Showing papers in "Journal of International Business Studies in 2001"
TL;DR: A critical review of the cultural distance construct, outlining its hidden assumptions and challenging its theoretical and methodological properties, is presented in this article, where concrete steps aimed at enhancing rigor are delineated.
Abstract: Cultural distance is a widely used construct in international business, where it has been applied to foreign investment expansion, entry mode choice, and the performance of foreign invested affiliates, among others. The present paper presents a critical review of the cultural distance construct, outlining its hidden assumptions and challenging its theoretical and methodological properties. A comprehensive framework for the treatment of the construct is developed and concrete steps aimed at enhancing rigor are delineated.
1,734 citations
TL;DR: This article found that multinational ownership, multinational customers, and exports to developed countries increase self-regulation of environmental performance, and suggested that globalization might also have positive environmental effects because global ties increase selfregulation pressures on firms in low-regulation countries.
Abstract: Critics assert that globalization is detrimental to the environment because it encourages location of polluting industries in countries with low environmental regulations. We suggest that globalization might also have positive environmental effects because global ties increase self-regulation pressures on firms in low-regulation countries. Using survey data from firms in China we find that multinational ownership, multinational customers, and exports to developed countries increase self-regulation of environmental performance.
841 citations
TL;DR: The authors analyzes how the costs of organizing business in transition environments influence entry mode choice and finds that host country institutions in transition economies, have an impact on the choice of entry modes.
Abstract: The process of change from a centrally planned system to a market economy generates an institutional framework that is only partially reformed, and therefore inconsistent and unstable. This leads to high transaction costs for economic agents. Multinational enterprises entering transition countries have to adapt their strategies to the local institutions and reduce exposure to highly imperfect markets. This paper analyzes how the costs of organizing business in transition environments influence entry mode choice. The empirical results show that host country institutions in transition economies, have an impact on the choice of entry modes. Moreover, different mechanisms determine the internalization of managerial and technological knowledge.
809 citations
TL;DR: In this paper, the authors combine the perspective of an international economist with that of an economic geographer to reflect on how and to what extent the Internet will affect the location of economic activity.
Abstract: This paper combines the perspective of an international economist with that of an economic geographer to reflect on how and to what extent the Internet will affect the location of economic activity. Even after the very substantial transportation and communication improvements during the 20th Century, most exchanges of physical goods continue to take place within geographically-limited “neighborhoods.” Previous rounds of infrastructure improvement always have had a double effect, permitting dispersion of certain routine activities but also increasing the complexity and time-dependence of productive activity, and thus making agglomeration more important. We argue that the Internet will produce more of the same: certain forces for deagglomeration, but offsetting and possibly stronger tendencies toward agglomeration. Increasingly the economy is dependent on the transmission of complex uncodifiable messages, which require understanding and trust that historically have come from face-to-face contact This is not likely to be affected by the Internet, which allows long distance “conversations” but not “handshakes.”
621 citations
TL;DR: This article investigated the impact of patriotism, nationalism and internationalism as antecedents to consumer ethnocentrism in Turkey and the Czech Republic, and found that internationalism does not have a significant effect on consumer ethnocentricity in either country.
Abstract: The study investigates the impact of patriotism, nationalism and internationalism as antecedents to consumer ethnocentrism in Turkey and the Czech Republic. Controlling for demographics, the findings indicate that the impact of patriotism and nationalism is not consistent across the two countries. Consumer ethnocentrism in Turkey is fueled by patriotism, and in the Czech Republic by nationalism. Internationalism does not have a significant effect on consumer ethnocentrism in either country. Managerial implications of these findings are considered and future research directions are identified.
608 citations
TL;DR: In this article, the authors provide both theoretical and empirical evidence to explain the discrepant findings and thus, help to resolve the national cultural distance paradox, which they call the "cultural distance paradox".
Abstract: Past studies of the relationship between national cultural distance and entry mode choice have produced conflicting results. Some scholars find cultural distance associated with choosing wholly owned modes; others find cultural distance linked to a preference for joint ventures. In this paper we provide both theoretical and empirical evidence to explain the discrepant findings and thus, help to resolve the national cultural distance paradox.
