International Business Literature Research Articles

Foreign market expansion of ecosystems: a process model

ABSTRACT Ecosystems of actors that need to interact to create value for end users are becoming an integral part of firms’ strategic realities as they reach new markets. However, the phenomenon of ecosystem internationalisation has not been explored in comparison to its practical prevalence. We conceptualise this phenomenon as agent-led structuration on new markets. We build on the structural ecosystem literature and literature on internationalisation challenges to create our recursive process model of ecosystem creation on foreign markets. Creating ecosystems on foreign markets necessitates new ecosystem structures that are adjusted to value propositions by orchestrators through interaction with foreign market actors. The model explains how ecosystem orchestrators drive the international expansion of ecosystems through blueprinting and aligning mechanisms and how these mechanisms help manage liabilities of foreignness. The model accounts for the agency of involved actors, and with the help of the bottleneck concept bridges international business and ecosystem literatures.

Internationalization of Chinese Manufacturing Firms: A Perspective from the Uppsala Model

Enhancing firm performance in the turbulent international situation has become an important issue in firm evolution. There has been a large amount of research interest in the rapid development of emerging international firms, but the relevant empirical studies are still limited. The purpose of this study is to investigate three factors that impact firm performance, utilizing the Uppsala model as a main theoretical foundation. Based on empirical analysis of 332 medium and large Chinese manufacturing international firms, this study finds that the degree of internationalization, knowledge development, and commitment processes have positively impact firm performance. This finding contributes to the international business literature's understanding of firm development in emerging markets and enhances the generalizability of the Uppsala model.

CEO childhood trauma experience and firm internationalization

Purpose The purpose of this study is to examine how the childhood trauma experiences of CEOs influence firms’ internationalization. Design/methodology/approach The research used a difference-in-difference method with constructing a treatment group whose chief executive officer (CEO) experienced the great famine in China between the ages of 7 and 11, and a control group whose CEO was born within three years after 1961. Findings The study reveals a significant inverse correlation between CEOs’ childhood trauma experiences and firm internationalization. However, this correlation is weaker in the case of state-owned enterprises and firms led by CEOs with overseas work experience. Originality/value To the best of the authors’ knowledge, this study is the first to extend the theoretical framework to elucidate firms’ internationalization by introducing childhood trauma theory into the field of international business literature. Second, the authors link the literature on the effect of CEO explicit traits and psychological traits on firm internationalization by exploring how CEOs’ childhood trauma experience shapes their risk aversion, which, in turn, influences firm internationalization. Third, the authors address the call for examining the interplay of CEO life experiences by scrutinizing the moderating effect of CEO overseas work experience on the association between CEOs’ childhood trauma exposure and firm internationalization.

Expatriate Academics’ Positive Affectivity and Its Influence on Creativity in the Workforce Indigenization Context: Revealing the Role of Perceived Fairness

Workforce indigenization in Gulf Corporation Council (GCC) countries is under-researched in international business literature, especially among expatriate academics from the Middle East and North Africa regions working in GCC countries. Therefore, drawing from the social exchange and conservation of resources theories, this study examines the moderating effect of perceived fairness on the relationship between positive affectivity (PA) and creativity in the context of enhanced indigenization of human resource (HR) policies in GCC countries. This study collects data from 228 mobile academics working in Saudi universities. Principal least squares structural equation modeling results show that PA positively impacts creativity. Further, perceived fairness is found to reinforce the connection between PA and creativity. This study’s results indicate that host universities must build appealing HR policies to cope with the diverse challenges related to the indigenization of HR policies. Furthermore, this study highlights the role of positive personality traits in enhancing creativity.

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.

