International Business Decisions Research Articles

Comparative Research on the Internationalized Business Strategies of China and U.S. Multinational E-commerce Companies

This paper conducts comparative research on the internationalized business strategies of Chinese and U.S. multinational technology companies, with a specific focus on E-commerce. It begins by examining the global macroeconomic context, including features of the world economy and the opportunities and challenges faced by multinational tech companies in their international operations. It then assesses the global competitiveness of Chinese and U.S. e-commerce industries through international market share analysis, trade competitiveness indices, and revealed comparative advantage indices. Subsequently, a comparative analysis is conducted for two multinational tech giants, Alibaba and Amazon, considering their management capabilities, financial performance, investment outcomes, and growth potential. The aim of this paper is to enhance understanding of the internationalization strategies of Chinese and American e-commerce firms, their competitive standings, and provide insights for future international business decisions in the e-commerce sector.

Causal foreign market selection and effectual entry decision-making: The mediating role of collaboration to enhance international performance

Foreign market selection and entry are important decisions for internationalizing small and medium-sized enterprises (SMEs) because they involve uncertainty, and influence performance. While it is inherent in effectual foreign market entry (FME) decision-making to rely on international partners and relationships to develop international markets, causal foreign market selection and business relationships/networks have frequently been presented as alternative ways to expand abroad. We conceive SMEs’ foreign market selection and entry as international business decisions and build on causal and effectual logic, and business network theory, to propose a model explaining SMEs’ international performance. We contribute to international business and SME literature by uncovering two different paths (causal and effectual) to FME collaboration and international performance. FME collaboration mediates the relation between causal foreign market selection and effectual entry decision-making and international performance. Our theoretical explanation for the mediating mechanism through which international performance can be enhanced is the network approach.

Towards a unified typology of digital communication technologies in international business: a tool for management and research

PurposeDigital communication technologies have become ubiquitous for various firm processes related to international business (IB) and global strategy. However, IB and strategy scholars lack an encompassing and theory-based typology of these technologies that facilitates analysis and discussion of their uses and effects. Likewise, managers have a large choice of technologies at their disposal making it difficult to determine what technology to use in different IB areas. This paper aims to develop a typology of digital communication technologies based on the synchronicity and interactivity of these technologies and capture their fundamental social and temporal dimensions. This results in four ideal types: broadcasting, corresponding, aggregating and collaborating technologies.Design/methodology/approachThis is a conceptual paper incorporating theoretical perspectives to theorize about four ideal types of digital communication technologies. A subsequent empirical test of this typology has been provided in the appendix.FindingsThe authors discuss how the typology might be applied in IB decisions and some of the contingencies that impact this choice. Building on that, the authors develop directions for future research to increase their understanding of the use of digital communication technologies to help improve IB functions. Overall, the authors suggest future research explores contingencies about where and when different types of digital communication technologies should be used. Finally, the authors provide implication of having a unified typology for both academics and managers.Originality/valueThe authors offer a robust framework for thinking about and capturing different types of digital communication technologies that can be applied by researchers and used by managers when making decisions related to IB. The authors also provide some initial testing of the typology with a three-country study design helping to determine its validity.

GEOPOLITICS AND ITS IMPACTS ON INTERNATIONAL BUSINESS DECISIONS

GEOPOLITICS AND ITS IMPACTS ON INTERNATIONAL BUSINESS DECISIONS

Geopolitics and its Impacts on International Business Decisions

Geopolitics and its Impacts on International Business Decisions

How knowledge and uncertainty affect strategic international business investment decisions: Implications for cross-border mergers and acquisitions

Changes in country-level and global economic conditions create numerous challenges for firms expanding internationally. Country-level changes such as volatility in GDP growth, increasing regulations, and/or inflation may influence temporal periods of static or declining markets and often drive an inward contraction of focus. Conversely, global-level changes such as expanding markets often drive an outward expansion of focus as firms adjust to opportunities created by changing conditions. However, given increasing technological interconnectedness and global economic interdependencies, firms may better leverage their knowledge of such factors to improve international business investment decisions. We hypothesize how firms seeking international expansion adjust based on changes in their environment through both the frequency and value of their cross-border M&A (CB M&A) activity. Our findings from a sample of pre- and post-CB M&A activity using data on the 2008–2009 financial crisis outline how firms’ strategic international business decisions incorporate knowledge and uncertainty regarding country and global economic fluctuations.

