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The purpose of this paper is to analyse the impact of institutional distance, extended to capture subnational institutional variation, on foreign entry mode choice.

As an empirical study, it focuses on manufacturing firms established in Russia by foreign investors from developed countries. The dependent variables, the share of foreign ownership and the entry mode choice binary variable (equal to 1 for full foreign ownership and zero for a joint venture) were obtained from the registry of foreign-owned firms in Russia. The World Bank's regulatory quality (RQ) index on a national level and a respective indicator for the various Russian regions on a subnational level were utilised to measure institutions. Multilevel cross-classified analysis including foreign firms, the various Russian regions and characteristics of the foreign owners’ home countries was applied to for making empirical estimations.

The empirical results show, first, that the regionally adjusted institutional distance, i.e. the distance between the home country and the Russian region in question, when measured in terms of RQ, shifts the ownership structure towards shared ownership. However, nation-level institutional distance between the home country and Russia does not show any statistically significant relationship with the modal choice.

The results indicate that with the exception of industries of strategic importance to the state, the most important “rules of the game” for foreign entry strategies are provided not by the federal government but by the regional governors. The theoretical value of the paper lies in the extension of the institutional distance concept to the subnational level. At the same time, the paper identifies those institutional features that foreign entrants eyeing Russia need to take into account when selecting an entry mode and location within Russia.

The rise of emerging economies in the innovation landscape has often been attributed to the positive spillovers of innovation capabilities from multinational corporations (MNCs). However, it is less certain that their innovative capabilities imported from the home country function effectively in the host country from the outset. This study examines the performance of the innovation capabilities of MNC subsidiaries in emerging economies over time by considering the gradual process of their learning about host countries.

We employed stochastic frontier analysis to measure innovation capabilities, our focal construct. For regression analysis, we applied the Mundlak estimator, a variant of the fixed-effects panel estimator, to a sample comprising subsidiaries of MNCs from technologically advanced nations operating in Korea between 2006 and 2016.

Our results indicate that the innovation capabilities of MNC subsidiaries initially underperform those of local firms but improve over time, eventually surpassing the capabilities of their local counterparts. Furthermore, our findings reveal that institutional distance amplifies the underperformance of the innovation capabilities of MNC subsidiaries.

This study contributes to the literature by extending both theoretical development and empirical measurement of innovation capabilities in cross-national settings. Additionally, it deepens our understanding of whether and how MNC subsidiaries adapt their innovation capabilities to the local market environment.

The purpose of this paper is to enhance our understanding on the effects of national and subnational institutions as well as subsidiary competences on the international market orientation in foreign-owned subsidiaries.

A postal survey has been conducted based on a census-like database of foreign-owned subsidiaries in the Northwest of England.

The findings show a positive relationship on the international market orientation for subsidiaries with extended competences and strong links to local suppliers, universities and competitors. A negative association has been found concerning formal institutional distance and strong links to local customers and government institutions.

The survey is limited to foreign-owned subsidiaries in the Northwest of England.

This study implies that subsidiary managers need to take national and subnational institutions as well as subsidiary specific competences into consideration when looking for international market expansion.

The originality of this paper lies in the detailed investigation of institutions at the national and subnational level as well as subsidiary competences on the international market orientation in foreign-owned subsidiaries.

This paper seeks to consider the impact of psychic, cultural and institutional distance, the adaptation of international joint ventures and the performance of international companies entering an emerging economy. It is also a critique of the dominant quantitative approach to analyzing distance in international business.

This study applies a comparative case study using a grounded theory approach of six companies who entered Vietnam from 1986 until the present. A total of 20 international executives were interviewed representing different phases from start-up, implementation to the current situation.

In comparison to other empirical studies on entry strategy and distance, this research finds that executives involved in entry do not consider established theories such as transaction costs. The resource-based approach is considered but from a practical view. Despite the considerable cultural and institutional distance between the European cultures and the Vietnamese values, these international ventures have managed to close the distance. This contradicts the findings of many quantitative studies on this issue.

This study is qualitative. It depends on the perceptions of international executives over a 25 year period. Only a few of the Vietnamese counterparts are included in this study.

