaling, are used to diagnose cross-national measurement equivalence for ordinal-level items.
Abstract: Many researchers have pointed out that it is necessary to ensure measurement equivalence in cross-national comparative research. Three aspects of measurement equivalence, translation, metric, and calibration equivalence, are necessary to establish the cross-national reliability and validity of items used to measure theoretical constructs. This paper discusses these issues and proposes two recently developed empirical techniques, Multiple Group LISREL and Optimal Scaling, for use in diagnosing cross-national measurement equivalence. These techniques are illustrated by reanalysis of a pioneering U.S. and Japanese study. The two techniques yield convergent results, indicating measurement equivalence for some, but not all, ordinal-level items under consideration. The findings demonstrate that the proposed methods are useful diagnostic tools for exploring measurement equivalence. Several suggestions for reducing the likelihood of problems with measurement equivalence and a number of methods for dealing with items where lack of equivalence persists are also discussed.
837 citations
TL;DR: This article examined the effects of policy and non-policy variables on the location of new U.S. direct investment abroad (as distinct from reinvested earnings of existing affiliates), using 1977 and 1982 Benchmark data.
Abstract: This study examined the effects of policy and non-policy variables on the location of new U.S. direct investment abroad (as distinct from reinvested earnings of existing affiliates), using 1977 and 1982 Benchmark data. The data revealed statistically significant effects for investment incentives (positive), performance requirements (negative), and host country effective tax rates (negative) with interesting differences between the two time periods and between developed versus developing countries. Significance was also found for non-policy variables such as political stability, cultural distance, GDP per capita, and infrastructure.
648 citations
TL;DR: In this article, the authors argue that overemphasis on the outcome has resulted in a neglect of the social processes underlying the outcome, and argue that a shift in focus from ownership to relational dynamics is encouraged.
Abstract: 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.
600 citations
TL;DR: In this article, the authors discuss four measurement issues, namely (1) standardized versus unstandardized coefficients, (2) the impact of measurement error and unequal reliability, (3) the overall error rate and simultaneous analysis and (4) construct equivalence.
Abstract: Substantive inference from cross-national studies have important implications for theory (e.g., because they reveal insights into generalizability and boundary conditions) and managerial practice (e.g., because they offer guidelines to MNC managers). However, few empirical studies attend to measurement issues involved in cross-national research, and still fewer recognize the risk of inferential errors that are likely to occur by overlooking measurement issues. We discuss four measurement issues, namely (1) standardized versus unstandardized coefficients, (2) the impact of measurement error and unequal reliability, (3) the overall error rate and simultaneous analysis and (4) construct equivalence. Using illustrate examples we demonstrate the nature of each of these problems, the likely impact they can have on substantive conclusions, and approaches for tackling these problems. Additionally, we reanalyze a recently published three-nation study by Dubinsky, Michaels, Kotabe, Lim and Moon [1992] to clarify these measurement concerns, highlight a methodological approach, and delineate the extent and severity of inferential errors. Our reanalysis shows that the interactive effects of these measurement issues are pervasive, complex and unpredictable. We close with implications for cross-national research in general.
541 citations
TL;DR: This article examined the preferences of 4405 individuals in forty-three organizations from sixty-eight different countries for four innovation championing roles: the organizational maverick, the network facilitator, the transformational leader and the organizational buffer.
Abstract: This paper examines the preferences of 4405 individuals in forty-three organizations from sixty-eight different countries for four innovation championing roles: the organizational maverick, the network facilitator, the transformational leader and the organizational buffer. The study shows that the cultural value of uncertainty acceptance is significantly associated with preferences for these four championing roles. It suggests that uncertainty-accepting societies may be more innovative than uncertainty-avoiding societies because of the greater legitimacy of those roles.
474 citations
TL;DR: The authors found that while Gray's [1988] model has statistically significant explanatory power, it is relatively weak in explaining extant professional and regulatory structures from a cultural base and that both the development of financial markets and levels of taxation enhance the explanations offered by Gray [1988].
Abstract: This paper attempts to test the theory developed by Gray [1988] linking accounting values and systems with Hofstede's [1980] cultural constructs. Based on data from twenty-nine countries, it finds that while Gray's [1988] model has statistically significant explanatory power, it is best at explaining actual financial reporting practices and is relatively weak in explaining extant professional and regulatory structures from a cultural base. This paper further finds that both the development of financial markets and levels of taxation enhance the explanations offered by Gray [1988].
405 citations
TL;DR: In this paper, the authors argue that in Europe there is only limited acceptance of the organizational autonomy upon which the concept in based, and therefore, different approaches to the notion of human resource management are required.
