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The purpose of this paper is to examine the process of capability building at subsidiary level and the forces preventing such process. The paper discusses and tests three propositions governing this process.

This research is based on multiple case studies. A case study research is most useful when addressing issues about which little prior theory has been developed or empirical evidence collected.

Subsidiaries in Asia operate in a way substantially different from those in the West. Specifically what ways do market specificities in Asian economies serve to either inhibit or positively encourage the development of a subsidiary? What are the circumstances which could induce subsidiaries to outsource production?

Future research should explore the regional effect on MNE subsidiary types and different flexibilities exhibited in the value chain. What are the specific aspects (macro and micro) that explain variations of business strategies at subsidiary levelboth over time and between countries?

Multinational enterprises (MNEs) should be aware of the strong potential for capability development at the subsidiary level. This increased awareness ought to induce consideration in MNEs about how best to encourage such know capability development and how to leverage these capabilities for a better MNE performance.

Managers who knew the host country languages and culture, and have outward-looking attitudes, are in advantageous positions to learn about new opportunities.

The paper offers empirical insights into the state and drivers of subsidiary performance in Asia. Specifically it shows how neglect of external conditions can act to open people’s eyes and foster a capability-building process within subsidiaries.

To understand how diaspora entrepreneurship evolves and becomes a small-scale emerging market multinational and how this process is enabled.

Case study and ethnographic methods were employed.

Diaspora entrepreneurs can act as change agents who create and penetrate markets under difficult conditions. They are less influenced by institutional voids in home and host countries when they have strong international diaspora networks that enable a connection to resources, overcoming such voids. Diaspora entrepreneurs may be resource-embedded socially in a way that creates superior competitive advantages and reduces liabilities of foreignness and of outsidership.

Diaspora entrepreneurship incorporates invisible and idiographic potential, such as social capital and knowledge networks. These are not available for other non-incumbent companies (e.g., foreign entrants) and are difficult to research due to access barriers.

Perception and active management of network-based resources is important for opportunity and business development. Management in a transition economy context requires holistic views, deep understanding, and working linkages across markets.

Transgenerational entrepreneurship and ethnic traditions are important for the community. Entrepreneurship provides continuity and identity, such as using ethnic language, as well as prosperity and solidarity that are important for supporting cultural identity.

This study connects diaspora entrepreneurship in Central Asia and emerging market multinationals that are small and medium-sized enterprises. Both are underexplored domains, but may share particular institutional settings. Growth and internationalization into a multinational enterprise with an emerging market origin, especially by women entrepreneurs, are rarely studied. This case illustrates the need to capture the processual dynamics, resources, and actor networks, including sociocultural and spatiotemporal factors for better contextualization.

We investigate the effect of distance – political, economic, cultural and spatial, on developed-economy multinational enterprises’ (MNEs’) ownership decisions in cross-border (CB) acquisitions. We start with the premise that distance discourages full and majority ownership in CB acquisitions, and further investigate the moderating role of distance-reducing factors. We examine how the relationship between distance and acquisition ownership decision is moderated by firm-specific characteristics, such as firm size, general international experience, and specific host country experience. Our data sample consists of 1,041 CB acquisitions under taken by Finnish MNEs in 58 countries during the time period 1990–2010. We find substantial support for all our hypotheses and conclude that the negative effects of distance on CB acquisition equity stake are positively moderated by the three firm-specific resources but their individual importance is conditional on the host country type (developed or emerging).

This paper aims to explore how institutional factors determine the adoption of employee empowerment practices by multinational enterprises (MNEs) subsidiaries in China.

This paper examines the effects of MNE subsidiaries’ external and internal institutional factors on the degree of employee empowerment practices adopted by these subsidiaries. Using hierarchical regression analysis, hypotheses were tested with a sample of 99 MNE subsidiaries operating in China.

The results show that both the informal institutions of the host country and the subsidiary’s characteristics play an important role in shaping the degree of empowerment practices adopted by MNE subsidiaries in China.

Employee empowerment practices have been increasingly used by MNEs to leverage human resources for organizational competitive advantage. Although a large body of work has studied a bundle of HRM practices as a whole adopted in MNE subsidiaries, there is a paucity of research on the specific empowerment practices in MNE subsidiaries. This research fills this important gap in the literature by investigating the institutional forces that influence the empowerment practices in MNE subsidiaries in China.

Multinational enterprises (MNEs) encourage their subsidiaries to develop and transfer their unique knowledge and expertise back to the MNE as it is critical for the development of the MNE as a whole. However, what underlies the subsidiary ability to create such specialized knowledge that can be transferred to the MNE is less clear. The purpose of this paper is to examine the influence of MNE entrepreneurial strategy, subsidiary initiatives and expatriation on reverse knowledge transfers in a cross-country comparative context.

