Showing papers in "Journal of International Business Studies in 2016"
TL;DR: Theoretically into Central and Eastern Europe: Transactions, Resources, and Institutions as mentioned in this paper is a survey of the contributions of research in CEE to theoretical debates in business research, highlighting the need to develop a better understanding of the boundary conditions of scholarly theories of knowledge.
Abstract: In “Probing Theoretically into Central and Eastern Europe: Transactions, Resources, and Institutions,” we outlined the contributions of research in Central and Eastern Europe (CEE) to theoretical debates in business research. In this retrospective, we reflect upon the evolution of the field over the past decade. With the fading impact of CEE’s distinct shared history, we suggest that CEE best be analyzed as emerging economies, rather than as a distinct geographic entity. Emerging economy business research is converging on common themes and shared theoretical ideas, while identifying critical variations that constrain generalizations among and beyond emerging economies. This research thus highlights the need to develop a better understanding of the boundary conditions of scholarly theories of business knowledge. Over the past decade, the institution-based view has emerged from distinct intellectual traditions in institutional economics, organizational theory, and the analysis of business–government bargaining. Research in these converging lines of theorizing places contextual variations at the center of explanations of business phenomena around the world. We suggest that the institution-based view is evolving toward a paradigm, and offer suggestions on how to advance this research agenda further, in particular by exploring how firms engage with different sets of potentially conflicting institutions at multiple levels and locations.
534 citations
TL;DR: In this article, the authors propose a research agenda for IB scholarship on spatially dispersed yet connected innovation processes, which is premised on the current reality of global value chains in which mobile (MNEs, people) and immobile (locations) factors interact.
Abstract: The innovation-driven multinational enterprise (MNE) has dominated international business (IB) research for several decades now. Beginning with the award-winning research of Dunning, there have been calls for IB researchers to rediscover the importance of locations. Recent work has emphasized that firms and locations co-evolve with one another, as knowledge is transferred and leveraged across space. Integrating insights from IB and economic geography, we propose a research agenda for IB scholarship on spatially dispersed yet connected innovation processes. This agenda is premised on the current reality of global value chains in which mobile (MNEs, people) and immobile (locations) factors interact. The research perspective suggested recognizes that locations are host to increasingly “fine-sliced” activities, whose nature and composition are continuously changed by MNE-driven innovation processes. As today’s specialized activities become tomorrow’s standardized ones, the shifting distribution of global value creation depends on the pattern of international knowledge connectivity.
239 citations
TL;DR: In this article, the authors outline the evolution of additive manufacturing technology, culminating in 3D printing and present a vision of how this evolution is affecting existing global value chains (GVCs) in production.
Abstract: This article outlines the evolution of additive manufacturing technology, culminating in 3D printing and presents a vision of how this evolution is affecting existing global value chains (GVCs) in production. In particular, we bring up questions about how this new technology can affect the geographic span and density of GVCs. Potentially, wider adoption of this technology has the potential to partially reverse the trend towards global specialization of production systems into elements that may be geographically dispersed and closer to the end users (localization). This leaves the question of whether in some industries diffusion of 3D printing technologies may change the role of multinational enterprises as coordinators of GVCs by inducing the engagement of a wider variety of firms, even households.
231 citations
TL;DR: In this paper, the authors examine the changing nature of the competitive advantages of places, the competitive advantage and strategies of firms, and the governance structure of IB networks in what has also been called the third industrial revolution.
Abstract: The new techno-economic paradigm of the information age has brought about new structures and processes in international business (IB). In this article, we examine the changing nature of the competitive advantages of places, the competitive advantages and strategies of firms, and the governance structure of IB networks in what has also been called the third industrial revolution. These three areas of change in IB activities can be mapped respectively to the location (L), ownership (O) and internalization (I) advantages of the eclectic paradigm. We interpret these OLI factors as dynamic constructs in order to depict analytically the shifts in the IB environment and their implications for IB.
200 citations
TL;DR: In this paper, the authors extend existing internationalization theory to encompass a new type of organization, the ibusiness firm, which offers a platform that allows users to interact with each other and generate value through user co-creation of content.
