International Business Research Research Articles

Driving Social Innovation in Bottom-of-the-Pyramid Markets through International Social Alliances: The Role of Legitimacy

AbstractInternational social alliances—in which multinational enterprises (MNEs) and social enterprises (SEs) collaborate—are a vital source for the development and scaling up social innovations for value creation. Yet, these alliances face significant legitimacy challenges, which are more glaring in bottom-of-the-pyramid markets (BOPMs) within emerging and developing economies owing to weak and underdeveloped formal institutions. Drawing on the legitimacy, institutional, and social alliances literature, we develop a conceptual framework that explains the importance of developing social, institutional, and commercial legitimacy in international social alliances operating in BOPMs. We also explored the challenges faced by international social alliances in BOPMs and the factors that enable MNEs and SEs to build different types of legitimacy. We contribute to international business research by providing an understanding of various legitimacy building strategies enacted by international social alliances based in BOPMs for social value creation.

Institutional distance and location choice: an experimental approach to the perception puzzle

PurposeIn this research, we designed and implemented a unique vignette experiment to study the effect of managers' perceptions of institutional distance on foreign location choice, as well as the moderating effect of managerial international experience and preferred entry mode on this relationship.Design/methodology/approachWe employ an experimental vignette methodology (EVM) approach applied in the context of Chinese managers to test the causal relationships depicted in our hypotheses. In this way, we measure the decision-makers' perceptions ex ante, i.e. in conjunction with and prior to a decision about a foreign location choice.FindingsOur findings show that managers' ex-ante perceptions of institutional distance negatively affect decisions on foreign location choice. Also, we find that managerial international experience and preference for high commitment entry modes mitigate the negative effect of managers' perceptions of institutional distance on foreign location choice.Originality/valueThis research study adds to our understanding of the effect of managers' perceptions of institutional distance and managerial contingencies on foreign location decisions. Further, it advances novel experimental design in international business research in general and on foreign location choice in particular.

When Does a Firm Fail to Walk the Talk? Decoupling in International Expansion

AbstractNeo‐institutional theory predicts that when adaptations to institutional pressures contradict a firm's efficiency needs, decoupling may arise. This study systematically investigates the drivers of heterogeneous decoupling in the context of international expansion. We propose that specific configurations – awareness of peers’ decoupling, a strong motivation to obtain legitimacy through ceremonial conformity, and a weak capability to couple stated policies with practices – will lead to a high occurrence of decoupling. An empirical analysis of 8918 annual reports of 1974 Chinese‐listed companies from the period 2013–17 suggests that the ‘Go Global’ initiative undertaken by the Chinese government has created high institutional pressure for all Chinese firms to expand globally. However, when the implementation of that move is perceived as too costly or risky for a firm, the firm is likely to choose to decouple its international expansion from its stated commitment to expand under certain configurations of awareness, motivation, and capability conditions. Our theory and empirical findings extend decoupling research and international business research by providing a holistic configurational analysis of firms’ decoupling in an international expansion context.

International business and decentralized finance

AbstractOver the last decade, the green shoots of a new economic order have emerged as decentralized technologies challenge traditional financial systems. Decentralized finance (DeFi) holds the potential to transform international business (IB) by offering accessible financial services across borders, disrupting traditional intermediaries, and promoting financial inclusion. While traditional fintech has challenged banks, DeFi operates outside legacy systems, leveraging blockchain technology and smart contracting to introduce a new range of products and services that provide first-movers with an upper hand to both expand their business across the globe as well realize cost savings on existing business. Despite offering advantages like efficiency, transparency, and security, DeFi faces regulatory uncertainties and scalability, adoption, and stability concerns. Our study explores how DeFi can seamlessly integrate into the IB space while addressing these challenges. In addition to offering insights for investors, multinational firms, and regulators, we also lay the groundwork for future IB research in the fintech domain. As the DeFi innovation unfolds, understanding and harnessing its potential can empower stakeholders to engage responsibly and effectively in this transformative landscape.

