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1 – 10 of 11Niron Hashai and Ravi Ramamurti
This chapter focuses on the four topics pertaining to foreign direct investment (FDI) and multinational enterprises (MNEs) that are the focus of this volume: (1) managerial…
Abstract
This chapter focuses on the four topics pertaining to foreign direct investment (FDI) and multinational enterprises (MNEs) that are the focus of this volume: (1) managerial decision-making processes that result in FDI and internationalization; (2) the changing national origin of MNEs, particularly those spawned by emerging markets; (3) the changing scope of MNEs, as they fine-tune and globally disperse their value chains, expand into new services, and rely increasingly on networks, alliances, and offshoring to enhance global competiveness, and speed up internationalization to the point of being “born global”; and (4) the changing relationship between MNEs and home and host countries. After surveying Yair Aharoni's significant contributions in each of these areas, the chapter offers a preview of the volume's contents on each topic. It concludes with an agenda for future research by international business scholars.
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International business theory leans heavily on neoclassical economics, ignoring its unrealistic assumptions and the many changes in the environment. The chapter calls for a…
Abstract
International business theory leans heavily on neoclassical economics, ignoring its unrealistic assumptions and the many changes in the environment. The chapter calls for a revision of the theory to a contingency theory. The major contingent elements analysed are the political system, business–government and NGOs relations, industries, regimes, ownership patterns, the degree of reliance on ethical behaviour, the institutional environment and social norms.
The purpose of this paper is to encourage scholars of international business (IB) to engage with the “decolonizing the university” project and reflect on what decolonizing might…
Abstract
Purpose
The purpose of this paper is to encourage scholars of international business (IB) to engage with the “decolonizing the university” project and reflect on what decolonizing might mean for IB research and education. The paper also argues that it is particularly important for IB scholars to join the decolonizing project given that the field’s main object of study – the multinational enterprise – has been central to colonialism.
Design/methodology/approach
An essay style is adopted to introduce the decolonizing project to IB and to explain why and how this scholarly field might benefit from engaging with it. As part of that, the paper calls upon IB scholars to work on decolonizing the field and to do so by not only interrogating its knowledge claims but also broadening the scope of its research so it can address the theme of neo-colonialism.
Findings
The paper reveals the conspicuous absence of IB scholars from the decolonizing project and situates such absence within a long-standing indifference within IB to the issue of colonialism.
Social implications
In learning about and engaging with the decolonizing project, IB scholars will be able to not only enrich IB theory and education but also help to tackle one of the grand challenges facing the modern world society, namely, social inequality and injustice rooted in colonialism.
Originality/value
It is hoped that this paper will stimulate reflection on IB’s absence from the decolonizing project and assist scholars in developing an understanding of the project’s rationale and underlying literature. It is also hoped that the paper will open dialogue within IB about how this field might be decolonized and help scholars engage meaningfully with other disciplines as they do so.
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The digital economy, which heralds the start of the Fourth Industrial Revolution (IR4), is upon us. What can history teach international business scholars about how firms are…
Abstract
The digital economy, which heralds the start of the Fourth Industrial Revolution (IR4), is upon us. What can history teach international business scholars about how firms are likely to respond to this new form of technological change? Who are the likely winners or the likely losers? For 30 years, the author has lived through, studied, and written about the Third Industrial Revolution and other major environmental shocks, ranging from new entrants to academia to regional integration to outbreak of war, looking at the fundamental issues of how individuals, firms, communities, and countries respond to and are affected by life-changing events. In this chapter, the author tells seven brief stories about living through and studying “shocks and responses.” Perhaps, some of these stories may provide useful lessons to the scholars of IR4.
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Rajneesh Narula and Khadija van der Straaten
Whether by direct or indirect action (or by inaction), multinational enterprises (MNEs) can have both a positive and a negative effect on within-country social and economic…
Abstract
Purpose
Whether by direct or indirect action (or by inaction), multinational enterprises (MNEs) can have both a positive and a negative effect on within-country social and economic inequality. This paper aims to comment on this multifaceted relationship between MNEs and within-country inequality.
Design/methodology/approach
Given the absence of either robust theory or evidence in the neglected realm of MNEs and within-countries inequalities, this paper offers some general observations, highlights some of the key issues and illustrates possible avenues for future research studies.
Findings
The capacity of MNEs to upgrade economic activity in the host country is a key policy objective. MNEs have arguably contributed to reducing income inequalities between countries. However, the limited evidence available suggests that the gains of FDI are rarely evenly distributed within recipient countries, and many of the underlying dynamics need further investigation.
Social implications
The authors broaden the engagement with inequality beyond income levels, as this is just one aspect of inequality that shapes or impedes human development. They believe it is necessary – for both MNEs and policymakers – to have a more nuanced understanding of how, and under what circumstances, the presence of MNEs affects inequality in host economies.
Originality/value
This paper relates the large literature on inequality (going beyond the mainstream focus on income inequality) to the mainstream understanding of MNE-assisted development.
