Showing papers in "Journal of International Business Studies in 1996"
1,547 citations
TL;DR: In this article, the authors examined organizational characteristics, structural mechanisms and contextual factors that influence knowledge acquisition from the foreign parent in international joint ventures (IJVs) and in turn relate assessments of knowledge acquisition to IJV performance.
Abstract: In this paper, we examine organizational characteristics, structural mechanisms and contextual factors that influence knowledge acquisition from the foreign parent in international joint ventures (IJVs). We in turn relate assessments of knowledge acquisition to IJV performance. The data come from a survey of IJVs in the Hungarian context, where learning and knowledge acquisition from the foreign parent is thought to be particularly critical. Adaptation mechanisms, such as capacity to learn, articulated goals, and structural mechanisms, such as the provision of training, technology and managerial assistance by foreign parents, all were positively associated with the degree to which IJVs reported acquiring knowledge from their foreign parents. We also found limited support for the belief that cultural conflicts can impede knowledge acquisition, but only for two-party joint ventures with 50/50 equity arrangements. We also looked at the relationship between knowledge acquisition and different dimensions for evaluating IJV performance. The relationship between knowledge acquisition and performance was significant for all indicators of performance, through knowledge acquisition from the foreign parent and the organizational characteristics hypothesized to enhance IJV knowledge acquisition affected assessments of some dimensions of performance more than others. Our findings contribute to advancing knowledge about the relationship between organizational characteristics and organizational knowledge acquisition in IJVs, as well as the relationships between knowledge acquisition and different dimensions of IJV performance.
1,229 citations
TL;DR: This article examined the financial performance of European and Asian work units of one multinational company as a function of the congruence between management practices and national culture and found that work unit financial performance is higher when management practices in the work unit are congruent with the national culture.
Abstract: The financial performance of European and Asian work units of one multinational company is examined as a function of the congruence between management practices and national culture. Using Hofstede's five national culture dimensions and analogous management practices, we find that work unit financial performance is higher when management practices in the work unit are congruent with the national culture.
1,196 citations
TL;DR: This article reviewed the main models on the subject, identified their structural characteristics, evaluated the methodologies used for their validation, and analyzed the key conceptual issues emerging from their assessment, concluding that future research in the field should harness the eclectic contribution afforded by existing theory and, at the same time, enhance its status with contributions from marketing, business and other disciplines.
Abstract: Despite widespread research on the export behavior of firms, no integrative review of the empirical work in relation to export development models exists in the extant literature. This article reviews the main models on the subject, identifies their structural characteristics, evaluates the methodologies used for their validation, and analyzes the key conceptual issues emerging from their assessment. While valuable inroads into the mechanics and constituent parts of the export development process have been made, this avenue of empirical inquiry has attracted criticism on structural, methodological and conceptual grounds. Future research in the field should harness the eclectic contribution afforded by existing theory and, at the same time, enhance its status with contributions from marketing, business and other disciplines.
1,041 citations
TL;DR: The authors found that psychically close countries are more easily understood than distant ones; and offer more familiar operating environments; however, the psychic distance paradox is that operations in these countries are not necessarily easy to manage, because assumptions of similarity can prevent executives from learning about critical differences.
Abstract: Companies tend to begin their internationalization process in countries that are ‘psychically’ close. Researchers describe the sequence of entry that firms follow and the mode of entry they choose. They suggest that psychically close countries are more easily understood than distant ones; and offer more familiar operating environments. Although not prescriptive, an unstated conclusion can be drawn linking sequence of entry to performance. Evidence from thirty-two Canadian retail companies shows that only seven (22%) were functioning successfully in the United States. The psychic distance paradox is that operations in psychically close countries are not necessarily easy to manage, because assumptions of similarity can prevent executives from learning about critical differences. Moreover, empirical evidence from 271 CEOs confirms greater cultural differences between Canada and the U.S. than assumed previously. Modifications are suggested to improve the psychic distance concept.
957 citations
TL;DR: In this article, a behavioral approach is used to understand the ex-post maintenance of cross-border marketing partnerships and identify the antecedents of trust and performance in such partnerships.