Leveraging natural language processing techniques to explore the potential impact of the EU’s Carbon Border Adjustment Mechanism (CBAM)

Debates on controversial policies often stimulate extensive discourse, which is difficult to interpret objectively. Political science scholars have begun to use new textual data analysis tools to illuminate policy debates, yet these techniques have been little leveraged in the international business literature. We use a combination of natural language processing, network analysis and trade data to shed light on a high-profile policy debate—the EU’s recently enacted Carbon Border Adjustment Mechanism (CBAM). We leverage these novel techniques to analyze business inputs to the EU’s public consultation, differentiating between different types of organizations (companies, trade associations, non-EU actors) and nature of impact (direct, indirect, potential). Although there are similarities in key concerns, there are also differences, both across sectors and between collective and individual actors. Key findings include the fact that collective actors and indirectly affected sectors tended to be less concerned about the negative impacts of the new measure on international relations than individual firms and those directly affected. Firms’ home country also impacted on their positions, with EU-headquartered and foreign-owned companies clustering separately. Our research highlights the potential of natural language processing techniques to help better understand the positions of business in contentious debates and inform policy making.

Building synergistic mindsets in international business education: the unmet demands of a VUCA marketplace

Purpose The COVID-19 pandemic was an eye-opening experience that put to the test our crisis management competencies across many institutions, including those offered by institutions of higher education. This study aims to review the literature on international business (IB) risks and IB education (IBE) to question whether business graduates are equipped to make decisions in today’s volatile, uncertain, complex and ambiguous (VUCA) marketplace. Design/methodology/approach While the IB literature has discussed the importance of various sources of risks on global business operations, IBE did not effectively adopt an integrative approach to building the needed risk management competencies related to those risks into our education. The authors argue that this integrative approach to teaching IB is critically needed to prepare future global managers for addressing crises, like that of the pandemic and others. Specifically, this study proposes that this integrated risk management competency can be developed through the building of “synergistic mindsets”. Findings This study presents a conceptual framework for the components of the synergistic mindset, with intelligence that directly links to present IB risks. These components are cultural intelligence (CQ), emotional intelligence (EQ), public policy intelligence (PPQ), digital intelligence (DQ) and orchestration intelligence (OQ). Originality/value Insights related to IBE effectiveness in addressing today’s VUCA market demands and IB risks are discussed.

Critical perspectives on GVC theory: uncovering GVC resilience through non-lead power

Critical perspectives on GVC theory: uncovering GVC resilience through non-lead power

Peripheral-based subsidiaries and financial and non-financial performance: Evidence from an emerging market

The study aims to explore the mechanisms by which peripheral-based subsidiaries not only enhance financial and non-financial performance (i.e., business performance) but also contribute to creating value for Multinational Enterprises (MNEs). Consequently, this research assesses how Corporate Social Responsibility (CSR) drives Absorptive Capability (AC) and Knowledge Ecosystems (KE), ultimately leading to Business Performance (BP). The present framework integrates Relational Strategy (RS) to examine whether it moderates the link between CSR and KE. Using a database of MNE subsidiaries in Vietnam, this study applies a Partial Least Square approach to Structural Equation Modeling. Our research highlights a significantly positive relationship between CSR and AC, KE, and BP. This result suggests that the better CSR is implemented, the higher the AC, the stronger the KE, and, finally, the better the BP. Additionally, the results confirm that RS moderates the influence of CSR on KE. This finding implies that the impact of CSR on KE varies depending on the extent of RS. Overall, this study contributes to bridging the current gap in International Business literature where little attention has been paid to periphery–core relations concerning knowledge interactions.

