Showing papers in "Journal of International Business Studies in 1999"

Knowledge transfer in international acquisitions

Abstract: This paper reports on a multimethod study of knowledge transfer in international acquisitions. Using questionnaire data we show that the transfer of technological know-how is facilitated by communication, visits & meetings, and by time elapsed since acquisition, while the transfer of patents is associated with the articulability of the knowledge, the size of the acquired unit, and the recency of the acquisition. Using case study data, we show that the immediate post-acquisition period is characterized by imposed one-way transfers of knowledge from the acquirer to the acquired, but over time this gives way to high-quality reciprocal knowledge transfer.

The Drivers of Foreign Direct Investment into Research and Development: An Empirical Investigation

Abstract: This paper examines the determinants of foreign direct investment (FDI) in research and development laboratories by 32 multinational enterprises in the pharmaceutical and electronics industries. The paper applies a dichotomous set of motives for FDI. Results from an econometric analysis of 136 laboratory investments show that relative market size and relative strength of a country's science base determine whether FDI in research and development is carried out in order to exploit existing firm-specific advantages, or in order to build up new firm-specific advantages. This holds true in similar form for Japanese, European and U.S. firms and across the two industries.

Learning to Compete in a Transition Economy: Experience, Environment, and Performance

Abstract: Does organizational learning as measured by experience in a host country affect international expansion performance? If so, does such a relationship between experience and performance hold over time? How do the environmental forces in the host country affect such a relationship? Focusing on organizational learning by multinational enterprises (MNEs) operating in a transition economy, this study answers these three critical questions by exploring the relationships among experience, environment, and performance at the subsidiary level. Based on a recent survey of 108 MNE subunits operating in China, we find that the intensity and diversity of host country experience is an important predictor of subunit performance. While the positive effect of the intensity of experience on performance diminishes over time, the impact of the diversity of experience on performance remains unchanged. Moreover, for MNEs experiencing greater environmental dynamism, complexity, and hostility, there is a stronger positive relationship between experience and performance.

Wealth, Culture, and Corruption

Abstract: This paper examines the impact of national wealth, income distribution, government size, and four cultural variables on the perceived level of corruption in a country. The study finds that corruption is significantly correlated to GNP per capita, power distance, masculinity, and uncertainty avoidance. Significant interaction effects occur in collectivistic and high power-distance countries. Suggestions for future research are developed.

An Empirical Examination of the Form of the Relationship Between Multinationality and Performance

Abstract: This paper reports findings from a study that systematically evaluated the form of the relationship between multinationality and performance. In contrast to most of the prior conceptualizations that rely on linear, monotonic models of the linkage, this study examined a curvilinear model that addresses both the costs and benefits associated with multinationality. It used time-series techniques to capture both the static and dynamic components of the relationship. Results show that increasing levels of multinationality bring significant performance benefits up to a certain optimum level beyond which benefits begin to decelerate, while costs accelerate.

Transfer of Marketing Know-How in International Strategic Alliances: An Empirical Investigation of the Role and Antecedents of Knowledge Ambiguity

Abstract: The competitive nature of knowledge transfer and the process of organizational learning between partners constitute a fundamental challenge for both academics and practitioners alike. By focusing on one type of competency - marketing know-how - this research examines the role of knowledge ambiguity pertaining to the process of knowledge transfer in international strategic alliances. Based on a cross-sectional sample of 151 multinationals and a structural equation methodology, this study empirically investigates the antecedents of knowledge ambiguity: tacitness, asset specificity, complexity, experience, partner protectiveness, cultural distance, and organizational distance. Further, the strength of the relationships between these theoretical constructs and ambiguity is examined in light of the possible moderating effects of collaborative experience, firm size, and the duration of the alliance entered. Consistently, tacitness emerges as the most significant determinant of knowledge transferability. Moreover, the effects of cultural distance, asset specificity, and prior experience are moderated respectively by the firm's level of collaborative experience, the duration of the alliance, and the firm's size.

