IB Literature Research Articles

Navigating HRM practices in the Indian institutional context: multinational vs domestic enterprises in comparative perspective

PurposeThe role of distinct institutional context in shaping employment practices is particularly evident in emerging markets where institutional measures are often evolving and not yet fully established. This presents several challenges, particularly for multinational corporations (MNCs) operating in such contexts. This research paper aims to provide a comparative analysis of HRM practices, specifically recruitment and selection, internal career opportunities and performance appraisals between domestic and multinational companies in a large emerging economy, that is India.Design/methodology/approachIn this study, survey-based data was gathered from a diverse sample of 252 companies, comprising both domestic enterprises (DEs) and MNCs, to collect comprehensive data on HRM practices. The aim is to provide a nuanced understanding of the variations in HRM approaches between DEs and MNCs, taking into account the unique institutional context of the Indian market.FindingsContrary to initial expectations, the study’s findings do not support the hypothesis that MNCs would prioritize more rigorous and effective HRM practices compared to DEs in the Indian context. Instead, the results reveal that DEs place a greater emphasis on effective HRM practices than their MNC counterparts, despite the latter’s international reach and operational success. These findings shed light on the distinctive HRM strategies used by MNCs and DEs when navigating the complexities of the Indian market.Originality/valueThis study contributes to the existing IB literature by providing a comparative perspective that emphasizes DEs proclivity for institutional entrepreneurship and change. Exploring the resource dynamics for both MNCs and DEs, the study showcases them as divergent adaptive navigators within (in)formal institutional logics, adept at navigating and influencing institutional structures and shaping distinct HRM practices. The findings challenge traditional assumptions about HRM priorities of MNCs and DEs.

Twenty years of Islamic banking literature by Indonesian researchers: A hybrid reviews

Purpose – The emergence and growth of Islamic Banking in Indonesia have significantly increased over the past few decades. Consequently, there is a pressing requirement for a thorough examination to analyze the present state of IB literature, including its development and conceptual framework.Methodology – This study utilizes a bibliometric methodology and Systematic Literature Review (SLR), applying content analysis techniques to uncover the intellectual framework of IB literature produced by Indonesian researchers, as documented in the Scopus database. This study utilized 418 articles published between 2003 and 2023, resulting in a total of 418 articles. Data were analyzed using various software applications, including Publish or Perish (PoP), Excel, VOS-Viewer, and Biblioshiny-R.Findings – This study identifies the institutions, authors, journals, and articles that have had the most influence on IB literature published by academics in Indonesia. Additionally, this study sought to uncover patterns of research collaboration within this body of literature. Moreover, this study discovered four main clusters: comparing Islamic and conventional banks, examining the interaction between Islamic banks and their customers, exploring corporate social responsibility (CSR) and accounting practices, and examining the impact of Covid-19 within the context of Islamic banking. Implications – The findings of this study will assist researchers in identifying a range of potential topics for future research that Indonesian researchers can explore.Originality – Applying bibliometrics and SLR methodologies enables this study to comprehensively assess literature development in the IB in Indonesia by incorporating quantitative and qualitative analyses.

The subsidiary strategising process for a competence-creating role

PurposeThe authors’ contention in this paper is that the expression of subsidiary strategy in IB literature has become fragmented and incomplete. Therefore, this study aims to propose a rethink on how IB scholarship approaches the important issue of subsidiary strategy by holistically examining the discrete and integrated set of activities, choices and decisions that constitute the subsidiary strategy process for, in this context, assuming a competence-creating role within the multinational enterprise (MNE).Design/methodology/approachA conceptual model is designed to illustrate the holistic process of subsidiary strategy from assigned to assumed role and how a subsidiary can navigate a pathway to elevated performance and survival.FindingsThe paper identifies the key integrated elements that constitute a holistic strategic process that can enhance a subsidiary’s standing within the MNE and maximise its survival prospects.Research limitations/implicationsParticular focus is placed on subsidiaries that strategise to advance their internal corporate role to competence creator via upgraded knowledge capabilities.Originality/valueThis paper offers a roadmap for IB scholars to contribute to a future discourse around the subsidiary strategy process for assuming a competence-creating role.