The Curvilinear Impact of Cultural Friction on Foreign Divestment

International business scholars have long recognized the potential influence of cultural differences on foreign divestment; however, the empirical results are mixed. Our study helps resolve this contradiction and contribute to the existing literature in three ways. First, we advocate the use of cultural friction metric, instead of the more traditional cultural distance approach. This overcomes a key limitation in the modelling the impact of cultural differences. The friction construct metric includes an index of firm-specific factors, referred to as the degree of ‘cultural interaction’. This index moderates the impact of cultural distance, reflecting firm—level differences. We also build on calls for more Positive Organizational Scholarship by challenging the negative bias in the international business literature and propose a curvilinear effect of cultural differences on divestment probability. Lastly, we investigate a potential boundary condition—the moderating effect of entry mode on the main hypothesis. Our empirical sample include 2120 Finnish foreign subsidiaries operating in 40 countries during 1970–2010. Our analyses confirm that the cultural differences, when measured by the friction metric, appear to be a significant and superior predictor of subsidiary divestment probability, and that the relationship appears to be U-shaped. Our robustness analyses also highlight the importance of which cultural framework is applied and controlling for selection bias.

Strategic asset-seeking acquisitions and marketing capabilities of Chinese multinationals: An ability, motivation, and opportunity perspective

This study explores the drivers of marketing capabilities of Chinese multinationals in the context of strategic asset-seeking acquisitions, which remain largely unexplored. Drawing on the integrative framework of the ability-motivation-opportunity (AMO) framework and the knowledge-based view, we argue that the decline in cost leadership capabilities before the acquisitions increases the motivation of Chinese multinationals to leverage the acquired strategic assets to enhance their marketing capabilities. Stronger managerial ability and higher regional international openness represent the ability component and favorable environmental conditions required to realize improvements in marketing capabilities. In contrast, industry dynamism, as an opportunity element, can constrain the achievement of this goal. We conduct an empirical analysis using the Heckman two-stage model, based on a sample of Chinese listed firms spanning the period from 2009 to 2021, and find support for our arguments in the results. Our findings contribute to the marketing literature by identifying a potential avenue for enhancing marketing capabilities and to the international business literature by investigating a new approach for emerging economy multinational enterprises (EMNEs) utilizing international M&As as a springboard to build competitive advantages of EMNEs in addition to improving innovation capabilities.

Business strategic insight: understanding the impact of perceived value and impulsiveness on consumer response in global mobile shopping

PurposeThis study aims to contribute to the International Business literature by investigating the marketing stimuli that drive impulsiveness and perceived value in mobile shopping (MS) platforms and their impact on consumer response.Design/methodology/approachThis study uses a sample of 891 MS platform users and applies structural equation modeling based on the stimulus–organism–response and the consumption value theory.FindingsThe empirical finding revealed that rewards, recognition, reviews and ratings are the most influential factors driving perceived value. In addition, the results indicated that customized offerings and visually appealing experiences were the most critical factors affecting the state of impulsiveness. This study also highlights the negative impact of the ubiquitous nature of MS on impulse buying behavior, emphasizing the importance of providing consumers with tools to make informed decisions. This study demonstrates a significant positive relationship between perceived value and impulsiveness, influencing MS.Practical implicationsThis study reveals generational differences in the impact of reviews and ratings on perceived value, which can inform businesses’ MS strategies. The results have implications for managers of international firms seeking to optimize their business strategies.Originality/valueTo the best of the authors’ knowledge, using structural equation modeling, this study is the first to conduct a comprehensive examination of marketing stimuli, impulsiveness and perceived value in MS platforms. It offers businesses strategic insights by identifying rewards, recognition and customized offerings as the key determinants of consumer behavior.

Cultural Intermediaries: How Local Experts Shape the Financial Performance of Foreign Cultural Products