Dimensions, Determinants, and Differences in the Expatriate Adjustment Process

Abstract: We comprehensively test the Black, Mendenhall, and Oddou (1991) model of the dimensions and determinants of adjustment to international assignments. We also expand the model to examine two individual factors (i.e., previous assignments and language fluency) and three positional factors (i.e., hierarchical level, functional area, and assignment vector) as moderators of adjustment determinants. Surveys were completed by 452 expatriates from 29 different countries assigned to 45 host countries by large multinational firms. The multi-dimensionality of adjustment was investigated and confirmed. Support for the expanded Black et al. (1991) model was found. Several significant moderating effects emerged, showing different patterns of adjustment for those with different amounts of previous expatriate experience and levels of host country language fluency. Hierarchical level and assignment vector were also important moderators, but the effects for functional area were generally weak.

Guanxi Versus the Market: Ethics and Efficiency

Abstract: Guanxi refers to a Chinese system of doing business on the basis of personal relationships, and it is representative of the way that business is done throughout much of the non-western world. In this paper we first evaluate guanxi from an ethical perspective, and then attempt to shed light on the sources of its economic advantages and disadvantages through the use of a simple mathematical model. Finally, we point out how eastern and western business practices may already be converging toward systems based on more complete models of trust to deal with the conditions of progress coupled with uncertainty that form our new economic reality.

Doing Business in the 21st Century with the New Generation of Chinese Managers: A Study of Generational Shifts in Work Values in China

Abstract: Our goal is to develop a profile of Chinese managers, and in particular a profile of the New Generation of Chinese managers. The purpose for developing this profile is primarily to provide relevant information for non-Chinese business people, especially Westerners, who plan to engage in business in China. This profile is based on measures of individual values (Individualism, Collectivism and Confucianism) relevant to China and business. Our findings suggest that the New Generation manager is more individualistic and more likely to act independently, while taking risks in the pursuit of profits. However, these New managers are, likewise, not forsaking their Confucian values. Thus, they may be viewed as crossverging their Eastern and Western influences, while on the road of modernization.

A Measure of Export Market Orientation: Scale Development and Cross-cultural Validation

Abstract: This study reports on the construction and psychometric assessment of a measure of export market orientation. Four multi-item scales were developed showing strong evidence of reliability and convergent, discriminant, and nomological validity in samples of U.K. and Dutch exporters. Further analysis revealed full invariance of the final measure across the two country samples. Several suggestions for applying the measure in substantive research are offered.

Information Internalization and Hurdle Rates in Small and Medium Enterprise Internationalization

Abstract: We investigate the role of information in the internationalization of small and medium enterprises (SMEs). Information internalization is fundamentally antecedent to SME internationalization and is being facilitated increasingly by recent important trends. We offer a conceptual explanation and related propositions on information internalization, emphasizing hurdle rate theory for ascertaining the acceptability of firms' internationalization projects.

The Impact of Government Policies on Foreign Direct Investment: The Canadian Experience

Abstract: The purpose of this paper is to identify, using the framework of a statistical model, the extent to which policy changes in Canada specifically directed toward inward foreign direct investment (FDI) have influenced both capital outflows to Canada and capital outflows from Canada. The paper adds to the literature concerned with how public policies targeted specifically at FDI have altered capital inflows, and uniquely links such policies to outward direct investment (ODI). We examine specifically the effects of major policy changes toward FDI implemented by the Canadian government over the period 1950-1995. In Canada's case, free-trade agreements (FTA and NAFTA) appear to have significantly increased levels of inward and outward foreign direct investment; however, Canada's attempt to screen FDI via the Foreign Investment Review Agency (FIRA) had no significant effects on either FDI or ODI.

International Joint Venture Instability: A Critique of Previous Research, A Reconceptualization, and Directions for Future Research

Abstract: This paper conducts an in-depth critique of previous research on international joint venture instability by pointing out its major limitations: lack of clear conceptualizations and consistent operationalizations, lack of clarity in the relationship with performance, static focus on the eventual destination rather than developmental processes, and lack of managerial relevance. To overcome these deficiencies, we propose a significant reconceptualization in which instability is defined as a neutral, dynamic, process-based, and multifaceted phenomenon. Directions for future research are provided.