Shared service centers in the Central and Eastern Europe: Theoretical framework

Shared services centers (SSC) are widely used by multinational corporations as a part of their business strategies. The attention of researchers in international business has increased along with the growth of SSCs and this topic is currently being studied by a number of authors. In this article we focused on the Central and Eastern Europe (CEE) in order to construct a structured evaluation of the extremely dispersed literature on SSCs in this region. A meta-analysis of the relevant literature sources has been the fundamental technique employed in this paper based on the analysis of the WoS, Science Direct, Taylor & Francis, and Emerald Insights databases. The results show that Poland is the most researched country, with Central Europe being studied more thoroughly than Eastern Europe. Relevant literature study shows that the researchers systematically investigated the motivations of foreign companies to create SSCs in CEE and focused frequently on human resources management part of their activities. They use a variety of techniques in their articles, including both qualitative and quantitative techniques. Based on this study, the authors of this paper formulate the conclusions and outline possible future prospects of the research of this phenomenon.

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

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

Nearby or faraway? Determinants of target selection in family firm acquisitions

We posit that, beyond the distinction between domestic and cross-border deals, family ownership configurations and board ownership determine whether family firms (FFs) prefer targets from closer or more distant markets, thus highlighting the crucial role of geographical distance when conducting acquisitions abroad. We further investigate whether target selection depends on firm performance relative to its aspirations. To test our hypotheses, we gather a comprehensive sample of 7297 acquisition deals, of which 3180 are cross-border transactions, undertaken by family and non-FFs from 30 European countries during the 2007–2015 period, with target firms located in 65 different countries. Our empirical strategy allows us to analyze FFs’ preference in terms of geographical distance when they decide to acquire a foreign company. The main findings suggest that FFs acquire targets from closer locations when there is a group of minority family shareholders or a higher level of board ownership. Meanwhile, FFs performing below their aspirations acquire more distant targets compared to other FFs. Our findings contribute to international business (IB) research by demonstrating that the distinction between domestic and foreign targets is not enough when investigating acquisitions, but the distance to the target firm is vital for a better understanding of cross-border deals.

Reviewer Acknowledgements for International Business Research, Vol. 17, No. 2

Reviewer Acknowledgements for International Business Research, Vol. 17, No. 2, 2024

How wicked is modern slavery: a consideration of Raškovic’s “taming wicked problems”

Purpose This is a response to “Taming wicked problems”, a paper recently published in CPOIB in which modern slavery is framed as a wicked problem. The purpose of this study is to convey the author’s appraisal of its contribution to policymaking regarding modern slavery in global supply chains. Design/methodology/approach The author engages in a discursive review of “Taming wicked problems”, taking inspiration from its perceived strengths and weaknesses to expand on the problem of modern slavery as a challenge to international business (IB) researchers. Findings “Taming wicked problems” is welcomed as a provocative contribution to modern slavery research in IB, although it is perceived to give too little critical attention to the problem of modern slavery itself. Research limitations/implications This is, by design, a subjective assessment of the treatment of modern slavery and policy from the perspective of an IB researcher who has previously studied the phenomenon without a wicked problem framing. Practical implications Modern slavery is a serious problem for IB scholars, as they have failed to extrapolate it from their analysis of international business strategy. This paper is intended to advance the disciplinary defence of vulnerable workers exploited to the ultimate benefit of MNEs. Social implications IB must engage critically with international business strategies that heighten the risk of human rights violations. The persistence of modern slavery disadvantages all persons in employment. Originality/value This paper seeks to better define the offense implicit in modern slavery so to inform critical IB research into its causes and deterrence.

Do It Right the First Time? Exploring the First Cross-border Acquisition and Expansion Frequency of Emerging Market Multinationals

Abstract Do it right the first time! But, how? Current dialogue on the expansion of emerging market multinational enterprises (EMNEs) is pervasive. Nonetheless, it ought to have examined strategic attributes and the speed of implementing different strategies for their first venture. Drawing on the springboard perspective, this study tests the impact of EMNEs' first cross-border acquisition (CBA) strategy and speed on their consequential expansion frequency and performance. We also examine the boundary conditions of comparative nationalism between countries, in view of the resurgence of nationalism in an era of deglobalization. Findings reveal that EMNEs' rapid adoption of a focused strategy for their first CBA increases their expansion frequency, while the adoption of a conglomerate strategy decreases it. These relationships are affected in reverse by high comparative nationalism, and the performance consequences of expansion vary with firms using different strategies for their first attempt. This study enriches the EMNE literature and highlights the role of national ideologies in international business research.

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.

