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1 – 10 of 370Vladislav Valentinov and Constantine Iliopoulos
Transaction cost economics sees a broad spectrum of governance structures spanned by two types of economic adaptation: autonomous and cooperative. Stakeholder theorists have drawn…
Abstract
Purpose
Transaction cost economics sees a broad spectrum of governance structures spanned by two types of economic adaptation: autonomous and cooperative. Stakeholder theorists have drawn much inspiration from transaction cost economics but have not paid explicit attention to the centrality of the idea of adaptation in this literature. This study aims to address this gap.
Design/methodology/approach
The authors develop a novel conceptual framework applying the distinction between the two types of economic adaptation to stakeholder theory.
Findings
The authors argue that the idea of cooperative adaptation is particularly useful for describing the firm’s collaboration with primary stakeholders in the joint value creation process. In contrast, autonomous adaptation is more relevant for firms interacting with secondary stakeholders who are not directly engaged in joint value creation and may not have formal contractual relationships with the firm. Accordingly, cooperative adaptation can be seen as vital for resolving team production problems affecting joint value creation, whereas autonomous adaptation addresses how the firm maintains legitimacy within the larger stakeholder environment.
Originality/value
Similar to its significance for transaction cost economics, the distinction between the two types of adaptation equips stakeholder theory with a new systematic understanding of a potentially broad spectrum of firm–stakeholder collaboration forms.
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This study aims to examine the effect of exploratory innovation offshoring on the level of hierarchical control and how this effect is moderated by transnational and dynamic…
Abstract
Purpose
This study aims to examine the effect of exploratory innovation offshoring on the level of hierarchical control and how this effect is moderated by transnational and dynamic environments.
Design/methodology/approach
This study draws on a sample of 148 Taiwanese multinational enterprises to examine their governance decisions on foreign investments.
Findings
Findings show that the more innovation offshoring is exploratory, the higher the level of hierarchical control will be used by multinational enterprises (MNEs) and that transnational and dynamic environments have different moderation effects on the positive exploratory innovation offshoring-hierarchical control relationship.
Research limitations/implications
This study has two theoretical implications. First, this study extends the concept of complexity from a transaction attribute level (problem) to an environmental level (transnational environment) and finds that exploratory innovation offshoring and transnational environments interactively impact governance choices. Second, this study distinguishes between two sources of technological uncertainty – uncertainty due to transaction-level attributes (exploratory innovation offshoring) and external environments (dynamic environments) and finds that exploratory innovation offshoring and dynamic environments interactively impact governance choices.
Practical implications
The practical implication of this study lies in the simultaneous consideration of exploratory innovation offshoring and transnational/dynamic environments, which will allow international decision-makers to adjust/select the governance forms most appropriate for speedy responding to and handling environmental changes.
Originality/value
This study employs the theoretical perspectives of transaction cost economics (TCE) and resource-based view (RBV) to analyze and discuss the impact of operational environments – transnational and dynamic environments – on MNEs’ decisions on the governance structure for a given innovation offshoring.
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Shiwangi Singh and Sanjay Dhir
Business research has highlighted the importance of knowledge transfer and innovation in multinational firms for better performance outcomes. However, the existing body of…
Abstract
Purpose
Business research has highlighted the importance of knowledge transfer and innovation in multinational firms for better performance outcomes. However, the existing body of literature is characterized by differentiated theories, antecedents and outcomes. This study aims to address this gap by adopting a systematic approach to analyze knowledge transfer and innovation literature from the perspective of multinational organizations.
Design/methodology/approach
This study follows “preferred reporting items for systematic reviews and meta-analyses” (PRISMA) guidelines for conducting a systematic literature review. The study adopts a systematic approach for analyzing the literature using School of thought (S), Contexts (C), Methodologies (M), Triggers (T), Barriers (B), Facilitators (F) and Outcomes (O) framework (SCM-TBFO framework) devised for holistic literature review. The study analyzes 75 articles from reputed journals from 2000 to 2022.
