International Business Studies Research Articles

Export Experience of Managers and the Internationalisation of Firms

AbstractAs the firm gravitates toward being the core in analyses of international trade, the possibilities for learning from cross‐disciplines studies increase. Managerial resources underlie export initiation in the theory of the multinational enterprise developed in international business studies, but they are largely ignored in empirical studies of international trade. This is probably not because they are unimportant, but more due to the challenges of identifying and measuring these resources. We exploit Danish employer–employee matched data to overcome this challenge and analyse the impact of managers' international experience, together with other managerial characteristics, on the likelihood that the firm starts exporting. We find that productivity and fixed costs associated with exporting are not the sole determinants of selection of firms into international markets, but that ‘managerial inputs’ are just as important. Our data allow us to identify manager export experience based on the CEO's historical career as documented in official registry statistics, a feature that makes our analysis different from other work that relies on self‐assessments.

In memoriam: Alan Rugman

JIBS mourns the loss of Alan Rugman, a major contributor to JIBS and the field of international business studies over a period of more than 40 years, who passed away suddenly on 8 July 2014. Professor Rugman was a former President of AIB (2004–2006) and Dean of the AIB Fellows, a long-time JIBS Consulting Editor, and author of several highly cited JIBS articles, including one of the 25 most cited articles that the journal has published. He was most recently Head of International Business & Strategy at Henley Business School, and a founding fellow of the John Dunning Centre for International Business, both part of the University of Reading. He previously held posts at the University of Winnipeg, Dalhousie University, the University of Toronto, Templeton College, Oxford and Indiana University.

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.

Specialist supplier or systems integrator? The relationship between competencies and export performance in the Norwegian defence industry

This article investigates how defence contractors’ competence profiles affect their export performance. It explores two competing hypotheses derived from international economics and business studies that (i) it is beneficial to be a specialist supplier and focus on a related set of competencies and (ii) it is beneficial to be a system integrator and assemble a broad set of competencies. It makes use of a unique and especially rich data set that includes close to 250 competency variables. These competency variables are used to compute entropy scores for the defence contractors, which again are used in in a fractional logit model to test the two hypotheses. The article concludes that the data only support the second hypothesis – that it is favourable to be a systems integrator.

Re-considering language within a cosmopolitan understanding: Toward a multilingual franca approach in international business studies

Much of the literature on language in international business (IB) has sought either to lay out the advantages of a common language or lingua franca that crosses the linguistic boundaries of a multinational company (MNC) (Harzing, Koster, & Magner, 2011; Luo & Shenkar, 2006), or to identify the imperialistic and hegemonic effects of using such lingua franca — which mostly turns out to be English — on actors in local subsidiaries (Piekkari, Vaara, Tienari, & Santti, 2005; Tietze, 2008). In our view, looking into the relationship between globalization and language(s) is more complex than simply pointing at the proliferation of English and the effects of its linguistic imperialism within one global market place. Actually, there is within every process of globalization simultaneously a genuine concern about issues of localization and contextualization (Appadurai, 1996; Bauman, 1998). Also, increased mobility has provided people access to very fragmented and incomplete language repertoires, often consisting of spoken, vernacular and accented varieties of different languages in which they have differentially developed literacy skills (Blommaert & Dong, 2010). Such complexities between globalization processes and linguistic repertoires raise the question of how, until now, studies on language in IB tend to approach the notion of language itself and how they (often implicitly) think about the relationship between universality and particularity when studying language within globalization processes.

Signals and international alliance formation: The roles of affiliations and international activities

This paper extends signaling theory to the study of firms’ international alliances. Signals can be valuable in facilitating these collaborations because they reduce the risk of adverse selection surrounding cross-border partnerships. We specifically investigate whether firms’ affiliations with prominent financial intermediaries enable the formation of international collaborative agreements. We also argue and find that the signaling benefits of these affiliations diminish with the firm’s engagement in international activities, which can function as alternative signals by which firms convey the quality of their resources and prospects. Examining firms’ cross-border activities helps to identify new and important signals that are unique to the international setting. Moreover, this also helps contextualize prior theory and findings that exist in the domestic setting on the effects of affiliations with financial intermediaries such as venture capitalists and investment banks. We conclude that signaling theory offers a promising addition to existing theories of international alliances and other cross-border activities. We contrast some of the main arguments and predications of signaling theory with other theories used in international business, and we emphasize the research opportunities that exist for employing this perspective in international business studies in the future.

