International Business Scholars Research Articles

Research methods in international business: The challenge of complexity.

International business (IB) research is designed to explore and explain the inherent complexity of international business, which arises from the multiplicity of entities, multiplexity of interactions, and dynamism of the global economic system. To analyze this complexity, IB scholars have developed four research lenses: difference, distance, diversity, and disparity. These four lenses on complexity have created not only unique research opportunities for IB scholarship but also unique research methodological challenges. We therefore view complexity as the underlying cause of the unique methodological challenges facing international business research. We offer several recommendations to help IB scholars embrace this complexity and conduct reliable, interesting, and practically relevant research.

Subsidiary innovation performance: Balancing external knowledge sources and internal embeddedness

Abstract The open innovation (OI) literature has focused primarily on OI strategies and external sourcing of knowledge at the organizational level and has paid less attention to the role of subsidiaries in the OI activities of multinational corporations (MNCs). In contrast, International Business (IB) scholars have shown that subsidiaries play an emergent role in MNC innovation activities and have highlighted the relevance of subsidiaries' external and internal linkages. In this paper, we bring together these perspectives by examining OI at the subsidiary level within MNCs and test our hypotheses through an empirical analysis using data from 91 MNC subsidiaries. Our findings show an inverted U-shaped relationship between the openness of subsidiaries to external knowledge sources and innovation performance. Moreover, we find that subsidiaries' internal embeddedness positively moderates the above relationship. Practically, our findings suggest the need for MNC and subsidiary managers to develop mechanisms to manage intra-organizational relations in order to achieve improved innovation performance while leveraging of external knowledge sources at the subsidiary level, thus favoring MNCs' knowledge management (KM) approach. We contribute to different interrelated streams of research by providing compelling evidence to support the assertion that subsidiaries need to balance external and internal openness.

Control changes in multinational corporations: Adjusting control approaches in practice

The issue of control in multinational corporations (MNCs) is central to international business scholarship. However, prior literature tends to provide a static perspective offering few theoretical insights on control changes, especially the practices that enable control adjustments. Adopting a practice theory perspective, we consider control as “in the making” whereby adjustments emerge through a social accomplishment, constituted and reconstituted as headquarters and subsidiaries engage in a co-creating process. Using a longitudinal case study approach, we had the rare opportunity to track and compare an unsuccessful and a successful attempt to adjust control in an MNC over time. Our main theoretical contribution is a model of adjusting control in MNCs that details the practices that enable control changes. This model offers theoretical implications for organizational control theory in MNCs, especially in relation to theorizing the subsidiary contribution in the design of control, the reconciliation of raised tensions in headquarters–subsidiary relationships, and the nature of unintended consequences in the adjustment process. Our study also contributes to theories on MNC change, as it details the construction of an ongoing strategy–structure alignment for strategic flexibility.

Skill formation, automation and governance: comparing German and Korean automotive manufacturers in Central-Eastern Europe

PurposeBuilding on neo-institutionalism models of the transfer of human resource management (HRM) practices within multinational companies, this paper aims to analyze the transfer of skill formation concepts using the cases of two automotive OEMs in Slovakia. The purpose of the paper is twofold. First, it aims to explain the differences between the two multinationals. Second, it builds on the empirical analysis to reconsider the neo-institutionalist theoretical framework.Design/methodology/approachThe paper is based on two qualitative case studies of automotive multinationals in Slovakia. The home country locations of both companies represent different approaches to skill formation: systematic vocational education for blue-collar workers is regarded as crucial at the German manufacturer, while the Korean company relies mainly on on-the-job-training and puts much less emphasis on skilled blue-collar work.FindingsThe paper shows that the differences between the companies are related to different understandings of technology/automation. It argues that the increasing automation and the decentralization of responsibilities for the product-launch processes supported the transfer of German skill formation concepts to the plant in Slovakia, while the Korean manufacturer’s specific engineering-led automation concept and centralization of product launch responsibilities in its Korean headquarters reduced the need to invest in skill formation for blue collars abroad. The paper concludes that theories of the transfer of HRM practices within multinationals must include technological factors and must also develop more specific concepts of the centralization of multinationals.Originality/valueThe paper is to the knowledge the first to include technology as a core variable into the neo-institutionalist theory in the field of international business and HRM. While the relationship between technology and organization has gained huge prominence in the recent discussions about digitalization, it has been so far neglected by scholars of international business.