Findings
In general, knowledge transfer and innovation in multinationals is a relatively new area and is evolving rapidly. There are many opportunities to study the various perspectives that are included in the SCM-TBFO framework. The key schools of thought included the evolutionary theory of innovation, institutional theory and internationalization theory. The studies had differing settings or contexts, including China, Europe, the USA and Taiwan. Further, key methodologies that were used included regression, case studies, structural equation modeling (SEM) and theoretical studies. Knowledge transfer and innovation triggers included competitive advantage, competitive pressure, constant requirements for better products and services, foreign direct investment (FDI) and globalization. Knowledge transfer and innovation facilitators were categorized into strategy-related facilitators, organization culture and orientation-related facilitators, and resource-related facilitators. Knowledge transfer and innovation barriers included autonomy, international knowledge dispersion, risk of knowledge leakage, search breadth, ambiguity and institutional voids. Key outcomes of knowledge transfer and innovation in multinationals included financial performance, innovation performance, knowledge flow, transfer effectiveness, patents and new product development.
Originality/value
By synthesizing the literature, the study aims to provide an overview of the current state of research on knowledge transfer and innovation in multinationals. The study develops a holistic model for fostering knowledge transfer and innovation in multinationals. The proposed novel framework can also be applied to perform a holistic assessment of the current literature in various research domains. Further, the study suggests future theory development and research agendas. The study also provides implications for practitioners using the framework to achieve more desirable outcomes.
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Fei Li, Yan Chen, Jaime Ortiz and Mengyang Wei
Deglobalization and the coronavirus disease 2019 (COVID-19) pandemic have severely hindered multinational enterprise (MNE) investment. At the same time, digital technology is…
Abstract
Purpose
Deglobalization and the coronavirus disease 2019 (COVID-19) pandemic have severely hindered multinational enterprise (MNE) investment. At the same time, digital technology is seriously challenging it with traditional production factor flows. Few studies have realized that the impact of digitalization is not limited to either transaction costs or the location-boundness of firm-specific advantages (FSAs), but extends to profound changes in the fundamental essence of MNEs. There is still limited understanding of this body of knowledge as a whole, including how its subtopics are interrelated. This study took the production factor change perspective to review MNE theory in the digital era. Therefore, this study aims to identify any upcoming and undeveloped themes in order to provide a platform suited to direct future research.
Design/methodology/approach
This paper presents a summary and a review of 151 articles published between 2007 and 2020. Such review was conducted to systematically explain the connotations and influential mechanisms of digital empowerment on MNE theory. This was achieved by using the CiteSpace citation visualization tool to build a keyword co-occurrence network.
Findings
The research findings pertain to how digitalization expands, breaks through, and even reshapes traditional MNE theory from four distinctive angles: the influential factors of internationalization, the process of internationalization, competitive advantage, and location choice. The findings are followed by the presentation of future research directions.
Originality/value
This paper presents an examination of MNE theory in the digital era from the perspective of production factor change. In doing so, it identifies significant theoretical innovation opportunities for future scholarly research priorities.
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Yuxiao Ye, Yiting Han and Baofeng Huo
In this research, we explore the adverse impact of foreign ownership on operational security, a critical operational implication of the liability of foreignness (LOF).
Abstract
Purpose
In this research, we explore the adverse impact of foreign ownership on operational security, a critical operational implication of the liability of foreignness (LOF).
Design/methodology/approach
The empirical analysis is based on a multi-country dataset from the World Bank Enterprises Survey, which contains detailed firm-level information from over 8,902 firms in 82 emerging market countries. We perform a series of robustness checks to further confirm our findings.
Findings
We find that a high ratio of foreign ownership is associated with an increased likelihood of security breaches and higher security costs. Our results also indicate that high levels of host countries’ institutional quality and firms’ local embeddedness can mitigate such vulnerability in operational security.