Chinese State-Owned Multinationals' (SOMNEs) Subsidiary nonmarket strategies in Selective De-globalization: An integrated perspective of co-evolution theory and the yin-yang frame

Subsidiaries adopt nonmarket strategies in host countries to merit legitimacy. This conceptual paper theorizes paradoxes and nonmarket strategies for Chinese SOMNEs' subsidiaries in selective de-globalization targeting China. We enrich the well-received co-evolutionary framework in the IB literature by incorporating the Yin-Yang frame into the analysis and broadening the scope of thinking beyond the economic analysis of risks and costs in political disruptions on MNE subsidiaries. Our integrated theoretical framework highlights two dynamic environments (social and geopolitical) that subsidiaries simultaneously confront and the multi-level institutional pressures within these environments. We propose three Yin-Yang framed nonmarket strategies — zao-shi (造势) (creating favorable momentum), ying-shi (应势) (Not resisting unfavorable momentum) and wu-wei (无为) (inactive action) to address the paradoxes in a de-globalized business environment.

Exogenous shocks and MNEs: Learning from pandemics, conflicts, and other major disruptions

Exogenous shocks have long been a feature of the global economy, yet they have become particularly salient in recent years. This Special Issue of the Journal of World Business addresses the shift to a New Normal characterized by frequent events that disrupt the international business context, such as the COVID-19 pandemic and the Russia-Ukraine conflict. In this Introduction to the Special Issue, we discuss how the IB literature has treated exogenous shocks. We posit that important lessons can be learned from history, and from the experience of MNEs in the countries of the Global South. We also suggest future research avenues centered around exogenous shocks, international business, and multinational enterprises.

Towards a more comprehensive assessment of FDI’s societal impact

Societal actors increasingly expect multinational enterprises (MNEs) to positively impact the host countries in which they operate. While these expectations have prompted IB scholars to engage more extensively with the societal impacts of foreign direct investment (FDI), our collective knowledge of these impacts is limited. Early IB literature investigated FDI’s aggregate impact but generally confined the scope to economic effects. Contemporary, strategy-oriented IB scholarship broadened the scope of impact types to include social and ecological effects, yet mostly limited the scope of the impacted actors to MNEs themselves. We argue that IB research should more comprehensively assess FDI’s impact by incorporating social and ecological effects in addition to economic ones, and by accounting for a broader set of stakeholders beyond MNEs. IB scholars should challenge the assumption that FDI’s economic impacts spill over to positive societal outcomes, and that MNEs’ interests parallel those of host countries. A more comprehensive assessment will require IB scholars to question “win–win” assumptions about the complementarity of corporate societal and financial performance, examine FDI’s societal impact over longer time horizons, leverage innovative approaches from allied sciences, and consider interactions between different types of societal effects in order to appreciate their sometimes countervailing effects.

Why do some firms stop exporting?

During economic turbulence, such as those caused by the US-China conflict and COVID-19, sunk cost effect has garnered attention in IB literature. As it becomes increasingly difficult to predict export profits, relying on sunk costs for strategic positioning in export markets appears to be a rational decision. However, few studies quantitatively examined sunk cost effect variations, especially in export-exit decision-making. In our study, we quantified sunk cost effect with respect to export performance and export portfolio, specifically in terms of export-exit probability. Our findings indicate that the export-exit rate due to sunk cost effect is less than 50% only if export volume surpasses a certain threshold. Consequently, we have provided an explanation for why export exits still occur in the presence of high sunk costs. Additionally, we have identified that geographic diversification, up to four destinations, has more synergy with sunk cost effect than product diversification, particularly in volatile environments.

Multinational family firms’ internationalization depth and breadth following the global financial crisis

This study examines how large family firms react to a macroeconomic shock in terms of their internationalization depth and breadth. Building on new internalization theory and acknowledging the dysfunctional manifestations of bifurcation bias in large family-owned MNEs, we argue that an unexpected shock induces family firms to recombine their family firm-specific resources with their thus far underutilized or unequally treated nonfamily resources. This recombination allows most family firms to economize on bifurcation bias and leverage their resources as firm-specific advantages (FSAs) resulting in an increased depth and breadth of internationalization post shock (while some of them may continue to suffer from bifurcation bias). Testing our theory on a panel dataset incorporating large family-owned (compared to nonfamily-owned) MNEs headquartered in Germany before and after the global financial crisis lends support to our theory. We discuss how our study contributes to new internalization theory, to the broader IB literature on MNEs’ unexpected shock response, and to family firm internationalization research.