International studies of management and organization: half a century of advancing scholarship

To celebrate the 50th Anniversary of International Studies of Management & Organization (ISMO), the Founding Editor, Jean J. Boddewyn, the past Editor-in-Chief, Moshe Banai, and the current Editor-in-Chief, Abraham Stefanidis, compile this issue that describes the journal’s half-a-century journey. In this article, we present ISMO’s evolution from a platform that included translations of non-US-published articles in the 1970s to an internationally renowned journal that represents a truly universal scholarship of management and organization research. Drawing on contributions from six prominent scholars, we further reflect on the themes of culture, expatriation, employment, and leadership that have shaped international business scholarship during the past fifty years and are expected to herald future streams of research in the years to come.

Firm-specific advantages: a comprehensive review with a focus on emerging markets

We consolidate and comprehensively review the international business (IB) literature on the firm-specific advantages (FSAs) of emerging market multinational enterprises (EM MNEs). We do so through a systematic examination of 88 empirical and conceptual articles published in top-ranked IB journals between 2011 and 2018. The results reveal that in the past decades, EM MNEs have acquired several of the same FSAs as their counterparts in developed countries (developed country enterprises or DC MNEs) - financial resources, technologies, marketing capabilities, brand equity, R&D intensity, and management competencies. However, more recently, EM MNEs have developed additional unique FSAs in the form of managerial capabilities - to cope with competition in uncertain and constantly changing environments; easy access to cheaper capital; a stronger commitment to networks, such as those with diaspora communities; and, political connections. These additional FSAs have catalyzed the internationalization of EM MNEs. Our study also shows that some hurdles remain in the IB literature on FSAs. For instance, while IB scholars agree that EM MNEs have different investment motives depending on whether they invest in other emerging economies or developed economies, scholars are silent on the exact FSAs necessary to make EM MNEs investments in the respective economies successful. To advance the IB literature, we present some promising future research areas and challenge scholars to pursue further empirical studies on the FSAs of EM MNEs.

Subnational institutions and EMNE acquisitions in advanced economies: institutional escapism or fostering?

Purpose The purpose of this paper is to examine whether subnational market-supporting institutions in Indian states affect the likelihood of Indian multinational enterprises (MNEs) to undertake acquisitions in advanced economies (AEs) rather than emerging economies (EEs) and, if so, which mechanism – institutional fostering or escapism – underlies the phenomenon. Design/methodology/approach The paper uses a logistic regression model on a dataset of 647 firm-level cross-border acquisitions (CBAs) undertaken by Indian MNEs during the period 2010–2016. Findings The paper finds support for the institutional escapism mechanism, as opposed to the institutional fostering mechanism, underlying Indian MNEs’ acquisitions in AEs (rather than EEs). That is, firms headquartered in Indian states where market-supporting institutions (such as economic liberalization and efficiency of legal systems) are weak are more likely to undertake CBAs in AEs than in EEs as an escapist response to weak subnational institutions at home. Originality/value The paper highlights the relevance of the mainstream international business (IB) concept of emerging market multinational enterprises (EMNEs) internationalization to critical IB scholarship by examining subnational institutional influences on EMNEs’ foreign market choice between AEs and EEs. In particular, by providing evidence for the institutional escapism mechanism which has potential negative socioeconomic consequences in the region of the investing firm, the paper adds to critical IB research which places great emphasis on the examination of inequalities and draws attention to the EMNE context as a suitable setting for further research on internationalization from a critical perspective.