Originality/value
This study is one of the first to uncover the critical operational implication of the LOF, indicating that a high ratio of foreign ownership exposes firms to operational security challenges.
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This study seeks to explicate how institutional disruptions impact multinational corporation (MNC) subsidiary control choices. It uses institutional theory to understand the…
Abstract
Purpose
This study seeks to explicate how institutional disruptions impact multinational corporation (MNC) subsidiary control choices. It uses institutional theory to understand the influence of formal and informal institutions across countries on the type of control system employed in an MNC manufacturing subsidiary.
Design/methodology/approach
This study’s sample is based on a unique dataset from five trustworthy sources. We use multi-level models to account for the hierarchical nature of the sample of 1,630 multinational subsidiaries spread across 26 host countries by firms from 21 home countries.
Findings
The institutional distance between the host and the home country has a negative relationship with strategic control. In contrast, the home country’s power distance has a positive relationship with strategic control.
Originality/value
Study findings indicate the need to incorporate formal and informal institutional elements in the control system’s conceptual framing and design. This notion complements existing visualizations of optimizing MNC controls through extant articulations of minimizing governance costs through organizational design choices or strategic needs.
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Feng Wan, Peter Williamson and Naresh Pandit
Chinese firms are winning market share from foreign multinational enterprises in domestic markets. The international business literature suggests that this is happening because…
Abstract
Purpose
Chinese firms are winning market share from foreign multinational enterprises in domestic markets. The international business literature suggests that this is happening because these firms are developing non-traditional firm-specific advantages (FSAs). Strategic factor market (SFM) theory provides a good basis for explaining how this is happening. However, it is underdeveloped in terms of analysing unique resources and unique access to those resources by Chinese firms in their domestic markets. This paper aims to develop a framework to understand how Chinese firms have developed non-traditional FSAs.
Design/methodology/approach
The case study method is adopted to explore how Chinese firms develop non-traditional FSAs. Specifically, the authors compare paired case studies of a Chinese firm and a foreign multinational in each of two industries.
Findings
The authors find that Chinese firms have developed non-traditional FSAs because of more relevant experience, better adapted strategies and privileged relationships. This has enabled Chinese firms to develop non-traditional FSAs.
Originality/value
The authors propose a framework that conceptualises non-traditional FSA development in Chinese firms as a product of superior access to unique and valuable resources in their domestic SFMs.
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Hanyang Ma, Jingjie Zou and Hailiang Zou
This study aims to explore the internationalization of multinational enterprises (MNEs) from China and aims to examine the relationship between Chinese MNEs’ duration of…
Abstract
Purpose
This study aims to explore the internationalization of multinational enterprises (MNEs) from China and aims to examine the relationship between Chinese MNEs’ duration of internationalization and export intensity, and the contingent roles of the home country government.
Design/methodology/approach
By extending the springboard theory with institutional and cost-benefit analyses, the authors elaborate a two-phase framework of internationalization to explain how Chinese MNEs develop their international business under the influences of the home country government. Furthermore, the authors apply the Heckman two-stage method based on a panel data set of 19,994 firm-year observations of Chinese listed firms in 2008–2018 to test the hypotheses.
Findings
The research findings demonstrate an inverted U-shape relationship between the duration of internationalization and the export intensity of MNEs from China. The export intensity of MNEs from China increases during the initial phase of internationalization, and decreases during the subsequent. A further study reveals that the inverted U-shape of Chinese non-SOEs is steeper than that of SOEs, and this moderating effect is more salient after the Belt and Road Initiative. These results highlight the influence of the home government through state ownership and policies on the inverted U-shaped relationship.
Originality/value
This study helps to refine the understanding of Chinese MNEs’ global expansion by addressing time as an explicit dimension and revealing the mechanism of state ownership and the home country governmental policy in the dynamic internationalization process.