Translation in cross-language international business research: Beyond equivalence

In this paper, we problematise the way translation has been treated in international business (IB) research. We start by conducting an interpretive content analysis of both qualitative and quantitative cross-language studies published in four core IB journals over the course of a decade. Our analysis shows the dominance of a technicist view of translation associated with the equivalence paradigm. In contrast, we advocate a shift to a more contextualised approach informed by theoretical developments in translation studies. More specifically, we focus on two theoretical perspectives – skopos theory and cultural politics – which offer related but distinct approaches to rethinking equivalence. We conclude by advocating that the translation process be reframed as a process of intercultural interaction, rather than a lexical transfer of meaning. This reconceptualisation would, we argue, open up what is currently a “black box” in most IB studies. The contextualised approach that we offer has the potential not just to enrich the findings of studies, but also provide insights that are of multidisciplinary relevance.

Culture and Hofstede (1980) in international business studies: a bibliometric study in top management journals

How countries differ in their fundamental cultural traits and how these differences impact firms and businesses has been a recurring topic in international business research. Geert Hofstede’s (1980) work on culture and the cultural dimensions has had high impact on research carried out in international business studies and has been used in a wider array of business/management disciplines to delve into a large variety of phenomena. In this study, we conduct a bibliometric analysis of the articles published in eight top ranked business journals that quoted Hofstede’s work, over a period of thirty years. Hofstede’s work is used as a key marker for culture. In a sample of 655 articles, we conducted citation and co-citation analyses to better understand the ties binding scholars, theories and ideas. Moreover, a longitudinal analysis of both cocitation and research topics allow us to observe and better understand how much does Hofstede – and culture – matter in international business studies and how research emphasis has changed over time. For instance, we noted how the emphasis of research has shifted from methodological concerns to help explaining, contextualizing why firms made the choices they did, and how operations ought to be managed. We discuss broadly the results, pointing some implications, especially for theory and scholars.

Dynamics of Persistent Heterogeneity in the Global Configuration of Business Services Value Chains

The paper develops an integrative framework that identifies, describes and links the firm –specific and non-firm-specific factors that co-evolve and mutually influence the changes in configurations of global business services value chains over time. We focus on the heterogeneity of configurations resulting from idiosyncratic choices regarding what processes to unbundle, what activities to locate where, and what control mechanisms to use. Expanding current models and empirical studies in International Business, we argue in particular in favour of a behavioural approach that gives more room to decision makers and the decision making process to explain changing but persistent heterogeneity in ALC configuration (Activity-Location-Control mechanisms) of business services global value chains.

Linguistic Distance and Bridge Language Effects on Equity Ownership in Cross-Border Acquisitions

We study the effects of language distance and bridge language proficiency on the level of equity taken by acquirers from 67 countries in 59,092 acquisition targets in 69 host countries. We theorize and find that both language distance and bridge language proficiency affect the level of equity an acquirer takes in a target. In addition to its direct effect, language distance also moderates the effect of bridge language on the level of equity taken. Our results clearly demonstrate that governance research and international business studies can benefit from incorporating language into their explanatory models.

Ethnic Diversity and Firms' Export Behavior

Selling internationally requires products that resonate with an international customer base and therefore an approach to markets that is in keeping with diverse cultures (i.e., relational capital). As emphasized by international business studies, this relational capital is in turn related to the successful teaming of a diverse workforce, as this process teaches employees to operate in multicultural environments. This knowledge becomes like an intangible asset to which firms can resort, also when engaging in international transactions. We explore this channel empirically, investigating the impact of workforce diversity on firms' exporting performances and find that ethnic diversity further justifies firms' different presence in international markets. Since hiring is not a random practice, and firms ultimately select into ethnically different labor forces, we exploit the EU enlargement of 2004 to instrument for the diversity of the pool of workers locally recruitable. Because migrants tend to settle where the attitude toward them is most favorable, we use the median voter's political ideology at firm's location to measure the hostility at time of settlement. This gives our instrument spatial variation besides time variation.

Ethnic Diversity and Firms' Export Behavior

Selling internationally requires products that resonate with an international customer base and therefore an approach to markets that is in keeping with diverse cultures (i.e., relational capital). As emphasized by international business studies, this relational capital is in turn related to the successful teaming of a diverse workforce, as this process teaches employees to operate in multicultural environments. This knowledge becomes like an intangible asset to which firms can resort, also when engaging in international transactions.We explore this channel empirically, investigating the impact of workforce diversity on firms' exporting performances and find that ethnic diversity further justifies firms' different presence in international markets. Since hiring is not a random practice, and firms ultimately select into ethnically different labor forces, we exploit the EU enlargement of 2004 to instrument for the diversity of the pool of workers locally recruitable. Because migrants tend to settle where the attitude toward them is most favorable, we use the median voter's political ideology at firm's location to measure the hostility at time of settlement. This gives our instrument spatial variation besides time variation.

