Foreign Expansion Research Articles

Foreign expansion of academic spinoffs. A polish perspective

Foreign expansion of academic spinoffs. A polish perspective

Accelerate or delay? Big step internationalization and the speed of subsequent foreign expansion—evidence from Chinese MNEs

Purpose In recent decades, emerging market multinational enterprises (EMNEs) have predominantly adopted a big step internationalization strategy to expand their business overseas. This study aims to examine the effect of big step internationalization on the speed of subsequent foreign direct investment (FDI) expansion for EMNEs. The authors also investigate the potential boundary conditions. Design/methodology/approach The authors use the random effects generalized least squares (GLS) regression following a hierarchical approach to analyze the panel data set conducted by a sample of publicly listed Chinese firms from 2001 to 2012. Findings The findings indicate that implementing big step internationalization in the initial stages accelerates the speed of subsequent FDI expansion. Notably, the authors find that this effect is more pronounced for firms that opt for acquisitions as the entry mode in their first big step internationalization and possess a board of directors with strong political connections to their home country’s government. In contrast, the board of director’s international experience negatively moderates this effect. Practical implications This study provides insights into our scholarly and practical understanding of EMNEs’ big step internationalization and subsequent FDI expansion speed, which offers important implications for firms’ decision-makers and policymakers. Originality/value This study extends the internationalization theory, broadens the international business literature on the consequences of big step internationalization and deepens the theoretical and practical understanding of foreign expansion strategies in EMNEs.

Do environmental regulations drive MNEs’ equity ownership? Considering the impact of exogenous shocks on MNEs’ cross-border acquisitions

Extant studies of how firms respond to environmental regulations in devising foreign expansion strategies often fail to consider how multinational enterprises’ (MNEs) equity ownership decision-making might depend on the host country's environmental regulations. To advance a conceptual framework based on institutional theory, the current study tests whether the stringency of host country environmental regulations influences MNEs' decisions about equity ownership. Novel, recent data pertaining to 3,679 cross-border acquisition (CBA) deals by 1,135 MNEs from 30 countries also provide insights into whether environmental capabilities and environmental regulation distance affect the relationships of MNEs' equity ownership decision-making and the stringency of host countries' environmental regulations. Because exogenous shocks, such as COVID-19, create notable disruptions, this study also considers how exogenous shocks have influenced MNEs' strategic decisions in international markets. The results reveal that MNEs choose higher equity ownership in host countries with more stringent environmental regulations; environmental capabilities and environmental regulation distance positively moderate the relationship between the degree of environmental regulation stringency and the level of equity ownership. Finally, the links between environment regulation stringency and equity ownership grow stronger when MNEs experience an exogenous shock such as COVID-19.

БРЕНД-МЕНЕДЖМЕНТ КОМПАНІЙ В ГЛОБАЛЬНОМУ КОНКУРЕНТНОМУ СЕРЕДОВИЩІ

This article is devoted to defining the growing role of brand management in companies in the context of intensifying competition in the international markets of goods and services. The turbulence of the marketing environment creates a demand for increasing the efficiency of management technologies. One of the most effective tools in the international marketing activities of companies is brand management. The purpose of this article is to reveal the benefits and risks when companies use global brand management. To study this issue, a set of methods was used, including analysis and synthesis, empirical and statistical analysis; comparative analysis; and systematization. Based on the data of international research and consulting organizations, the article presents a quantitative measurement of certain aspects of the implementation of global brand management strategies. The result of the study is the disclosure of the content of competitive advantages achieved by companies when they choose a global branding strategy. Among the priorities are the following: increasing customer loyalty in the markets where the company operates; improving brand awareness and perception; improving the financial performance of an international company; improving the company's reputation; attracting and retaining talent. The factors that can complicate the implementation of global branding approaches include the persistence of differences in consumer and business cultures in different foreign markets, peculiarities in the institutional environment of different countries that affect the conditions of registration and legal mechanisms for protecting trademarks in different jurisdictions, a more positive perception of local brands of national businesses in the context of the intensification of new economic nationalism at the level of regulatory policies and consumer sentiment. The theoretical significance of the study is to expand knowledge about achieving a balance between global and local determinants that define the success of international companies in the context of increased competition in international markets for goods and services. The practical value is due to the search for new mechanisms to enhance the competitive position of domestic companies in global markets in the context of forced business relocation during the war between Ukraine and russia. Prospects for further research are seen in the systematization of empirical material and cases on the implementation of effective brand management strategies by domestic businesses in foreign expansion.

