Contractor argues that the coronavirus outbreak only had temporary effects on the global economy, and that post COVID-19 globalization will resume. We posit that the pandemic will have significant ...long-lasting effects on globalization. Our arguments are grounded in three observations. First, the pandemic has increased inter- and intra-country inequalities and has reversed trends in poverty reduction, which will intensify anti-globalization sentiments in the future. Second, the pandemic has fueled populism, nationalism, and the return of the interventionist state in the economy, which has paved the way for a rise in protectionism. Third, governmental responses to the COVID-19 crisis have undermined the multilateral institutions that have thus far facilitated globalization. These forces have resulted in growing global uncertainty and higher costs in international transactions. We argue that global value chains’ reconfiguration will result in a less globalized, and more regionally fragmented world economy. We conclude by suggesting two fertile opportunities for international business scholars: researching commitment failure in international transactions and studying resilience, as illustrative examples of lines of inquiry that can help explain why this latest pandemic will compromise trends in globalization that have dominated the world economy for a long time.
This paper studies the effects of state fragility and economic development on necessity and opportunity-based individual entrepreneurial efforts. We contribute to the literature on the contextual ...determinants of entrepreneurship by examining multilevel data on 956,925 individuals from 51 countries for the period of 2005–2013. We show that state fragility has a positive effect on necessity-based entrepreneurial efforts while hindering opportunity-based efforts. Our findings illustrate that the level of economic development moderates the relationship between state fragility and necessity-driven entrepreneurial efforts reducing the likelihood of the latter. We discuss the implications for theory and for proentrepreneurship policy.
This research note links insights from the family firm literature with extant internalization theory-based studies on family firm internationalization to explain how family-owned multinational ...enterprises (MNEs) can leverage family resources for successful internationalization, and why some family firms are unable to do so. We identify examples of internationally relevant resources contributed by the founding family, namely, social capital, long-term orientation, and reputation. We then differentiate between pre-existing resources that reside at the family level, and firm-specific advantages (FSAs) that reside at the firm level. In order to derive FSAs from family resources, and to profitably exploit those across borders, family MNEs must engage in two types of recombination.
First
, family and non-family resources are recombined to create actionable FSAs.
Second
, family-derived FSAs are recombined with location-specific resources in order to respond to differences between home and host country environments. We discuss complementary resources required for each type of recombination and specific mechanisms utilized by family MNEs to integrate those resources. By investigating a potential functional contribution of a family to successful internationalization, we extend prior internalization theory-based work, which focuses predominantly on family firms’ propensity toward bifurcation bias and the constraining effect of this bias on efficient international governance.
•In the coffee industry, in-house certifications by global buyers are on the rise.•Certified coffee farms are more environmentally (but not socially) sustainable.•Farms’ social conduct depends on ...their home country institutional strength.•Certified farms’ environmental conduct is better when they sell to cooperatives.•Certified farms’ environmental conduct improves in institutionally weak countries.
In this paper we investigate whether coffee farms that have been granted in-house socio-environmental certification from a global buyer, display better social and environmental conduct compared to non-certified farms. We perform an econometric analysis using data from an original cross-country survey covering 575 farms in various regions of Brazil, Colombia, Costa Rica, Guatemala, and Mexico. We find that farms that have been granted in-house certification demonstrate better environmental but not better social conduct than non-certified farms. We find also that the positive relationship between in-house certification and environmental conduct is stronger if the farm sells to a cooperative, and if it is located in an institutionally weak country. Finally, we find that the institutional strength of the farm's home country has a positive influence on its social conduct. We discuss how our analysis contributes to the literature on the social and environmental impacts of certifications, and to scholarship in global value chains’ social and environmental upgrading.
Corporate Diplomacy and Family Firm Longevity Ciravegna, Luciano; Kano, Liena; Rattalino, Francesco ...