An implicit leadership theory examination of cultural values as moderators of the relationship between destructive leadership and followers’ task performance

Destructive leadership and its effects on followers all over the world have been emphasized in cross-cultural research in recent years. Despite continued scholarly and practitioner interest in both destructive leadership and job performance due to its implications for cross-cultural research, we have an incomplete understanding of the impact of cultural context on the relationship between destructive leadership and followers’ task performance. We advance international business research by building and testing implicit leadership theory predictions about the impact of country-level cultural values as moderators of the relationship between destructive leadership and followers’ task performance. We test our hypotheses and research question with a meta-analytic dataset that includes respondents from 12 countries (k = 72, N = 20,878). Our results demonstrate that several of the Global Leadership and Organizational Behavior Effectiveness (GLOBE) framework’s cultural value dimensions moderate the relationship between destructive leadership and followers’ task performance across countries. The findings are driven by the strong predictive validity of the performance orientation, in-group collectivism, gender egalitarianism, and humane orientation cultural value dimensions. Our contributions are important because we generate nuanced knowledge about the independent, relative, and collective predictive validity of cultural values in explaining the strength of the relationship between destructive leadership and followers’ task performance across countries.

Actor-agency and institutional complexity: multinational corporations’ strategies to combat the framework convention on tobacco control in Brazil

Purpose This study aims to analyse the strategic moves used by major tobacco corporations to thwart the ratification of the World Health Organization’s Framework Convention on Tobacco Control (FCTC) in Brazil. Design/methodology/approach The authors conducted a detailed historical case study spanning 1988–2005 and encompassing the period leading up to Brazil’s FCTC ratification. The authors collected qualitative data from various sources to triangulate and develop a comprehensive historical account. Findings The historical analysis identified three distinct phases. First, the acquisition of a Brazilian cigarette factory, Souza Cruz, by British American Tobacco dramatically altered power dynamics, strengthening the position of the tobacco industry. The second phase regards the era of dictatorship and the efforts of various actors advocating against smoking and the tobacco industry. The third phase involved Brazil’s re-democratisation and the challenges of securing FCTC ratification, during which fierce industry opposition had to be overcome. Throughout these phases, the authors identified four key strategies used by multinational corporations (MNCs) in Brazil to uphold unsustainable practices and products that contradicted public interests instead of reforming them: shaping collective memory, dissimulation, re-presentation and redirecting attention. Originality/value This study contributes to critical international business research on emerging economies by examining how Brazil’s position in the global capitalist system has influenced its dependency and how MNCs produce and maintain cycles of poverty and unsustainable practices through the exploitation of power dynamics within the country.

Edith Penrose's Under-Explored Insights in Strategic Management and International Business Research

Edith Penrose's Under-Explored Insights in Strategic Management and International Business Research

Moving beyond delinking, decoloniality and the pluriverse: reflections on the “decolonizing international business” debate

PurposeThis viewpoint adds context and variety to the “decolonizing international business” debate by engaging in a discussion of the decolonial thinking approach and proposing a broader framework for analysing the link between international business (IB) activities on the one hand and colonisation and decolonisation on the other. The purpose of this paper is to inspire a more intensive engagement of IB scholarship with issues related to colonisation and decolonisation.Design/methodology/approachThis paper involves taking a reflexive review on recent calls to decolonise IB, contextualising and extending the decolonisation debate in the academic field of IB.FindingsThis paper argues that the current discussion of decolonisation should be extended beyond the decolonial thinking approach and its focus on knowledge and the cultural dimension towards a broader framework that covers both colonisation and decolonisation as well as the respective economic, political, social and cultural dimensions. It introduces the varieties of colonisation and decolonisation approach, which considers the complexities of the phenomenon and covers the economic, social, political and cultural dimensions.Research limitations/implicationsThrough its focus on foreign market expansion, international trade, global value chains and formal and informal institutions in the business environment, the academic field of IB provides several starting points for research on the link between IB activities and colonisation and decolonisation. The decolonisation debate can be used to inspire future research in IB, for example, with respect to the role of multinational corporations in colonisation and neo-colonisation processes and the implications of the emerging multipolar world order for IB.Practical implicationsIB scholars will be better informed when engaging in discussions on decolonisation and the decolonise IB project. This paper suggests considering both colonisation and decolonisation processes as well as the respective economic, political, social and cultural dimensions in research and teaching. The varieties of colonisation and decolonisation approach provides a comprehensive and flexible alternative framework to analyse issues related to colonisation and decolonisation.Social implicationsA balanced view of the implications of colonisation and decolonisation with respect to economic, political, social and cultural dimensions may suitably be incorporated in the field of IB and contribute to tackling grand societal challenges. This applies likewise to past, current and future processes of colonisation and decolonisation.Originality/valueThis paper contextualises and adds a new perspective and variety to the current debate on decolonising IB. This is valuable for engaging in discussions on decolonisation and future conceptual and empirical research on the topic.

