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Article
Publication date: 10 November 2014

Alexander Mohr and Georgios Batsakis

– The purpose of this paper is to study draws on the resource- and knowledge based views (RBV/KBV) of the firm to explain the internationalisation speed of retail firms.

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Abstract

Purpose

The purpose of this paper is to study draws on the resource- and knowledge based views (RBV/KBV) of the firm to explain the internationalisation speed of retail firms.

Design/methodology/approach

The authors use a panel data set of 144 international retailers over a ten-year period and employ feasible generalised least squares analysis in order to assess the effect of intangible assets and international experience on internationalisation speed.

Findings

The results support direct effects of intangible assets and international experience, while the latter effect is also moderated by firms’ home-region concentration.

Research limitations/implications

The study investigates the determinants of retailers’ internationalisation speed. While research stresses the positive performance effects of rapid internationalisation, future research should investigate the role of internationalisation speed for the performance of retailers empirically. The findings support the usefulness of adopting a RBV/KBV for explaining internationalisation speed.

Practical implications

The findings imply that firms need to have particular intangible resources before being able to internationalise rapidly. They also show that decision-makers need to be mindful of the effects of international experience in allowing them to expand overseas both within and outside their home region.

Originality/value

There has been very little research into the speed with which firms in general and service sector firms in particular expand their operations internationally. Through a theory-based analysis of a newly created panel data set this study provides novel insights into the factors that lead retail firms to internationalise rapidly.

Article
Publication date: 16 November 2015

Quyen T.K. Nguyen

The purpose of this paper is to examine the determinants of home-region strategy of the multinational subsidiary and the impact of such a strategy on its performance. The author…

Abstract

Purpose

The purpose of this paper is to examine the determinants of home-region strategy of the multinational subsidiary and the impact of such a strategy on its performance. The author draws upon new internalization theory to develop a theory-driven model and empirically tests the simultaneous relationships between home-region strategy and performance of the subsidiary.

Design/methodology/approach

The author tests the model using a simultaneous equation statistical technique on an original, new data set of publicly listed multinational subsidiaries operating in the ASEAN region, with parent firms’ headquarters across the broad triad.

Findings

There are three significant findings. The first finding is that subsidiary-level downstream knowledge (marketing advantages), and the geographic location of the subsidiary in the same home region as of the parent firm are key antecedents of a subsidiary’s home-region strategy. The second finding is that a subsidiary’s profitability reduces home-region orientation; however, home-region strategy has an insignificant effect on performance. The third finding is that these subsidiaries generate on average 92 per cent of their total sales in the home region (the Asia Pacific).

Originality/value

The author advances the existing literature on the regional nature of parent-level multinational enterprises by demonstrating that their quasi-autonomous subsidiaries also operate mainly on a home-region basis.

Details

The Multinational Business Review, vol. 23 no. 4
Type: Research Article
ISSN: 1525-383X

Keywords

Book part
Publication date: 26 July 2007

Walid Hejazi

It has been demonstrated by Rugman and his colleagues that a majority of the activities undertaken by the world's largest 500 MNEs, such as sales, assets, and employment, are…

Abstract

It has been demonstrated by Rugman and his colleagues that a majority of the activities undertaken by the world's largest 500 MNEs, such as sales, assets, and employment, are regional in nature. This evidence has also been extended to trade and FDI patterns of OECD countries. Given the costs associated with doing business in foreign and distant markets, one may expect there to be a regional concentration in such activities. That is, the concentration of MNE activities in regional markets may be consistent with a transactions cost model. The objective of the analysis undertaken in this paper is to measure the extent to which the concentrations of OECD MNE activities can be explained by a formal transactions costs model (the gravity model in this case). These results are important for two main reasons. To the extent the concentrations are consistent with a formal model, then, first, this would provide further theoretical arguments in support of Rugman's hypotheses, and second, this would indicate that MNE managers have it right – that is, the activities of the corporations they manage are as global as they should be. On the other hand, if the activities are not fully explainable by atransactions cost model, the implications would be quite different. Theresults indicate that although some activities can be explained by a gravity model, many dimensions of OECD MNE activities, especially within the EU, are not explainable using a gravity model. That is, many of the activities of EU MNEs are more regionally concentrated than would be predicted by transactions costs.

Details

Regional Aspects of Multinationality and Performance
Type: Book
ISBN: 978-0-7623-1395-2

Article
Publication date: 10 April 2017

Evgeniy Kutsenko, Ekaterina Islankina and Vasily Abashkin

This paper aims at assessing the impacts of the national cluster policy, cluster age, cluster development benchmarks of neighbouring regions and the cumulative level of regional…

Abstract

Purpose

This paper aims at assessing the impacts of the national cluster policy, cluster age, cluster development benchmarks of neighbouring regions and the cumulative level of regional innovative capacity on the quantity and quality of cluster initiatives in Russia.

