Research Summary
We utilize the institution‐based view to study the effect of home institutions on the internationalization of emerging economy firms. We argue that institutional support and ...institutional hazards co‐exist and can influence firm internationalization simultaneously. However, institutional support has a stronger effect on internationalization than institutional hazards. Further, we argue that when the institutional environment is supportive of the internationalization effort, state ownership provides proximity to institutional resources and thus amplifies the relationship between institutional support and firm internationalization. However, when the institutional environment is perilous to business activities, state ownership increases dependency on the institutional environment and constrains the escape from the domestic market. Results based on the World Bank Enterprises Survey of 9,337 manufacturing firms from 81 emerging economies largely support our arguments.
Managerial Summary
Home country institutions have different components, some of which can support while others can hinder the internationalization of emerging economy firms. Our study helps managers to identify different types of home‐based institutional supports that can help international expansion and home‐based institutional hazards that firms can avoid by diversifying their sales geographically. The findings suggest that leveraging institutional support at home country has a stronger effect on internationalization than escaping institutional hazards because institutional supports can complement other home‐based advantages that emerging economy firms have. Furthermore, state ownership can increase a firm's proximity to institutional resources, providing firms greater access to institutional support for international expansion.
Purpose
This paper aims to attempt to examine the effect of firm-customer exchange characteristics, frequency and specificity, on the likelihood of the firm to generate customer-driven innovation. ...The authors draw from social capital theory and argue that repetitive and customer-specific exchange improves the trusts between firm and customers, which in turn ease the flows of tacit knowledge from customers to the firm. From the perspective of customer knowledge management, the authors contribute by examining the mechanism by which a firm can acquire knowledge from and about customers. The authors further argue that a firm’s ability to absorb knowledge from customers and turn them into innovation also depends on its internal capability. A firm that consistently upgrades its capacity is more likely to generate customer-driven innovation than those that do not. Also, the authors argue that the joint effect of exchange characteristics and internal capability upgrading can further increase the likelihood of customer-driven innovation. Such a joint force implies the positive moderating effect of internal capability upgrading to the relationship between exchange characteristics and customer-driven innovation.
Design/methodology/approach
The authors test the hypotheses on 3,000 firms from six countries in Latin America. They take advantage of the 2017 World Bank Enterprises Survey. This most recent of the survey asks questions on various types of innovation and firm-customers exchange characteristics and other firm-level variables.
Findings
The authors find support for our hypotheses that repeated exchange and exchanges tailored to specific customers have a positive effect on customer-driven innovation. Also, they find the support that internal capability upgrading, in the form of investment in product design, marketing and organizational development has a positive effect on customer-driven innovation. The authors also find that investment in product design positively moderates the impact of exchange characteristics on the likelihood of customer-driven innovation.
Originality/value
While past studies focus on strategies to acquire and manage customers’ knowledge, little has been said about how exchange attributes can encourage or discourage innovation? This question is important because various theoretical perspectives may have a different prediction on the effect of firm-customer relationship and innovation. This study attempts to bridge such theoretical tension.
Research Summary: We study antecedents of innovation performance for the subsidiaries of multinational enterprises (MNEs) using the microfoundations approach. Based on the upper echelon perspective, ...we argue that managers’ characteristics, such as prior MNE work experience and industry experience, affect subsidiary innovation. We tested our hypotheses on a sample of 228 MNE subsidiaries from 11 countries. Results indicate that managers’ industry experience serves as an external boundary‐spanning capability and, therefore, it has a greater effect on autonomous subsidiaries. In contrast, managers’ prior MNE work experience functions as an internal boundary‐spanning capability and, therefore, it has a smaller effect on subsidiaries that are less autonomous or engage in R&D.
Managerial Summary: The success of an MNE now increasingly depends on its ability to generate knowledge anywhere in the world. Thus, the ability of foreign subsidiaries to generate innovation plays an increasingly important role in enhancing the performance of MNEs. In this regard, what factors determine the innovativeness of foreign subsidiaries is an important question for managers. Our study suggests that the international experience of the top management team (TMT) of a subsidiary and its CEO’s industry experience positively affect subsidiary innovation. Furthermore, the TMT’s international experience has a greater effect on the innovativeness of subsidiaries that remain dependent on their headquarters for knowledge transfer. In contrast, the CEO’s industry experience has a greater effect on the innovativeness of autonomous subsidiaries.
The World Trade Organization (WTO) has a significant impact on international business activities due to its actions and decisions that set the rules of international trade. However, our understanding ...of how WTO affects firm behavior is limited. Taking advantage of the variations in entry dates to the World Trade Organization, we perform difference-in-differences estimation to examine whether a country’s accession to the WTO significantly increases firms’ export intensity. In addition, we apply insights from the threat-rigidity hypothesis to argue that firms’ reactions to supranational institutions vary depending on how managers perceive the institutional environment. We find that firms from countries that enter the WTO experience significantly higher growth in export intensity when their managers have positive perceptions about domestic institutions. In contrast, accession to the WTO does not significantly increase firms’ export intensity whose managers perceive domestic institutions as obstacles. Our findings suggest that supranational institutions, such as the WTO, play an important role in the strategic decisions that firms make. However, the full value of such institutions can only be realized if the managers are aware and positively disposed to engage with these institutions.