International business, multinational enterprises and nationality of the company: a constructive review of literature

In the aftermath of the Global Financial Crisis, the long-held confidence that ‘nationality’ would not matter in a globalised economy has dwindled. As the impact of economic and foreign policy on firms’ internationalisation and investment decisions appears to grow, and economic nationalism built on constructs of ‘nationality of the company’ gains weight, companies doing business abroad, including multinational enterprises operating in the US and Europe, are increasingly exposed to (often unexpected) implications of their ‘nationality’. We elaborate on related perspectives to the theme developed in the IB, global strategy, and international management literature and in business history. Based on these readings, we conceptualise the opaque notion of ‘nationality of the company’ and outline perspectives. We argue that ‘nationality’ appears in very different ways and suggest that research should focus more on specific political and institutional environments, and specific constructs of ‘nationality’.

Internationalization-Performance Relationship of Family Firms: The Moderating Role of Familyness

Despite the growth in family firm (FF) research we hardly know how internationalization (I) impacts performance (P) of FFs, and how the familyness within FFs shape their IP relationship. Drawing on IB and FF literatures, we theorize in this study how two important sources of heterogeneity—extent of family ownership and involvement of CEO (family versus professional; founder versus non-founder)—moderate FFs’ IP relationship. Our empirical analysis of data from India suggests that FFs’ IP relationship is negative, but the extent of family ownership and involvement of professional CEO and founder CEO positively influences this relationship. Our results also demonstrate that involvement of family CEO and non-founder CEO casts a negative moderating influence on FFs’ IP relationship. Our results further provide evidence that FFs’ IP relationship is positively moderated when family CEOs possess international experience. Our study contributes to the IB and FF literature in multiple ways.

MNEs, Heterogeneity in Corporate Social Responsibility, and Subsidiary Employment in Host Countries

Building on the theories of CSR and MNEs, this study investigates the relationships between multinational enterprises’ (MNEs’) corporate social responsibility (CSR) commitment and subsidiary employment in host countries. This study theorizes that MNEs’ CSR impacts on overseas subsidiary employment vary by CSR types (social versus environmental); those impacts may be contingent on the MNEs’ firm-level motivations of outbound foreign direct investment (FDI), host country-specific institutions, and geographic orientations in the triad. The empirical findings from a sample of Japanese MNEs’ 11,086 subsidiary-year cases over the period of 2002–2013 are three-fold: (1) it supports the positive relationships between each of social and environmental commitment and subsidiary employment of Japanese MNEs in host countries; (2) the positive effect of social commitment on the subsidiary employment of Japanese MNEs becomes stronger in host countries governed by informal institutions or within the home region of the Japanese MNEs in the triad; and (3) the positive influence of environmental commitment on the subsidiary employment levels is elevated under the Japanese MNEs’ production-seeking outbound FDI motivation or in foreign countries governed by formal institutions. The study concludes with theoretical, empirical, and practical implications to the IB literature.

Boundary Conditions of Subsidiary Reverse Knowledge Transfer Benefiting the MNE Parent

The subsidiary reverse knowledge transfer (RKT) has recently drawn much attention in the IB research. Despite prior efforts on exploring the determinants of the subsidiary RKT from diverse perspectives, the subsidiary RKT benefit to the MNE parent in contingency with heterogeneity of subsidiary entrepreneurial initiatives, the MNE parent’s discretion over the subsidiary resource use, and the knowledge transfer mechanism are rarely examined in a holistic approach. Drawing on the organizational learning perspective and resource dependence theory to develop our hypotheses, and testing them with a unique sample of 2277 observations of 1831 Taiwan MNEs collected from 2013 to 2017, we found that (1) the RKT both of subsidiary exploitative and explorative initiatives are beneficiary to the MNE parent, and the benefit derived from the exploitative initiative is stronger than the explorative one; (2) the knowledge transfer conduit of bureaucratic routine is more detrimental to the RKT benefit of subsidiary explorative initiative; and (3) the MNE parent’s higher resource discretion enhances the RKT benefit of subsidiary explorative initiative. Our findings provide academic contributions to the IB literature and managerial implications for managing the subsidiary RKT.

Foreign to all but fluent in many: The effect of multinationality on shock resilience

The sudden COVID-19 pandemic sent shockwaves through international markets. This paper studies the relation between multinationality and risk. While IB literature agrees that internationalization, in times of relative stability, increases systematic risk, we argue that internationalization also improves resilience against exogenous shocks. Leveraging the sequential COVID-waves as a unique empirical laboratory, we show that although multinationality causes liability of foreignness that increases systematic risk, it also generates an asset of multinationality that enhances shock resilience. Yet this advantage of internationalized firms gradually erodes as less internationalized firms learn about the shock and investors adapt their valuations to the post-shock reality.