Abstract: The concept of human resources management (HRM) has been much debated in the literature. The concept developed initially from work in the U.S.A. in the 1960s and 1970s and since then has been adopted increasingly around the world. This paper argues that in Europe there is only limited acceptance of the organizational autonomy upon which the concept in based, and that, therefore, different approaches to the notion of human resource management are required. External constraints are analysed and a new model of the concept that would encompass EuroHRM is proposed.
TL;DR: This article investigated the antecedents of commitment in IJVs from the major partners' perspective and found that commitment is largely a function of the perceived benefits of the relationship, i.e., satisfaction and economic performance.
Abstract: This study investigated the antecedents of commitment in IJVs from the major partners' perspective. Data were gathered from Japanese and local partners in IJVs located in eleven countries and analyzed in structural equations models. Results indicated that commitment is largely a function of the perceived benefits of the relationship, i.e., satisfaction and economic performance. However, exploration analyses of differences between local partners and the Japanese suggest that the effects of psychological antecedents might be contingent on the strategic intent of the relationship.
TL;DR: In this article, a case study and simulation model indicate that demand-related disruptions created substantial and unexpected costs in terms of expedited shipping, high inventories, and lower demand fulfillment.
Abstract: An international supply chain is conceptualized as a complex, dynamic system in which disruptions interact with long shipping and lead times to generate costs. Findings from a case study and simulation model indicate that demand-related disruptions created substantial and unexpected costs in terms of expedited shipping, high inventories, and lower demand fulfillment. Production-related disruptions declined over time, but demand-related disruptions did not. Implications for management are discussed.
TL;DR: The authors found that job autonomy and material life satisfaction were key predictors for both internal and external turnover tendencies of expatriate turnover in a survey with 155 expatriates in the US.
Abstract: Foreign postings for executives are costly undertakings for multinational corporations, especially when they fail. Yet little research has been done on the causes of expatriate turnover. This 155-expatriate survey assesses individual, organizational/work and environmental influences on both internal and external turnover tendencies. It was found that job autonomy and material life satisfaction were key predictors for both internal and external turnover tendencies. Only for organizational turnover did job autonomy supersede material life satisfaction as the lead predictor of turnover tendencies. American expatriates attach much importance to maintaining living standards in postings to foreign locations.
TL;DR: In this paper, the authors presented the results of a study linking the performance of international joint ventures and alliances set up in the global aerospace industry to their strategic and organizational features, and evaluated the economic performance of various types of alliances on the basis of industry expert opinions.
Abstract: This paper presents the results of a study linking the performance of international joint ventures and alliances set up in the global aerospace industry to their strategic and organizational features. In a first stage, an empirically based taxonomy of the observed alliances is generated. Then, the economic performance of various types of alliances is evaluated on the basis of industry expert opinions, and the difference in performance of different alliance types is tested.
TL;DR: In this article, the authors examined twelve characteristics of a sample of Korean firms with partners in developing countries (LDCs) and compared them with existing research where (a) developed country firms have linked with firms in other developed countries, and (b) local firms in developing country.
Abstract: Little has been reported on joint ventures between firms from newly industrialized countries and developing countries. This paper examines twelve characteristics of a sample of Korean firms with partners in developing countries (LDCs) and contrasts them with existing research where (a) developed country firms have linked with firms in other developed countries, and (b) developed country firms have linked with local firms in developing countries. As part of the analysis, ten hypotheses were formulated and tested.
TL;DR: In this paper, the authors investigated the moderating effects of sourcing-related factors on the relationship between sourcing strategy and a product's strategic and financial performance, and found that product innovation, process innovation and asset specificity were significant moderator variables for financial, but not strategic, performance.
Abstract: Using a contingency model of global sourcing strategy, this study investigated the moderating effects of sourcing-related factors on the relationship between sourcing strategy and a product's strategic and financial performance. The results lent some support to the contingency model of global sourcing strategy in that product innovation, process innovation and asset specificity were significant moderator variables for financial, but not strategic, performance. However, the results provided no support for bargaining power of suppliers and transaction frequency as moderator variables. In other words, in achieving high financial performance for a product, whether a particular sourcing strategy should be used for a particular product depended on the levels of product innovation, process innovation and asset specificity.
TL;DR: In this article, the authors argue that the driving factors of these location choices have differing influences on indigenous and foreign investors, and that foreign investors suffer from a condition of adverse asymmetry in information costs compared to insiders.
Abstract: The literature on foreign direct investments (FDIs) has analysed the location strategies of multinational enterprises across national borders, but there have been few studies of location decisions by foreign investors within the borders of a single country. The paper argues that the driving factors of these location choices have differing influences on indigenous and foreign investors. Specifically, foreign investors suffer from a condition of adverse asymmetry in information costs compared to insiders. Thus, foreign investors' decisions on the location of their activities within a host country mainly reflect a rational responses to the existence of information costs.