Abstract: Information and communication technologies have given rise to a new type of firm, the ibusiness firm. These firms offer a platform that allows users to interact with each other and generate value through user co-creation of content. Because of this, ibusiness firms face different challenges when they internationalize compared with traditional firms, even those online. In this article we extend existing internationalization theory to encompass this new type of organization. We theorize that because ibusiness firms produce value through the creation and coordination of a network of users, these firms tend to suffer greater liabilities of outsidership when expanding abroad and therefore concentrate on network and diffusion-based user adoption processes as they internationalize. Based on a multi-case investigation of a sample of ibusiness firms, we develop new theory and testable hypotheses. Thus, we make an important contribution by expanding internationalization theory to a new set of firms.
186 citations
TL;DR: This paper explored how market and non-market activity affect foreign firm legitimacy in times of political turmoil and found that those that also invested in social-benefit projects and in social ties with families with few ties to the Qadhafi family earned a broad-based legitimacy that helped them survive the overthrow of Moghaddam.
Abstract: Using the before–after natural experiment occasioned by the Arab Spring in Libya, we explore how market and non-market activity affect foreign firm legitimacy in times of political turmoil. Although all MNEs in Libya had to cultivate strong ties to Qadhafi to succeed during his 40 years of rule, we found that those that also invested in social-benefit projects and in social ties with families with few ties to the Qadhafi family earned a broad-based legitimacy that helped them survive Qadhafi’s overthrow. Our findings contribute to the political risk and political behavior literature the notion that the pursuit of firm legitimacy in general, and especially in the eyes of social-sector actors, is an effective hedge against political risk. More theoretically, our findings support the addition of a social-sector-based path to firm legitimacy in the host country that complements and may at times substitute for, the government-based path to foreign firm legitimacy. Practically, our findings suggest that MNEs’ facing severe political risk can improve their prospects for survival by investing in relationships with influential social groups and by offering goods or services that are perceived as socially valuable.
171 citations
TL;DR: The authors explored two different sets of hypotheses based on the Varieties of Capitalism and other branches of comparative capitalisms literature, and found that comparative advantages in industries with radical innovation emerge in specific configurations mixing coordinated and liberal institutional features.
Abstract: How do national-level institutions relate to national comparative advantages? We seek to shed light on this question by exploring two different sets of hypotheses based on the Varieties of Capitalism and other branches of comparative capitalisms literature. Applying fuzzy-set qualitative comparative analysis to data from 14 industries in 22 countries across 9 years, we find that comparative advantages in industries with radical innovation emerge in specific configurations mixing coordinated and liberal institutional features. Institutional comparative advantage in industries with radical innovation may thus be based on the “beneficial constraints” of opposing institutional logics rather than on the self-reinforcing institutional coherence envisioned in much of the Varieties of Capitalism literature. By contrast, we find that coordinated market economies may have comparative advantages in industries with incremental innovation, as envisioned in the Varieties of Capitalism literature. Our article contributes to our understanding of the “so what?” related to capitalist diversity and its implications for location decisions of multinational enterprises. We further present a coordination index going beyond Hall and Gingerich (Br J Polit Sci 39:449–482, 2009) with annual values for 22 OECD countries from 1995 through 2003.
160 citations
TL;DR: In this paper, the authors examine the question of how host country institutions affect corporate social responsibility adoption by multinational enterprises (MNEs) and propose that CSR encompasses a set of practices that MNEs draw on to signal legitimacy in different kinds of institutional contexts.
Abstract: Drawing on institutional theory, this study examines the question of how host country institutions affect corporate social responsibility (CSR) adoption by multinational enterprises (MNEs). I propose that CSR encompasses a set of practices that MNEs draw on to signal legitimacy in different kinds of institutional contexts – contexts that vary in how they shape issue salience and stakeholder power in a given issue field. Building on ideas related to field opacity and the managerial implications of CSR, I study why MNEs adopt two distinct types of CSR policies: standards-based CSR in response to contexts marked by issue salience, and rights-based CSR in response to contexts marked by stakeholder power. To test these hypotheses, I use subsidiary and firm-level data from a sample of 540 Western European MNEs in the issue field of labor rights. Results show that MNEs strategically adopt these CSR policies related to their presence in distinct institutional contexts. The study offers implications for how MNEs manage the legitimacy of their global operations and how CSR, as a form of private governance, can emerge as both a substitute and complement to regulatory institutions.
153 citations
TL;DR: The authors provide guidance to help international business scholars navigate the complexity of international business research and ensure that readers can trust their findings, providing suggestions for how to rule out alternative explanations, explaining key considerations not only in empirical analyses, but also in theory building and in research design.