Orchestrating ecosystem resources in a different country: Understanding the integrative capabilities of sharing economy platform multinational corporations

This paper investigates how sharing economy platform multinational corporations (SEP-MNCs) orchestrate ecosystem resources to drive sustainable growth in a different country, through a dynamic capability perspective. Based on a multiple-case design, we offer a process perspective that identifies three sets of distinct integrative capabilities that come to the fore at different stages of the SEP-MNC's ecosystem development in a different country. By arguing that dynamic capabilities need to be co-created, we posit that, ultimately, the platform ecosystem value creation requires collective engagements of both internal and external resources of the platform ecosystem in building and preserving the collaborative action that amplified their individual resources to identify new and novel opportunities. We therefore re-conceptualizing dynamic capabilities of SEP-MNCs resides at the ecosystem level where the capabilities become an emergent and highly integrated property, with recurrent patterns that only become apparent from continuous interactions with their ecosystem partners. We also contribute to the IB literature by offering a holistic view that infuses dynamic capabilities with the themes of interdependence, sub-national network coordination, and data intelligence; themes that are yet to be fully incorporated into IB scholarship.

It's all in the past: how do colonial legacies between host and home countries affect the expatriate experience?

PurposeWithin the expatriation subset of the wider IB literature, the focus of research has been on contemporary contextual factors. The purpose of this paper is to link the present to the past by investigating how the individual expatriate experience may be affected by a colonial legacy between host and home countries.Design/methodology/approachGiven the exploratory nature of this study, a qualitative interview-based approach eliciting thick, detailed descriptions of the practical experiences of seven Japanese expatriate managers working in Malaysia was adopted. These were supplemented by additional interviews with three host-country nationals who work alongside some of the expatriates. The data were analysed through a two-stage coding process.FindingsThe expatriate respondents were largely unanimous in their view that the colonial past between the two countries had no negative impact on their experiences in Malaysia, and the Malaysian interviewees corroborated this. On the contrary, the majority of the expatriates actually spoke positively about their experiences. This was especially true for expatriates in both the tourism and education/research field whose work was linked in some way to the period of Japanese occupation.Research limitations/implicationsThe small, single-context nature of the investigation limits generalisation. There are also many particularities in this study (the nature of Japanese-Malaysian postcolonial relations, cultural values of the Malaysians and Japanese, and so on) that are perhaps not easily relatable to other contexts. Having said this, qualitative research is not always geared towards generalisability but rather towards contextual intricacies and nuances.Originality/valueWhile most of the extant literature on expatriation has examined largely contemporary factors, this paper explores the impact of more historical events on the expatriate experience. Although such events may seem distant from an expatriate's current activities, this study suggests that in certain circumstances, they may have a lingering effect.

EMNEs international expansion: home country institutional voids and nonmarket strategy effects

Based on new institutional economics view, we theorized and empirically demonstrated that home country institutional voids not only provide an incentive to the Emerging Markets Multinationals Enterprises (EMNEs) escape to foreign markets, but also and mainly that these home country institutional voids may create exit barriers to EMNEs' international expansion through outward foreign direct investment (OFDI). Moreover, we provide new insights explaining how home country nonmarket political strategy fill home country institutional voids for EMNEs enter in foreign markets. Our original database on cross border mergers and acquisitions (CBM&A) by Brazilian firms over a 16-year time frame provide strong support for the paradox effects of home country's institutional voids on EMNEs international expansion. Our findings also reveal that home country nonmarket political strategy support EMNEs in their international expansion. Finally, our results suggest that particular political positions may mitigate home country institutional voids on international expansion of EMNEs. The study develops theoretical and empirical implications to IB literature extending the knowledge of the international expansion of EMNEs and bringing new insights regarding the role of nonmarket political strategy for the international expansion of EMNEs.

Populism, political risk, and pandemics: The challenges of political leadership for business in a post-COVID world

The examination of political risk, political uncertainty, and political institutions in the international business literature has, not unexpectedly, been shaped by the prevailing issues faced by firms at their time of writing. While these three separate angles together have provided an iteratively more comprehensive view of the politics and business nexus, they are still missing an important component, namely the ability of specific actors to utilize political uncertainty and generate institutional volatility. This paper examines the rise of two specific phenomena that challenge prevailing theoretical frameworks, and potentially have the ability to render our previous insights less relevant: first, the rise of populism as a persistent political force in developed economies, and second, the rapid spread and disparate political response to COVID-19. We argue that exclusively institutional-based frameworks are inadequate to cope with the political realities of the 21st century, as institutions themselves are being subverted or utilized for actions far beyond their original conception in practice and their operationalization in the IB literature (something that COVID-19 has exacerbated). Although extant IB work has much to recommend itself in helping to understand risk and uncertainty in the political sphere, these new challenges for business reveal that we need to incorporate political personalities, actors, and leaders(hip) into our research. Only then can we have a more complete picture of how politics can influence business.