Do a Firm’s Depth and Diversity of International Experience Increase Its Speed of Foreign Expansion? Evidence from South Korean Firms

Purpose - Based on the Uppsala model and organizational learning theory, this study empirically analyzes the effects of South Korean firm international experience depth and diversity on the speed of foreign expansion.
 Design/Methodology/Approach - The hypotheses were tested using GLS regression analysis and a panel data set of 424 Korean manufacturing firms listed on the KOSPI market from 1999-2007.
 Findings - First, the depth of firm international experience has a negative effect on the speed of foreign expansion. Second, the diversity of international experience has a positive influence on the speed of foreign expansion.
 Research Implications - First, depth of international experience has a negative impact on the speed of foreign expansion. This is contrary to Hypothesis 1, indicating that if a firm operates its business in a particular country for an extended duration, its level of commitment to that country could increase, hindering its swift expansion to another country. Second, diversity of international experience has a positive influence on speed of foreign expansion, which implies that, by being exposed to varied national environments, a firm’s diverse international experiences, represented by its official and unofficial management systems and operational experience tailored to its business in each country, reduces its perceived risk of uncertainty of internationalization, or increases its capability of effectively responding to the liability of foreignness, thus positively affecting the speed of foreign expansion.

Белорусская национальная идея сквозь призму исторического анализа: этапы, подходы, перспективы

Among the variety of functions of the national idea as an important part of the modernization processes, one can single out its significance as a historical constant, an imperative defining the goals of the national-state organism. From the position of the epistemological ideal, it is possible to analyze and evaluate various national ideas, since the true effectiveness of a national idea depends on its historical adequacy. Within the framework of five stages of the history of the formation and evolution of the Belarusian national idea during the late XVIII – first decades of the XXI century, the last of which is not completed, the cultural and civilizational confrontation of the Polish-Catholic (and later the entire Western) and the Russian-Orthodox world manifested itself. As a result, today there are three competing approaches to the definition of Belarusian national identity – the Western-Russian-pro-Soviet (which has an obvious advantage in terms of rational validity and historical authenticity), the Litvinist and hybrid (dualistic). The complex of the main myths of Litvinism, refuted within the framework of his-torical analysis, includes the concepts of the cultural and state development of Belarus isolated from the rest of the principalities of Ancient Russia in the XI – XIII centuries, the non-Slavic (Baltic) ethnic origin of Belarusians, the great cultural development and a high degree of legal democracy of the Belarusian society under the rule of Lithuania and Poland, its significant linguistic and the cultural difference from Moscow Rus, the decline of the Belarusian lands after their incorporation into the Russian Empire, the genocide of Belarusians on the initia-tive of Moscow in the XVII and XX centuries. The condition for completing the formation of a full-fledged na-tional idea in the Republic of Belarus is the rejection of the artificial construction of parallel history, the use of Western-centric cultural stamps, fetishization of what has no real relation to its national-state formation. A pro-ductive methodological principle of studying the past of Belarus can be the identification of the history of the Belarusian people and the history of Polish-Lithuanian subjects and institutions, as well as an objective as-sessment of the processes and consequences of foreign expansion into its territory.