The Impact of Order and Mode of Market Entry on Profitability and Market Share

Abstract: 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.

Leadership and Organizational Justice: Similarities and Differences across Cultures

Abstract: International management scholars and practitioners agree that managers cannot simply assume that leadership behaviors effective in one culture can be readily transferred to other cultures. This study examines the relationship of transformational leadership and leader member exchange to organizational justice and job satisfaction in five separate cultures. Results indicate that while there is consistent support for some of the proposed linkages, there are also some interesting differences across cultures. Implications for theory and future research on international business are discussed.

Decision Specific Experience in Foreign Ownership and Establishment Strategies: Evidence from Japanese Firms

Abstract: In this paper, we examine the importance of decision specific experience for a multinational firm's foreign ownership structure and establishment mode decisions. A unique procedure to measure the decision specific experience construct is developed. Based on data for the period 1969–1991, we find strong empirical evidence from experiences of Japanese firms to support the hypotheses that firms tend to select ownership structures and establishment modes based on their experiences with similar ownership structures and establishment modes in the past.

Trade, Foreign Direct Investment, and R&D Spillovers

Abstract: Attempts to measure the spillover effects of multinational enterprises on host countries have generally been cross-sectional and limited to labour productivity in manufacturing for a single country. Recent work in growth theory has measured the extent to which growth in total factor productivity in a country depends not only on domestic RD the importance of the trade channel is much reduced once FDI is included; and the overall spillovers increase significantly with the inclusion of FDI.

Intra-cultural Variation: Evidence and Implications for International Business

Abstract: This paper discusses the methodological and theoretical significance of intra-cultural variation (ICV)—the population distribution of a characteristic within a culture. A Monte Carlo study shows that ICV has substantial influence on the statistical power of cross-cultural tests. Therefore, studying ICV is methodologically important if we are to understand inconsistent findings and design cross-cultural studies with enough statistical power. Moreover, an examination of the cultural means and ICVs of 42 cultures shows that ICV is as large as the variation of cultural means across cultures and its relationship to cultural means is not definite. A model based on multiple disciplines is proposed to cast ICV in a nomological net and to illuminate several avenues for future research. Practical implications are also discussed.

The Distinction between Stable and Dynamic Cross-cultural Competencies: Implications for Expatriate Trainability

Abstract: Existing research fails to distinguish between stable cross-cultural (C/C) competencies (e.g., personality traits) and dynamic ones. Yet, stable competencies may constrain trainability in the dynamic C/C skills that are critical for C/C adjustment. Accordingly, this distinction is drawn using Black & Mendenhall's [1990] 3-dimensional typology of C/C competencies as a framework. Operationalizations for the C/C competencies are suggested. The practical and theoretical implications for expatriate management are then discussed.

Is Dunning's Eclectic Framework Descriptive Or Normative?

Abstract: Can Dunning’s OLI (Ownership, Location, Internalization) framework be used to predict the best performing international entry modes or merely the most commonly selected modes? Using data from German and Dutch firms investing in Central and Eastern Europe, we investigate the relationship between Dunning’s OLI variables, entry mode selection and managerial satisfaction with firm performance We found empirical support for Dunning’s framework as both a descriptive and a normative model

A Framework for Culture Assessment

Abstract: Understanding the nature and influences of culture is central to international business. Such inquiry presupposes knowing that the cultural grouping(s) of a study is a valid unit of analysis, which is critical in that the estimation of culture effects can vary based on the unit definition. Unfortunately, perhaps out of convenience, international studies often simply use a country-based definition of culture. In a desire to facilitate further development in understanding culture effects, in this paper, we propose a framework by which valid cultural groupings may be assessed.

Diaspora interest in homeland investment

Abstract: This paper examines four diaspora communities resident in the United States that were targeted by their homelands as foreign investors during the 1990s. The homelands comprise Armenia, Cuba, Iran, and Palestine. We pose the question: What are the determinants of interest in homeland investment, and can they be generalized across the four communities? The paper explores concepts of ethnic advantage, altruism, homeland orientation, and perceptions of business impediments, as well as investigating the role of demographic factors regarding investment interest.