Design/methodology/approach

Hypotheses’ testing was carried out by a series of calculations comparing the qualitative and quantitative characteristics of cluster initiatives; the number of new cluster initiatives to the number of neighbouring regions, where cluster initiatives had begun to develop earlier; and ranks of regions within the Russian regional innovation scoreboard to the quantity and quality characteristics of cluster initiatives therein.

Findings

The results of the study empirically confirm that the national cluster policy significantly influenced the emergence and advancement of cluster initiatives in Russia. The proximity to the regions, having previously launched cluster support programmes, also had an impact on the emergence of new cluster initiatives. The cluster initiatives’ age had an ambiguous effect on their performance. Finally, the level of regional innovative capacity was correlated only with the number of cluster initiatives localised therein.

Practical implications

The findings show that along with the direct effects of the national cluster policy for the government-supported clusters, there are positive externalities, e.g. the emergence of new cluster initiatives throughout the country.

Originality/value

The research database of 277 cluster initiatives has been drawn up as a part of the first national cluster mapping and covers almost a decade of clustering activity in Russia. The study analyses not only the cluster initiatives supported by the federal government but also those developed independently.

Article
Publication date: 20 July 2012

Louise Curran and Soledad Zignago

The fact that many international companies remain strongly orientated towards their home region has been highlighted in the work of several international business scholars. This…

Abstract

Purpose

The fact that many international companies remain strongly orientated towards their home region has been highlighted in the work of several international business scholars. This work has given rise to the concept of “the liability of inter‐regional foreignness”. This paper aims to argue that the data that have so far been exploited in this debate are too aggregated and that more attention needs to be paid to differences between different types of companies if we are to better understand the reasons for this liability of inter‐regional foreignness and how companies can overcome it.

Design/methodology/approach

This paper uses trade data to explore levels of global and regional orientation in international exchanges of goods. It disaggregates the trade data by type of product (final goods or inputs to production), level of technology (high, medium and low tech) and direction of flow (imports and exports).

Findings

The paper finds striking differences between regions, types of products and trade direction. The trade data do not show an overwhelming home region bias in exchanges, but neither are these exchanges overwhelmingly global. Companies in different regions and different sectors seem to experience the liability of inter‐regional foreignness differently. In particular there is some evidence that high‐tech companies may be less subject to such difficulties. These findings imply that more attention needs to be paid to sectoral differences when analysing international business.

Research limitations/implications

The trade data also suffer from some aggregation bias, as highlighted in the paper. In addition the inability to differentiate between inter‐ and intra‐firm trade limits the usefulness for theory building. However the results do provide some pointers for further research and imply that greater attention should be paid to the type of company and its position in the supply chain when considering the impact of the liability of inter‐regional foreignness.

Originality/value

The debate so far has been based on either Fortune 500 data or foreign direct investment data. Both of these datasets mix companies with very different market structures and operating practices. The originality of this work is to explore macro data extensively and look at exchanges differentiating by type of good. The results have implications for work on aggregated datasets. Simply differentiating by technology alone may lead to interesting variations in findings from firm‐level studies.

Details

Critical perspectives on international business, vol. 8 no. 3
Type: Research Article
ISSN: 1742-2043

Keywords

Article
Publication date: 23 September 2022

Aparna Bhatia and Meenu Khurana

The paper aims to measure the nature and extent of international diversification followed by Indian companies over the period 2009–10 to 2017–18. The study also aims to assess the…

Abstract

Purpose

The paper aims to measure the nature and extent of international diversification followed by Indian companies over the period 2009–10 to 2017–18. The study also aims to assess the pattern of transition of companies to various strategies of international diversification.

Design/methodology/approach

Jacquemin and Berry’s (1979) entropy approach has been applied to measure the extent and assess the nature of international diversification. Further, the study deploys two-dimensional categorical framework advocated by Vachani (1991) and categorizes the firms into four international diversification strategies.

Findings

Larger proportion of companies in internationally low diversification (ILD) strategy reveals low extent of international diversification of Indian companies. The pattern of diversification depicts that the trend of moving forward is speeding up sequentially toward higher strategies of growth. Both the extent and pattern depict that the nature of diversification is shifting from relatedness to un-relatedness with transitions from intra-regions to inter-regions. The study confirms the applicability of eclectic theory and psychic distance Uppsala model in determining the preference of international diversification strategies and process of internationalization respectively in Indian firms.

Originality/value

The paper is first of its kind on account of several reasons. First, such a comprehensive evaluation of preferences for international diversification strategies has never been taken up with reference to emerging economies, especially India. Second, the paper is not static and does not limit itself only to the identification of favored strategies of Indian companies but also gauges the transitional behavior of Indian companies across different strategies at different points of time. In fact it is the first study to statistically research the applicability of psychic distance model in firms in emerging economy. Third, the results not only measure the quantum of international diversification but also assess the extent of relatedness and un-relatedness followed by Indian companies.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 9 March 2012

Joachim Wolf, Till Dunemann and William G. Egelhoff

The current paper seeks to analyze to what degree theories from different fields of social science are able to explain the home‐region orientation of MNCs. This is necessary since…

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Abstract

Purpose

The current paper seeks to analyze to what degree theories from different fields of social science are able to explain the home‐region orientation of MNCs. This is necessary since there has been only a relatively narrow, economics‐oriented explanation for such an orientation.