International Expansion Selection Model by Machine Learning—A Proprietary Model

AbstractThis study aims to explain a simple but crucial complex problem often faced by multinational enterprises: why multinational companies choose to enter the markets of certain countries. Accordingly, this study developed an international expansion selection model by using the machine learning method. The priority targets for enterprises’ international expansion and the strategic country groups for classification can be identified on the basis of ideas expressed in three primary business concepts, namely ‘market attractiveness’, ‘enterprise’ resources and capabilities’ and ‘customer-oriented approach’; the identified priority targets and strategic country groups are useful for multinational enterprises when designing different configurations for limited resources and can ultimately assist the business managers with making international business decisions. Models can elucidate the complexity behind enterprise decisions. By contrast, strategic grouping based on simple rules can aid the managers to make instantaneous decisions and respond according to the changing market. This study constructed an exclusive strategic model based on the international expansion strategy selection modes adopted by a leading Taiwan enterprise in electronics industry and the unique characteristics possessed by this enterprise.

Fundamentals of VAT grouping in the Netherlands

VAT grouping is a complex concept in European VAT law. Due to the optional nature of Article 11 VAT Directive and the judgment of the CJEU in the Larentia + Minerva case that Member States must develop and maintain their own specifications of the so-called link criteria, no strong harmonisation between national VAT grouping regimes is to be expected in the near future. It is beyond doubt that VAT grouping pervades the practice of many Member States, and as such can play a significant role in international business decisions. It is up to VAT practitioners in each Member State to provide their foreign colleagues with the legal particulars of their national VAT grouping regime. In this contribution, the authors take up this challenge by giving a brief overview of the fundamentals of the VAT grouping regime in the Netherlands. The contribution contains a sketch of the history of the Dutch grouping regime and a short examination of the criteria for forming a Dutch VAT group. It also touches on the consequences of being a VAT group for the application of VAT law to the parties concerned, as well as on matters of administrative obligation and joint liability. More in-depth attention is given to the Dutch interpretation of the criteria of close financial, organizational and economic links. Finally, the authors examine on an even deeper level a contemporary discussion in Dutch VAT doctrine as regards the criterion of close economic links, spurred on by recent case law of the Dutch Supreme Court

Influence of country and company characteristics on international business decisions: A review, conceptual model, and propositions

This research advances four propositions and a conceptual model of country and company characteristics influencing key International Business Decisions (IBDs). The IBDs in this study are country selection and evaluation, entry mode, segmentation-targeting-positioning, and the marketing mix – the first two in the international business domain, and the latter two in the international marketing field. The conceptual model and related four propositions are advanced, based on an extensive literature review and subsequent in-depth review of 169 published research papers on major IBDs and their determinants, namely, country characteristics, including opportunities, risks, and various distances between the host country and home country, and company characteristics, which include international business experience, assets/resources, and expansion/growth strategies. Managerial implications and directions for future research are discussed.

Global convergence of consumer spending: Conceptualization and propositions

The convergence versus divergence debate has persistently presented a puzzle in the scholarly literature. Forces of globalization created a wave of convergence. Yet, the recent worldwide events have changed the course of globalization, slowing its seemingly unavoidable forward direction. It is, therefore, incumbent upon international business scholars to reexamine the convergence versus divergence debate in the contemporary world economy. Despite the central role that global convergence plays in international business decisions, the literature is lacking a conceptualization of the convergence construct in terms of consumer spending behavior. Offering a new perspective derived from the convergence-divergence-crossvergence (CDC) framework and the coevolution theory, the authors define and conceptualize the convergence construct associated with consumer spending behavior. The proposed conceptual framework is comprehensive, offers refinements to the convergence phenomenon, and leads the way for further development of new theories in the international marketing domain.