For Whom Does the Subaltern Speak? Critical and Strategic Issues on Post-colonial Management Studies

This paper discusses the current state and evolution of post-colonial, subaltern and indigenous perspectives on international business and management. It argues that some of the once “Subaltern”, indigenous and other formerly “peripheral” and dominated populations (China and India in particular) may now have moved to center stage and use post-colonial discourse to their advantage against formerly dominant-Western counterparts. We thus pose the question of the potentially strategic character and use of some post-colonial theories, discourses and practices in international business and management studies, nation-states policies and/or strategic corporate moves from those countries and populations. We first identify and discuss five major issues to critique current post-colonial, subaltern and indigenous perspectives and illustrate how these can be used strategically. We then draw a number of conclusions and offer some suggestions for further development of the “critical” potential of post-colonial research.

Revisiting international business theory: A capabilities-based theory of the MNE

An introduction to this issue of the Journal of International Business Studies, in which the author discusses a capabilities-based theory of multinational enterprises (MNE), is presented.

Explaining cross-cultural service interactions in tourism with Shenkar's cultural friction

In this article, we commence a new dialogue on cross-cultural research in tourism. Using Shenkar's [Shenkar, O. (2001). Cultural distance revisited: Towards a more rigorous conceptualization and measurement of cultural differences. Journal of International Business Studies, 32(3), 519–535] metaphor of cultural friction as the analytical framework, we examine cross-cultural service interactions between guests and service-providers in a luxury hotel. Cultural friction departs from, and extends, the notion of ‘cultural distance’, as it recognises asymmetry in social-economic conditions and considers the goals and the influence of control and power between the interacting parties. We use the Critical Incident Technique and Narrative Inquiry as the data collection technique and analytical approach, respectively. The findings reveal that guests and service-providers use a number of strategies to exert power and gain control during their interactions, including subjective essentialism and stereotyping, to achieve their goals. The implications for tourism and hospitality management include providing cross-cultural sensitivity training to service-providers, ensuring a cultural-diverse employee composition, and to foster cross-cultural understanding amongst employees. We further suggest to develop strategies to facilitate effective cross-cultural service interactions based on evidence about cultural norms, expectations and behaviours from specific cultural groups. Further research is recommended to connect specific interactions between the interacting parties to examine whether the various strategies used lead to effective cross-cultural communication.

Editorial Policy and Style Information

<b>Editorial Policy and Style Information</b>

Going beyond national cultures – Dynamic interaction between intra-national, regional, and organizational realities

Cultural studies in international business have focused intensively on country-level analyses and have been criticized for their limited efforts to conceptualize and measure much richer, more dynamic and multi-level cultures. Drawing on literature from economic geography, we propose a new perspective that takes intra-national regional culture as the unit of analysis. Combining this perspective with acculturation theory and the concepts of cultural strength and embeddedness, we develop a conceptual model to analyze dynamic interaction between intra-national regional cultures and organizational cultures and propositions on how such interactions affect firm performance. Implications for future research and business practice are presented.

Letter from the Editors: Volume 13 Issue 4

This editorial article introduces an AIB Insights issue composed of eclectic articles. The issue includes “Terrorism Studies in International Business: Increasing Knowledge, Reducing Victimization” by Gabriele Suder and Michael Czinkota; “FDI in the Former Soviet Periphery in Six Charts” by Kalman Kalotay; “Born Global in Bangalore: Emergent Pathways for International New Ventures via Multinational Enterprise Networks” by Shameen Prashantham; and “A Few Lessons from my Long Experience in IB Research— Opinion/Editorial:” by Yair Aharoni.

Terrorism Studies in International Business: Increasing Knowledge, Reducing Victimization

This article proposes that terrorism studies have become an integral part of the international business (IB) literature, despite the difficulties inherent in studying the phenomenon. The article makes the point that, hopefully, terrorism itself will suffer from enhanced exposure and knowledge, which, over time may lead to containment in the future.

STUDY TOUR OBJECTIVE: EXPERIENTIAL LEARNING IN DEVLOPING ENTRY LEVEL INTERNATIONAL BUSINESS PEOPLE

ABSTRACT One of the objectives of an international business school program should be to aid in the development of students into entry level international business people. Whether the student embarks on an international career immediately upon graduation, mid-career, or not at all; the global marketplace will place value on the employee who can understand and successfully navigate the international business environment. Coursework in international business topics does not fully prepare the student to be able to conduct international business. Experiential learning is very important in international business studies because few students have been exposed to international concepts outside of the classroom.Experiential learning in the form of an international internship would be invaluable, however it is difficult to secure because it is much harder for a student to add value to an organization in another country where the language, culture and customs are unfamiliar. Furthermore, organizations are hesitant to commit resources to what could prove to be a “paid vacation” for the intern. Hence opportunities for actual international work experience are very limited. Recognizing the need for experiential learning in international business programs, many schools therefore recommend an international study tour to round out the students’ education and fill in the cultural gaps that are difficult if not impossible to obtain in the classroom but nonetheless necessary to develop the students into entry level international business people. Keywords Study Tours, Experiential Learning, International Business, entry level international business people