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The study this chapter reports focuses on how network theory contributes to the understanding of the internationalization process of SMEs and measures the effect of network capability on performance in international trade and has three research objectives.

The first objective of the study relates to providing new insights into the international market development activities through the application of a network perspective. The chapter reviews the international business literature to ascertain the development of thought, the research gaps, and the shortcomings. This review shows that the network perspective is a useful and popular theoretical domain that researchers can use to understand international activities, particularly of small, high technology, resource-constrained firms.

The second research objective is to gain a deeper understanding of network capability. This chapter presents a model for the impact of network capability on international performance by building on the emerging literature on the dynamic capabilities view of the firm. The model conceptualizes network capability in terms of network characteristics, network operation, and network resources. Network characteristics comprise strong and weak ties (operationalized as foreign-market entry modes), relational capability, and the level of trust between partners. Network operation focuses on network initiation, network coordination, and network learning capabilities. Network resources comprise network human-capital resources, synergy-sensitive resources (resource combinations within the network), and information sharing within the network.

The third research objective is to determine the impact of networking capability on the international performance of SMEs. The study analyzes 11 hypotheses through structural equations modeling using LISREL. The hypotheses relate to strong and weak ties, the relative strength of strong ties over weak ties, and each of the eight remaining constructs of networking capability in the study. The research conducts a cross-sectional study by using a sample of SMEs drawn from the telecommunications industry in Ireland.

The study supports the hypothesis that strong ties are more influential on international performance than weak ties. Similarly, network coordination and human-capital resources have a positive and significant association with international performance. Strong ties, weak ties, trust, network initiation, synergy-sensitive resources, relational capability, network learning, and information sharing do not have a significant association with international performance. The results of this study are strong (R2=0.63 for performance as the outcome) and provide a number of interesting insights into the relations between collaboration or networking capability and performance.

This study provides managers and policy makers with an improved understanding of the contingent effects of networks to highlight situations where networks might have limited, zero, or even negative effects on business outcomes. The study cautions against the tendency to interpret networks as universally beneficial to business development and performance outcomes.

This chapter identifies features of foreign economic policy of the Republic of Belarus determined by its multidirectional external economic relations and participation in the processes of international economic integration.

It is noted that in the last decade there has been an active search for opportunities to shift the focus in foreign economic policy, including geographic redirection of trade and investment flows, intensification of the search for a “niche” and new ways of incorporating into the world economic relations system, progress toward the liberalization of trade relations by means of multilateral and bilateral interaction formats.

This section assesses the motivation for the boost of the foreign economic policy of the Republic of Belarus in the context of aggravated geopolitical situation and the growth of protectionist tendencies and identifies obstacles to its implementation.

In 1969, Warren Nutter left the University of Virginia Department of Economics to serve as the Assistant Secretary of Defense for International Security Affairs in the Nixon administration. During his time in the Defense Department, Nutter was deeply involved in laying the groundwork for a military coup against the democratically elected president of Chile, Salvador Allende. Although Nutter left the Pentagon several months before the successful 1973 coup, his role in Chile was far more direct than the better-known cases of Friedrich Hayek, Milton Friedman, James Buchanan, and Arnold Harberger. This chapter describes Nutter’s role in Chile policymaking in the Nixon administration. It shows how Nutter’s criticisms of Henry Kissinger are grounded in his economics, and compares and contrasts Nutter with other economists who have been connected to Pinochet’s dictatorship.

This piece takes issue with the deployment of Trotsky’s idea of uneven and combined development (UCD) in the Anglophone discipline of International Relations (IR). It argues that this strand of thought makes a theory out of what is really a theorem (a deduction from an axiom), whilst forgetting about the original, actual theory of which it was part, Leon Trotsky’s theory of permanent revolution. IR U&CD, marketed in the discipline as International Historical Sociology (IHS), posits ‘the international’ as the field to which ‘the theory’ must be applied in order to open it up to social theorisation. This is analogous to the late-19th-century subjective turn in social science in which reality is presented as unfathomable, and rationality is merely subjective, an attribute of individual ‘actors’. ‘The international’ in this sense may be compared to ‘the market’ in neoclassical economics. Although it presents itself as Marxist, the U&CD/IHS project was part of a regressive conjuncture in Anglo-American, mainstream IR, as transpires from its attempt to position itself close to the ‘English School’ in IR. I conclude with a variation on Trotsky’s original theory, applying it to the ‘permanent counterrevolution’, of which the current war on terror is the latest stage.

The leaders of the Association of the Southeast Asian Nations (ASEAN) announced to negotiate a Regional Comprehensive Economic Partnership (RECP) in November 2012, which is comprised of 10 ASEAN Member States (Thailand, Indonesia, Philippines, Malaysia, Singapore, Brunei, Vietnam, Cambodia, Laos, and Myanmar) and its six FTA partner countries (China, Japan, South Korea, Australia, New Zealand, and India). Embedded in the ASEAN Charter and implemented in all existing ASEAN + 1 FTAs, the ASEAN Centrality has been a corner stone principle in ASEAN-centric economic initiatives. Emerging discord in the region, complicated security climate and the rise of China, among others, have put the ASEAN Centrality under challenge. The development of the RCEP provides a timely case to assess ASEAN’s leadership role in creating the world’s most populous Free Trade Area. The RCEP may enhance ASEAN’s central role, but ASEAN needs to address challenges facing the regional integration now and beyond 2015. On the country/economy level, the chapter reviews some ASEAN Member States and their FTA Partners how they practice their ASEAN policy and seek leadership role in ASEAN. The three major players in ASEAN-Indonesia, Thailand, and Malaysia have reiterated the importance of the ASEAN Centrality in their foreign policy in the past, but debates emerge whether, such as in Indonesia, ASEAN Centrality best suits the national interests. The chapter also explores how the major powers, including China and the United States, respond to and collaborate with the group of smaller developing country players.