Abstract: The complex nature of international business research, with its cross-country and multilevel nature, complicates the empirical identification of relationships among theoretical constructs. The objective of this editorial is to provide guidance to help international business scholars navigate this complexity and ensure that readers can trust their findings. We provide suggestions for how to rule out alternative explanations, explaining key considerations not only in empirical analyses, but also in theory building and in research design. Our discussion covers both qualitative and quantitative studies, because we believe that it is imperative to understand how trustworthiness is established in both traditions, even for international business researchers who self-identify with only one. This enables scholars to have a broader scope of knowledge when interpreting past research in the field and to be more adept at explaining their design choices to a diverse audience.
138 citations
TL;DR: In this article, the authors identify family ownership and family involvement in management as potential powerful sources of heterogeneity in family-owned firms' foreign entry, and show that family involvement both in the firm ownership and management leads to a higher propensity towards greenfield initiatives (vs. acquisitions).
Abstract: Extant literature on foreign entry increasingly recognizes firms’ heterogeneity as a potential reason for inconsistency in results on the establishment mode choice, that is, whether and under which conditions firms should choose to enter a new country through a greenfield investment or an acquisition. Our study contributes to this debate by identifying family ownership and family involvement in management as potential powerful sources of such heterogeneity. Integrating international business studies with both corporate finance literature on family firms and recent contributions from the Socio Emotional Wealth perspective on family ownership, we claim that, due to greater risk aversion and lower access to information, the family involvement both in the firm ownership and management leads to a higher propensity towards greenfield initiatives (vs acquisitions). However, we also find that such a propensity decreases with international experience especially in family-owned firms given the greater ability of professionalized management to overcome family-related concerns on making acquisitions. Our analysis on 1045 foreign initiatives undertaken by 311 Italian family and non-family firms between 2003 and 2013 confirms our expectations, indicating family ownership as a significant driver of firms’ international strategies.
136 citations
TL;DR: In this paper, the authors make a distinction between the effects of institutional profile and institutional distance on cross-border business activities and conclude that current institutional research in international business is unable to explain how institutions matter for MNEs.
Abstract: Extant institutional research has failed to make a distinction between the effects of institutional profile and institutional distance on MNEs. The problem stems from the fact that, due to the use of a single reference country, variation in institutional distance between the reference country and partner countries is essentially equal to variation in the institutional profiles of these partner countries, making institutional distance and institutional profile effects indistinguishable. This research begins by demonstrating that the problem of profile – distance conflation is relevant for virtually all possible countries as reference points, and then showing how this problem is mitigated by using more than one country as reference points from which to calculate institutional distance. We conclude that current institutional research in international business is unable to explain how institutions matter for MNEs and that a more careful theoretical and empirical distinction between the effects of institutions and institutional distance on cross-border business activities is essential for pushing the institutional perspective in international business studies forward. Multiple reference point research designs are required to achieve this.
TL;DR: In this paper, the authors show that heterogeneity in capabilities and firm size jointly determine foreign direct investment and in doing so show the simultaneity of a race to the bottom and to the top.
Abstract: This study builds on the pollution haven and induced innovation arguments as explanations for firm behavior with regard to international environmental management and argues both need to be integrated. This implies that foreign direct investment is capable of facilitating a “race to the bottom” and a “race to the top” simultaneously. Using novel and detailed data, we test whether environmental capabilities and weaknesses and other characteristics affect US firms’ foreign direct investment choices in Chinese provinces with more or less stringent environmental regulation. This enables a more detailed analysis by allowing country regulation to vary spatially and over time. Our study finds that heterogeneity in capabilities and firm size jointly determine foreign direct investment and in doing so shows the simultaneity of a race to the bottom and to the top. Specifically, firms with environmental capabilities invest in more stringently regulated regions and firms with weaknesses are less likely to target such regions. These diverging effects are both moderated by firm size, which further amplifies each of them. Our findings underscore the need to integrate pollution haven and induced innovation arguments in a joint analysis. They furthermore show the relevance of methodological choices when testing hypotheses integrating the above arguments empirically.
TL;DR: In this article, the authors explore the impact of local legitimacy on the imitation of certification by subsidiaries of foreign multinational enterprises and domestic firms and find that MNE subsidiaries imitate national certifications by geographically proximate firms to overcome a liability of foreignness.