581 citations
TL;DR: In this article, the authors focus on institutional change as the central and most consequential contextual aspect of China's transition, and identify key characteristics of these emergent institutions, which leads to propositions on their relevance for international business practice.
Abstract: This paper focuses on institutional change as the central and most consequential contextual aspect of China's transition. Identification of key characteristics of China's emergent institutions leads to propositions on their relevance for international business practice. China's transition also raises issues for theory development, including the way that transition is modeled, the need to draw upon multiple perspectives, and the concomitants of a contextual approach.
571 citations
TL;DR: This article proposed a method to design better multi-country samples for international business studies using Hofstede's framework and aimed at determining the effects of national culture on various business phenomena and developed sets of algorithms that calculate indexes reflecting the power of different samples for hypotheses testing.
Abstract: We propose a method to design better multi-country samples for international business studies using Hofstede's framework and aimed at determining the effects of national culture on various business phenomena We describe typical research scenarios, then develop sets of algorithms that calculate indexes reflecting the power of different samples for hypotheses testing The indexes were computed from Hofstede's data, then rank ordered The top multi-country samples are presented in tables for selection when designing studies
523 citations
TL;DR: In this paper, a systematic cross-country analysis of e-commerce activity reveals that although physical infrastructure explains much of the variation in basic Internet use, ecommerce activity also depends significantly on a supportive institutional environment, chief among the characteristics of such an environment are national respect for the "rule of law" and the availability of credible payment channels such as credit cards.
Abstract: A systematic cross-country analysis of e-commerce activity reveals that although physical infrastructure explains much of the variation in basic Internet use, e-commerce activity also depends significantly on a supportive institutional environment. Chief among the characteristics of such an environment are national respect for the “rule of law” and, secondarily, the availability of credible payment channels such as credit cards. These results suggest that an institutional environment that facilitates the building of transactional integrity is critical to the development of e-commerce.
398 citations
TL;DR: The authors used a theory of face to identify predictors of interest in entrepreneurship in six East Asian and four Anglo-Saxon countries, and found that social status of entrepreneurship and shame from business failure predict interest better in East Asian than Anglo countries.
Abstract: This study uses a theory of face to identify predictors of interest in entrepreneurship in six East Asian and four Anglo-Saxon countries. At the cultural level, social status of entrepreneurship and shame from business failure predict interest in entrepreneurship better in East Asian than Anglo countries. At the individual level, social status predicts interest in entrepreneurship in the entire sample.
383 citations
TL;DR: In this article, a sample of distributors from Canada, Chile, Great Britain, and the Philippines were used to model resource-and market-based assets influencing power in international relationships, showing that asset specificity, predictability and market knowledge gap influence a distributor's power.
Abstract: Global dynamic capabilities is used to integrate resource- and market-based views of the firm to enhance understanding of a firm's power in international business relationships. Regression is used to model resource- and market-based assets influencing power in international relationships, with a sample of distributors from Canada, Chile, Great Britain, and the Philippines. Results indicate that asset specificity, predictability and market knowledge gap influence a distributor's power. Implications are presented.
TL;DR: The international operations of firms have substantial impact on the formulation and implementation of business ethical principles such as codes of conduct as mentioned in this paper, and the international sporting goods industry has been a pioneer in setting up codes and thus provides much relevant experience.
Abstract: The international operations of firms have substantial impact on the formulation and implementation of business ethical principles such as codes of conduct. The international sporting goods industry has been a pioneer in setting up codes and thus provides much relevant experience. Different sourcing strategies, degrees of multinationality and national backgrounds affect the contents of codes. Moreover, international (non-governmental) organizations prove equally effective in triggering sophisticated codes.
TL;DR: The traditional bargaining model of MNC-host developing country relations has become obsolete as mentioned in this paper, and today, those relations are better understood as the result of a two-tier, multi-party bargaining process.
Abstract: The traditional bargaining model of MNC-host developing country relations has become obsolete. Today, those relations are better understood as the result of a two-tier, multi-party bargaining process. Tier-1 bargaining, between the governments of host and home countries, occurs bilaterally or through multilateral institutions. It produces macro rules on FDI that affect micro negotiations in Tier-2 (per the traditional bargaining model). The extent of FDI liberalization resulting from Tier-1 bargaining varies predictably across home-host country pairs and industries. Suggestions for testing the two-tier bargaining model are also presented.