Abstract: Existing research on international partnerships focuses primarily on the ex ante structuring of interorganizational relationships This study departs from this research by taking a behavioral approach to understand the ex post maintenance of cross-border marketing partnerships A conceptual model is developed by identifying the antecedents of trust and performance in such partnerships The model is empirically tested on a sample of US firms having distributor and licensing relationships with firms from Asia, Europe, and Central/South America Findings support the importance of bilateral relational norms and informal monitoring mechanism in building interorganizational trust and improving market performance of international partnerships
794 citations
TL;DR: In this paper, a life cycle framework was proposed, and used to explore the factors associated with the gain, development and loss of mandates by subsidiaries, and it was shown that there is a risk in having a full-scope world product mandate because it is possible to become marginal to the corporate strategy.
Abstract: A subsidiary mandate is a business, or element of a business, in which the subsidiary participates and for which it has responsibilities beyond its national market. This research studied thirty-one mandates in six Canadian subsidiaries of U.S.-owned multinational corporations. A life-cycle framework was proposed, and used to explore the factors associated with the gain, development and loss of mandates by subsidiaries. Two key findings emerged. First, it was shown that there is a risk in having a full-scope world product mandate, because it is possible to become marginal to the corporate strategy. Second, it was observed that the engine of subsidiary growth is its distinctive capabilities, and that for a mandate to be effective it must be built on those capabilities. Implications for mandate sustainability are proposed on the basis of these two insights.
586 citations
TL;DR: In this article, the authors describe the systems that operate in five leading industrial countries -Germany, Japan, France, USA and UK -to establish two basic principles of good corporate governance and show how they are applied in each country.
Abstract: This study describes in turn the systems that operate in five leading industrial countries - Germany, Japan, France, the USA and the UK. It establishes two basic principles of good corporate governance and shows how they are applied in each country - indicating where methods vary and how most countries fall short of the ideal. The book concludes by highlighting the UK's strengths and weaknesses, and calls for a thorough overhaul of policy.
542 citations
TL;DR: In this paper, a LISREL model is proposed to analyze cooperation in international business relationships between suppliers and customer firms. But the model is limited to a sample of 136 business relationships.
Abstract: Cooperative relationships between firms can be better understood if they are examined in the context of a network of connected business relationships. Based on research on business relationships and business networks, this paper formulates a LISREL model that analyses cooperation in international business relationships between suppliers and customer firms. Theory suggests that cooperation can raise the value of business relationships, and that business network connections have an impact on cooperation. The model is investigated in a sample of 136 international business relationships. The analysis shows that relationship profitability is directly affected by relationship commitment and, indirectly through commitment, by business network connections.
520 citations
TL;DR: In this article, the authors proposed three means (channels) of overcoming location-based disadvantages of Japanese joint ventures in Southeast and East Asia, and found that partnering with local firms (the first channel) can be a primary strategy for accessing local knowledge and improving JV performance.
Abstract: Foreign firms in host country environments frequently face location-based disadvantages. This study proposes three means (channels) of overcoming local knowledge disadvantages. Based on a sample of 558 Japanese joint ventures (JVs) located in Southeast and East Asia, we find that partnering with local firms (the first channel) can be a primary strategy for accessing local knowledge and improving JV performance. JV experience in the host country (the second channel) also mitigates local knowledge disadvantages and leads to increased JV performance. The third channel, the foreign parent's host country experience, leads to increased performance in the absence of a local partner. However, when a JV is formed with a local partner, increased parent experience in the host country leads to decreased performance suggesting that the need for a local partner declines as parent experience in a host country increases.
495 citations
TL;DR: In this paper, the authors investigated the formation and outcomes of trust between partners in a specific form of strategic alliance not often studied, the non-equity-based international cooperative alliance (ICA).
Abstract: This study investigated the formation and outcomes of trust between partners in a specific form of strategic alliance not often studied, the non-equity-based international cooperative alliance (ICA). Because a component of the investigation involved the reciprocal effects of trust in the ICA relationship, dyadic data were gathered from Japanese and U.S. partners in 101 ICAs based in Japan. Results showed that partner cultural sensitivity is an important contributor to trust building for both sides of the dyad. Complementarity with partner contributed to trust for the U.S. but not for the Japanese. Similarity between ICA partners led to trust for the Japanese but not the U.S. partner. The results also showed strong reciprocal effects of trust in the relationship, and that trust of the ICA partner leads the individual firm to integrate the ICA into its own strategic framework.
TL;DR: In this paper, the authors explored the factors that contribute to the explanation of FDI in the United States by country of origin of investment, and found that the main significant positive influences are home country's exports to the USA and home country market size.
