Drawing on the comparative ownership framework, we perform a comparative analysis of Chinese and Indian multinational enterprises (MNEs)’ ownership strategies in knowledge-intensive cross-border ...acquisitions (CBAs). Specifically, we claim that due to their lower comparative ownership advantage, and the consequent higher information asymmetry, Chinese MNEs are more cautious (than Indian MNEs) in their ownership strategy. We rely on a dataset of acquisitions undertaken by high and medium-high tech Chinese and Indian MNEs worldwide during the period 2000–2014. Results confirm that Chinese MNEs prefer lower equity control than their Indian counterparts. However, such a preference for lower equity decreases with higher home-host institutional distance and host country-specific previous experience. These factors do not seem to modify the ownership preference of Indian MNEs in the same way.
Research Summary: Research on the internationalization of family firms has flourished in recent years, yet the mechanisms through which family involvement shapes the determinants, processes, and ...outcomes of internationalization remain little understood and largely undertheorized. We contribute to research at the intersection of international business and family business by examining the roles of different sources of family firm heterogeneity and the context in shaping the determinants, processes, and outcomes of business internationalization. Drawing on this analysis, we summarize the articles published in this special issue and set out an agenda for further research aimed at advancing a more fine‐grained and contextualized understanding of internationalization in family firms.
Entry mode deviation Elia, Stefano; Larsen, Marcus M.; Piscitello, Lucia
Journal of international business studies,
10/2019, Volume:
50, Issue:
8
Journal Article
Peer reviewed
Open access
We explore when and why decision makers choose international entry modes (e.g., hierarchies or markets) that deviate from internalization theory’s predictions. By applying a cognitive perspective on ...entry mode decision making, we propose that the performance of prior international activities influences decision makers’ behavior in different ways than assumed in internalization theory. More specifically, due to a representativeness bias, underperforming (overperforming) past ventures influence the decision to change (continue using) the previous entry mode choice, which may result in an entry mode deviation. In addition, the propensity to deviate from theoretical predictions is stronger when the experience is recent and/or salient due to an availability bias. In conclusion, we argue that internalization theory can benefit from incorporating more systematically important behavioral assumptions on how firms enter international markets. In so doing, we contribute to the recent conversation on how variations in human behavior influence internalization theory.
Experience, meant as the repetition of the same action, is considered a predictor of the entry mode choice in foreign markets because it allows reducing uncertainty. However, repetition does not ...necessarily increase the expected performance, depending on the learning stemming from previous experiences. Focusing on offshoring decisions, namely the choice between captive and outsourcing entry mode, we distinguish between the inertial repetition of routines vs. the mindful repetition of previous entry modes (where the company distinguishes and internalizes the outcomes of the past offshoring initiatives). We claim that: (i) mindful repetition leads to higher growth perspectives for the focal offshoring initiative, and; (ii) learning is higher when repetition concerns captive entry modes. Our empirical analysis, run on 410 companies' offshoring decisions undertaken from 2006 to 2011, confirms our expectation.
The information and digital age is shaped by a small number of multinational enterprises from a limited number of countries. This volume covers the latest insight from the International Business ...discipline on prevailing trends in business model evolution. It also discusses critical issues of regulation in the new information and digital space.
It has been demonstrated that more creative innovative activities of subunits of multinational companies (MNCs) rely upon the munificence of local knowledge in the host country. Here, we argue that ...the strength of international business network connections of a host location influences the potential accessibility of international knowledge and hence tends to widen the domain of new knowledge search that can be successfully undertaken by an MNC subunit. This in turn increases the likelihood of an MNC subunit building new areas of competencies, that is, in fields of competencies which are relatively new to the MNC. Specifically, we suggest that the relevant international business network connections are those involving local actors in the MNC subunit's relevant industry. Moreover, geographical proximity between MNC subunits and their parent company has an inverse U‐shaped relationship with new competence creation by subunits. Using a balanced panel data set on innovative activities conducted abroad by 194 of the world's largest industrial firms from 1975 to 1995, we find support for our expectations.
Cantwell J. and Piscitello L. (2005) Recent location of foreign-owned research and development activities by large multinational corporations in the European regions: the role of spillovers and ...externalities, Regional Studies39, 1-16. This paper examines the role of spillovers and externalities in influencing the recent siting of foreign-owned research and development activities in European regions. In accordance with the literature on knowledge creation in multinational corporations, the location of foreign-owned research tends to agglomerate depending upon the potential for the following different sources of spillovers and externalities: (1) intra- industry spillovers or specialization externalities associated with the presence of a wide-ranging collection of firms active in the same sector; (2) inter-industry spillovers or diversity externalities associated with the co-presence of firms working in different fields; and (3) science-technology spillovers and externalities stemming from the presence of a munificent scientific and educational infrastructure. Additionally, benefits from spillovers decline with distance, but this holds especially for intra- and inter-industry spillovers.