Impact of Domestic, Foreign, and Global Environments on International Business Decisions of Multinational Firms : A Systematic Study

International business decisions to be taken by executive managers of multinational firms are becoming more challenging due to uncertainties in business environment which is due to fast changing and unpredictable domestic, foreign, and global environment for long term sustainability. Even though firms are cautious and take precautions while taking decisions on international investment for production and marketing, their sustainability for a long time in a given business is shaking due to continuous changes in domestic, foreign, and global business environment. This is mainly due to variations in economic conditions, political scenarios, socio-cultural environment, technological breakthroughs, legal aspects and human behavioural effects on opportunities and challenges on the international business performance of multinational firms. In this paper, we have studied in brief, the various domestic, foreign, and global environmental issues which affects the multinational firm’s business decisions related to international investments and marketing. The paper also discusses the impact of the domestic environment, foreign environment, and global environment on economical, political, technological, legal, and cultural issues on investment and expansion decisions of multinational corporations in general.

Impact of Domestic, Foreign, and Global Environments on International Business Decisions of Multinational Firms: A Systematic Study

International business decisions to be taken by executive managers of multinational firms are becoming more challenging due to uncertainties in business environment which is due to fast changing and unpredictable domestic, foreign, and global environment for long term sustainability. Even though firms are cautious and take precautions while taking decisions on international investment for production and marketing, their sustainability for a long time in a given business is shaking due to continuous changes in domestic, foreign, and global business environment. This is mainly due to variations in economic conditions, political scenarios, sociocultural environment, technological breakthroughs, legal aspects and human behavioural effects on opportunities and challenges on the international business performance of multinational firms. In this paper, we have studied in brief, the various domestic, foreign, and global environmental issues which affects the multinational firm’s business decisions related to international investments and marketing. The paper also discusses the impact of the domestic environment, foreign environment, and global environment on economical, political, technological, legal, and cultural issues on investment and expansion decisions of multinational corporations in general.

Impact of Domestic, Foreign, and Global Environments on International Business Decisions of Multinational Firms: A Systematic Study

Impact of Domestic, Foreign, and Global Environments on International Business Decisions of Multinational Firms: A Systematic Study

International business decisions and manager’s cognitive style: opening up research avenues from cognitive behavioural strategy

The topics of internationalization and cognitive styles have been investigated extensively in an unrelated manner over decades. From the latter psycho-sociological approach, it can be stated that the decision maker cognitive characteristics have an impact on the organization’s strategic decisions. Meanwhile, the former perspective has emphasized the issue of internationalization as a process that strongly relies on gaining experiential knowledge. This conceptual paper aims to enlighten the influence and interaction of the manager’s cognitive style on international business (IB) decisions of small-and-medium enterprises (SMEs). Two main theoretical approaches explaining the internationalization process of SMEs are compared: the Uppsala gradual model and the International New Ventures-INVs approach. The main research question is whether there is a cognitive style that always outperforms the others when it comes to the internationalization pattern the SME follows, or whether the optimal style is dependent on the task and the context (i.e. the pattern of the internationalization the SME choses). Some propositions and research avenues are suggested as new findings are continuously emerging relative to how the human brain works in this promising intersection labeled as organizational neuroscience in the quest of the micro-foundations of the theory of internationalization.

The effects of within-country linguistic and religious diversity on foreign acquisitions

This article explores how within-country diversity of both language and religion influences the ownership structure of foreign acquisitions. Commentators have acknowledged the potential importance of “within-country diversity,” but to date this issue has received minimal empirical attention. We propose that diversity plays two distinct roles. Namely, diversity within the host country may be an additional source of behavioral uncertainty and information asymmetry, over and above the effects arising from cross-national differences. Moreover, diversity within the home country may increase the cognitive complexity of the decision makers, moderating the firm’s response to the distance and diversity of the host country. Results based on foreign acquisitions across 67 acquirer and 69 target countries confirm both of these roles. While the main focus of this article is on the role that within-country diversity plays in international business decisions, it also makes contributions in terms of expanding the range of dimensions of distance investigated in the cross-border acquisition literature, in highlighting a potentially positive role that diversity might play in such acquisitions, and in providing a potential explanation for asymmetries in distance – that is, differences in cognitive complexity.

