International Business Theory Research Articles

Reconsidering, refashioning, and reconceptualizing research methodology in international business

We introduce this Journal of World Business special issue on methodological advances in international business (IB) research. Due to technological advances and the availability of bigger, deeper, and multi-level data, there is a need to reconsider, refashion, and reconceptualize IB research methodology. To do so, we discuss ethnography, multilevel modeling, textual analysis and multimodal data, visual methods, machine learning, accommodating multiplicity in qualitative research, and crowdsourcing. The future is bright for the field of IB because there are almost unlimited contributions that it can make to organizations and societies. But, to continue to do so, we must adapt and rethink our “research business model:” The way we think, conduct research, and report results to make meaningful contributions and impact both IB theory and practice.

Striking a balance? Finance perspectives on international business research

PurposeThe purpose of this paper is to bridge the disciplinary divide between international finance and international business (IB) to realign academic research with business reality in which strategy and finance align to determine firms’ success or failures.Design/methodology/approachThe authors discuss theoretical differences between the fields of international finance and IB strategy that caused the fields to develop in isolation with little fertilization across disciplines. The authors review scarce interdisciplinary contributions between the fields. Finally, the authors identify complementarities that suggest fruitful avenues for future research.FindingsThe authors find a persistent disconnect between finance and strategy/IB literature that can be explained by fundamentally different aims and assumptions about the markets. While finance theory seeks to explain typical effects under functioning markets, strategy and IB theories focus inherently on exceptional effects and market inefficiencies.Research limitations/implicationsThe fundamental theoretical differences that isolate finance and strategy/IB create avenues for interdisciplinary research that harness the complementarities of the two disciplines. These include strategic aspects of capital structure, internal capital market inefficiencies, corporate governance, capital market liability of foreignness and institutional aspects of financial management.Practical implicationsWith this paper, the authors not only bring academic researchers in finance and strategy closer to corporate practice. The theoretical discussion also challenges the functional blind spots of practitioners and encourages more holistic decision-making.Social implicationsChallenging market functioning and recognizing market inefficiencies using strategy and IB foundations connects financial economics with non-market topics such as environment, society and governance or impact investing.Originality/valueThe value and originality of the paper come from the qualitative, epistemological approach to study and analyse the divide between international finance and strategy/IB scholarship.

Internationalization of Enterprise Resource Planning Vendors

International business theory suggests that multinational corporations are usually disadvantaged compared to local firms when competing in a host market. However, we find that foreign enterprise resource planning (ERP) vendors in the Chinese high-end ERP market perform significantly better than local vendors. To understand this gap, the authors first analyze the ERP business model and its four characteristics as a service and use Dunning's OLI paradigm to specify the ownership-specific, internalization-incentive, and location-specific advantages (O-, I-, and L-advantages) required for foreign ERP vendors to compete in the host country's high-end market. Then, after conducting case studies of the two foreign vendors with the highest share in the Chinese high-end ERP market, SAP and Oracle, they confirm that the O-advantages from strong brand and reputation, high research and development capabilities, professional partners, I-advantages from wholly owned subsidiaries, and L-advantages from economically developed regions cause SAP and Oracle to excel in the Chinese high-end ERP market.

Decolonizing international business

PurposeThe purpose of this paper is to encourage scholars of international business (IB) to engage with the “decolonizing the university” project and reflect on what decolonizing might mean for IB research and education. The paper also argues that it is particularly important for IB scholars to join the decolonizing project given that the field’s main object of study – the multinational enterprise – has been central to colonialism.Design/methodology/approachAn essay style is adopted to introduce the decolonizing project to IB and to explain why and how this scholarly field might benefit from engaging with it. As part of that, the paper calls upon IB scholars to work on decolonizing the field and to do so by not only interrogating its knowledge claims but also broadening the scope of its research so it can address the theme of neo-colonialism.FindingsThe paper reveals the conspicuous absence of IB scholars from the decolonizing project and situates such absence within a long-standing indifference within IB to the issue of colonialism.Social implicationsIn learning about and engaging with the decolonizing project, IB scholars will be able to not only enrich IB theory and education but also help to tackle one of the grand challenges facing the modern world society, namely, social inequality and injustice rooted in colonialism.Originality/valueIt is hoped that this paper will stimulate reflection on IB’s absence from the decolonizing project and assist scholars in developing an understanding of the project’s rationale and underlying literature. It is also hoped that the paper will open dialogue within IB about how this field might be decolonized and help scholars engage meaningfully with other disciplines as they do so.