‘If you use the right Arabic…’: Responses to special language standardization within the BBC Arabic Service’s linguascape

Within language-sensitive IB literature, a range of studies examine responses to corporate language policies, especially in relation to English. However, research addressing other languages, and profession-specific influences on responses to language standardization remains scarce. This qualitative paper discusses journalists’ responses to corporate language standardization within the linguascape of the BBC Arabic Service. The findings demonstrate the impact of various interlinked influences on these responses: from external ones associated with the macro-level of the arabophone context and the journalistic profession, to internal organizational ones, occurring at the meso-level of the BBC, and the micro-level considerations linked with individual journalists’ career-related intentions.

The Resource-Seeking Internationalization Process of a Nongovernmental Organization

This paper aims at investigating the resource-seeking internationalization process of an international nongovernmental organization (INGO) from the process point of view. INGOs have received scant attention in the international business literature, despite their relevance in almost every aspect of aid and development and as actors of global governance. The research question addresses the issue of whether or not INGOs can follow a path similar to business firms in their internationalization process. The study departs from two different theoretical perspectives - the Uppsala model and the born global perspective - to study the case of the NGO Médecins Sans Frontières (Doctors Without Borders), an international, private, nonprofit, member-based organization. We identify three stages in the resource-seeking internationalization process of the NGO, which present similarities with that of business organizations. The study contributes to the IB literature by revealing key aspects of the internationalization trajectory of an NGO to raise funds and recruit volunteers in advanced and emerging economies with the purpose of employing these resources to support its emergency assistance activities in less developed countries, and to the literature on INGOs in exploring the issue of resource-seeking internationalization.

The OLI Paradigm as a comprehensive model of FDI determinants: a sub-national approach

PurposeThis study aims to advance a sub-national perspective within the OLI Paradigm by analyzing how and to what extent the Eclectic Paradigm can serve as a general model to capture region-specific aspects of the location determinants of FDI, encompassing institutional effects that extend beyond the quality of institutions.Design/methodology/approachThe authors conducted a systematic literature review of 41 selected papers published between 1990 and 2019. Using inductive content analysis, they investigated the theoretical choices used to support analyses of the effects of institutional factors on MNEs' location decisions at the sub-national level.FindingsIt was found that, when changing from the national to the sub-national level of analysis, there is no need to change the main assumptions used in the literature, although a different perspective must be adopted. The Eclectic Paradigm permeates most of the studies revised and can serve as a general model to capture the sub-national perspective. It offers a foundation for new perspectives on the dynamics of institutional and political factors and their effects on location strategies and determinants at the sub-national level. Adopting the OLI Paradigm with a sub-national approach could widen the IB literature's prevailing focus on traditional economic factors and institutional quality.Research limitations/implicationsThe authors contribute to extant International Business literature Their paper enhances the literature on FDI location determinants by providing a more specific approach to development of a sub-national perspective within the OLI Paradigm, extending the institutional effects to capture more region-specific factors influencing the location of FDI. Study limitations are related to our analytical focus on the location dimension, excluding motives for FDI or firm-level location strategies. Rather than limiting analysis to quantitative studies, future research that includes qualitative studies and also covers the other dimensions of the OLI Paradigm could open additional new research avenues for advancing the sub-national perspective within the field of IB.Practical implicationsThe authors’ main findings suggest that MNEs' location strategies should include a sub-national perspective, which means that firms need to assess different levels of the location and understand their interaction with nationwide constraints and limitations, as it may affect firms' ability to effectively conduct their value-adding activities. They also contribute elements that can support sub-national governments' actions and policies aiming to enhance locational advantages to attract and retain FDI.Originality/valueThis review specifically analyzes the location determinants of FDI at the sub-national level, in studies published in a broad set of journals, from a variety of fields, prioritizing articles that investigate sub-national institutional determinants. The authors derive implications for the International Business literature and propose that the sub-national dimension should be incorporated into the Eclectic paradigm in order to better understand the influence of institutional sub-national determinants.