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Purpose – Taking a configurational perspective, this study explores if there are different market entry strategies used and if there are ideal configurations of subsidiary strategy in different types of foreign countries.

Methodology – The study is based on a sample of 238 subsidiaries of German companies that are located in 38 different countries. Capturing many different facets of the subsidiary strategy, the configuration of top performers in different environments is identified. With a ‘fit as profile deviation’ approach, it is investigated whether the strategy of the top performers indeed constitutes an ideal strategy.

Findings – The host countries of the subsidiaries can be clustered in four types: BRICs, Eastern Europe, Western Europe and the USA. Chosen market entry modes differ significantly between those four host country types. The top performing subsidiaries in each of the country types have distinct strategy patterns. However, deviation from the strategy profile of the top performers only explains the lower performance of subsidiaries in country types BRICs and Eastern Europe. Performance differences between subsidiaries in Western Europe and the USA cannot be explained with the variables captured in this study.

Research limitations/implications – Taking a configurational approach on subsidiary strategy proves to be a promising path to create new insights. But subsidiary strategy pattern alone is insufficient to explain performance in two country types. Thus, other influence factors must be investigated. Furthermore, the study did explore subsidiary strategy patterns with a cluster analysis, without ex ante hypotheses about the patterns. Hence, further studies are needed to re-investigate these patterns.

Among the prominent economic trends in recent decades is the exponential increase in flows of goods and capital driven by technological progress and falling of restrictions. A key driver of this phenomenon has been the cross-border production, foreign investment, and trade both final and intermediate goods by multinational corporations. Research has sought to understand how foreign direct investment (FDI) affects host economies. This paper reviews the main theories and empirical evidence of two streams of literature: the mechanisms by which multinational activity might create positive effects and externalities to countries and the role of complementary local conditions, also known as “absorptive capacities,” that allow a country to reap the benefits of FDI paying particular attention to the role of factor markets, reallocation effects, and the linkages generated between foreign and domestic firms. The survey focuses mainly on work related to developing countries.

Throughout centuries, Latin America has faced a paradox. On one hand, the abundance of resources has attracted immigrants who find a suitable place to undertake profitable business ventures in the region. On the other hand, the limited entrepreneurial resources of most countries of the region have motivated the migration of talented people, among them entrepreneurs, to non-Latin American countries. This chapter explores this paradox through the analysis of entrepreneurs' motivations to immigrate to, and migrate from Latin America, the influence of their profile on their business ventures, as well as the role played by both the home and the host countries' institutional conditions. The findings of this analysis underline the diversity of migrant entrepreneurs in terms of personal resources and survival versus opportunity-driven migration decisions. They also reveal the kind of mechanisms migrant entrepreneurs use to counteract their host country's institutional challenges.

Location-specific advantages (LSA) and the liability of foreignness (LOF) are key concepts in international business and management research. To combine these concepts in a systematic framework, I develop a two-by-two matrix focusing on the nature of International Business (IB) research using four key terms: firm, context, comparative and interactive. This framework serves as a heuristic device in describing three main challenges IB scholars face when advancing the role of LOF and LSAs. These challenges relate to our understanding of the nature of relative advantage, to the development of a dynamic (so-called non-ergodic) world view and to the inclusion of the relevant spatial heterogeneity.

The research question is how home country corruption and nationalism may affect operations of BRIC multinational enterprises. BRIC composition permits a comparison of two authoritarian regimes and two constitutional democracies. Each BRIC features a different combination of corruption and nationalism. The chapter adds South Africa information for two limited reasons. First, from 2010 South Africa is a member of the BRIC summit process. South Africa is an important entry point to Africa, for BRIC multinationals and particularly for China. Second, concerning corruption and nationalism South Africa is analytically useful as a control context that helps illustrate but does not appear to change highly exploratory BRIC findings.

The chapter draws on limited literature and information concerning corruption and nationalism in BRICs to suggest tentative possibilities. Transparency International provides bribe payers index estimates for 28 large economies, with important multinational enterprises, and corruption perceptions index estimates including those 28 countries. These estimates include the four BRICs and South Africa. The available sources suggest some suggested findings about varying impacts of home country corruption and nationalism on operations of BRIC multinationals.