Digital transformation and export performance: a process mechanism of firm digital capabilities

PurposeThis study aims to investigate the logic between digital transformation and export performance by analysing a large sample of Vietnamese exporters. The theoretical model is further extended by investigating the driving role of digital transformational leadership and mediating effects of firm digital capabilities and employee exploration and exploitation innovation.Design/methodology/approachThe study sample comprised 364 middle managers at 107 export firms in Ho Chi Minh City, Vietnam. The data are analysed using a partial least square-structural equation model (PLS-SEM).FindingsDigital transformation may be an indispensable tool for enhancing the export performance of businesses. Moreover, digital transformational leadership may drive digital transformation through the mediating mechanisms of firm digital capabilities and employee exploration and exploitation innovations to achieve high export performance.Originality/valueThis initial study contributes significantly to international business theory through the lens of dynamic capabilities theory, which reveals the role of digital transformation in export performance via mechanisms of digital transformational leadership, firm digital capabilities and employee exploration and exploitation innovation.

Using field and quasi experiments and text-based analysis to advance international business theory

Methodological developments are critical for driving theoretical advancements in international business (IB) due to the field's diversity regarding disciplinary, theoretical, and conceptual bases. We provide an accessible introduction to two methodological approaches—one related to design and one to analysis—that are currently underutilized in IB despite their great potential: (a) field and quasi experiments, and (b) text-based analysis. We describe each method and provide examples of how they can be used to make advancements in several IB domains and theories including internationalization process theory; ownership, location, internalization (OLI) paradigm; knowledge-based view of multinational enterprises; dynamic capability theory; and international entrepreneurship.

Determinants of Foreign Direct Investment and the Advantages Theory

This study reviews three classic international business theories and some related empirical studies to identify the gaps in the literature and suggest future research directions. In international business studies, most analyses on the determinants of FDI are centered on three concepts of firm-specific, internalization, and location advantages according to the monopolistic advantage theory, internalization theory, and OLI paradigm. These three advantages determine whether a firm will internationalize, how it will enter foreign markets, where it will locate in the host country, and how it will perform in a foreign market. However, These theories are set up with the premise of firm-specific advantages and cannot be used to explain the phenomenon of emerging market multinational enterprises, which have emerged in large numbers in recent years. Simultaneously, these theories, which focus on manufacturing, need to be used to explain the internationalization of the service industry in-depth and with greater relevance.

International alliance networks, expansion modes and coopetition

PurposeMultinational enterprises (MNEs) strive to expand into new markets either by exploiting their resource base or by gaining access to partner companies that own the required resources. Thus, companies face the compete–cooperate–coopete decision. The purpose of this study is to determine the effect of MNEs’ networks of interorganisational alliances, and their interaction with resource ownership, and market attractiveness, on the choice of international expansion modes, whether they are sole venture (competitive) or collaboration agreements (cooperative) or both (coopetitive).Design/methodology/approachA biprobit model is used to analyse more than 50,000 new international operations by 164 MNEs in a five-year window. A moderation analysis is carried out to reveal the interaction between network centrality, resource ownership and market size.FindingsThe results show the extent to which the competitive–collaborative contradictory forces attenuate each other in different market scenarios. This study’s contribution advances the resolution of the resource allocation dilemma by recognising the conditions for the selection of each expansion mode: sole venture, cooperation and coopetition.Originality/valueMainstream international business theory claims that firm’s own resources and transaction outcomes are generally sufficient to explain their international expansion decisions, whereas network and social capital theories focus on the role of relationships and network embeddedness. Both perspectives seem to neglect the fact that firms frequently develop both factors simultaneously. This study bridges these perspectives and reveals the interplay between resource ownership, alliance network centrality and market size for MNEs’ expansion mode choice.

A review of location, politics, and the multinational corporation: Bringing political geography into international business

AbstractHow has international business (IB) research evolved to account for the politicization of the context in which multinational corporations (MNCs) operate? To address this question, we review research at the nexus of location, politics, and the MNC from 2000 through 2021. Rooted in classic IB theories, our review reveals three directions in current IB research: (i) expansion of MNC agency in shaping the political environment, (ii) a wider diversity of actors involved in the business–government–society interface, and (iii) extension of the levels of analysis from country level to sub- and supra-national levels. This three-fold evolution has moved IB research closer to the field of political geography, but the shift has remained largely implicit and its theoretical linkages are few. Drawing on key theoretical insights from political geography, we discuss the opportunities and challenges of bringing political geography into IB research.