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Lorraine Eden and Stewart R Miller
The costs of doing business abroad (CDBA) is a well-known concept in the international business literature, measuring the disadvantages or additional costs borne by multinational…
Abstract
The costs of doing business abroad (CDBA) is a well-known concept in the international business literature, measuring the disadvantages or additional costs borne by multinational enterprises (MNEs) that are not borne by local firms in a host country. Recently, international management scholars have introduced a second concept, liability of foreignness (LOF). There is confusion in the two literatures as to the relationship between CBDA and LOF, as evidenced in a recent special issue on liability of foreignness (Journal of International Management, 2002). We argue that LOF stresses the social costs of doing business abroad, whereas CDBA includes both economic and social costs. The social costs arise from the unfamiliarity, relational, and discriminatory hazards that foreign firms face over and above those faced by local firms in the host country. Because the economic costs are well understood and can be anticipated, LOF becomes the core strategic issue for MNE managers. We argue that the key driver behind LOF is the institutional distance (cognitive, normative, and regulatory) between the home and host countries, and explore the ways in which institutional distance can affect LOF. We operationalize our arguments by showing how institutional distance and liability of foreignness can provide an alternative explanation for the MNE’s ownership strategy when going abroad.
The extent to which emerging multinational enterprises (EMNEs) challenge extant international management (IM) theories is a question under current discussion. The purpose of this…
Abstract
Purpose
The extent to which emerging multinational enterprises (EMNEs) challenge extant international management (IM) theories is a question under current discussion. The purpose of this paper is to confront two classic theories (internationalization process model (IPM) and post-acquisition integration types) to several EMNEs strategies within their initial conceptual frameworks, exploring how their practices lead to extend and update existing models.
Design/methodology/approach
This paper compares the classic IPM with the development stages of iconic EMNEs. This reveals how EMNEs’ strategies can be analyzed within extant conceptual frameworks, extending their theoretical content. This approach is then applied to an empirical study of post-acquisition integrations conducted in France by EMNEs from 11 countries of origin.
Findings
Two theories are discussed, with suggested updates, within their extant frameworks, taking into account EMNEs’ strategies. First, the initial IPM is re-explored to reveal concentrated paths, from all quadrants of the framework. Similarly, post-integration typologies are updated, including the partnering approach frequently implemented by EMNEs, and the holding approach empirically identified with some specific features (subjection).
Originality/value
This paper combines an analysis of some iconic EMNEs’ internationalization processes and empirical data on up-market acquisitions by EMNEs from diverse countries of origin. It provides suggestions to update two IM theories.
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Benjamin Robb and Snejina Michailova
Globalisation plays a major role in the existence and persistence of modern slavery, one of the most extreme examples of human rights abuses in recorded history. This paper aims…
Abstract
Purpose
Globalisation plays a major role in the existence and persistence of modern slavery, one of the most extreme examples of human rights abuses in recorded history. This paper aims to explore how multinational enterprises (MNEs), as central players in international business (IB) activities, relate to modern slavery. This paper focusses on human rights–minded MNEs and investigates their narratives and proactive approaches to tackling modern slavery.
Design/methodology/approach
This study conducted 12 semi-structured interviews with managers and consultants with substantial knowledge on the topic. This study also gained insights from a business conference on modern slavery organised by a New Zealand ministry in 2021.
Findings
This study identified four MNE narratives and three approaches to responding to modern slavery.
Practical implications
This paper discusses the challenges faced by MNEs when addressing modern slavery and outlines the relevant implications for MNE managers.
Originality/value
The scholarly conversation on modern slavery in the field of IB is in its infancy. This paper offers an account of how MNEs deal with modern slavery. In addition, while most studies take a critical angle and focus on problems, this study focusses on progressive and human rights–minded MNEs.
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Robert D. Pearce and Yuxuan Tang
The purpose of this paper is to evaluate multinational enterprises’ (MNEs) performance and impact in contexts beyond their own internal objectives.
Abstract
Purpose
The purpose of this paper is to evaluate multinational enterprises’ (MNEs) performance and impact in contexts beyond their own internal objectives.
Design/methodology/approach
Based on an “eclectic” paradigm and the range of motivations, the framework is designed around three layers of evaluation: “efficiency” as static optimisation, “growth and development” as the dynamics of change on a purely economic view; political/economic sphere in terms of the outcomes of “distribution”, and “sovereignty” on the more purely political concern of how MNEs may undermine countries’ policy independence.
Findings
MNE and national economies have to use current sources of competitiveness efficiently while addressing the necessity to reinforce and refocus them through time. Within these broad agendas, significant interactions and outcomes reflect a range of contingencies conditioned by both MNE objectives and hosts’ competitive status.
Originality/value
The paper concerns economics and MNE role in globalisation. The paper defines a framework of four generic evaluative issues of MNE performance, which subsume a wider range of important but more niche concerns.
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Jieqiong Ma, Jie Yang and Ying Song
Political ties are critical for multinational enterprises’ (MNE) survival and success. However, the effect of political ties is not monotonic. The purpose of this paper is to look…
Abstract
Purpose
Political ties are critical for multinational enterprises’ (MNE) survival and success. However, the effect of political ties is not monotonic. The purpose of this paper is to look into the contingent effect of political ties on MNEs’ post-entry performance.
Design/methodology/approach
Based on survey data collected from 416 foreign subsidiaries operating in China, which was combined with several secondary data sources, this study examined the three-way interaction of political ties, entry mode and industry restriction.
Findings
The findings support the hypotheses that the impact of political ties on firm performance is contingent on firms’ ownership-based entry modes and industry restriction. In particular, the impact of political ties is stronger for joint ventures (JV) in less restricted industries and wholly owned subsidiaries (WOS) in more restricted industries.
Practical implications
Political ties have different effects on WOS and JV. While in general political ties have a stronger impact for JV than for WOS, their impacts on both parties vary on industry restriction. Managers should consider ownership structure as well as industry restriction when making non-market strategies and decisions.
Originality/value
By analyzing the impacts of intra-organizational and market environmental factors, this study provides a fine-grained view of foreign firms’ non-market strategy in China from a post-entry performance perspective.
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