New Analysis of Multinational Enterprises and Their Linkages with Markets and Institutional Diversity

Abstract

Purpose

This chapter provides an overview of various new streams in international business (IB) research that will have an important impact on IB studies in the years to come, both from a conceptual and a methodological perspective.

Methodology/approach

The authors discuss a set of 18 chapters, all included in this research volume, and highlight both the key intellectual contributions and the challenges identified that will need to be taken into account in future research.

Findings

The findings of the studies discussed are manifold and profound. Some of the main findings include the following: (1) multinational enterprise (MNE)-centric empirical research studies should be avoided. Resource recombination typically requires taking into account the resource base and the strategies of at least two economic actors. (2) IB studies, almost by definition, need to take into account “distance,” but most prior empirical research has not done a particularly good job in including relevant distance parameters in a methodologically sound way to assess their impact on MNE strategy, operational functioning or performance. (3) Nonbusiness institutions can be very helpful in promoting MNE expansion but include “dark side” institutions that sometimes appear very effective in particular situational contexts. (4) Institutional diversity matters: it can make international knowledge transfers difficult, it can lead to discrimination against firms from specific nationalities, it certainly suggests that there is no generalizable multinationality–performance relationship, and it raises the question whether new theory is needed to accommodate previously neglected institutional contexts.

Practical implications

This overview of several recent IB studies confirms that managing the international innovation chain in its entirety is fraught with difficulties. MNE senior management must economize on bounded rationality (meaning: improving information quality and information processing) and bounded reliability (meaning: making sure that economic actors make good on open-ended promises, whether implicit or explicit). Any IB transaction by definition entails new resource recombination. Doing so effectively requires correct information, reliable partners and a recombination outcome that supports value creation for the MNE. Multiple, practice-driven puzzles in the IB context are proposed to the reader, and the outcomes are often unexpected.

Originality/value

A variety of new concepts and methodological approaches are proposed to improve the quality of future IB research.

Citation

Verbeke, A., Van Tulder, R. and Lundan, S. (2014), "New Analysis of Multinational Enterprises and Their Linkages with Markets and Institutional Diversity", Multinational Enterprises, Markets and Institutional Diversity (Progress in International Business Research, Vol. 9), Emerald Group Publishing Limited, Leeds, pp. 1-23. https://doi.org/10.1108/S1745-886220140000009006