Abstract: Given the large size and rapid growth of foreign direct investment in the United States, this subject is a central concern of U.S. firms and U.S. government policymakers. This study explores the factors that contribute to the explanation of FDI in the United States by country of origin of investment. Evidence from the past twelve years shows that the main significant positive influences are home country's exports to the United States and home country market size. Significant negative influences include the home country's imports from the United States, the cultural and geographic distances of the home country from the United States, and the exchange rate (fx/$).
TL;DR: In this paper, the authors find that two characteristics of the transnational network, its BREADTH (number of foreign countries in which the MNC has operations) and DEPTH (the concentration of foreign subsidiaries in a few countries) are significant in explaining the value of operating flexibility.
Abstract: The returns to multinationality are estimated as the value of “operating flexibility.” Empirical measures of the return of multinationality require a precise specification of the extensiveness of the MNC's transnational network to measure the degree of multinationality. This precise, empirically grounded definition of multinationality has been absent from the academic literature to date. We address this omission and we find that two characteristics of the transnational network, its BREADTH (number of foreign countries in which the MNC has operations) and DEPTH (the concentration of foreign subsidiaries in a few countries) are significant in explaining the value of operating flexibility. In particular, we find that the returns to multinationality are maximized for firms with networks that have BREADTH, but not DEPTH. The role of market intangibles such as R&D and advertising on MNC market valuation is shown to depend on the flexibility regime.
TL;DR: In this article, the authors argue that internationalization is more complex than envisioned by this index and suggest that further refinement of the construct is necessary before constructing indices, and they also suggest that an index measure of the internationalization construct is superior to single variable measures on psychometric, content validity, criterion validity, reliability, and utilitarian grounds.
Abstract: Sullivan's [1994] suggestion that an index measure of the internationalization construct is superior to single-variable measures is critiqued on psychometric, content validity, criterion validity, reliability, and utilitarian grounds. We argue that internationalization is more complex than envisioned by this index and suggest that further refinement of the construct is necessary before constructing indices.
TL;DR: The authors examined the determinants of foreign equity ownership in joint ventures in China and found that eleven variables that impact foreign ownership preferences and concessions are examined, including advertising intensity, foreign capital input, country risk of China, investment amount, EJV contractual duration, cultural distance, competitive intensity and local partner state ownership, local partner alignment, foreign partner alignment and EJV location.
Abstract: This study examines the determinants of foreign equity ownership in joint ventures in China. Drawing upon Duning's ownership, locational and internalization paradigm and the literature on bargaining power, eleven variables that impact foreign ownership preferences and concessions are examined. These variables are advertising intensity, foreign capital input, country risk of China, EJV investment amount, EJV contractual duration, cultural distance, competitive intensity, local partner state ownership, local partner alignment, foreign partner alignment, and EJV location. The empirical findings are largely consistent with the hypotheses. The empirical findings are largely consistent with the hypotheses. Further, interesting differences were found among U.S., European and Japanese firms with respect to the impact of these determinants.
TL;DR: In this article, the authors focus on international strategic technology partnerships, and the choice that companies have in terms of the organizational mode, either through complex inter-organizational modes involving equity-sharing, or contractual non-equity alliances.
Abstract: This paper focuses on international strategic technology partnerships, and the choice that companies have in terms of the organizational mode, either through complex inter-organizational modes involving equity-sharing, or contractual non-equity alliances. The empirical results show that the choice of particular mode of cooperation varies with the technological characteristics of sectors of industry. Joint ventures are disproportionately represented in relatively mature industries. Contractual alliances dominate strategic technology partnering in so-called high-tech industries.
TL;DR: The authors examines the notion that the multinational's nationality influences its foreign subsidiary ownership decisions and concludes that there are significant differences in ownership preferences among various nationalities that can be explained using cultural as well as economic variables, but that these differences may become weaker in larger multinationals.
Abstract: This paper examines the notion that the multinational's nationality influences its foreign subsidiary ownership decisions. It identifies theoretically meaningful constructs to represent nationality and examines, under carefully controlled conditions, their influence on subsidiary ownership preferences in American and European multinationals. The paper concludes that there are indeed significant differences in ownership preferences among various nationalities that can be explained using cultural as well as economic variables, but that these differences may become weaker in larger multinationals.