The impact of global city location intensity on MNE performance: Leveraging learning and connectivity

Building on recent international business research that embraces insights from economic geography, we hypothesise that MNEs locating a high share of the total number of their subsidiaries in global cities (which we conceptualize as global city location intensity) exhibit higher financial performance. We further argue that knowledge-intensive firms benefit more from global city location intensity than less knowledge-intensive firms. We also posit that multinationality (international geographic dispersion) negatively moderates the relationship between global city location intensity and financial performance. We test our hypotheses on a sample of 497 MNEs and find strong support for our predictions. We contribute to the literature by introducing the notion of intensity into the relationship between global city locations and financial performance and call for considering scale effects when examining locational decisions and their consequences.

Integrating contemporary accounting and international business research: progress so far and opportunities for the future

To date, the accounting and international business (IB) research fields have been developing rather independently, although some cross-discipline fertilisation is emerging. This paper aims to illustrate the conceptual and empirical bridges between the two disciplines. Specifically, we highlight how contributions originating in either field have influenced theory and research in such diverse areas as corporate governance, risk management, taxation and strategic decision making in multinational enterprises (MNEs). Further, we identify examples where attention by accounting researchers to the IB literature has resulted in innovative research, including studies focusing on control systems and financial reporting in MNEs. Based on our discussion of the state of mutual contributions between the disciplines, we highlight various areas where future research could benefit from further integration of the accounting and IB literatures.

Becoming a Multilatina: strategic capabilities as necessary conditions for the internationalization of Latin American firms

PurposeThis study aims to challenge the generic interpretation of Multilatinas as Latin American firms that have been able to internationalize because of highly competitive strategic capabilities. The authors test whether capabilities that international business researchers commonly associate with internationalization are necessary at different stages of the internationalization process to better understand the extent to which emerging market (EM) firms need to develop them.Design/methodology/approachInternational business research suggests a positive association between strategic capabilities and firm internalization. However, it remains unclear what specific capabilities are necessary and when they are necessary. These questions are particularly important in the context of the internationalization of firms from emerging economies, such as Latin America. The authors apply necessary condition analysis (NCA) on a sample of Latin American firms at different internationalization stages to test what strategic capabilities represent necessary conditions for becoming a Multilatina.FindingsThe findings suggest that only a few strategic capabilities are necessary for Latin American firms to become “Multilatinas”. While entrepreneurial orientation and marketing and sales capabilities represent necessary conditions, EM firms may internationalize even though other capabilities are developed to a lesser extent. The authors reflect on how shifts in local markets and technology drive the emergence of different types of Multilatinas.Research limitations/implicationsMeasuring strategic capabilities across multiple EM firms implies a risk that firm-specific aspects are not fully captured. While the authors focused on the comparative competitive strength of capabilities and took great care to minimize measurement error, the authors acknowledge possible bias. Also, while NCA does not require a minimum sample size, findings from our sample of firms from four countries may not generalize to the region or other EMs.Originality/valueAs a relatively new statistical technique, the use of NCA has spread rapidly. To the best of the authors’ knowledge, the linkage between organizational capabilities and firm internationalization has not been tested from a necessary conditions perspective yet. The reflections on the “Multilatina” concept based on the notion of EM firms as configurations of strategic capabilities inform current debates on EM multinational enterprises.

Reviewer Acknowledgements for International Business Research, Vol. 16, No. 12

Reviewer Acknowledgements for International Business Research, Vol. 16, No. 12, 2023

Vox populi, vox dei: A concept and measure for grassroots socio-political risk using Google Trends

In this paper, we propose a concept of grassroots socio-political risk (SPR) and provide a measure for it that is based on individual-level Google Trends data that captures issue salience. Our concept provides a bottom-up complement to established measures that focus more on political and institutional players and the institutional constraints they face. Our grassroots SPR index attempts to capture public pressure to initiate institutional change in a country. In contrast to existing measures, our Google Trends–based measure captures issue salience directly among individuals rather than media or analyst reports. As such, it is uniquely representative of socio-political sentiment, timely, and widely available. Our concept and measure offer international business (IB) researchers novel opportunities. In addition to developing the index, we scrutinize its validity and provide an illustrative empirical application in the IB context by showing that differences between internal and external assessments of grassroots SPR are contingent on psychic distance.