Broadening our Sights: Advancing Interdisciplinary Thinking on Global Migration

This panel symposium addresses several topics in the All Academy Theme (AAT), the International Management Division, and other divisions, all through the lens of global migration. The purpose is to engage a group of expert panelists with different interdisciplinary backgrounds in a formal, moderated, interactive discussion of key aspects of migration that are germane to management and international business (IB) but have yet to be integrated within mainstream scholarship in these fields. The main topics tackled will include: 1) migrants as bi-cultural boundary spanners in global organizational contexts, and their impact on firms’ approach to strategy and organization; 2) the changing balance of location and firm-specific human capital advantages; and 3) the implications of migration for cross-border activities of firms and ethno-cultural diversity. In addition, we will examine the extent to which management and IB scholarship can be enriched by recognizing and incorporating knowledge on migration generated in allied disciplines with a sharper focus on the topic - namely political science, political economy, sociology, and anthropology. By surfacing, synthesizing, and connecting arguments taken from different disciplinary perspectives, we will show how and why the global movement of migrants has altered the nature of firm competitiveness with implications for the governance choices of multinational enterprises. Our main contribution will lie in breaking self-imposed dichotomies and mindsets that, inadvertently or otherwise, can stand in the way of creating a truly interdisciplinary synthesis of migration as a global phenomenon with real implications for management and IB scholarship at different levels.

The Renaissance of International Business Research in the Sustainable Development Goals Era

In this study we hope to inspire international business (IB) scholars to engage in research on grand challenges that pose an imminent threat to the planet and society. IB research has the potential to pave the road to sustainable development across the globe by delving into relevant themes aligned with the new decade—the United Nations Sustainable Development Goals (SDGs) decade. Given the global nature of SDGs, IB researchers are probably the best equipped business scholars to advance knowledge in this area. Likewise, an IB-SDG research agenda can energize the IB community and help to redirect their research efforts to have a broader impact beyond their research community and in the practitioner world. However, grand challenges have been essentially neglected in IB research. We therefore propose to adopt the UN SDGs as a framework to connect IB research and grand challenges to make IB scholarship more instrumental and actionable on understanding grand challenges

Communication and culture in international business – Moving the field forward

The centrality of communication in international business (IB) is undeniable; yet our understanding of the phenomenon is partially constrained by a cross-cultural comparative focus as opposed to intercultural, process-oriented research designs that capture the dynamic nature of communicative interactions. Our brief review of studies at the intersection of culture and communication in the context of global work interactions reveals the dominant research trends that guided IB scholarship to date in this domain. We propose eight shifts in perspective to advance the field’s theorizing and create avenues for further research.

Modern Slavery Responses Need International Business Scholarship

Modern slavery poses a challenge to many areas of international business and sometimes questions the legitimacy of underlying business models. All businesses are exposed to modern slavery in one way or another through their supply chains, but their actions to address the issue differ hugely. Some blame the complexity and anonymity of international supply chains or the limits of their market power to push for change. These are of course familiar experiences of international business practitioners, but no excuse to avoid action. This article hopes to offer routes and inspiration for international business scholars to contribute to ending modern slavery.

FDI inflows and intellectual property rights for MNEs in emerging markets: an alternative approach through the lens of trademarks in Vietnam (1986-2016)

PurposeWhile the current anti-globalisation wave is considered as a regional and cyclical relapse among Western countries, the new era of globalisation has shifted away from stagnant developed economies towards the rising prosperity of emerging Asia, where it is attracting substantial global inward foreign direct investment (FDI). Focussing on Vietnam, the country that is seen as Asia’s next economic tiger, the question of how important intellectual properties (IP) protection is in the international competition for FDI inflows is still unsettled, especially on the under-researched topic of trademarks.Design/methodology/approachThis paper takes on the business history approach, which allows rich evidence from the dynamic and evolving natures of multinational enterprises (MNEs) to drive the research process, so that international business scholars can test models rigorously. The evidence provided in this paper is essentially qualitative and combines trademark registrations data, with trade and FDI statistics between 1986 and 2016, also draws on companies’ archives, industry reports and related newspaper articles.FindingsThis paper provides the chronology of intellectual property right (IPR) legal landscapes and the dynamic co-evolution of trademarks and FDI inflows in Vietnam. Three trademark protection strategies for MNEs and their patterns here are addressed. The paper also argues that trademarks bring new insights and IP protection strategy for pharmaceutical MNEs for the case of Vietnam is as important in trademarks as it is in patents. In emerging markets with strong incentives for FDI such as Vietnam, MNEs are not necessarily put off by weak IPR, but rather create alternative strategies for dealing with the lack of IP protection in these emerging market settings.Originality/valueThis study challenges the stream of thoughts that view trademarks as a “neglected intangible asset” among different IPRs, while in fact, trademarks advance MNEs’ knowledge by ensuring competitiveness and long-run survival in emerging markets. This paper is among the first few attempts to look at pharmaceutical industry through the lens of trademarks, moving away from the traditional patent-focussed approach. It extends the understanding of OLI paradigm and highlights that MNEs need to possess Oa and Op advantages not only at the beginning of internationalisation process but rather evolving through the time to cope with imitation risks in the host country.

