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1 – 10 of 229Seymour's application of the eclectic paradigm to the international construction industry is examined. As with other theories on multinational enterprise, the paradigm was…
Abstract
Seymour's application of the eclectic paradigm to the international construction industry is examined. As with other theories on multinational enterprise, the paradigm was conceived by Dunning to explain the phenomenon of foreign direct investment in the manufacturing sector. In retaining it to explain international involvement of construction companies, certain conventional economic reasoning was modified. It is the contention of this paper that Seymour's conceptualization is incongruent with the peculiarities of international contracting. Neither does it reflect the extensive debate on the suitability of well‐grounded economic thoughts to international services. In the course of preparing this paper, it was found that a few government and international agencies have had to confront the difficulties of applying the existing theoretical framework to the services sector. Refinements are proposed here to make Seymour's theoretical construct more robust as a tool for future research, simply by referring to direct observations and materials which were at his disposal.
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The past three years have seen an acceleration in the rate with which companies have formed strategic partnerships with foreign firms in both the US and overseas markets. This…
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The past three years have seen an acceleration in the rate with which companies have formed strategic partnerships with foreign firms in both the US and overseas markets. This article examines the theoretical rationale underlying joint ventures and asks what strategic considerations lie behind their formation. Fifteen case examples of joint ventures are presented and analysed to see how the theoretical concepts fit actual situations.
This paper delves into the mechanism of the contingency framework for foreign entry mode decisions and identifies two essential tasks that jointly determine the outcome of the…
Abstract
This paper delves into the mechanism of the contingency framework for foreign entry mode decisions and identifies two essential tasks that jointly determine the outcome of the entry mode decision. It then recognizes a critical weakness in previous research pertaining to the comparison of entry modes along a key decision criterion, the degree of control. Existing studies generally treat equity involvement as the only source of entrant control, while largely ignoring non‐equity sources of control (i.e., bargaining power and trust). Non‐equity sources of control, when underutilized, amount to missed opportunities, increased resource commitments, and heightened risk exposures in foreign markets. Drawing from a pluralism perspective in transaction and relationship governance, the author presents a more integrative method for the ranking of entry modes along the degree of control. The central message is that companies entering foreign markets should make an earnest effort to identify trust and bargaining power situations and fully utilize their control potential in making entry mode decisions.
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The purpose of this paper is to analyse the impact of major structural changes on the conceptualization of the transnational corporation (TNC) based on foreign direct investment…
Abstract
Purpose
The purpose of this paper is to analyse the impact of major structural changes on the conceptualization of the transnational corporation (TNC) based on foreign direct investment (FDI) and on indicators of transnationality.
Design/methodology/approach
Analysis of three major structural changes which impact the current conception of transnationality. They are: the rise of digital companies; the increased role of finance in the economy; externalization of activities via non-equity modalities (NEMs) with an impact on FDI and on the labour market.
Findings
The paper finds that the current concept of transnationality needs widening to take account of companies with a low degree of fixed assets abroad such as the digital and the financial companies and those internationalizing via NEMs, as well as to take account of the evolving relationship between TNCs and labour.
Research limitations/implications
Future research along the lines proposed should consider: working explicitly with the new, inclusive concept of transnationality and arrive at an empirical estimate of the proposed indices of transnationality which modify and amplify the current United Nations Conference on Trade and Development indices.
Social implications
Useful for understanding the nature of transnationality in the twenty-first century and for developing policies.
Originality/value
The paper proposes a new concept of transnationality and of the TNC, one that allows for new ways of organizing direct business activities abroad. It also proposes broadening the list of indicators of transnationality.
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This paper aims to analyse the growing body of literature on small and medium‐sized enterprise (SME) internationalisation by considering a set of propositions regarding the…
Abstract
Purpose
This paper aims to analyse the growing body of literature on small and medium‐sized enterprise (SME) internationalisation by considering a set of propositions regarding the drivers and inhibitors of an entry mode decision.
Design/methodology/approach
Following a quantitative methodological approach, a survey was applied to a sample of SMEs to empirically test the proposed conceptual model. Logistic regression analysis was used to analyse the data.
Findings
Results from the study revealed the importance of the firm's international experience, its ability to innovate, the market potential for growth and market‐specific knowledge as key predictors for choosing an equity‐entry mode. SMEs are rather flexible in nature and tend to perform activities with low‐cost structures, thereby minimising the relevance of the perceived risk associated with the host country.
Practical implications
Empirical findings are relevant as they may assist SME managers to make financially sound entry mode choices, which, if effectively made, enable a firm to gain important competitive advantages.
Originality/value
This study contributes to the current body of knowledge in the area of SME internationalisation by combining two key dimensions of Dunning's eclectic framework, while also including the managerial and ownership structure characteristics, whose dimensions have been assumed to be important drivers for SME internationalisation.
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Pushyarag N. Puthusserry, Zaheer Khan and Peter Rodgers
The purpose of this paper is to examine the role that different collaborative entry modes play in how international new ventures (INVs) expand into international markets.
Abstract
Purpose
The purpose of this paper is to examine the role that different collaborative entry modes play in how international new ventures (INVs) expand into international markets.
Design/methodology/approach
The paper’s arguments are based on the INVs and social network literatures. In order to investigate the entry modes adopted by British and Indian small and medium information and communication technology (ICT) firms into each other’s markets, the paper outlines the results of qualitative semi-structured interviews with the key decision makers of ten British and ten Indian ICT firms.