Entrepreneurship theory and practice,
01/2020, Volume:
44, Issue:
1
Journal Article
Peer reviewed
Open access
We discuss family firm longevity building upon a new conceptual lens, informed by transaction cost economics (TCE), but augmented with corporate diplomacy thinking. Family firms, because of their ...superior foundation of bonding social capital (interpreted here as a firm-specific, transaction cost-reducing governance mechanism), have an intrinsic advantage vis-à-vis nonfamily firms with regards to utilizing network ties supportive of longevity. Most family firms, however, fail to leverage effectively this governance tool to achieve longevity, due to bifurcation bias (BB), that is, the unchecked prioritization of assets and relationships that hold affective value for the family. We propose that corporate diplomacy, through its three process steps, familiarization, acceptance, and engagement, can help the family firm augment its baseline reservoir of social capital, and allows improved economizing on contracting challenges that endanger its survival. Externally, corporate diplomacy helps economizing on expressions of BB in relationships with outside stakeholders, thus augmenting bridging social capital. Internally, it can address biased treatment of family versus nonfamily human assets, thereby augmenting bonding social capital. Intergenerationally, corporate diplomacy supports access to, and improved reliance upon the firm’s social capital by next generation family members. The family firms that focus on corporate diplomacy processes and the resulting social capital creation greatly improve their chances of longevity.
This paper provides empirical evidence about born-global firms in the software industry of a small developing country with an open economy: Costa Rica. The paper is based on data collected through ...interviews with CEOs or founders of 40 Costa Rican software companies. Findings show that there are few bornglobal firms among Costa Rican software providers. We find that most companies followed a gradual approach to internationalization, and they did not export immediately upon birth. A careful analysis of firms that exported soon after they were born reveals that most firms are actually "born regional."
Corporate misconduct can have serious harmful consequences for business if it is revealed and sanctioned. For this reason, the literature argues that Multinational Enterprises’ (MNEs) involvement in ...misconduct depends on the regulatory pressures exerted by the governments of the countries where they deploy their global value chain (GVC). We argue that regulatory pressures are not the only determinant of corporate misconduct, and that these pressures interact with civil liberties generating more complex outcomes than a linear low to high regulatory pressure scenario. In countries where regulatory pressures are high and that enjoy a high degree of civil liberties, firms avoid misconduct because it is in their interest. In countries with low regulatory pressures and a low degree of civil liberties, misconduct is likely to go unpunished. In these situations, MNEs may be under pressure to conform to local norms, including engaging in misconduct, or risk being expelled or sanctioned by the authorities. Finally, countries with a low level of regulatory pressures but a high degree of civil liberties may be better at avoiding firm misconduct than countries with high regulatory pressures and low degrees of civil liberties. Access to technology for information and communication purposes makes it so that even when regulatory pressures are low, as long as there is a certain degree of civil liberties, corporate misconduct can be exposed and punished by stakeholders. Implications of this interaction are discussed.
This study investigates the antecedents of human rights infringements (HRIs) by emerging market firms (EFs). We used fuzzy set qualitative comparative analysis (fsQCA) to examine HRIs in 245 firms ...based in eight emerging markets, between 2003 and 2012. Our findings disclose three equifinal configurations of high levels of HRIs, all involving EFs that have expanded to a high number of foreign markets: (i) large, old, low performing state-owned enterprises (SOEs) operating in high quality institutions’ home and host markets, (ii) small, young, over-performing EFs operating in low quality institutions’ home and host markets, and finally (iii) large, old, high performing SOEs, operating in low quality institutions’ home and host markets. We contribute to the literature by examining a novel dataset on HRIs by EFs, and by building a configurational explanation of HRIs that bridges the arguments of the institutional theory and strain theory literatures on corporate wrongdoing.
We analyze the impact of home country uncertainty on the internationalization-performance relationship of emerging market firms. Building on organizational learning theory and the institutional ...approach, we argue that internationalization has a positive impact on the performance of emerging market firms, and that this relationship is strengthened for firms based in emerging countries with higher corruption and political risk. The reason is that by being exposed to high levels of home country uncertainty in the form of political risk and corruption, firms develop an uncertainty management capability at home that helps them face the challenges of internationalization better. We also propose that this uncertainty management capability helps emerging market firms perform better outside of their home region. We test our arguments on a sample of 536 firms from Argentina, Brazil, Chile, and Peru.
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