TL;DR: The authors examined whether there are systematic differences in the traditional capital structure determinants between MNCs and DCs, and if there are additional, uniquely international factors that may help explain the capital structure choice of multinational corporations.
Abstract: This paper examines whether there are systematic differences in the traditional capital structure determinants between MNCs and DCs, and if there are additional, uniquely international factors that may help explain the capital structure choice of multinational corporations. The results suggest that specific international factors such as political risk and exchange rate risk are relevant to the multinational capital structure decision, that multinationals have higher agency costs than purely domestic firms, and that international diversification does not lower earnings volatility for multinational corporations.
TL;DR: The authors explored the role of culture in moderating consumers' opinion exchange behavior and found that the cultural characteristics of power distance and uncertainty avoidance influence the focus of consumers' product information search activities, but not their tendency to share product-related opinions with others.
Abstract: Research conducted primarily in the United States has shown that interpersonal influence arising from opinion exchange behavior is an important factor in consumers' product adoption and brand choice decisions. An important managerial question in the international arena is whether information-giving and seeking behaviors depend on culture. In a study representing eleven nationalities, we explore the role of culture in moderating consumers' opinion exchange behavior. Results indicate that the cultural characteristics of power distance and uncertainty avoidance [Hofstede 1980] influence the focus of consumers' product information search activities, but not their tendencies to share product-related opinions with others. Following earlier opinion leadership studies, we find that individual characteristics such as product category interest and involvement are most indicative of active opinion leadership behavior.
TL;DR: In this paper, the authors show that in uncertain environments ownership and internalization advantages may be negatively rather than positively associated with FDI, and that this reversal from extant theory occurs because ownership advantages often serve to make FDI delayable, while internalization advantage often serves to make it less reversible.
Abstract: We show that in uncertain environments ownership and internalization advantages may be negatively rather than positively associated with FDI. This reversal from extant theory occurs because ownership advantages often serve to make FDI delayable, while internalization advantages often serve to make it less reversible. When FDI becomes either more delayable or less reversible, it is less likely to occur at a point in time. Our approach enriches the “who,” “where” and “why” explanations offered by current FDI theory to incorporate the question of “when.”
TL;DR: In this article, the authors make their assumptions explicit, for example, the set of strategies available to the ftrms that they are studying is clearly specilled and the details of each strategy are spelled out.
Abstract: Over the last twenty years, the application of economic theory to international business studies has sharpened the analysis of key issues. Economists aim to ask the right questions and to answer these questions in a rigorous way. This means making their assumptions explicit, for a start. The set of strategies available to the ftrms that they are studying is clearly specilled and the details of each strategy are spelled out.
TL;DR: In this paper, the transition process within established multinational corporations (MNCs) in moving from decentralized to network-based structures is investigated and models, distinguishing adjustments altering how the MNC defines its "global" strategy, where it locates key resources, and how it structures and manages operations.
Abstract: This paper investigates and models the transition process within established multinational corporations (MNCs) in moving from decentralized toward network-based structures. Whereas there has been substantial research on various MNC models, there has been little longitudinal research on the movement toward projected network-based models. This paper develops an evolutionary perspective of this transition, distinguishing adjustments altering how the MNC defines its “global” strategy, where it locates key resources, and how it structures and manages operations. It argues that rather then being a planned process, each phase represents a viable strategic response to then-existing challenges and opportunities. The paper also argues that the focus of the process shifts over time, initially focusing on building organizational linkages and adjusting the quantity and nature of resources within dispersed units, and later shifting toward reallocating resources and roles across units.
TL;DR: In this article, a simple stochastic model is employed to investigate how transaction cost and strategic option considerations interact to influence a firm's evaluation of collaborative venturing as a market entry mode.
Abstract: This paper employs a simple stochastic model to investigate how transaction cost and strategic option considerations interact to influence a firm's evaluation of collaborative venturing as a market entry mode. After demonstrating how uncertainty about the market and about the potential partner can add to the value of a collaborative venture, the paper explicates a condition under which the option to acquire or sell out generates a positive economic value for both of the partners. The interaction of transaction cost and strategic option considerations is then examined, and a number of testable hypotheses are proposed based on the theoretical analyses of the paper.
TL;DR: In a survey of local employees of joint venture hotels in China, it was found that procedural and performance-based distributive justice was related to job satisfaction, but interactional justice was not.