This study demonstrates the importance of adaptation overtime for the success of international ventures.

A long term qualitative study including executives from six major international companies and executives over such a longtime is rare. Using the grounded theory process in this research context is also unique.

Drawing on a range of literature, this paper develops a theoretical model of the cross‐national transfer of HRM practices in multinational corporations (MNCs). This model integrates the significant research on transferability, transfer mechanisms, effects of transfer, and reverse transfer to produce a comprehensive analytical framework. A three‐fold analysis of transferability is presented to include national, company and HRM practice level. The transfer mechanisms are categorized into direct and indirect methods. The analysis of reverse transfer is not only a complement to the forward transfer but also an important part of the integrated model. The model reflects the complexity of cross‐national transfer HRM practices in MNCs. The propositions presented and suggestions for future research serve to aid further practical studies.

This paper focuses on the debates about globalisation – its nature and impact – and the significance of multinational companies in the global economy. Introduces the special issue of the International Journal of Manpower, based on selected papers presented at the 7th Conference on International Human Resource Management hosted by the University of Limerick in June 2003, which focused on the issue of HRM and its transferability in such corporations. The MNC is viewed as the vehicle by which dominant HR policies and practices are transported across national boundaries and the papers shed light on the likelihood of, and limits, to this transfer. In order to contextualise the debate, the paper begins by outlining the extent to which human resource management remains a key issue for multinational corporations and, in advance of introducing the five papers in this special issue, summarily charts some of the key research trends emerging in the literature on international human resource management (IHRM).

Research suggests that context matters for MNEs’ international business strategy. MNEs’ strategies vary when different intertwined contexts interact with each other. While International Business scholars understand well the influence of the institutional environments on firms’ international strategies and operations, some contextual differences are less understood as is the case involving African countries and firms. In this study we investigate how different institutional contexts and legitimacy challenges combine to impact ownership strategic choices of African firms in their cross-border acquisitions (CBAs). Specifically, we study the influence of the host country institutional development and two institutional dimension distances: administrative distance and knowledge distance. Methodologically, we use a sample of 314 CBAs made by acquirers from 24 African countries in 71 host countries worldwide to test a number of theoretically driven hypotheses. This study contributes to our understanding of how foreign investors from less institutionally developed countries that are more likely to face higher legitimacy barriers use ownership strategies to achieve legitimacy abroad.

Understanding institutional distance – i.e., the difference in institutional context between countries – is critical for firms whose operations span national boundaries. Institutional distance impacts the relative attractiveness of country markets, trade-offs among foreign market entry strategies, the management of subsidiaries abroad, and ultimately, firm performance. Although scholars in various disciplines have made great advances in defining and measuring the institutional characteristics of nations, we contend that many of these advances have occurred in a parallel fashion. Moreover, extant empirical studies focus disproportionately on the impact of different subsets of the identified institutional characteristics. We suggest that it is time to find common ground across the disparate literatures. Doing so would allow us to view differences in institutional contexts more holistically, and refine our understanding of their implications for multinational corporations.

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 purpose of this paper is to contribute to the ongoing and unresolved debate in the international business (IB) literature with respect to what drives or impedes multinational company (MNC) success in emerging markets, focusing specifically on the impact of institutional conditions on subsidiary performance.

In the understanding that greater attention to different institutional settings and their diversity has much to offer theory-building in the IB area, this panel study examines the influence of institutional distance on the return on assets (ROA) of 399 foreign subsidiaries in a previously understudied host market, that of Brazil during the period from 2008 to 2011. Regression analysis was carried out on panel data using weighted least squares as estimator.

Similar to research conducted in other national contexts, results revealed significant correlation between institutional distance and firm performance measured by ROA. Unlike previous research, however, these correlations were positive: the greater the institutional distance, the better the performance. Both normative distance and regulatory distance positively influenced ROA, raising questions with regard to the concept of institutional distance, its operationalization and influence.

The paper is of value in showing the institutional distance and the performance of foreign subsidiaries with a positive relationship in an emerging market (Brazil) using a panel perspective rather than the more usual sectional perspective.