Abstract: We explore the impact of local legitimacy on the imitation of certification by subsidiaries of foreign multinational enterprises and domestic firms. We propose that MNE (multinational enterprise) subsidiaries and domestic firms differ in their propensity to imitate geographically proximate firms when deciding whether to adopt national vs global CSR (corporate social responsibility) certifications for two reasons. First, there are differences in the legitimacy they can expect to gain in different communities from adopting these certifications. Second, there are differences in their knowledge about the local legitimacy of these certifications. We test our hypotheses by studying the decisions of automotive suppliers in Mexico to certify either to ISO 14001, a global certification, or to Clean Industry, a national certification. We find that geography matters: MNE subsidiaries imitate national certifications by geographically proximate firms to overcome a liability of foreignness, while domestic firms imitate global certifications by proximate firms to overcome the disadvantages of localness. We explore the implications of our findings for institutional theory and future research.
TL;DR: In this paper, the authors make a critical examination of the Uppsala internationalization process model by incorporating business network theory and entrepreneurship theory into the model and conclude that several issues have to be addressed regarding the relationship between business networks and firms' internationalization.
Abstract: In their article from 2009, Johanson and Vahlne suggest a reformulation of the Uppsala internationalization process model by incorporating business network theory and entrepreneurship theory into the model. The present paper makes a critical examination of this reformulation. The overall conclusion is that several issues have to be addressed regarding the relationship between business networks and firms’ internationalization, the meaning of entrepreneurship as well as the possibility to combine business network theory and entrepreneurship theory in the Uppsala model before the full potential of such an incorporation can be realized.
TL;DR: This paper explored how within-country diversity of both language and religion influences the ownership structure of foreign acquisitions and found that diversity within the host country may be an additional source of behavioral uncertainty and information asymmetry, over and above the effects arising from cross-national differences.
Abstract: This article explores how within-country diversity of both language and religion influences the ownership structure of foreign acquisitions. Commentators have acknowledged the potential importance of “within-country diversity,” but to date this issue has received minimal empirical attention. We propose that diversity plays two distinct roles. Namely, diversity within the host country may be an additional source of behavioral uncertainty and information asymmetry, over and above the effects arising from cross-national differences. Moreover, diversity within the home country may increase the cognitive complexity of the decision makers, moderating the firm’s response to the distance and diversity of the host country. Results based on foreign acquisitions across 67 acquirer and 69 target countries confirm both of these roles. While the main focus of this article is on the role that within-country diversity plays in international business decisions, it also makes contributions in terms of expanding the range of dimensions of distance investigated in the cross-border acquisition literature, in highlighting a potentially positive role that diversity might play in such acquisitions, and in providing a potential explanation for asymmetries in distance – that is, differences in cognitive complexity.
TL;DR: In this article, the authors argue that current theory and research in international business may have overly emphasized a negative view on foreignness, distance, and differences of all kinds (national, cultural, organizational, and institutional), with an emphasis on liabilities and adverse outcomes associated with such differences.
Abstract: The point of departure for the special issue is that current theory and research in international business (IB) may have overly emphasized a negative view on foreignness, distance, and differences of all kinds (national, cultural, organizational, and institutional), with an emphasis on liabilities and adverse outcomes associated with such differences. While existing research is certainly valuable, we argue that focusing on mostly negative processes and outcomes has hindered our understanding of the dynamics, processes, and conditions that enable organizations to benefit from diversity in a wide range of IB contexts. The goal of this special issue is to promote research that is in line with a Positive Organizational Scholarship perspective, which encourages scholars to look at commonly considered phenomena in new ways, as well as to explicitly consider positive phenomena in IB research. We then introduce the three articles included in the special issue and highlight how they help IB scholars better understand when and how foreignness, distance, and diversity can enhance organizational effectiveness and performance at multiple levels.
TL;DR: In this article, the authors identify a variety of R&D alliance modes in a knowledge-intensive industry (e.g., pharmaceuticals), and classify them into four ordered categories which go beyond the traditional binary equity vs non-equity alliance classification.
Abstract: We identify a variety of R&D alliance modes in a knowledge-intensive industry (e.g., Pharmaceuticals), and classify them into four ordered categories which go beyond the traditional binary equity vs non-equity alliance classification. This enriches our understanding of alliance governance structures and broadens the application of alliance modes in what is today a more complicated international R&D collaboration setting. We then explore national, industry and firm factors that determine the selection of an appropriate R&D alliance governance mode, using a sample of 237 international alliance deals. The likelihood of using a more-integrated alliance governance mode decreases as the difference or “distance” between nations of the partner firms increases in terms of human capital and cultural distance. On the other hand, a greater geographic and institutional difference is positively associated with the selection of more integrated alliance governance modes. Furthermore, firms in the research stage are more likely to use a more-integrated governance mode, as opposed to firms in the development stage. These findings advance research on alliance governance structure. They reveal the factors affecting the R&D alliance governance mode choice.