Findings
The findings contribute to the relatively under-researched area of how INVs enter foreign markets through collaborative entry mode. The findings suggest that INVs utilize both equity and non-equity modes of collaboration to expand their international operations. The findings also indicate that financial and non-financial resources always limit the market expansion and internationalization of such companies. Against this background, the INVs rely on building collaboration as one of the safest methods for foreign market expansion and successful internationalization. The collaborative entry mode is enhanced by entrepreneurs’ prior experience, social ties and knowledge of the foreign market.
Research limitations/implications
Set against the backdrop of an ever-increasing trend of internationalization of small and medium enterprises (SMEs), the paper offers important implications for understanding the conditions and factors behind the choice of collaborative and non-collaborative entry modes by INVs in particular and SMEs more broadly.
Originality/value
The paper is one of the few studies that have examined the role of collaborative entry modes choice adopted by INVs from two of the largest economies – the UK and India.
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This chapter contributes to the existing literature on institutional theory and international business research by integrating the concepts of polycentrism and institutional…
Abstract
This chapter contributes to the existing literature on institutional theory and international business research by integrating the concepts of polycentrism and institutional learning to examine how MNEs from emerging economies invest in developed countries. We argue that equity-based market entry modes and non-equity-based modes create different needs for learning about economic, regulatory and political institutions; entry modes with or without local partners lead to different levels of institutional embeddedness and institutional learning speeds. Finally, the content of institutional knowledge also determines its transferability and adaptability. We emphasize the importance of recognizing the integrated nature of economic, regulatory and political institutions from a polycentric perspective and discuss their change in different situations.
Cooperative strategies, both domestic and foreign, have become an important component of the strategic repertoire of firms. Various forms of interfirm alliances are redefining and…
Abstract
Cooperative strategies, both domestic and foreign, have become an important component of the strategic repertoire of firms. Various forms of interfirm alliances are redefining and transforming the very nature of competition. Considering their importance, a solid understanding of their fundamental dynamics is necessary. Different forms of alliances exist: from those that emerge because partners have some preexisting advantages such as geographic proximity or shared history to those that arise because third parties such as governments have created the enabling environment. Looking at the context and operational dynamics of various alliance configurations may help our understanding of how to manage them. This paper presents four configurations or clusters of alliances based on their origins and link the context to operational dynamics. The policy and research implications of the paper are also presented.
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João Paulo Cerdeira Bento and António Moreira
This paper aims to examine how foreign direct investment (FDI) and firm-specific advantages (FSAs) of US multinational enterprises (MNEs) majority-owned subsidiaries affect…
Abstract
Purpose
This paper aims to examine how foreign direct investment (FDI) and firm-specific advantages (FSAs) of US multinational enterprises (MNEs) majority-owned subsidiaries affect environmental pollution in host countries. The research results contribute to helping managers and policymakers understand the environmental impact of MNEs activities, and encourage these firms to develop environmentally responsible management (ERM) as an element of their corporate social responsibility practice.
Design/methodology/approach
Panel data consisting of developing and developed countries spanning the years 2004 through 2014 are used. The dynamic panel generalised method of moments technique is implemented. This method avoids common estimation bias, such as endogeneity, heteroscedasticity and autocorrelation.
Findings
This paper finds that the direct environmental impacts of FDI vary significantly between the two groups of countries. The environmental benefits of FDI to the recipient country are achieved through capital and technology transfer. The study also reveals that R&D intensity moderates the relationship between FDI and environmental pollution in both developing and developed countries in such a way that environmental pollution decreases.
Research limitations/implications
Future research could explore the environmental impact of MNEs on host countries by considering both equity and non-equity entry modes. The findings offer some support to host government policies offering generous incentive packages to attract R&D investment to improve environmental pollution. This research raises questions as to the reasons corporations operating in developing and developed countries should pursue their ERM practices.
Originality/value
This research examines both the direct effect of FDI and the moderating effects of FSAs on the relationship between FDI and the environment. Although previous studies have already looked at the relationship between FDI and the environment, the moderating effect of FSAs is very under-developed in this relationship.
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Manlio Del Giudice, Ahmad Arslan, Veronica Scuotto and Francesco Caputo
The purpose of this paper is to address internationalisation of small- and medium-sized enterprises (SMEs) by specifically focussing on collaborative entry modes. Despite…
Abstract
Purpose
The purpose of this paper is to address internationalisation of small- and medium-sized enterprises (SMEs) by specifically focussing on collaborative entry modes. Despite significant research done on market entry and internationalisation strategies of firms, the use of collaborative entry modes by SMEs during internationalisation has not received a lot of attention. The authors contribute to foreign market entry studies by analysing the influences of cognitive dimensions on collaborative entry mode choice (equity vs non-equity modes) of SMEs in their international markets.
Design/methodology/approach
The authors analyse the influences of cognitive dimensions on the choice between equity-based vs non-equity-based collaborative entry modes. The empirical sample consists of internationalisation strategies of 345 Italian SMEs, where the authors used a questionnaire to collect the data. The authors use structural equation modelling to analyse influences of factors like asymmetric information, informal institutional distance, time trends of country, perception of size and resources of potential host country partners, and perception of host country partners’ power on this important market entry mode.
Findings
The results show that high informal institutional distance leads to preference of non-equity-based collaborative entry mode by Italian SMEs. The authors also find that positive time trends of the host country, positive perception of size and resource of the local partner, as well as the local partners’ power leads to preference of equity-based collaborative entry mode by Italian SMEs.
Originality/value
This study focusses on an ignored aspect of market entry strategies, i.e., equity vs non-equity collaborative entry mode choice of SMEs. The authors use insights from resource-based view and cognitive dimensions literature, to address the influences of five cognitive dimensions on the collaborative entry mode choice of SMEs during their internationalisation.
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