Abstract: In a survey of local employees of joint venture hotels in China, it was found that procedural and performance-based distributive justice was related to job satisfaction, but interactional justice was not. Comparison with other local employees was related to job satisfaction, but comparison with overseas employees was not. Senior managers reported a lower level of procedural and interactional justice, and senior managers and supervisors regarded their pay as less fair in comparison with local employees in state-owned hotels. Employees who worked with overseas Chinese and Japanese expatriates were less satisfied than those who worked with expatriates from the West, and this difference was explainable in terms of differences in perceived distributive justice.
TL;DR: In this paper, the authors examined the nature of technology and the process of its transfer in five service industries from parent companies to foreign affiliates and found that more technology transfer occurred when firms were more international, when affiliates were more recently established, and when parent ownership was lower in the affiliate.
Abstract: This study examines the nature of technology and the process of its transfer in five service industries from parent companies to foreign affiliates. Three principal research questions are posed: What is the key technology in each industry? What are the main methods for transferring this technology? How and why do technology and transfer methods differ across firms, industries and countries? The empirical analysis shows that key technologies were generally knowledge of/experience in the industry and methodology for producing the service. Transfer of the technology was mainly done through the training and transfer of experts: and organizational forms were wholly owned subsidiaries and international partnerships. More technology transfer occurred when firms were more international, when affiliates were more recently-established, and when parent ownership was lower in the affiliate. Some evidence exists that more firm-specific, jointly produced technology leads to higher ownership percentage and greater transfer to affiliates.
TL;DR: This article investigated cross-national differences in managerial values by means of Rokeach's value survey and found that broadminded, capable and courageous was the most important value dimension by managers from all twelve nations.
Abstract: This study investigated cross-national differences in managerial values. A total of 567 managers from twelve nations participated in the study. Managerial values were assessed by means of Rokeach's value survey. Factor analysis of the eighteen instrumental values included in Rokeach's Value survey revealed four underlying value dimensions. The value dimension that included the instrumental values broadminded, capable and courageous was ranked as the most important value dimension by managers from all twelve nations. National differences were found on three of the four value dimensions.
TL;DR: In this paper, the authors explored the impact of cross-national carriers of ethics on attitudes about questionable business practices and form of moral reasoning across Mexican, Spanish and U.S. MBAs.
Abstract: The study explores the impact of cross-national carriers of ethics on attitudes about questionable business practices and form of moral reasoning across Mexican, Spanish and U.S. MBAs. Results show substantial agreement across cultures on twelve personally most objectionable practices, while form of moral reasoning varied significantly. Social cognitive theory is used to address the theoretical and practical implications.
TL;DR: In this paper, an exploratory study examines empirically expatriate performance appraisal practices for U.S. multinational firms and assesses how such practices relate to the perceived accuracy of EPAs.
Abstract: This exploratory study examines empirically expatriate performance appraisal (EPA) practices for U.S. multinational firms and assesses how such practices relate to the perceived accuracy of EPAs. From a sample of U.S. multinationals, the results suggest that a balanced set of raters from host and home countries and more frequent appraisals relate positively to perceived accuracy of EPAs. The data suggest, however, that most respondent firms did not follow these practices. In addition, the use of standardized and customized EPA evaluation forms relates negatively to perceived EPA accuracy. Implications of these exploratory findings for research and practice are also discussed.
TL;DR: In this paper, the authors test the dimensionality of the scales from a statistical viewpoint and find that the statistical determination is reasonably consistent with Miller's conceptual determination, and also investigate Miller's measure by comparing scales, conceptualized by Miller, with ones determined by factor analysis.
Abstract: Increasingly, scholars have suggested that there is a need to approach the problem of international risk from a multidimensional perspective [Brouthers 1995; Miller 1993; Shan 1991]. Miller [1992, 1993] developed and tested the most comprehensive framework to date. Miller [1993] showed high inter-rater reliability in his measure of Perceived Environmental Uncertainty (PEU). In this paper we test the dimensionality of the scales from a statistical viewpoint and find that the statistical determination is reasonably consistent with Miller's conceptual determination. We also investigate Miller's measure by comparing scales, conceptualized by Miller, with ones determined by factor analysis. We test the reliability of these scales and find that the conceptualized scales have generally high internal consistency in samples of both manufacturing and service firms. However, the findings also suggest that several changes in the PEU measure are warranted, resulting in a refinement of Miller's measure, which we have labeled PEU 2.