Understanding the Footprint of the RBV in International Business Studies: the Last Twenty Years of Research

International business (IB) research has evolved substantially over the past four decades incorporating new concerns and theoretical contributions. During the past two decades, the Resource-Based View (RBV) has gained the preference of many IB scholars and has gradually become one of the dominant theoretical perspectives for studying IB decisions and operations. The 1991 article “Firm resources and sustained competitive advantage” by Jay Barney is recognized as a fundamental contribution to the Resource-Based View (RBV). In this paper we assess the influence of the RBV, proxied by Jay Barney’s (1991) article, on IB research over the twenty years period, from 1991 to 2010. In this bibliometric study of the articles published in the leading journal for IB research – Journal of International Business Studies (JIBS) – we conduct citation and co-citation analyses, the networks of co-authorship, and delve into the analysis of the key research topics. Beyond understanding the extant research we also contribute to identifying future research avenues.

Relevant dimensions and contextual weights of distance in international business decisions: Evidence from Spanish and Chinese outward FDI

We investigate how distance and different dimensions of distance between countries explain the outward FDI of firms according to distinct home country contexts. We identify three important dimensions of country distance: socio-economic development distance, cultural and historical distance and physical distance. We then empirically explore whether these dimensions receive different weights when explaining the location of FDI depending on its origin by comparing the outward FDI of China and Spain using partial least squares-based structural equations modelling (SEM-PLS). We find that although country distance significantly explains the FDI of both countries, the weights of the three dimensions of distance depend on the home country context. More specifically, we find that all three dimensions of distance explain the direction of Spanish investments, whereas only cultural and historical distance significantly explains Chinese outward FDI. Our research advances the understanding of distance between countries, the dimensions of distance, and how context influences the impact of the dimensions of distance.

Cross-national Distance: Concepts, Measures and Relationships

Cross-national distances between national cultures and national institutions have been studied extensively in the last two decades, particularly with respect to their effects on the conduct of international business. Yet varying levels of analysis, inconsistent definitions, and different operationalizations of cross-national distances inhibit theoretical and empirical advances. Three approaches to non-geographic cross-national distance permeate the literature: psychic distance, national cultural distance, and institutional distance. The meaning of psychic distance has become muddied by evolving operationalizations, from objective indicators to individual perceptions. National cultural distance has been confused with both psychic distance and institutional distance. Various and inconsistent institutional arrangements and business practices are used as measures of institutional distance. This article reviews overlaps, inconsistencies, and ambiguities in the definitions and measurements of psychic, national cultural and institutional distance; suggests a way to rationalize the three constructs; and offers two competing models to explain the role of all three distances in international business decisions.

The antecedents of psychic distance

This study investigates the antecedents of psychic distance. Building on original data in 25 of the world's largest economies, we investigate potential drivers of perceived psychic distances to foreign countries. The results show these perceptions to be influenced by a range of cultural, geographic, political and economic factors. Among these, absolute geographic distance accounts for the largest share of the explained variance, suggesting that physical distance should be given a more prominent role when it comes to empirically investigating international business decisions for which psychic distance perceptions may be important. The findings also suggest that, used in isolation, 'cultural distance' - as measured by the so called Kogut and Singh index - is a poor predictor of such perceptions. © 2010 Elsevier Inc.

International Accounting Diversity and Business Decisions: UK Multinational Companies with Chinese Joint Ventures

ABSTRACT The paper investigates the question of whether diversity between national accounting and disclosure practices and regulations affect the business decisions of major foreign users of financial statements. The study focuses on the use by United Kingdom multinational companies (MNCs) of Chinese joint venture financial statements. Of the 100 largest UK MNCs, nine are involved in joint venture businesses in China. Questionnaires, together with interviews, were used to collect data about UK MNCs. The main conclusions, subject to the inherent limitations of the study, are that: 1) most UK MNCs in the sample rely heavily on the financial statements of Chinese joint ventures in making business decisions; and 2) accounting differences do affect UK MNC's decisions, particularly in determining the value of existing joint ventures.