China and Russia are authoritarian regimes in transition from central planning-oriented communist regimes. They are global military powers, expanding influence in their respective regions. Brazil, India, and South Africa are constitutional democracies. India, a nuclear-armed military power, seeks a regional leadership role in South Asia. Brazil and South Africa are key countries economically in their regions. BRIC multinationals are positioned between home country and host country conditions. Chinese and Russian multinationals may reflect a stronger nationalistic tendency due to home country regimes and ownership structure.

The chapter is an original but highly exploratory inquiry into impacts of corruption and nationalism on BRIC multinationals. Extant BRIC literature tends to understudy effects of home country corruption and nationalism on managerial mindset and incentives in either commercial or state-owned enterprises.

Germany has become one of the major destination countries for labour migration within the European Union. The German government introduced temporary restrictions on labour migration after the eastern enlargement rounds of 2004 and 2007. These barriers had little impact on the overall volume of labour mobility. Rather they were accompanied by new “atypical” forms of mobility through the posting of workers, self-employment and seasonal workers, which according to EU rules are covered only by a minimum of host country regulations. The combination of temporary restrictions on regular migration and the opportunities through atypical mobility created strong incentives for companies to engage in ‘regime shopping’ strategies. This contributed to a considerable growth in outsourcing, subcontracting and flexible use of external labour added to pre-existing dynamics of low-wage competition, segmentation and fragmentation in the German labour market. Using data on the different forms of intra-EU migration to Germany, the article analyses the different paths that labour migration has frequently used since the fall of the Iron Curtain. First, it maps the changes in magnitude, character and direction of intra-EU labour mobility to Germany and the relative weight of the different channels through which such movements occurred from 2000 to 2015. Second, the article discusses the various responses by the government by the extension of collective agreements and the statutory minimum wage.

In this study, we analyze the general effect of acquirers’ ownership strategy on the survival in foreign acquisitions. Furthermore, we attempt to address five potential moderating effects: international, regional, target country experience, cultural distance, as well as host country development. The developed hypotheses are tested on a sample of 1,345 acquisitions made by 174 Finnish firms in 59 countries during 1980–2005. The results indicate that in general WOS increases the probability of survival of foreign acquired units. We further find that the impact of WOS on the survival of foreign acquired units is contingent upon cultural distance and host country development but not on the experience of buying firms.

This chapter investigates a shock transmission path between a home country (a country where globalized banks’ headquarters are located) and a host country (Indonesia as the emerging market) through the lending channel of global banks’ local branches (i.e., the internal transfer channel). Using novel data of monthly individual foreign bank’s balance sheet in Indonesia, the author finds the evidence that shocks to a parent bank and a home economy are transmitted to a host economy through the foreign banks’ internal capital market. With the Indonesia banks’ capital injections and their difficulty in financing dollar funds without risk premiums since the 1998s crisis, the foreign banks’ dollar lending in Indonesia is a good showcase of internal capital markets. A change in a home stock market index and industrial production appears to have a negative effect on growth rates in foreign currency loans of foreign banks in the host market. On the other hand, high growth rates in the parent bank’s stock price in the home market lead to an increase in foreign banks’ US dollar lending in the host country. This effect does not appear in local currency lending because limited hedging instruments against foreign exchange risk results in immobility of bank capital in the local currency.

This chapter explores the impact of international financial integration on credit markets in Latin America, using a cross-country dataset covering 17 countries between 1996 and 2008. It is found that financial integration amplifies the impact of international financial shocks on aggregate credit and interest rate fluctuations. Nonetheless, the net impact of integration on deepening credit markets dominates for the large majority of states of nature. The chapter also uses a detailed bank-level dataset that covers more than 500 banks for a similar time period to explore the role of financial integration – captured through the participation of foreign banks – in propagating external shocks. It is found that interest rates charged and loans supplied by foreign-owned banks respond more to external financial shocks than those supplied by domestically owned banks. This does not hold for all foreign banks. Spanish banks in the sample behave more like domestic banks and do not amplify the impact of foreign shocks on credit and interest rates.