TL;DR: This paper examined cooperation-based relations between MNCs and host governments and found that resource commitment, personal relations, political accommodation, and organizational credibility are four building blocks for improving an MNC's cooperative relationships with governments.
Abstract: This study examines cooperation-based relations between MNCs and host governments. We theorize that resource commitment, personal relations, political accommodation, and organizational credibility are four building blocks for improving an MNC's cooperative relationships with governments. Analysis of 131 MNCs in China validates the importance of these blocks in shaping MNC–government relations and the importance of these relations in shaping the performance of MNC subsidiaries.
TL;DR: In this paper, the authors examined whether knowledge spillovers from MNCs' local R&D activities benefit domestic firms in the Indian pharmaceutical industry from 1980-1994, and found that the only significant R&DI spillovers in Indian pharmaceutical sector were between MNC and each other.
Abstract: We examine whether knowledge spillovers from MNCs’ local R&D activities benefit domestic firms in the Indian pharmaceutical industry from 1980-1994. In a policy environment that restricted FDI and provided weak intellectual property protection, we find that the only significant R&D spillovers in the Indian pharmaceutical sector were between MNCs and each other. We explore the implications of our findings in light of India's economic and industrial policy goals and implementation.
TL;DR: In this article, the authors investigated the relationship between human resource management (HRM) and the performance of 101 foreign-owned subsidiaries in Russia and found that investments in HRM practices can substantially assist a firm in improving performance.
Abstract: This study investigates the relationship between human resource management (HRM) and the performance of 101 foreign-owned subsidiaries in Russia. The study's results provide support for the assertion that investments in HRM practices can substantially assist a firm in improving performance. Further, different HRM practices for managerial and non-managerial employees are found to be significantly related to firm performance. Only limited support, however, is obtained for the hypothesized relationship between efforts at aligning HRM practices with firm strategy and subsidiary performance.
TL;DR: In this article, the authors examine what firm-specific factors are associated with the propensity of pure U.S.-based Internet firms to enhance their international presence on the Internet by developing country-specific websites.
Abstract: By providing a nearly instant connection among parties at opposite corners of the world and enabling a variety of commercial exchanges, the Internet emerged as the technology expected to create a truly global market space. Internet firms faced the challenge of capitalizing on this development. In this paper we examine what firm-specific factors are associated with the propensity of pure U.S.-based Internet firms to enhance their international presence on the Internet by developing country-specific websites. Despite the assertion that all Internet firms are born global, our findings show that the pursuit of internationalization by Internet firms is related to the levels of their intangible assets and strategic activity. Two types of intangible assets—reputation and website traffic—are positively related to the degree of internationalization; so are the levels of competitive and cooperative activity, and the interaction effects between reputation and competitive and cooperative activity. These findings suggest that ideas from both resource-based theory and research on competitive dynamics can contribute to understanding the internationalization of Internet firms.
TL;DR: In this paper, the authors compared the control-performance relationship for foreign versus local parents in international joint ventures in China and found that both overall and specific controls are associated with performance for foreign parents, while only specific control is for Chinese parents.
Abstract: This study compares the control-performance relationship for foreign versus local parents in international joint ventures in China. Transaction cost analysis is found more applicable to foreign than to Chinese parents. Both overall and specific controls are associated with performance for foreign parents, while only specific control is for Chinese parents. Under goal incongruity, Chinese parent control is associated with foreign parent dissatisfaction with venture performance, but not vice-versa. Having a majority stake improves performance from a foreign parent perspective, but not from that of the Chinese parent.
TL;DR: In this article, the authors examined the effects of within-country subcultures on business outcomes and found that values as expressed through motivational domains, influence business performance, and that business performance will vary by subculture.
Abstract: This study examines the effects of within-country subcultures on business outcomes. We first argue that individuals' values vary across subcultures. We then suggest that values, as expressed through motivational domains, influence business performance. Finally, joining these two propositions, we posit that business performance will vary by subculture. Based on data from four regional subcultures in Brazil, a subculture effect was found for both motivational domains and business performance. The results suggest that it is important to consider the cultural variation within a country when examining business outcomes.