Purpose - This study examines the pivotal role of local expert reviewers in the financial success of imported foreign films (Hollywood movies) within the Chinese market. It integrates signaling theory and gatekeeping scholarship to examine how these intermediaries reduce mainstream uncertainty. We hypothesize local expert reviewers to better grasp spaces for resonance between imported films and local preferences compared to foreign critics. Moreover, we examine the moderating roles of films attributes such as production scale, prestigious awards, and local adaptation strategies.
 Design/Methodology/Approach - We test hypothesized relationships and contingencies via OLS regressions on box office performance spanning 500 top-grossing Hollywood studio imports in China from 2000 2017 with data from multiple sources.
 Findings - The OLS regressions reveal that local expert reviewers significantly influence cross-border film success, with the impact moderated by production budgets and awards, but potentially diminished by cultural adaptation.
 Research Implications - Our study unpacks market drivers and product-level contingencies around imported creative products amidst mainstream uncertainty. The findings contribute to international business literature and cultural business by showcasing the nuanced impact of local cultural intermediaries on the financial performance of foreign cultural products. This research underscores the importance of local expert opinions in navigating the complex landscape of global content distribution and consumption, offering valuable insights for content creators and marketers aiming to optimize the global reach of products.

The Effect of International Marketing and Tariff and Non-Tariff Strategy to Business Performance through Nationalism Spirit

In the rapidly evolving landscape of global business, this research investigates the intricate interplay between international marketing, tariff and non-tariff strategies, nationalist spirit, and their collective impact on business performance. Employing a cross-sectional quantitative design within the Indonesian context, the study explores how businesses adapt their marketing approaches to navigate diverse trade regulations and respond to nationalist sentiments. The results reveal significant relationships between international marketing and both business performance and nationalist spirit. Moreover, the study underscores the substantial influence of tariff and non-tariff strategies on business performance, with pronounced effects in markets characterized by heightened nationalist spirit. These findings contribute to theoretical advancements in international business literature and offer practical insights for businesses aiming to formulate effective strategies, navigate regulatory complexities, and enhance performance in a globalized economy

The Impact of Consumer Characteristics and Brand Attributes on Global Brands: A Focus on the MZ Generation in Emerging Markets

Purpose - As emerging markets continue to expand and exert more influence on the global economy, it has become increasingly important to understand the attitude of consumers in these market towards global brands. In particular, Chinese consumers’ interest in foreign brands has been steadily growing, creating significant market potential for products and services perceived as global brands. Based on the theory of planned behavior, this study aims to investigate how consumer characteristics and brand attributes influence the attitudes and purchase intentions of Millennials and Gen Z consumers towards global brands. Design/Methodology - The researchers used an online questionnaire to collect data from a total of 293 Chinese MZ generation participants. To analyze the data, structural equation modeling (SEM) was employed using SPSS. Findings - The findings of this study indicate that brand attributes such as perceived brand quality and price have a greater influence on the attitudes and purchase intentions of MZ consumers towards global brands than individual characteristics like consumers’ cosmopolitanism, ethnocentrism, and materialism. Moreover, consumer ethnocentrism has negative impact on attitudes, while consumers’ cosmopolitanism and materialism do not show any significant effects on attitudes and purchase intentions towards global brands. Originality/value - By gaining insights into how Generation MZ consumers in emerging markets evaluate global brands, this study explores the determinant factors influencing consumers’ attitudes and intentions towards global brands. The findings not only enrich the international business literature but also provide practical insights for global brand managers to effectively customize their marketing strategies and enhance their brand positioning for successful entry into emerging markets

See who I know! Addressing the liabilities of outsidership through status signaling

Status is an important intangible asset, yet when firms enter new countries, they lack standing in new social hierarchies as outsiders. Conventional wisdom suggests embeddedness in host-country networks can alleviate newcomers’ liability of outsidership. We complement this with insights from status signaling theory: Newcomers in host countries can address their liability of outsidership through the visual display of social affiliations. We utilize a novel visual qualitative research approach that analyzes annual report photographs of an emerging-market family business, depicting the firm’s leaders with high-status alters. Complementing the international business literature, which emphasizes strong ties to host-country business partners, we identify three signaling mechanisms that are more circuitous: bypass (host-country affiliations beyond the firm’s industry), allusion (global affiliations beyond the host country and industry, often celebrities), and aspiration (global industry affiliations). We also suggest that such diffuse status signaling mechanisms may be especially salient in emerging-market family firms investing in developed markets, which are accorded low status in many developed markets. These firms feature firm/owner identity overlaps, long leader tenures, and a tendency to build reputation through prosocial behavior, facilitating the activation of status signaling tactics through ephemeral affiliations with high-status actors situated in world society.