Cantwell J. et Piscitello L. (2005) L'implantation récente dans les régions d'Europe des centres de recherche à capital majoritaire étranger par les sociétés multinationales: le rôle des retombées et des effets externes, Regional Studies
39, 1-16. Cet article cherche à examiner le rôle des retombées et des effets externes quant à l'implantation récente dans les régions d'Europe des centres de recherche à capital majoritaire étranger. Conformément à la documentation sur la création de la connaissance dans les sociétés multinationales, les emplacements des centres de recherche à capital majoritaire étranger ont tendance à s'agglomérer en fonction des différentes sources de retombées et d'effets externes: à savoir, (1) des retombées intraindustrielles ou des effets externes dus à la spécialisation, qui s'associent à la présence d'un large parc d'entreprises du même secteur; (2) des retombées interindustrielles ou des effets externes dus à la diversité, qui s'associent à la présence des entreprises de divers secteurs; et (3) des retombées scientifiques et technologiques, et des effets externes qui remontent à la présence d'une infrastructure scientifique et scolaire avantageuse. En plus, il s'avère que les retombées diminuent en fonction de la distance, surtout pour les retombées intra et interindustrielles.
Cantwell J. und Piscitello L. (2005) Für in ausländischem Besitz befindliche Forschungs-und Entwicklungsunternehmen neuerlich in europäischen Regionen von großen multinationalen Firmen gewählte Standorte: die Rolle von Verbreitung und externen Effekten, Regional Studies39, 1-16. Dieser Aufsatz untersucht die Rolle von Verbreitung und externen Effekten bei der Beeinflussung kürzlich erfolgter Standortwahlen für in ausländischem Besitz befindliche Forschungs-und Entwicklungunternehmen in europäischen Regionen. In übereinstimmung mit der Literatur zur Wissensgenerierung in multinationalen Korporationen stellen die Autoren fest, daß die Standortwahl von in ausländischem Besitz befindlichen Forschungszentren zur Ballung neigt, je nach Potential für die folgenden verschiedenen Quellen für Verbreitung und externe Effekte: (1) innerbetriebliche Verbreitung oder spezializierungsexterne Effekte in Verbindung mit dem Vorhandensein einer breitgefächerten Palette von im gleichen Sektor tätigen Firmen; (2) innerbetriebliche Verbreitung oder Vielfalt externer Effekte in Verbindung mit gleichzeitiger Anwesenheit von Firmen, die auf anderen Gebieten tätig sind; und (3) wissenschaftlich-technologische Verbreitung und externe Effekte, die sich aus dem Vorhandensein einer großzügigen Wissenschafts-und Bildungsstruktur ergeben. Darüberhinaus wird festgestellt, daß sich aus Verbreitung ergebende Vorteile mit zunehmender Entfernung abnehmen, doch dies bezieht sich vorallem auf inner-und zwischenbetriebliche Verbreitung.
Cantwell J. y Piscitello L. (2005) La reciente localización de actividades de investigación y desarrollo extranjeras por parte de corporaciones multinacionales en las regiones europeas: el rol de los efectos de arrastre (spillovers) y de las externalidades, Regional Studies39, 1-16. Este artículo examina de qué forma los efectos de arrastre (spillovers) y las externalidades han afectado la reciente localización de actividades de investigación y desarrollo extranjeras en regiones europeas. De acuerdo con la literatura sobre creación de conocimiento dentro de las corporaciones multinacionales, descubrimos que las actividades de investigación extranjeras tienden a aglomerarse, dependiendo del potencial que exista para que se den las siguientes fuentes de efectos de arrastre y externalidades: (1) efectos de arrastre intra-industriales o externalidades derivadas de la especialización, los cuales están asociados con la presencia de un conjunto de empresas de carácter diverso que permanecen activas dentro del mismo sector; (2) efectos de arrastre inter-industriales o externalidades derivadas de la diversidad, los cuales están asociados con la presencia conjunta de empresas que trabajan en diferentes campos; y (3) efectos de arrastre científico- tecnológicos y externalidades derivadas de la presencia de una infraestructura educativa y científica munificiente. Asimismo, encontramos que los beneficios que se generan a partir de los efectos de arrastre disminuyen con la distancia, especialmente en el caso de los efectos de arrastre intra- e inter-industriales.
In order to better understand the complex and dialectical relationships between digital technologies, innovation, and skills, it is necessary to improve our understanding of the coevolution between ...the trajectories of connected digital technologies, firm innovation routines, and skills formation. This is critical as organizations recombine and adapt digital technologies; they require new skills to innovate, learn, and adapt to evolving digital technologies, while digital technologies change the codification of knowledge for productive and innovative activities. The coevolution between digital technologies, innovation, and skills also requires, and is driven by, a reorganization of productive and innovation processes, both within and between firms. We observe this in all economic sectors, from agriculture to services. Based on evidence on past technologies and the innovation literature, we suggest that we might require a new set of stylized facts to better map the main future trajectories of digital technologies, their adoption, use, and recombination in organizations, to improve our understanding of their impact on productivity, employment and inequality.
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