A paradigm shift in the global strategy of MNEs towards business ecosystems: A research agenda for new theory development

Abstract This paper addresses the theories of global strategy from the contrasting perspectives of MNEs and business ecosystems. A business ecosystem approach has become pervasive regarding strategic management and international business. Although this perspective can be useful to describe the specific phenomenon of new business models at the system level, it seems that scholars have yet to develop a new normative theory on why, when, and how firms benefit from business ecosystems. The existing theories of the global strategy for MNEs are originated from the extensive research streams about ownership advantages from the standpoint of Coase's theory of the firms. In contrast, international business scholars may need to turn attention to some alternative research streams that can provide a fertile ground for building a new theory of global strategy for business ecosystems from the perspective of Hayek's dispersed knowledge economy. For the purpose of facilitating this paradigm shift in global strategy, this article proposes (1) a theory-building framework to identify assumptions, theoretical pillars, and theoretical building blocks and (2) a research agenda to shed light on new directions for global strategy research and help scholars to develop normative research beyond the descriptive research on business ecosystems.

How outward investment from emerging markets affects economic development at home: using the eclectic paradigm to synthesize two IB literatures

PurposeThis paper aims to use the eclectic paradigm as a broad organizing framework to bring together two somewhat parallel international business (IB) literatures, one on the development effects of multinational enterprise activity and the other on the internationalization of emerging market multinationals (EMNEs). The author does so to better understand how outward foreign investment shapes economic development in firms’ home countries.Design/methodology/approachConsidering that the characteristics of foreign investment by EMNEs likely differ from that of their developed economy counterparts and that such characteristics may have unique development consequences, the author revisits one of IB’s overarching theories to rethink how ownership, location and internalization advantages take shape and stimulate diverse development outcomes.FindingsMy narrative review and conceptual analysis indicate that the eclectic paradigm is a valuable framework that can be used to shed light on underexplored phenomena and thereby inform important policy debates. The analysis suggests that unique characteristics of EMNE investment simultaneously have positive and negative development consequences in their home countries.Practical implicationsThe author sets out a research agenda that revolves around six propositions that separately relate one of these three distinct characteristics of EMNE investment to two development outcomes, namely, spillovers and direct effects on home-country employment. My propositions suggest that important policy dilemmas potentially apply, in that each of the three characteristics positively affects one of the aspects of development, but negatively the other.Originality/valueMy research agenda presents international business scholars with new opportunities to build on a history of policymaking impact, now geared toward resolving society’s grand challenge of underdevelopment.

Multinational enterprises and corporate tax planning: A review of literature and suggestions for a future research agenda

Corporate tax planning by the multinational enterprise (MNE), that is, the MNE’s ability to plan its tax affairs by using a multitude of strategies to reduce its tax bills legally, is a central research question in the literatures of international business, public economics, tax, finance, law and accounting. Underlying theoretical assumptions, approaches to empirical testing, profit shifting estimation strategies and findings are varied. Thus, it is important to conduct a critical literature review. In this paper, we offer new insights by studying the phenomenon from the international business (IB) perspective. We survey the academic literature on the MNE and corporate tax planning to examine the extent of knowledge on this topic and identify areas that we hope will stimulate interest among IB scholars for further research. We find materials across disciplines that are relevant to IB readers. We examine 120 articles in 51 scholarly journals and classic books published during the period 1966-2017. We identify the key mechanisms and the firm characteristics that may influence corporate tax planning. We suggest a research agenda where IB research can make clear contributions.

How important is regional vs. global scope? An examination of U.S. multinationals

Beginning with Rugman and Verbeke (J Int Bus Stud 35(1):3–18, 2004), several international business (IB) scholars have proposed that most large multinationals are not global but regional. This argument has recently been challenged for both its conceptualization and its implementation. We aim to contribute to this debate by revisiting the definitions of regional and global, by leveraging data from the U.S. Bureau of Economic Analysis that is new to this literature, and by analyzing multinationals’ scope in terms of both sales and production. We find that U.S. multinationals are significantly more global than has previously been acknowledged in the IB literature.