TL;DR: The authors argue that there is less consensus in our understanding of internalization and transaction costs than commonly supposed, and that a fuller vision of the terrain already mapped and that which is yet uncharted would provide a more useful basis for exploration and discovery.
Abstract: Debate is an indication that an issue warrants discussion. The comments of James Love and Donald McFetridge in this issue are fine statements that articulate a received wisdom.' Their comments differ with each other, and these differences remind us that there is less consensus in our understanding of internalization and transaction costs than commonly supposed. If we do not address all of the commentators' specific points, it is not for lack of appreciation, but because it is our belief that a fuller vision of the terrain already mapped and that which is yet uncharted would provide a more useful basis for exploration and discovery. A listing of issues is the task of a referee, while a published debate might perform a useful task by laying out the contours of the research tradition and future.
TL;DR: In this paper, the authors examined linkages between business strategy and human resource management (HRM) strategy in Japanese subsidiaries in the U.S. and found that matched strategies performed better than unmatched ones in terms of HRM-related performance measures such as rates of promotion and turnover.
Abstract: This study examines linkages between business strategy and human resource management (HRM) strategy in Japanese subsidiaries in the U.S. It investigates whether or not fit between a subsidiary's business strategy and its HRM strategy is associated with higher performance. The data show that subsidiaries with matched strategies performed better than unmatched ones in terms of HRM-related performance measures such as rates of promotion and turnover. Japanese subsidiaries with a business strategy/HRM strategy match were also more likely to experience better business performance versus competitors than were unmatched ones.
TL;DR: In this paper, two dimensions of culture used in this research, individualism and Confucian dynamism, are treated as if they are independent when in fact they appear to be highly interrelated.
Abstract: Hofstede and his associates have presented statistical evidence purporting to identify a link between national culture and economic growth. This note describes two problems with this line of research. First, two of the dimensions of culture used in this research, individualism and Confucian dynamism, are treated as if they are independent when in fact they appear to be highly interrelated. And second, culture is not a sufficient condition to explain economic growth and is related to other important factors that play a role in determining economic growth. The consequences of these problems on interpretation of the research findings are discussed and recommendations for future research directions are proposed.
TL;DR: In this article, the emphasis males and females place on leadership behaviors and styles across four countries characterized as two cultural dyads (Norway - Sweden and Australia - U.S.).
Abstract: This study investigates the emphasis males and females place on leadership behaviors and styles across four countries characterized as two cultural dyads (Norway - Sweden and Australia - U.S.). Previous gender comparisons and cross-cultural studies of leadership are reviewed. A framework for exploring leadership, consisting of five leadership behaviors and six leadership styles, is then presented and tested with questionnaire data from 209 managers across the four countries. Results demonstrate significant effects for gender and country, but no interaction effects, Post-hoc analyses suggest that across all four countries, male emphasize the goal setting dimension, while females emphasize the interaction facilitation dimension. Australians scored significantly differently than leaders in the other countries on interaction facilitation, benevolent autocratic style, and laissez-faire style. These findings are discussed in light of gender characteristics and cultural values.
TL;DR: In this article, the authors report the results of a large-scale survey among senior executives in the U.S., the UK, Germany, and Austria and find that country and industry type have significant effects both with regard to identification of ethical problems and the comprehensiveness of written ethics policies and ethics training.
Abstract: This paper reports the results of a large-scale survey among senior executives in the U.S., the U.K., Germany and Austria. The research provides empirical evidence on the variation of perceptions of ethical issues by country and type of firm. Our findings suggest that country and industry type have significant effects, both with regard to identification of ethical problems and the comprehensiveness of written ethics policies and ethics training.
TL;DR: This article explored how the tension between global integration and local responsiveness affects the dimensions and determinants of international human resource (IHR) strategy and found new and informative associations between the interorganizational interdependency variables (subsidiaries' dependence on parent's resources, local resources, and hot institutions) and IHR strategy.
Abstract: This paper explores how the tension between global integration and local responsiveness affects the dimensions and determinants of international human resource (IHR) strategy. To accomplish this, Jarillo and Martinez's [1990] business strategy framework for parents and their subsidiaries was recast in an IHR strategy setting. Then, the relationships between the two dimensions of IHR strategy that emerged, global integration and local responsiveness, and a set of interorganizational interdependency variables were explored. Several new and informative associations between the interorganizational interdependency variables (subsidiaries' dependence on parent's resources, local resources, and hot institutions) and IHR strategy were observed in a sample of one hundred subsidiaries of Japanese, U.S. and European MNCs operating in Taiwan.