TL;DR: In this paper, the authors focus on the brown-field entry mode, a special case of acquisition, in which the resources transferred by the investor dominate over those provided by the acquired firm.
Abstract: This paper focuses on the brown-field entry mode, as a special case of acquisition, in which the resources transferred by the investor dominate over those provided by the acquired firm. We see this mode as having particular relevance for entry strategies in emerging markets. The choice of entry mode is analyzed on the basis of a framework utilizing both resource-based and transaction-cost theories. The resource requirements have to be matched with resources available to the investor through an acquired firm, and the decision has to account for the costs of acquiring and integrating the resources.
TL;DR: In this paper, the authors extended the work of Peng and Ilinitch (1998) by undertaking the first empirical efforts to explore the determinants of export intermediary performance, and they suggest that given the transaction cost constraints and principal-agent conflicts, export intermediaries' performance depends on their possession of valuable, unique, and hard-to-imitate resources which help minimize their clients' transaction and agency costs.
Abstract: Integrating transaction cost, agency, and resource-based theories, this study extends the work of Peng and Ilinitch (1998) by undertaking the first empirical efforts to explore the determinants of export intermediary performance. We suggest that given the transaction cost constraints and principal-agent conflicts, export intermediaries' performance depends on their possession of valuable, unique, and hard-to-imitate resources which help minimize their clients' transaction and agency costs. Survey results from 166 firms largely support our hypotheses.
TL;DR: In this paper, the role of three characteristics of international managers, namely nationality, cultural distance, and expatriate status, for their network ties is studied, and the implications for international management theory and practice are discussed.
Abstract: We study the role of three characteristics of international managers—nationality, cultural distance, and expatriate status, for their network ties. A network analysis of cross-subsidiary interactions among 457 managers in an MNE demonstrates that managers form strong expressive ties with peers with smaller cultural distance and from the same status group. However, managers form strong instrumental ties with peers who are different on these background characteristics. The implications for international management theory and practice are discussed.
TL;DR: The authors applied a resource-based view of the firm to analyze data from a sample of 898 joint-venture firms in China, including both joint ventures established by overseas Chinese and by firms from Western cultures.
Abstract: This study applies a resource-based view of the firm to analyze data from a sample of 898 joint-venture firms in China, including both joint ventures established by overseas Chinese and by firms from Western cultures. It is hypothesized that culture could influence the timing of entry of joint ventures, their investment preferences, and performance. ANOVAs and regressions were conducted, and the results suggest the impact of cultural as well as technological resources. This paper concludes with a discussion on the implications of the findings.
TL;DR: In this article, a sample of advanced Internet users from 20 countries showed differences in beliefs, attitudes, perceptions, and Internet buying behavior depending on user experience, and home country or region.
Abstract: The prospect of an emerging global Internet consumer entices many internationalizing organizations as it would enable standardization of Internet strategies on a worldwide basis. A sample of advanced Internet users from 20 countries shows differences in beliefs, attitudes, perceptions, and Internet buying behavior depending on user experience, and home country or region. There were important differences after controlling for social, cultural and macro-economic variables. Implications for a regional approach to global e-commerce strategies are discussed.
TL;DR: In this paper, the authors examined the impact of operational hedges of US multinational corporations (MNCs) on their exchange rate exposure and found that the importance of hedges as significant determinants of exchange rate risk.
Abstract: This paper examines the impact of operational hedges of US multinational corporations (MNCs) on their exchange rate exposure. The two important contributions of this study are: First, it documents the importance of operational hedges as significant determinants of exchange rate risk, as measured by “breadth” and “depth” dimensions of the MNC foreign subsidiary network. Second, this finding remains robust even after examining the impact of operational hedges on exposure separately for negatively and positively exposed MNCs.
TL;DR: In this article, the authors explore how the possibility of remote electronic access to markets, resources and knowledge, enabled by the new information and communication technologies (ICTs), might change the motivations of firms to locate activities internationally, and in turn affect worldwide dispersion and concentration in an industry.