We measure ^{2}H(e,e^{'}p)n cross sections at 4-momentum transfers of Q^{2}=4.5±0.5 (GeV/c)^{2} over a range of neutron recoil momenta p_{r}, reaching up to ∼1.0 GeV/c. We obtain data at fixed ...neutron recoil angles θ_{nq}=35°, 45°, and 75° with respect to the 3-momentum transfer qover →. The new data agree well with previous data, which reached p_{r}∼500 MeV/c. At θ_{nq}=35° and 45°, final state interactions, meson exchange currents, and isobar currents are suppressed and the plane wave impulse approximation provides the dominant cross section contribution. We compare the new data to recent theoretical calculations, where we observe a significant discrepancy for recoil momenta p_{r}>700 MeV/c.
We present deeply virtual π^{0} electroproduction cross-section measurements at x_{B}=0.36 and three different Q^{2} values ranging from 1.5 to 2 GeV^{2}, obtained from Jefferson Lab Hall A ...experiment E07-007. The Rosenbluth technique is used to separate the longitudinal and transverse responses. Results demonstrate that the cross section is dominated by its transverse component and, thus, is far from the asymptotic limit predicted by perturbative quantum chromodynamics. Nonetheless, an indication of a nonzero longitudinal contribution is provided by the measured interference term σ_{LT}. Results are compared with several models based on the leading-twist approach of generalized parton distributions (GPDs). In particular, a fair agreement is obtained with models in which the scattering amplitude includes convolution terms of chiral-odd (transversity) GPDs of the nucleon with the twist-3 pion distribution amplitude. This experiment, together with previous extensive unseparated measurements, provides strong support to the exciting idea that transversity GPDs can be accessed via neutral pion electroproduction in the high-Q^{2} regime.
•We investigate the impact of exposure to foreign competition in and out the home country on the imitative innovation of emerging economy firms.•We use a dataset of 949 firms in the Middle East and ...North Africa (MENA) region.•Results confirmed that exposure to foreign competition through inward FDI and exporting activity are positively associated with imitative innovation.•Additionally, we find that government ownership and strength of legal rights moderate the relationship between exposure to foreign competition in the home country and imitative innovation.•We also find that natural resources abundance negatively moderates the impact of exposure to foreign competition through exporting activity on imitative innovation.
We examine the effect of increased competitive pressures within and outside the home market on the innovation of local firms. We argue that the relationship between exposure to foreign competition in domestic and international markets and firm innovation is better captured by imitative innovation than by radical innovation. We hypothesize that exposure to foreign competition inside and outside the home country is positively associated with local firms’ imitative innovation. Further, we argue that this relationship is contingent on institutional factors, including the role of the government, the legal system, and natural resource endowment. Using a dataset of 949 firm-year observations in the Middle East and North Africa (MENA) region, we find empirical support for the positive impact of competitive pressure on imitative innovation.
We report the first longitudinal-transverse separation of the deeply virtual exclusive π^{0} electroproduction cross section off the neutron and coherent deuteron. The corresponding four structure ...functions dσ_{L}/dt, dσ_{T}/dt, dσ_{LT}/dt, and dσ_{TT}/dt are extracted as a function of the momentum transfer to the recoil system at Q^{2}=1.75 GeV^{2} and x_{B}=0.36. The ed→edπ^{0} cross sections are found compatible with the small values expected from theoretical models. The en→enπ^{0} cross sections show a dominance from the response to transversely polarized photons, and are in good agreement with calculations based on the transversity generalized parton distributions of the nucleon. By combining these results with previous measurements of π^{0} electroproduction off the proton, we present a flavor decomposition of the u and d quark contributions to the cross section.
What determines the firm scope is a fundamental question driving strategy and international business research. Extant literature examining a firm’s vertical scope decision has historically not ...accounted for the influence of institutional reforms. To fill this gap, we develop a theoretical framework based on insights from institutional economics to examine how pro-market reforms and firm-level R&D activity influence the likelihood of outsourcing production activities. Using data from the Business Environment and Enterprises Performance Surveys conducted by World Bank and European Bank for Reconstruction and Development in twenty-eight transition economies, we analyze the influence of pro-market reforms on the outsourcing decision. We do not find support for a strong direct influence of pro-market reforms on the likelihood of starting outsourcing. However, we find evidence that pro-market reforms influence the relationship between R&D activity and the likelihood of outsourcing. Interestingly, economic and legal reforms moderate the relationship between R&D activity and the likelihood to start outsourcing in different ways. While economic reforms weaken the positive relationship between R&D activity and outsourcing, legal reforms strengthen it.
•What determines the firm scope is a fundamental question driving strategy and international business research.•We examine this question by analyzing secondary data on more than 2800 firms in 28 transition economies.•We find that the outsourcing decision is influenced by pro-market reforms and firm-level R&D activities.•Interestingly, while economic reforms weaken the relationship between R&D and outsourcing, legal reforms strengthen it.
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