TL;DR: This article examined factors that influence firms' choices of foreign stock exchanges and found strong evidence that foreign listing locations are significantly influenced by financial disclosure levels and the level of exports to a given foreign country.
Abstract: This study aims to enhance our understanding of multiple listings by addressing the where question related to foreign listings. It examines factors that influence firms' choices of foreign stock exchanges. Based on a sample of 459 internationally traded MNCs, with at least one foreign listing on one of nine major stock exchanges (in eight countries) at year-end 1992, we find strong evidence that foreign listing locations are significantly influenced by 1) financial disclosure levels, and 2) the level of exports to a given foreign country.
TL;DR: In this article, a model of formal control used in managing activities performed in foreign markets is proposed. And theoretically derived contingency relationships are also proposed to assess the performance consequences of different formal control types, supporting the importance of internal and external sources of uncertainty in determining the type of control used.
Abstract: This study builds upon previous control research to propose a model of formal controls used in managing activities performed in foreign markets. Theoretically derived contingency relationships are also proposed to assess the performance consequences of different formal control types. The findings support the importance of internal and external sources of uncertainty in determining the type of control used. Partial support was also found for the premise that the fit between the type of control used and the type of uncertainty perceived will contribute to superior performance.
TL;DR: In this article, the benefits of portfolio investment in the stock markets of politically risky countries by evaluating the effects of political risk constraints on the performance of a portfolio of international stocks was examined.
Abstract: This paper examines the benefits of portfolio investment in the stock markets of politically risky countries by evaluating the effects of political risk constraints on the performance of a portfolio of international stocks. We use monthly data on political risk ratings and stock returns for a sample of thirty-six countries from April 1982 to December 1991. Ex-post and ex-ante portfolio selection strategies are developed to assess the gains from international diversification. Efficient sets are derived using a quadratic programming technique. We use four ex-ante portfolio strategies whose optimal portfolio weights are those of the equally weighted portfolio, the minimum-variance portfolio the certainty-equivalence tangency portfolio and the Bayes-Stein portfolio. The empirical findings, based on the performance tests of Jobson and Korkie [1981], suggest that diversification among politically risky countries improves the risk-return characteristics of optimal portfolios. However, the most striking benefit of the inclusion of politically risk countries in an international portfolio is the reduction in overall portfolio risk.
TL;DR: In this paper, the obsolescing bargain theory for manufacturing companies was enhanced by statistically testing the effects of nine explanatory variables on the static and dynamic manifestations of bargaining success, with longitudinal, firm-level data.
Abstract: This research attempts to enhance the obsolescing bargain theory, for manufacturing companies, by statistically testing the effects of nine explanatory variables on the static and dynamic manifestations of bargaining success, with longitudinal, firm-level data. In order to highlight those effects, it develops a conceptual framework that provides a broader context in which the primary variables operate. It demonstrates that the obsolescing bargain took effect in India over a fifteen-year period following restrictive legislation. Unlike previous research, this study measures the effect of benefits received by multinationals from the host government in exchange for equity dilution. American companies are found to retain a smaller share of their foreign ownership over time than British and other European multinationals. Some explanatory variables that have previously been found to influence level of foreign ownership (static bargaining success) are found to be less important, or have a different effect, in explaining proportion of foreign ownership retained (dynamic bargaining success).
TL;DR: In this paper, businesses competing as part of the global U.S. construction equipment industry were categorized into three subgroups according to the integration-responsiveness framework (I-R) in an attempt to further understand industry pressures confronting businesses that compete internationally.
Abstract: In this study, businesses competing as part of the global U.S. construction equipment industry were categorized into three subgroups according to the integration-responsiveness framework (I-R) in an attempt to further understand industry pressures confronting businesses that compete internationally. The results show that three generic strategies suggested by the I-R framework do appear in a single industry context: globally integrated, locally responsive and multifocal. Beyond providing additional insight into the nature of competition in a “single global industry,” several broad extensions to the integration-responsiveness framework are suggested.
TL;DR: In this article, the percentage of lawyers in total employment is introduced as a proxy for the internalization advantage that is associated with the presence of intangible assets, and strong empirical evidence in support of the intangible assets model of foreign direct investment is provided.
Abstract: This study provides strong empirical evidence in support of the intangible assets model of foreign direct investment. The percentage of lawyers in total employment is introduced as a proxy for the internalization advantage that is associated with the presence of intangible assets. Legal intensity is shown to be directly related to the level of U.S. foreign direct investment abroad for sixty-one manufacturing industries from 1982–1989.