Race has played a central role in state-building in Latin America. This chapter foregrounds the role of transnational racialization politics in bureaucratic development in the region in the late nineteenth century. Analyzing the transformation of the Bolivian diplomatic bureaucracy following the War of the Pacific (1879–1884), I argue that the circulation in Europe and the Americas of racial discourses on Bolivia that cast doubt on its place among the concert of civilized nations motivated its reform and expansion. This study suggests that, given the potential costs of transnational racialization threats, states across the region developed agencies and practices that expanded their capacity to manage their racialized national images among international audiences. Against the threat of racialized imperialism and colonialism, Bolivian liberal reformers envisioned a diplomatic bureaucracy capable of negotiating Bolivia's place in the global racial imaginary abroad. This study emphasizes the central role of the diplomatic bureaucracy as a condition of possibility in these projects and directs attention to the role of race in the development of state agencies less commonly associated with race, such as diplomacy.

In an international setting, the potential conflict between the trading partners is thought to be more acute than in the domestic market, as cultural distance and ensuing misunderstandings make trading relations more complicated and demanding: the international marketer is confronted with the challenges of not only understanding the culture but also interpreting the local market information. This situation is often aggravated by limited resources put into the international marketing endeavour by the marketer.

This part contains four papers. Even though this volume of AIM primarily concerns exporter–intermediary relations, the first two contributions deal with channel choice and partner selection. The first chapter by Kent Eriksson, Jukka Hohenthal and Jessica Lindbergh, “SME export channel choice in international markets”, tests some of the fundamental factors proposed by the IP model explaining choice of entry mode (accumulation of knowledge of foreign markets determining foreign operation modes). Later developments of the model claim that experience and knowledge of local business relationships are also essential elements of the IP model. Whereas the IP model has been found to hold well for incremental resource commitments, it has – in contrast to transaction-cost theories – produced mixed results concerning its ability to explain operation modes. The authors present findings from research in 494 firms from Sweden, Denmark and New Zealand: factors included in the initial explanation of the IP model explain choice of channel, but later developments of the model do not. Implications are that the foreign market knowledge is, and that more incremental experiential knowledge accumulation is not relevant for export channel choice as regards integrated or non-integrated channel. The results show that for Small and Medium Sized Businesses (SMEs), expected market growth lead to use of integrated channels. Integrated channels make it possible to reap more of the profits from a growing market and to learn faster about what is going on in the market. They also found that use of integrated channels is correlated with cultural distance, contradicting the findings of Johanson and Vahlne (1977) and Kogut and Singh (1988). The IP model therefore offers a rather weak explanation of choice of integrated channel.

In this chapter we approach the issue of Business Diplomacy (BD) from a historical perspective, showing how this activity has been performed since the ancient Greece. In particular, we give a brief overview of the main BD concepts used, starting with the proxenos, the “pioneers” in the BD field, until present days.

The analysis is grounded on a theoretical approach backed by a comprehensive overview of the representative literature in the field of BD. We identify and discuss the main challenges to be faced by BD in a globalized world, dominated by multinational corporations (MNCs).

We show that BD has been practiced for centuries and nowadays is still performed by honorary consuls and chambers of commerce. In a globalized world, BD is being assimilated by MNCs either as their main activity or as an auxiliary one becoming a key tool and mindset toward securing their market reputation, positioning, and legitimacy.

Apart from the historical overview of the beginnings and evolution of the main diplomatic actors and activities, the chapter proposes new concepts and legal frameworks for the actual BD field such as: consulariate instead of consulate (devoted to business) and chancellariate instead of embassy (devoted to political affairs).

This chapter applies the business diplomacy concept to Brazil, a leading emerging economy and a member of the BRICS group. Brazil’s emergence as a new economic power has facilitated the emergence of several large national champions whose international behavior is understudied.

The chapter presents an extensive review of secondary sources and selective use of previous survey data compiled by the author.

This chapter adds to the literature on business diplomacy and contributes empirical research on a leading emerging power. Brazil’s ambitious diplomatic agenda is matched by the country’s growing number of internationalized companies. Brazilian corporate managers need to increase their business diplomacy competency to effectively leverage their presence and legitimacy abroad.

Additional case studies will foster a more robust theory regarding business diplomacy of emerging economies.

A growing number of cases of business diplomacy in Brazil will benefit both business and diplomacy communities and facilitate greater research collaboration.

How Brazilian business diplomats navigate between the boundaries of international business, diplomacy, and foreign policy are important questions for a country concerned with its international role and its goal of becoming a key actor in the international arena. A better understanding of how business diplomacy works in Brazil together with more case studies will benefit a new generation of business leaders.

The behavior of Brazilian business elites in international affairs remains largely unexplored. This work’s original contribution is precisely in the form of its focus on Brazilian business diplomats and how business diplomacy is exercised by Brazilian companies.