SOCIAL PROFILES OF TURKISH CHILDREN AND YOUTH LITERATURE AUTHORS

When examined the national and international literature, there are very few studies on the social profiles of the artists working in the fields of children and youth literature. The scarcity of existing studies in the field in terms of quantity has been the starting point for this study. In this study, the profiles of 577 authors in Hasan Latif Sarıyüce's encyclopedia of Turkish children's and youth literature were examined in terms of gender, date and place of birth, educational status, father's profession, own profession, literary genre, the number of awards they received, and foreign expansion variables. The study was qualitative, and the data were analyzed using content analysis technique. According to the results obtained in the study, it is evident that the number of authors who wrote works in the field increased after the Republic period. The gender role of most authors was male. The artists were mainly born in the western provinces of Turkey. The fathers of the artists were mostly soldiers, teachers, and members of parliament. When the professions of the artists are examined, it is seen that they are mostly teachers, authors, and civil servants. It has been seen that artists mostly produce poems, stories, and novels. Few artists in the field have received awards. The number of authors whose works have been translated into foreign languages is also very low. Some suggestions are presented based on the findings obtained from the study.

The role of political connections in rapid internationalisation: A study among Chinese international new ventures

Drawing upon the attention-based view, we examine whether political connections facilitate or hinder the speed of new venture internationalisation. Given the limited managerial attention and information-processing capacities of decision-makers, international new ventures (INVs) need to make a trade-off between domestic business activities and rapid foreign expansion. We hypothesise that INVs with political connections, being embedded in political networks in their home market, tend to focus their attention on domestic business activities rather than rapid internationalisation. We also hypothesise that a high level of subnational trade openness mitigates the baseline negative relationship. Analyses based on the longitudinal data of INVs publicly listed in China support the hypotheses. Our study contributes to the literature by unveiling the dilemma of INVs which are developing board political connections at home and seeking rapid internationalisation abroad.

Organizational mode choices of multinational banks abroad

We investigate the determinants of organizational modes adopted by multinational banks abroad using a unique database of 98 parent banks and their organizational modes in 169 countries from 2005 to 2015. Our findings reveal that multinational banks operate in various organizational modes abroad, including multiple modes in a single host country; however, subsidiaries are the dominant mode of operation, followed by branches and simultaneously operating branches and subsidiaries in the host country. Furthermore, the characteristics of multinational banks play a significant role in determining their organizational decisions in a host country. Our results indicate that less profitable banks are less likely to open representative offices and are more likely to have branches. In contrast, multinational banks with high asset growth are more likely to operate a representative office abroad and less likely to open a subsidiary. These findings suggest that parent bank profitability and asset growth are important considerations when determining the optimal organizational mode of foreign expansion. Furthermore, country characteristics (particularly openness to economic and capital flows, institutional framework, and geographical and cultural distance) between host and home countries also influence foreign bank operations in a given host country.

Springboard internationalisation in times of geopolitical tensions

Geopolitical tensions and a world where state interventions are driven by national security and ideology present novel challenges for emerging market multinational enterprises (EMNEs). Often, individual companies are targeted, and their corporate growth gets curbed. These phenomena are derived from non-market factors, which are generally absent in the springboard view of the international business discourse that explains the foreign expansion of EMNEs by viewing these firms as ambidextrous organisations capable of handling conflicting requirements. This research aims to understand the international expansion of EMNEs under geopolitical tensions by incorporating non-market factors into the ambidexterity model to enrich the springboard view. A case study of Huawei and its exclusion from the telecommunications industry in Sweden forms the empirical base of this research. The contributions are twofold. First, within the springboard view, the ambidexterity model can be upgraded by incorporating non-market factors that better explain the international expansion of EMNEs in changing geopolitical and business contexts. Second, the research highlights the management of EMNEs' subsidiaries while considering geopolitical tensions.