TL;DR: In this paper, the authors investigated how the predictors of cross-border M&A completion involving emerging markets depend upon the direction of global expansion, i.e., investment inbound to a developing market or outbound from a developed market.
Abstract: While cross-border mergers and acquisitions (M&As) involving emerging markets have been increasing in recent years, a high percentage collapse before completion. This study investigates how the predictors of cross-border M&A completion involving emerging markets depend upon the direction of global expansion, i.e., investment inbound to a developing market or outbound from a developing market. Analysis based on 15 years of data from four emerging economies, Brazil, Russia, India, and China, from 1995 to 2010, reveals fundamental differences in the predictors of inbound vs. outbound M&A completion. Country-level factors reflecting differences in political, trade, and legal environments strongly affect the completion for inbound M&As, but have a much weaker influence on outbound M&As. By contrast, firm-level factors such as past M&A experience have a significantly stronger effect on completion for outbound than for inbound M&As. Most interestingly, two deal-level factors (the percentage of stake sought by the acquirer and whether or not the deal is a cash transaction) increase the likelihood of completion for inbound but decrease it for outbound M&As. These findings have important managerial implications for enhancing the success of global expansions.
TL;DR: The authors leveraged identity theory to address the question of when and how foreignness acts as an advantage and liability for the MNE subsidiary. But, they did not consider how subsidiaries manage their foreignness by accentuating and attenuating internal and external organizational attributes.
Abstract: This article leverages identity theory to address the question of when and how foreignness acts as an advantage and liability for the MNE subsidiary. Applying an organizational identity lens, I delineate how subsidiaries manage their foreignness by accentuating and attenuating internal and external organizational attributes. Drawing on this conceptualization, I theorize how an accentuated foreign identity moderates context-specific advantages and liabilities. In offering a more nuanced understanding of how subsidiaries actively manage their foreignness, and its contextual implications, an identity-based framework helps to both explain and reconcile the advantages and liabilities of foreignness.
TL;DR: In this article, the effect of regional institutional complexity on foreign direct investment decisions by multinational enterprises (MNEs) was studied and it was shown that extremely low or high regional institutional diversity has negative effects on internationalization, but moderate diversity has a positive effect on internationalisation.
Abstract: International business research is only beginning to develop theory and evidence highlighting the importance of supranational regional institutions to explain firm internationalization. In this context, we offer new theory and evidence regarding the effect of a region’s “institutional complexity” on foreign direct investment decisions by multinational enterprises (MNEs). We define a region’s institutional complexity using two components, regional institutional diversity and number of countries. We explore the unique relationships of both components with MNEs’ decisions to internationalize into countries within the region. Drawing on semiglobalization and regionalization research and institutional theory, we posit an inverted U-shaped relationship between a region’s institutional diversity and MNE internationalization: extremely low or high regional institutional diversity has negative effects on internationalization, but moderate diversity has a positive effect on internationalization. Larger numbers of countries within the region reduces MNE internationalization in a linear fashion. We find support for these predicted relationships in multilevel analyses of 698 Japanese MNEs operating in 49 countries within 9 regions. Regional institutional complexity is both a challenge and an opportunity for MNEs seeking advantages through the aggregation and arbitrage of individual country factors.
TL;DR: In this paper, the authors analyze differences in the innovativeness of domestic firms and subsidiaries of foreign firms operating in the same country and argue that domestic firms suffer a liability of localness in innovation, or a competitive disadvantage in product innovation relative to subsidiaries operating in foreign countries.