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Ebrahim Merza and Omar Alhussainan
This paper aims to investigate the drivers of foreign direct divestment (FDD), how it relates to foreign direct investment (FDI) flows and stocks and its implications for…
Abstract
Purpose
This paper aims to investigate the drivers of foreign direct divestment (FDD), how it relates to foreign direct investment (FDI) flows and stocks and its implications for developing countries. While divestment occurs for various reasons, it can be explained by reversing the propositions implied by FDI theories.
Design/methodology/approach
The authors combine FDI data and FDI theories to provide theoretical explanations for FDD and what it means for developing countries. FDI stock and flow data are used to derive inferences on trends in FDD and examine the implications of FDI theories on FDD.
Findings
Changes in the modes of global production and the rise of COVID-19 have reinforced the trend of stagnant or diminishing FDI flows observed since the global financial crisis, with implications for FDD. The authors demonstrate how the various FDI theories can be used to explain FDD, except for the currency areas hypothesis. By reviewing the costs and benefits of FDI, it is concluded that shrinking FDI flows and stocks may not be as detrimental for developing economies as it is typically portrayed.
Originality/value
The paper uses two original approaches to measure and explain the motives for FDD. The first is a reassessment of FDI theories in a way that makes them valid theories for FDD. The second original approach is to interpret data on FDI flows and stocks to imply the trends governing FDD, which is useful, as data on foreign divestment are not available on a country or regional basis.
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Augusto Bargoni, Alberto Ferraris, Šárka Vilamová and Wan Mohd Hirwani Wan Hussain
The purpose of this paper is to provide an integrative picture of the state of the art of the literature on digitalisation of small and medium-sized enterprises (SMEs) as an…
Abstract
Purpose
The purpose of this paper is to provide an integrative picture of the state of the art of the literature on digitalisation of small and medium-sized enterprises (SMEs) as an enabler for their internationalisation process and as a comprehensive view of the specific domains impacted by digital technologies as well as their repercussions on the international outreach.
Design/methodology/approach
A systematic review which leverages a descriptive analysis of extant literature and an axial coding technique has been conducted to shed light on the current knowledge and to identify primary research areas and future research lines.
Findings
The research indicates that digitalisation impacts the internationalisation of SMEs in three specific domains: (1) internationalisation through the adoption of information and communication technologies (ICT) technologies and e-commerce platforms; (2) international expansion through the digitalisation of value chain activities and (3) international outreach through knowledge acquisition on digital platforms.
Originality/value
The value of this study is threefold. First, the authors attempt to systematically review the literature on SMEs digitalisation and internationalisation and provide a holistic perspective on the intertwining of these two research streams. Second, the authors propose a novel conceptualisation on the dimensions of SMEs digitalisation as enablers to internationalisation. Third, the authors put forward promising future lines of research.
Highlights
Digitalisation represents a pivotal strategy that allows companies to build new strategic capabilities and is a propeller for SMEs internationalisation.
Through e-commerce, SMEs could compete at the same level of multinational companies but enduring lower costs of expansion.
Digital platforms allow SMEs to enhance the learning processes about international markets through an immediate access to relevant information.
Digital entrepreneurship has enabled SMEs to develop new configurations of value chain activities, evolving their business model or reaching new markets.
SMEs are changing the “business as usual” paradigm offering digital tools to build modular architectures that are scalable and agile in their evolution ability.
Digitalisation represents a pivotal strategy that allows companies to build new strategic capabilities and is a propeller for SMEs internationalisation.
Through e-commerce, SMEs could compete at the same level of multinational companies but enduring lower costs of expansion.
Digital platforms allow SMEs to enhance the learning processes about international markets through an immediate access to relevant information.
Digital entrepreneurship has enabled SMEs to develop new configurations of value chain activities, evolving their business model or reaching new markets.
SMEs are changing the “business as usual” paradigm offering digital tools to build modular architectures that are scalable and agile in their evolution ability.
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