Lost that lovin’ feeling: The erosion of trust between small, high-distance partners

We investigate the role of high distance in trust erosion between small partners. High distance is known to hinder the formation of trust between potential partners, but its role in trust erosion in established partnerships is less understood by international business scholars. Through a qualitative longitudinal study, we extend current theory of how high distance affects the trust dynamics between cross-border partners. Specifically, we unearth three interrelated mechanisms that together explain how and why trust can erode due to high distance. We show that, before a partnership is formed, high distance can lead partners to erroneously attribute cues to a potential partner’s high quality, leading to over-expectations of partner performance. Once the partnership is operational, high distance hinders actors’ ability to understand situational factors associated with disappointing outcomes, and so they are attributed to failings of the partner. At the same time, distance-related challenges of bounded reliability render partners reluctant to discuss partnership outcomes. This can result in a vicious cycle of inertia as partners strive to protect goodwill while abandoning efforts to produce partnership outcomes because of doubts of the other’s quality. Thus, our theoretical model illustrates the limitations of trust and explains how, paradoxically, high distance can facilitate both trust formation and trust erosion.

The regional nature of Japanese firms: antecedents and consequences

ABSTRACT This article examines the regional nature of Japanese firms, in line with the framework suggested by Collinson and Rugman in 2008. By analysing 52 of the largest Japanese firms, it argues for the regional nature of Japanese firms even in the 2010s, clarifying the inevitable consequences (as well as antecedents) of firms being global. Its findings and contributions are twofold. Firstly, it confirms that Japanese firms have continued to maintain region bound advantages in the Asian region, even in the face of macro challenges, such as the financial crisis and the rise of China. This sharply contradicts the underlying assumptions in the current literature that Japanese firms are moving to being global. Secondly, it shows that the selection of case studies in the current literature is still biased towards global and bi-regional large Japanese firms, rather than reflecting the majority of Japanese firms, which are regional. This underlying tendency to focus on an unrepresentative sample explains why international business scholars wrongly assume a single path of firms becoming global. This article, albeit limited to only Japanese firms, redirects our attention to how firms move dynamically in and between regions, alerting scholars to the need to avoid the possible pitfall of selecting large established manufacturers, typically global firms.

Transferring family logic within a multinational corporation

PurposeThe purpose of this paper is to extend the understandingof how family logic is transferred through mundane practices across the subsidiaries of a Japanese multinational corporation (MNC) in different national contexts.Design/methodology/approachIn order to fulfil this purpose, a comparative qualitative case study was adopted with emphasis on actors’ interpretations.FindingsThrough qualitative data analysis, three findings and their theoretical significances can be summarised. First, it was found that the constellations of family, market and religion logics were transferred differently. This is significant for Japanese management scholars since it illuminates the importance of actors who perceive the (non-) necessity of logics in a Japanese MNC facing institutional dualities. Second, it was found that the family logic is enacted at different levels and with different boundaries. This is significant for both institutionalists and international business scholars since it highlights the strong influence of language and religion in the transfer of logics from one country to another. Third, it was found that the enactment of the family logic greatly affects the acceptability of Japanese management practices. This is significant for business managers since it further proposes an intimate relationship between Japanese management practices and the meanings attached to the family logic.Originality/valueThe originality of this work stems from an updated comparative qualitative study of the management of a Japanese MNCs’ subsidiaries across different countries, providing in-depth insights for international business, Japanese subsidiary management and institutional logics perspectives.

The structural reshaping of globalization: Implications for strategic sectors, profiting from innovation, and the multinational enterprise

The rapid reshaping of the global economic order requires fundamental shifts in international business scholarship and management practice. New forms of protectionist policies, new types of internationalization motives, and new tools of techno-nationalism may lead to what we call “bifurcated governance” at the macro-level and “value chain decoupling” at the micro-level. As a result, innovation networks will require novel reconfigurations. We examine the emerging constraints on multinational enterprises, imposed by a bifurcated world order. We also discuss how the dynamic capabilities framework can guide scholars and managers alike to achieve new forms of evolutionary fitness.