Developing non-traditional firm-specific advantages in domestic strategic factor markets: evidence from China

Purpose Chinese firms are winning market share from foreign multinational enterprises in domestic markets. The international business literature suggests that this is happening because these firms are developing non-traditional firm-specific advantages (FSAs). Strategic factor market (SFM) theory provides a good basis for explaining how this is happening. However, it is underdeveloped in terms of analysing unique resources and unique access to those resources by Chinese firms in their domestic markets. This paper aims to develop a framework to understand how Chinese firms have developed non-traditional FSAs. Design/methodology/approach The case study method is adopted to explore how Chinese firms develop non-traditional FSAs. Specifically, the authors compare paired case studies of a Chinese firm and a foreign multinational in each of two industries. Findings The authors find that Chinese firms have developed non-traditional FSAs because of more relevant experience, better adapted strategies and privileged relationships. This has enabled Chinese firms to develop non-traditional FSAs. Originality/value The authors propose a framework that conceptualises non-traditional FSA development in Chinese firms as a product of superior access to unique and valuable resources in their domestic SFMs.

Managing artificial intelligence in international business: Toward a research agenda on sustainable production and consumption

AbstractThe collaboration between artificial intelligence (AI) and humans is reshaping international business (IB) management dynamics, aiming to achieve global sustainable development. Recent IB literature indicates that managing AI brings benefits such as better resource reconfiguration, reduced transaction costs, and global sustainable development. However, existing IB literature provides only meager knowledge about the characteristics of AI and how these characteristics can be employed for international expansion at the intersection of sustainable development. In response, our aim is to construct these characteristics by employing directed qualitative content analysis of empirical AI research. Based on our three constructed characteristics of AI, we contribute to current IB literature by providing a framework to balance economic and social goals and utilizing AI for global sustainable development. Further, we provide future IB research themes to guide IB and AI research toward achieving a sustainable production and consumption agenda.

Green Innovation and Export Performance in Emerging Market Firms: A Legitimacy-based View

AbstractWhereas emerging market firms (EMFs) face severe legitimacy barriers when entering global markets, whether and under what conditions green innovation can help them gain legitimacy remains under-examined. This article argues that green innovation can help EMFs obtain regulatory and social legitimacy in host countries and consequently boost their exports. Based on a panel dataset populated by 254 Chinese-listed manufacturing companies from 2011 through 2017, this article finds that green innovation is positively associated with EMF export performance. Moreover, this positive relationship is stronger when host-country political risk is lower or host-country buyer sophistication is higher but becomes weaker for state-owned EMFs. These findings enrich the legitimacy-based view and international business literature by identifying the role of green innovation in boosting EMF export performance and specifying important institutional contingencies.

Emerging market multinationals and international investment agreements

This study investigates the effects of international investment agreements (IIAs) on the internationalization decisions of emerging market multinationals (EMNEs). Drawing on the POLI advantage framework, we argue that bilateral investment treaties (BITs) add to the political and institutional capabilities of EMNEs, enhancing their OLI advantages in host countries. We identify two mechanisms through which BITs facilitate EMNEs’ internationalization: by offsetting political risk and by mitigating the informational asymmetries and transaction costs associated with investing in unfamiliar destinations. We probe the plausibility of our claims with data from an original survey of firms in four emerging economies and a larger sample of bilateral FDI flows from UNCTAD’s FDI/MNEs database. Our findings show a positive association between BITs and FDI from the South, especially in politically unstable and unfamiliar contexts. Apart from adding to the International Business literature on EMNEs, this study contributes to International Political Economy scholarship on FDI by highlighting the growing relevance of South-South IIAs.