Abstract: I analyze differences in the innovativeness of domestic firms and subsidiaries of foreign firms operating in the same country. I argue that domestic firms suffer a liability of localness in innovation, or a competitive disadvantage in product innovation relative to subsidiaries of foreign firms. I propose that this liability of localness is driven by the relatively lower levels of multiculturalism in employees of domestic firms in comparison with subsidiaries, which limit the identification, transfer, and integration of a large diversity of knowledge that supports product innovation. I also propose that managers of domestic firms can compensate for this liability of localness in two ways: by investing in the training of their employees and by exporting. Training modifies the mindsets and abilities of employees and enables them to become more cognitively multicultural, which facilitates product innovation. Exporting changes employees’ mindsets as they become exposed to new ideas available abroad, which also facilitates product innovation. I test these arguments on a sample of manufacturing firms and find that, although domestic firms introduce fewer new products than subsidiaries of foreign firms, they introduce more new products than subsidiaries at the same level of investment in language training and of exports.
TL;DR: In this paper, the authors take an architectural approach to describe how different types of human capital develop from the individual level, to the unit level, and then to the firm level in order to build a talent portfolio for the multinational corporation.
Abstract: A unique characteristic of the multinational corporation is that it comprises a geographically dispersed and culturally differentiated workforce that embodies both firm-specific and location-specific human capital. This article takes an architectural approach to describe how different types of human capital develop from the individual level, to the unit level, and then to the firm level in order to build a talent portfolio for the multinational corporation. Depending on the company’s strategy (multidomestic, meganational, transnational), different configurations of the talent portfolio tend to be emphasized and integrated to achieve competitive advantage. Implications for theory and practice are discussed and a research agenda is introduced.
TL;DR: In this paper, the authors highlight the value and limitations of experiments in IB research, and explain the basic tenets of experimental design and thinking with the goal of encouraging the submission of more papers with an experimental design to JIBS.
Abstract: The question that motivated this editorial was, “where are the IB experiments?” The short answer is that experiments are largely absent from the IB literature; and we argue that they shouldn’t be. Experimental methods offer the opportunity to significantly improve the evidence for the causal relationships in international business research in a variety of ways. In this article we highlight the value and limitations of experiments in IB research, and explain the basic tenets of experimental design and thinking with the goal of encouraging the submission of more papers with an experimental design to JIBS.
TL;DR: In this paper, the effect of adopting Internet-enabled information and communication technology (ICT adoption) on the decision to reorganize production across national borders (foreign boundary decision) by multinational enterprises (MNEs) was evaluated using a transaction cost framework.
Abstract: This article evaluates the effect of adopting Internet-enabled information and communication technology (ICT adoption) on the decision to reorganize production across national borders (foreign boundary decision) by multinational enterprises (MNEs). Using a transaction cost framework, we argue that ICT adoption influences foreign boundary decisions by lowering coordination costs both internally and externally for the firm. We propose that the heterogeneity in the technology’s characteristics, namely complexity and the production processes’ degree of codifiability, moderate this influence. Using a difference-in-differences methodology and exploiting the richness of confidential US Census Bureau microdata, we find that overall ICT adoption is positively associated with greater likelihood of in-house production, as measured by increases in intra-firm trade shares. Furthermore, we find that more complex forms of ICT are associated with larger increases in intra-firm trade shares. Finally, our results indicate that MNEs in industries in which production specifications are more easily codified in an electronic format are less likely to engage in intra-firm relative to arm’s length trade following ICT adoption.
TL;DR: The relationship between political violence and greenfield foreign direct investment is contingent on the type of violence, characteristics of the investment-receiving sector, and extent to which the investing firm is geographically diversified.
Abstract: The relationship between political violence and greenfield foreign direct investment is contingent on the type of violence, characteristics of the investment-receiving sector, and extent to which the investing firm is geographically diversified. This paper presents an analysis with a dynamic fixed effects model for a panel of 90 developing countries from 2003 to 2012. The analysis shows that nationwide political conflict is negatively associated with total and non-resource-related greenfield foreign direct investment, but not with resource-related greenfield foreign direct investment. The insensitivity to political conflict of multinational firms in the resource sector is associated with the high profitability of natural resource extraction and the companies' geographic constraints on location choice during the period of estimation. In the non-resource sector, the less geographically diversified firms are most sensitive to the risk of conflict.
TL;DR: In this article, the authors examined the positive effect of leaders' global identity on multicultural team innovation and found that leaders with high global identity foster team-shared innovation goals and motivate team members to adopt communication inclusion behavior, making sure that they all understand each other.