Management , Business Strategies and Organisation of National and International Business

This research aims to provide guidance to companies seeking to initiate a process of internationalization , discusses possible strategies and methodologies that can be followed to succeed in this process. It is based on a case study focused on Inditex group, although it is a descriptive research , tries to give a clear focus to consider , on proven theories supported in addition to the strategic and operational structure of our case study. Our main results conclude in determining a variant strategy for each company, but can come from the sane schema international diversification, which is crucial part of business development and its main strength should be good management skills. This paper is part of a review of the literature of international business and international management which attempts to highlight the strengths and weaknesses of the two traditions and build conceptual bridges between them. The complementary strengths of the two traditions should enable international business theory to develop greater relevance without losing its rigorous grounding. Today, business is acknowledged to be international and there is a general expectation that this will continue for the foreseeable future. International business may be defined simply as business transactions that take place across national borders. This broad definition includes the very small firm that exports a small quantity to only one country, as well as the very large global firm with integrated operations and strategic alliances around the world . Within this broad array, distinctions are often made among different types of international firms, and these distinctions are helpful in understanding a firm’s strategy , organization , and functional decisions. (for example , its financial, administrative, marketing, human resource, or operations decisions). One distinction that can be helpful is the distinction between multi -domestic operations, with independent subsidiaries which act essentially as domestic firms, and global operations, with integrated subsidiaries which are closely related and interconnected. These may be thought of as the two ends of a continuum , with many possibilities in between . Firms are unlikely to be at one end of the continuum, though, as they often combine aspects of multi-domestic operations with aspects of global operations. European corporations, enmeshed in a symbiotic relationship with national banks and the state, have traditionally disdained the aggressive, profit-maximizing behaviour of their U.S. counterparts. But the pressures of globalization and economic integration are now compelling European corporations to manage with an American accent. The continent’s engagement with the global economy will be mediated in large measure by the capacity of European companies to adapt their strategies and structures to the modern world.

International business under sanctions

Sanctions are a tool used by political actors to induce foreign countries, firms or individuals to alter their behavior. As nonmilitary coercive measure, they have the potential to disrupt the international business environment, often on short notice, and change the rules of the game. Synthesizing the available evidence on the economic and political impacts of sanctions, we explore how sanctions disrupt the institutional framework for international business and how firms respond to sanctions. Based on a review of available scholarly evidence, we discuss how theories of international business, such as institution-based view, resource- and knowledge-based view, resource dependency theory, and behavioral theories of the firm, can contribute to explaining the impact of sanctions. At the same time, we discuss how sanctions, as politically motivated disruptions, challenge some assumptions underlying these theories. Going forward, our research agenda on sanctions is likely to help firms and governments to strategize in a geopolitically sensitive world.

Are environmental conditions in the eyes of the beholder? Foreign and local firms in Africa

ABSTRACT International business research has provided substantial empirical evidence that foreign firms investing in countries with adverse environmental conditions may emerge as the main competitors in those countries. Against this backdrop, the dominance of local banks in Nigeria is puzzling. Our exploratory study, designed to investigate this inconsistency, revealed that managers of foreign and local banks perceive Nigeria’s environmental resources differently and, consequently, respond to them with different strategic choices that lead to different performance outcomes. Building on environmental psychology theory, we theorize the mechanisms by which foreignness affects perceptions and the ways in which these perceptions guide strategic choices. The study makes novel contributions to IB theory by blending insights from environmental psychology with theories of international business and employing individual-level analysis to supplement the firm-level analyses that have dominated preceding studies. The research enabled us to shed light on different explanatory variables than those commonly employed in international business research and to explain the puzzle that triggered our interest.

Spanning the boundaries: International business theories in a complex global environment

The field of international business is constantly evolving, and there is much debate about what exactly constitutes international business and how its definition influences theorizing. Traditionally international business has focused on cross-border activities of multinational enterprises, including foreign direct investment, multinational enterprises’ strategies, and organization, along with the understanding of the process of internationalization. Changes in the global environment have necessitated a broader, multidisciplinary approach to international business theorizing. This paper explores how international business emerged as a field of inquiry and how the interrelated fields such as international management, international entrepreneurship, and international strategy can inform international business theorizing. A more complementary approach would be beneficial rather than treating these fields as distinct ones. Moreover, this paper recognizes the complex nature of the global environment and highlights the myriad of challenges and opportunities it presents for businesses operating internationally. It proposes a future research agenda that considers this intricate global context, and challenges international business scholars to adopt a holistic and multidisciplinary approach to develop comprehensive theories that capture the dynamic and interconnected nature of the complex global business environment.

The determinants of foreign investment size: the role of parent firm advantage and cross-national distance

This study investigates the determinants of foreign investment size by considering the role of both parent firm advantage and cross-national distance. We first develop an economic model of foreign investment size. Building on this model and theories in international business, we derive hypotheses on the determinants of foreign investment size: it is positively related to parent firm-specific advantage, while it follows an inverted U-shape relationship with different dimensions of cross-national distances. Moreover, parent firm advantage and cross-national distance interact with each other to influence investment size. Our empirical analysis of Japanese firms' foreign direct investment (FDI) data from 1990 to 2009 supports our hypotheses. Our study contributes to the literature on FDI by examining an overlooked aspect of FDI: investment size. We also integrate economic model and international business theories to explain firm-level and country-level determinants of foreign investment size.