International alliance structure and effectiveness: evidence from law firms

Abstract International alliances are important strategic vehicles to build geographic scope and enter foreign markets, especially for firms lacking the resources or facing limitations to direct foreign expansion. Addressing recent calls to study alliance structure, we investigate the design parameters of nonequity international alliances and their performance implications. Building on the resource-based view of the firm, we theorize the effect of three key structural dimensions – formalization, interface, and specialization – on firm effectiveness. Our empirical work focusses on the legal service industry where international interfirm alliances are common, and resources like expert workers and knowledge are essential. We study 121 French, German, Italian, and Spanish law firms; and our data include the structural features of the alliances to which they belong, as well as various measures of firm effectiveness. Our analyses via structural equation modelling point toward the importance of informality and strong interface for effectiveness in these contexts. This study contributes to a finer understanding of international alliances by directly addressing the structural variation among nonequity international alliances, and analyzes their implications for firms. We thus respond to calls to investigate structural dimensions of alliances, operationalizing relevant dimensions of alliance organizational structure. Second, we add to understanding of the performance effects of international alliances, showing the benefits of individual structural parameters for firm effectiveness. Finally, we extend research on the use of international alliances as a strategic vehicle to enter foreign markets, capturing essential aspects of the internal arrangements of these interorganizational collaborative relationships, and thus adding to understanding of this strategic entry mode.

National payment card system: Problems and prospects of international cooperation and work in foreign markets

Subject. This article examines the economic relations between the National Payment Card System and operators of foreign payment systems, their participants, users of payment services, as well as Russian and foreign regulators and organizations that ensure the functioning of the payment infrastructure. Objectives. The article aims to analyze the problems and prospects of international cooperation of the National Payment Card System and its work in foreign markets, and formulate basic recommendations for improving its international cooperation effectiveness. Methods. For the study, I used theoretical research methods. Results. The article finds that the National Payment Card System’s development has greatly contributed to consolidating the sovereignty of Russia in the financial sphere. The article highlights the priority areas of foreign expansion of the National Payment Card System and priority formats of cooperation with foreign partners. Conclusions. Western partners, refusing to fulfill their obligations and imposing sanctions bypassing the mechanisms and rules adopted at the UN level, demonstrate their unreliability in mutual economic relations. That is why, when developing international cooperation in foreign markets, the National Payment Card System should rely on its own strength and mutually beneficial partnership with friendly countries.

Internationalisation of firms in the digital economy. Analysis of tenants of Polish technology parks

PurposeThis paper aims to discuss the relationship between the digital economy and the model of internationalisation followed by companies resident in technology parks – institutions designed within the framework of regional and national innovation systems – to promote the country’s digital development. The authors selected Poland as the case study. It is one of the biggest European Union members that joined the EU after 2004. In the second decade of the 21st century, the Polish Government has oriented its economic strategy towards building a competitive digital economy. One of its fundamentals is to support the internationalisation of innovative firms.Design/methodology/approachThe analysis interrogates the forms and determinants of internationalisation undertaken by tenants of technology parks. The study sample consisted of 300 of the total 1,584 enterprises resident at the 36 technology parks in Poland and was a stratified random sample, with particular strata classified by location at a specific park. The research applied an interview questionnaire designed to cover such issues as innovativeness, research and development, public aid and the support offered by technology parks.FindingsThe results show that around half of the investigated enterprises undertake international activities. The key factors determining the chances of a firm’s internationalisation in the digital economy are whether it conducts research and development projects and receives public aid support. Many tenants of technology parks in Poland enter foreign markets at an early stage of their development, using diverse forms of foreign expansion. The findings also show that the internationalisation of tenants of Polish technology parks usually occurs in six relatively independent modes (types).Originality/valueThis study contributes to a better understanding of the internationalisation patterns of firms facing digital development challenges. Technology parks have a crucial role in building a digital economy, facilitating a technological “leapfrog”. The final recommendations can guide the technology parks’ managers to adopt more relevant support services for the internationalisation of their tenants. It is a critical point for small- and mid-size young innovative enterprises.