Abstract: This study contributes to the empirical research on leadership of multicultural teams from the Positive Organizational Scholarship perspective (POS). Following the information/decision-making processes perspective on team cultural diversity, we examined the positive effect of leaders’ global identity, on multicultural team innovation. We proposed that R&D, multicultural team leaders with high global identity foster team-shared innovation goals and motivate team members to adopt communication inclusion behavior, making sure that they all understand each other. Furthermore, we propose that the effect of fostering team shared innovation goals on communication inclusion will be stronger for teams with perceived high, rather than low, cultural diversity and that team communication inclusion will positively affect team innovation. Participants were 574 R&D multicultural team members, their leaders, and their leaders’ managers in 82 co-located teams in a Chinese branch of a large, German global organization. Using SEM analysis, our findings supported our research model, demonstrating that multicultural team leaders with high global identity leveraged cultural diversity to promote innovative goals, which further enhanced team communication inclusion and its positive impact on team innovation. We discuss the theoretical and practical implications to the POS perspective on cultural diversity.
TL;DR: In this article, the authors examine cross-border syndication in investments led by foreign venture capitalists focusing on the potential correlation between cultural differences and the formation of VC syndicates, and find that a greater cultural disparity between the countries of investors and their companies is actually associated with smaller VC-led syndicates.
Abstract: We examine cross-border syndication in investments led by foreign venture capitalists (VCs) focusing on the potential correlation between cultural differences and the formation of VC syndicates. Contrary to the risk-sharing motive, we find that a greater cultural disparity between the countries of investors and their companies is actually associated with smaller VC syndicates. This is driven largely by lesser local investor representation in foreign VC-led syndicates. However, certain cultural disparity-related syndication strategies, such as the involvement of locally experienced foreign VCs or syndicate members from culturally similar countries, are associated with greater presence of local VCs who provide valuable monitoring services. We further show that these culture-linked syndication approaches are significantly correlated with VC financing and monitoring strategies in cross-border investments and their eventual success.
TL;DR: The authors developed a multidimensional scale of the work-and family-role adjustment of global professionals, using data from a total of 1231 corporate and self-initiated expatriates, international business travelers, and global domestics.
Abstract: Although the original model of expatriate adjustment proposed by Black and colleagues has received substantial empirical support, it has come under increased academic scrutiny, due to both the conceptual overlap among its dimensions and its limited applicability for global professionals who interact with individuals from diverse cultures. Drawing on role theory, we conceptualize and develop a multidimensional scale of the work- and family-role adjustment of global professionals. We assess this scale through five interlocking studies using data from a total of 1231 corporate and self-initiated expatriates, international business travelers, and global domestics. After confirming the scale’s dimensionality, we provide evidence for convergent, discriminant, nomological, and predictive validity. We also demonstrate differences in levels of adjustment and in relationships between work and family demands and resources and their respective forms of adjustment across various types of global professionals. We contribute to international business research, and the organizational behavior and work–family literatures, by offering a theoretically based scale that assesses adjustment to both work and family roles for a wide range of global employees. Our scale further lends itself as a diagnostic tool during the selection, training, and support of global professionals and their families.
TL;DR: In this paper, the authors compare the performance management practices of MNCs in the UK, Ireland, Canada, Spain, Denmark and Norway and argue that there is evidence of standardization in the nature of practices across countries.
Abstract: Drawing on a dataset constructed from a parallel series of nationally representative surveys of multinational companies (MNCs), we compare the performance management (PM) practices of MNCs in the UK, Ireland, Canada, Spain, Denmark and Norway. In each country we analyze data relating to MNCs from that country and of the foreign affiliates of US MNCs. We argue that there is evidence of standardization in the nature of practices across countries, particularly evident in the analysis of US MNCs. Standardization of practices among MNCs is also evident in the rather limited variation in practices between US and indigenous MNCs within each country. Moreover, even where there is evidence of variation across and within countries, this cannot be fully explained by adaptation to local institutional constraints but rather can be seen as the product of how distinct national contexts can promote the take-up of practices.
TL;DR: In this article, the authors provide guidance on how to build IB specific theory using grounded theory (GT) and contribute to future theory development by identifying areas within IB where GT can be applied and the type of research issues that can be addressed using this methodology.
Abstract: The field of international business (IB) is in need of more theory development. As such, the main focus of our manuscript was to provide guidance on how to build IB specific theory using grounded theory (GT). Moreover, we contribute to future theory development by identifying areas within IB where GT can be applied and the type of research issues that can be addressed using this methodology. Finally, we make a noteworthy contribution by discussing some of GT’s caveats and limitations, particularly those relevant to IB. This effort is intended to spur further interest in the development of IB theory.