International Expansion of Telecommunication Carriers: The Influence of Market Structure, Network Characteristics, and Entry Imperfections

Abstract: This paper examines the internationalization process of telecommunication carriers. In this industry, early entrants gain substantial first-mover advantages due to the transient nature of the windows of market opportunity, and the potential to influence the regulatory process as an incumbent. To capture these strategic and economic advantages, firms follow a strategy of preemption, both of markets and partners. The authors argue for the need to augment prevailing theory with contextual idiosyncrasies that characterize specific industries.

A Comparative Study of the Work Values of North and South Vietnamese Managers

Abstract: We examine managerial work values and subsequent behaviors of Vietnamese managers that foreign investors may face doing business in Vietnam. To establish a global reference-point, we compare the managerial values of Vietnamese managers with those of Chinese and U.S. managers. The findings from this exploratory study, while not always intuitive, should help foreign investors to better understand Vietnam. Furthermore, the study raises important theoretical issues concerning Individualism and Collectivism as cross-cultural measures.

Nigerian Consumer Attitudes Toward Foreign and Domestic Products

Abstract: The Nigerian consumer obsession with foreign-made goods has had a detrimental effect on the domestic manufacturing industry. This paper uses conjoint analysis to investigate the importance of a product's country-of-manufacture relative to other attributes in the Nigerian consumer choice. It was found that the country-of-manufacture is significantly more important than price and other product attributes in consumer preference. Nigerian consumers have a negative image of the ‘Made in Nigeria’ label, rating it lower than labels from more economically developed countries. Additional analyses indicate that the superior reliability and technological advancement of foreign products are the most important correlates of the Nigerian consumer's likelihood to purchase foreign products. Implications for foreign marketers, domestic governments and domestic manufacturers are discussed.

International Corporate Visual Identity: Standardization or Localization?

Abstract: This study examines the influences on the international standardization of corporate visual identity for a sample of U.K. multinationals. The results suggest that market entry form and equity holding are associated with the degree of corporate visual identity standardization. Further findings show the influence of culture, nationalism and product attributes on corporate visual identity standardization.

A Note on Countertrade: Contractual Uncertainty and Transaction Governance in Emerging Economies

Abstract: This paper develops a conceptual framework for analyzing organizational responses to contractual uncertainty in the context of emerging economies. Elaborating on Hennart's (1989) transaction cost rationale for countertrade, we develop a typology of exchange and transaction governance pertinent to the study of emerging economies: Contract, trust and hostage. Notwithstanding the traditional explanation based on foreign exchange shortage, we argue that the persistence of international countertrade illustrates organizational remedies to institutional deficiency in transaction governance.

Salesperson Performance, Pay, and Job Satisfaction: Tests of a Model Using Data Collected in the United States and Japan

Abstract: A causal model of salesperson performance and satisfaction is tested using data collected in Japan and the United States. The model seems to work well for both cultural groups, that is, comparable levels of variance are explained. However, the data appear to fit the model differently across samples; culture appears to moderate the relationships among constructs. Pay and valence for pay play a more central role for the Americans than the Japanese. Value congruence has a strong influence on job satisfaction for the Japanese, but not the American sales representatives. These findings confirm both the conventional wisdom that financial incentives are crucial in the United States, and the anecdotal evidence that closer supervision and corporate culture will be more useful sales management tools in Japan.

The Effects of Cultural Adaptation on Business Relationships: Americans Selling to Japanese and Thais

Abstract: A 2 × 4 (culture of participants × degrees of cultural adaptation) experimental design with 145 Thai and 101 Japanese professionals is used to investigate the effect of cultural adaptation on attraction and outcomes when Americans adapt to Japanese and Thais. This study extends the research of Francis (1991). The curvilinear relationship between adaptation and attraction found in Francis is not replicated. For Thais, the relationship appears monotonic positive. For Japanese, it reaches a plateau beyond moderate adaptation.