The Apple Company's Foreign Expansion and Market Entry Strategy

The Apple Company's Foreign Expansion and Market Entry Strategy

Russia’s Assistance to Africa in Opposing Neocolonialism

Today, the African continent is a new center of opposition to neocolonialism and foreign expansion. African countries, having gained the independence, still cannot save themselves from the control of the former colonialists and the global hegemon — the United States. Africans consist Russia as a reliable partner, which fights consistently for the building of international relations on justice equal base. Russia, as the Soviet Union at its time, provides assistance and support for African countries in the fight against neocolonialism and imperialist exploitation. Russian-African relations are gaining new momentum amid the Ukrainian crisis. The issues of past colonialism and modern neocolonialism and the ideological content of the discourse of the anti-colonial struggle will be discussed in July 2023 within the framework of the 2nd Russia-Africa Summit, designed to give a new impetus to Russian-African cooperation.

Trust in startups implementing foreign expansion: leader's perspective

The issue of supporting innovation, ensuring inclusive development, using new technologies and entrepreneurial potential is one of the basic elements of the concept of sustainable development, which is reflected, among others, in in EU strategic documents. There is a research gap where entrepreneurship is relatively little researched in the context of trust. Mainstream trust research overlooks entrepreneurship and its special features of placing uncertainty at the heart of its operation, in particular in the information, communication and high technology sector, and therefore among startups. The above results from the still weak research invention regarding the issues of managing these enterprises. Meanwhile, this is an area particularly predestined for research on trust. Therefore, the aim of the article is to try to answer the question about importance and the ways of building trust from the point of view of startup owners.Author used critical review of relevant literature and in-depth interviews to carried out the research in startups implementing foreign expansion outside of Poland. The presented study is part of a wider project, including interviews with leaders of other technology companies, as well as with other employees of selected departments of these companies. This article presents the results of the study of the one of group of leaders who are owners of startups, implementing foreign expansion.The conclusions drawn from the analysis confirm that the challenges underlying the foreign expansion of startups are not only technical, financial, legal or related to tax, etc. but they should be rooted and related to the need to take into account the specificity of the organizational culture of companies in their activities. The conducted research showed a high level of leaders' awareness of the need to build collective trust between employees in the company, but there is a need for systemic development at the institutional level regarding methods and tools that can be used in this regard. The key issue here is the growing importance of the organizational culture of trust built and developed by leaders, based on values. Therefore, the problem of managing startups in this context seems important, so that they can dynamically develop and grow.

MNCs’ orchestration capability of the 3Ds and financial performance

PurposeIn today’s ever-increasing context of volatile, uncertain, complex and ambiguous market conditions, the shifts of countries’ protectionist policies toward inward Foreign Direct Investment (FDI), and an increased gap between headquarters’ (HQ) and subsidiaries’ perspectives on what makes business sense, it has become apparent that challenges toward foreign expansion are becoming more severe and require a multidimensional dynamic approach. The authors draw from orchestration theory, dynamic capabilities literature and previous literature on dimensions of internationalization [specifically, density, geographic distance and degree of diversity of the multinational corporation (MNC) subsidiary network] to argue that firms must enhance their orchestration capability. In doing so, this study aims to highlight the nuances of orchestrating a three-dimensional (3D) conceptualization of MNCs’ international configurations.Design/methodology/approachThe authors analyzed the patterns of configurations that are adopted by MNCs. This sample was made up of the international configuration of 78 Fortune 500 MNCs consisting of 3,318 foreign subsidiaries. Furthermore, the authors examined the impact of different configurations of the 3Ds on firm performance using ordinary least squares regression analysis.FindingsWhile the research did indicate that the sample MNCs adopted the sample configurations of the three internationalization dimensions more frequently than others, the authors found that orchestrating MNCs with an international configuration characterized by high density, low geographic distance and low internetwork scope diversity had a positive impact on firm performance.Practical implicationsWhile international expansion is often motivated by financial performance or market/resource gains, it is also impacted by the firm’s dynamic capability profile. Thus, as MNCs seek to continue to expand globally, they must assess and, if needed, develop their management team’s orchestration capability, which includes effectively determining how the addition or removal of a subsidiary will impact the density, geographic distance and diversity dynamics of the MNC’s international configuration. Finally, the management team needs to be able to devise plans to respond to the potential challenges associated with each of these dimensions.Originality/valueThe contribution of this study includes bringing a dynamic capabilities lens to the extant international business literature examining the multinationality and performance relationship by highlighting the importance of an MNC’s process orchestrating capability that is needed for firms to effectively manage increasingly complex subsidiary networks. It also conceptually explains and empirically supports that some configurations are likely to yield higher returns than others, which can act as a guide for firms as they are seeking to expand in more geographically distant as well as diverse sectors. Furthermore, this study highlights the need for a multidimensional simultaneous approach to the examination of internationalization to performance relationship. Finally, it highlights the tradeoffs that MNCs must address across the orchestration of the three internationalization dimensions using a dynamic capabilities theoretical lens that acknowledges the differences in perspective that exist between HQs and subsidiaries.