Design/methodology/approach

The analysis is based on a thorough review of the literature that refers to a MNC's home‐region orientation and on different theories from the social sciences.

Findings

The paper shows that several theories from economics, psychology, and sociology are able to explain an MNC's home‐region orientation.

Research limitations/implications

The paper contributes to the development of a more multi‐faceted explanation of why MNCs generally prefer a home‐region orientation. The paper derives propositions that are consistent with each theory. These propositions can be tested empirically in subsequent research studies.

Originality/value

The paper discusses a number of different theories and streams of research that can be used to conceptually explain and gain insight into the phenomenon of a home‐region orientation for MNCs

Details

Multinational Business Review, vol. 20 no. 1
Type: Research Article
ISSN: 1525-383X

Keywords

Article
Publication date: 12 April 2013

Andre Sammartino and Thomas Osegowitsch

The paper aims to motivate more rigorous theoretical and empirical specification of the home regionalization phenomenon, in particular the dynamics of shifting advantage over time…

Abstract

Purpose

The paper aims to motivate more rigorous theoretical and empirical specification of the home regionalization phenomenon, in particular the dynamics of shifting advantage over time within a multinational enterprise. It aims to improve dialogue among regionalization researchers.

Design/methodology/approach

Contrasting the economizing and behavioral perspectives on internationalization, the paper presents five different archetypes of the home‐regionalization phenomenon. These archetypes are predicated on strategic management stylizations of competitive advantage.

Findings

The paper demonstrates that the notion of home regionalization as a dominant and superior model for firm internationalization remains a promising yet under‐explained and inconsistently articulated thesis. By introducing and exploring the archetypes, it shows the diversity of home‐regionalization theses, and the prospect that multiple forms of regionalization may be at play for different firms, industries and locations.

Originality/value

The paper presents the full complement of archetypes of the home‐regionalization phenomenon and explores their corresponding assumptions. These explorations open up new empirical and theoretical research avenues for distinguishing any genuine region effects.

Book part
Publication date: 18 August 2006

Alan M. Rugman and Nessara Sukpanich

This chapter is an extension of a recent work that has examined the intra-regional sales of large multinational enterprises (MNEs). First, we examine the interaction between the…

Abstract

This chapter is an extension of a recent work that has examined the intra-regional sales of large multinational enterprises (MNEs). First, we examine the interaction between the performance of MNEs and four proxies for their firm-specific advantages (FSAs). This includes: firm size, knowledge (as represented by research and development (R&D)), marketing ability, and industry type. We find that FSAs in R&D and service sector type are best exploited within the home region. In contrast, the FSA firm size is better exploited by global and bi-regional firms. Second, we find that a service MNE tends to be more home-region oriented and has a higher proportion of intra-regional sales than a manufacturing firm.

Details

Regional Economic Integration
Type: Book
ISBN: 978-0-76231-296-2

Article
Publication date: 15 June 2012

Alain Verbeke and Liena Kano

This paper seeks to demonstrate that internalization theory, as a “complete” theory of the firm, is particularly well equipped to analyze multinational enterprise (MNE) regional…

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Abstract

Purpose

This paper seeks to demonstrate that internalization theory, as a “complete” theory of the firm, is particularly well equipped to analyze multinational enterprise (MNE) regional strategies, thanks to its joint transaction cost economics and resource‐based foundations.

Design/methodology/approach

This paper builds on recent work by Wolf, Egelhoff, and Dunemann to show that internalization theory's predictions on MNE regional strategy are superior to those suggested by several other conceptual frameworks. For each of the 11 hypotheses formulated by Wolf and his co‐authors, an alternative is proposed here that is consistent with internalization theory predictions.

Findings

MNE regional strategy is an important empirical phenomenon. Internalization theory, as a powerful conceptual framework with general applicability, simplicity and accuracy, allows in‐depth analysis of MNE regional strategies.

Research limitations/implications

Internalization theory scholars need to find new ways of operationalizing MNE firm‐specific advantages (FSAs), as well as MNE resource recombination trajectories, to predict accurately when and how MNEs will pursue regional versus global strategies.

Practical implications

MNE senior management should rethink international expansion strategies and realize that most large MNEs actually pursue regional, not global strategies.

Social implications

Even the world's largest MNEs have great difficulty engaging in novel resource recombination across the globe, and their alleged market power should therefore not be overestimated.

Originality/value

International business scholars should embrace internalization theory as the general theory of the MNE, rather than looking for insight from theories not intended – nor properly equipped – to study strategies of the world's most complex entrepreneurial organizations.

1 – 10 of 147