Data are gathered through surveys from 429 foreign subsidiaries operating in New Zealand and 164 subsidiaries in Brazil, and these are analyzed using variance-based structural equation modeling.

Subsidiary initiatives partially mediate the relationship between MNE entrepreneurial strategy and reverse knowledge transfers in case of subsidiaries operating in Brazil, but they fully mediate in case of New Zealand. Furthermore, expatriation, in case of the latter, has a negative interaction in the relationship between subsidiary initiative and reverse knowledge transfers, but, in case of the former, it has no moderating role. Overall, the results suggest that the influence of MNE entrepreneurial strategy and expatriation on reverse knowledge transfers can be explained by contingencies such as the subsidiary host economy and the heterogenous HQ–subsidiary relationships.

The paper contributes to literature by identifying some contingencies with regard to the occurrence of reverse knowledge transfers. It addresses some research calls with regard to examining reverse knowledge transfers and the role of expatriation across different empirical contexts.

Investigates the influence of market concentration, market diversification and internationalization strategies on the performance of multinational enterprises (MNEs). Using a sample of 450 large, medium and small MNEs, and three alternative definitions of market concentration and market diversification, results indicate that market diversification strategy produces better performance results for MNEs than market concentration strategy. In addition, MNEs using market concentration‐low internationalization strategy performed better than those using market concentration‐high internationalization strategy, and MNEs using market diversification‐low internationalization strategy performed better than those using market diversification‐high internationalization strategy. Discusses implications of the study′s findings for improved MNE performance.

The purpose of this chapter is to demonstrate that sound, mainstream international business (IB) thinking should be applied when assessing the economic opportunities available to multinational enterprises (MNEs) in Bottom of the Pyramid (BOP) markets.

We describe and evaluate critically the key points made in the BOP literature about the alleged attractiveness of BOP markets, and the alleged strengths of MNEs to penetrate these markets successfully. We revisit the managerial implications from the BOP literature using an internalization theory lens.

We demonstrate the weak conceptual grounding of conventional BOP thinking, which suggests that MNEs from developed economies should be very entrepreneurial and should systematically serve BOP markets with new products and business models. We also show the fallacy of the idea that a “success template” in one BOP market would be easily replicable in other BOP markets and would allow the MNE to earn economies of scale and scope.

IB researchers should start conducting serious studies on the attractiveness of BOP markets for MNEs. They should also analyze seriously the micro-foundations of successful knowledge recombination in BOP markets and the limits to the transferability of success templates. Mainstream IB theory, namely internalization theory, is particularly well equipped to analyze the costs and benefits of entering BOP markets, building upon a comparative institutional logic.

Senior MNE managers should not allow themselves to be blinded by BOP gurus, advocating the alleged great benefits of penetrating BOP markets. BOP markets may be especially challenging international expansion targets for MNEs because of large institutional voids, high uncertainty, high “distance” vis-à-vis the home country market and the difficulties of transferring relevant knowledge from one BOP market to another.

This chapter is the first to show that mainstream IB research can be usefully applied to analyze the “real” attractiveness of BOP markets for MNEs. Comparative institutional analysis is proven to provide substantially more insight to make BOP market penetration work than past guru-talk on BOP markets.

As an institution, the multinational enterprise has evolved in complexity. From having roots in just a few Western nations, it now has roots in dozens of nations, including many developing countries. Its scope has likewise expanded from natural resource-based industries and manufacturing to a variety of services. And firms are becoming multinational earlier in their lives and at smaller sizes than in the past. This chapter analyzes the evolution of multinationals over the last century, the forces driving that evolution, and distinctive characteristics of the latest wave of multinationals coming out of developing countries. It also explores the risk of a backlash against globalization and multinationals in Western societies, even as these trends gain in popularity in developing countries. It concludes with questions that international business scholars might want to pursue in their future research.

Briefly reviews previous literature by the author before presenting an original 12 step system integration protocol designed to ensure the success of companies or countries in their efforts to develop and market new products. Looks at the issues from different strategic levels such as corporate, international, military and economic. Presents 31 case studies, including the success of Japan in microchips to the failure of Xerox to sell its invention of the Alto personal computer 3 years before Apple: from the success in DNA and Superconductor research to the success of Sunbeam in inventing and marketing food processors: and from the daring invention and production of atomic energy for survival to the successes of sewing machine inventor Howe in co‐operating on patents to compete in markets. Includes 306 questions and answers in order to qualify concepts introduced.