The complementarity effect of exporting, importing and R&D on the productivity of Ukrainian MNEs

After two decades of research on Emerging Market Multinational Enterprises (EMNE), the debate still concerns the antecedents and strategies of their foreign expansion. However, much less has been said on the effects of international participation on their productivity. Building on insights from the Resource-Based View of the firm and agency theory, we develop hypotheses on the presence of complementarities among export, import and R&D and their impact on productivity. Our empirical analyses on a panel of 23,000 time-year observations of Ukrainian MNEs over the period 2000–2006, confirm that: (i) EMNEs benefit from complementarities stemming from the assimilation and integration of knowledge from international external sources (import and export) with internal knowledge (own R&D investment); (ii) the effect is more pronounced for private-owned enterprises (POEs) rather than state-owned enterprises (SOEs), and (iii) especially when they trade with partners in/from advanced markets.

Cross-Border M&As and Green Innovation among Emerging Market Multinationals: Evidence from China

The reverse spillover effect of the foreign expansion of multinational enterprises (MNEs) from emerging economies (EMNEs) on their green innovation in home countries have been largely ignored; by contrast, the main focus has been directed toward the spillover effect of MNEs from developed countries in emerging economies. The only related research available limits their analysis to the regional level, rendering the relationship between the foreign expansion of EMNEs and their green innovation unclear. Specifically, as an increasing foreign expansion strategy adopted by EMNEs, how do cross-border mergers and acquisitions (CBMAs) affect the post-merger green innovation of EMNEs? To examine this question and explore the boundary conditions, this study integrates institutional theory and the business ethics literature to construct a motivation–ability framework in the context of green innovation. Using the Propensity Score Matching with Difference-in-Difference (PSM–DID) method, we tested our hypotheses on a sample of Chinese listed manufacturing firms between 2009 and 2017. Results suggest that Chinese MNEs decrease their green innovation in response to CBMAs. Moreover, the CBMA–green innovation relationship varies across firms and is determined by heterogeneity in state ownership, government subsidies, and industry openness. These findings not only elucidate the reverse effect of the foreign expansion of EMNEs on their green innovation in home countries; they also provide an approach to reconciling mixed conclusions on the relationship between CBMAs by EMNEs and their innovation performance by clarifying types of innovation in international business research.

Imagination and Firm Internationalization

In this paper, we explore the connection between imagination and firm internationalization. We review existing internationalization process models to suggest that these models have paid limited attention to the imaginative and forward-looking aspects of managerial decision making. A set of conjectures outlines how imagination in managers’ decision making matters for variance and jumps in foreign establishment chains, modes of foreign expansion, and how it may affect success in firm internationalization. We discuss how incorporating imagination into the research agenda on firm internationalization opens up new possibilities for research, with particular emphasis on developing a better understanding of how at the micro level managers think about internationalization, and its methodological implications.