Abstract: We explore how the possibility of remote electronic access to markets, resources and knowledge, enabled by the new information and communication technologies (ICTs), might change the motivations of firms to locate activities internationally, and in turn affect worldwide dispersion and concentration in an industry. Preliminary results from an exploratory analysis of the spatial distribution of firms in financial services suggest that the introduction of a business-to-business (B2B) trading network increases the global market participation of firms from peripheral countries, but does not appear to reduce the importance of locational clusters. A set of propositions is derived that provide guidance for more detailed research on the impact of ICTs on the strategy and structure of global industries.
TL;DR: In this paper, the authors use two theoretical perspectives, information processing and resource dependency, to examine global account management (the co-ordination of activities involved in serving a single customer in multiple countries).
Abstract: This paper uses two theoretical perspectives, information processing and resource dependency, to examine global account management (the co-ordination of activities involved in serving a single customer in multiple countries). It is hypothesized that global account management structures allow the multinational corporation (MNC) to increase its information processing capacity as well as its bargaining power vis-a-vis the global customer. Using data on 106 global accounts in 16 MNCs, we find support for both perspectives individually. Furthermore, evidence is presented for an interaction effect in which the effectiveness of structures for increasing information processing is conditional upon the presence of high customer dependence.
TL;DR: In this article, the authors analyzed the impact of governance structures of privatized firms on one key outcome of new strategies: export intensity using a longitudinal, multi-industry dataset.
Abstract: The fall of the Soviet Union brought new enterprise opportunities whose exploitation required the development of entirely new strategies. Simultaneously, enterprises faced crucial constraints in their governance structures. This paper analyzes the impact of governance structures of privatized firms on one key outcome of new strategies: export intensity. Using a longitudinal, multi-industry dataset of privatized firms in Russia, Ukraine and Belarus, we analyze how export intensity is mediated by strategies involving product development, acquisitions and links with foreign partners.
TL;DR: In this article, the authors examined the relationship between market valuation and the geographic scope of U.S. multinational corporations' foreign operations by focusing on the importance of the location of MNC operations.
Abstract: This study examines the relationship between market valuation and the geographic scope of U.S. multinational corporations' (MNCs) foreign operations by focusing on the importance of the location of MNC operations. The location factors utilized here capture the degree of segmentation/integration between the United States and the foreign regions where the MNC operates. The results indicate that MNCs with presence in countries with developing economies have significantly higher market values than MNCs that operate only in countries with advanced economies. Furthermore, the market value impact of intangible assets increases with the degree of an MNC's expansion into developing locations only; this result is consistent with the notion that internalizing markets for the cross-border transfer of intangibles leads to competitive advantages.
TL;DR: The Janus face of globalization has been explored by international business scholars at a recent research symposium as discussed by the authors to understand the causal relationships be-tween globalization, the MNE, the state, and the economy.
Abstract: panning the globe, its affiliates andstrategic partnerships linking coun-tries in complex webs of alliances, themultinational enterprise (MNE) is theembodiment of globalization and itsprincipal agent. Nation states have con-tributed towards making the MNE thekey agent of globalization through pro-moting technological innovation, reduc-ing tariff and non-tariff barriers, and lib-eralizing their domestic financial sys-tems. Multinationals have been theprime movers behind globalization, tak-ing advantage of the increased opennessof domestic economies to integrate theiractivities across national markets and so-cieties.Given their mobility and visibility, itis not surprising that MNEs have becomea lightning rod for groups concernedabout the various costs of globalization:social, cultural, political, and perhapsmost importantly, the economic costs.Although international business (IB)scholars and policymakers emphasizethe benefits of globalization and cooper-ative relations with MNEs, the publicand non-governmental organizationshave ignored these views and focused onthe “dark side” of MNE-state relations.With the growing backlash against glob-alization and MNEs, more research onthe Janus face of globalization is neededif the pro-MNE, pro-globalization viewsof most IB scholars are to prevail in pub-lic policy debates.This research symposium served as aninvitation to international businessscholars to further explore the Janus faceof globalization. Through organizing thissymposium, we have come to appreciatethat when scholars look at problemsidentified with globalization’s dark side,they also often contribute to our under-standing of the bright side—the potentialfor globalization to bring with it wide-spread benefits for all. We submit that asscholars we can learn more when we tryto ferret out the causal relationships be-tween globalization, the MNE, the state,