Spatial and temporal distances in a virtual global world: Lessons from the COVID-19 pandemic

The experience of COVID-19 prompted us to rethink the imperatives of distance for the organization of value-creating activities globally. We advance a conceptualization of distance as representing separation in both space and time and posit that these distance dimensions represent different kinds of separation and require varied theoretical attention. We delineate the intrinsic qualities of spatial and temporal distances and theorize the impact of this extended conceptualization of distance on major tenets of international business theory and their predictions regarding the patterns of international business activity. We illustrate the ways by which varying configurations of spatial and temporal distances serve different value-creating activities and draw their implications for countries’ global integration. We advance a call for more attention to time and temporal distance and their impact on the ways firms organize their value-creating activities in an increasingly virtual world.

지식서비스산업으로서 전시회의 해외진출 동기와 방법 : 국제화 이론으로 분석한 코엑스의 베트남 전시 진출 사례

By examining Coex’s overseas expansion business project, the first overseas business trial among exhibition organizers in Korea, this study attempts to analyze the theoretical motivations and strategic approaches for overseas expansion. Compared to previous studies mainly focusing on manufacturing and service industries, this study provides a new approach to applying international business theories of the contents industry to the exhibition industry in the sense that both are in the scope of the knowledge service industry. The findings show that governments’ multi-faceted support is necessary to enhance the competitiveness of the knowledge service industry. Also, it is a critically successful point to develop a micro-level strategic approach by considering a macro-level blueprint. In addition, adopting a glocalization approach is essential for the success of overseas business expansion in the exhibition industry. This study provides meaningful theoretical foundations for future studies on the global expansion of exhibition businesses and the important political implications for Korea’s exhibition industry.

The MNE as the “crown of creation”?: a commentary on mainstream theories of multinational enterprises

PurposeThe purpose of this paper is twofold: to analyse what theories assume about multinational enterprises (MNEs) when they claim these are superior and to discuss possible explanations for why MNE superiority seems to be dominant in the international business (IB) research field.Design/methodology/approachA common theme in mainstream IB theories is that multinational enterprises (MNEs) are superior in terms of cost efficiency and innovativeness compared with other types of organizations. A closer look at transaction cost economics (TCE)/internalization theory, evolutionary theory and dynamic capability theory reveal a bias toward MNE supremacy because of how MNEs are conceptualized as firms and therefore fail to explain the essence of “multinational advantage”. These revelations and the strong dependence on the benevolence to provide unbiased data means that MNE supremacy posited by mainstream IB theories is as much a rationalized myth as an empirical fact.FindingsAlthough mainstream theories differ when it comes to the building blocks that constitute MNE supremacy, they have one attribute in common: they are silent as to why MNEs are superior compared with, for example, domestic firms or other types of economic agents. Irrespective of whether the focus is the strength of the hierarchy, the skill of managers or a common identity, nothing in the theories tells us that these factors are more pronounced in MNEs than in other types of economic actors.Originality/valueThe paper deals with the issue of multinational advantage. It claims that mainstream theories of MNEs tend to assume, explicitly or implicitly, that MNEs are superior in terms of cost efficiency and innovativeness compared with other types of economic agents. The analysis demonstrates that this tendency is a consequence of how MNEs are conceptualized as firms in the different theories as well as of the strong dependence in IB research on the benevolence of MNEs to provide unbiased data. It is concluded that MNE supremacy posited by mainstream IB theories is as much a rationalized myth as an empirical fact.

Africa rising: Opportunities for advancing theory on people, institutions, and the nation state in international business.

The online version contains supplementary material available at 10.1057/s41267-022-00581-z.

The “costs of doing business abroad” in a cross-border context characterised by extreme political volatility

PurposeThe purpose of this study is to describe and explain the organisation design antecedents of coordination, learning and trust in an international strategic alliance in a cross-border context characterised by extreme political volatility.Design/methodology/approachThe research was carried out as a single-case study in situ in a humanitarian international strategic alliance in Pyongyang, the Democratic People’s Republic of Korea (North Korea).FindingsIn addition to explaining the effects of interface, specialisation, formalisation and centralisation on coordination, learning and trust, the study demonstrates the influence of classic international business (IB) “costs of doing business abroad” (Hymer, 1960/1976) on the same organisational outcomes. Moreover, the study identifies intergovernmental engagement/containment/disengagement as a contextual antecedent of both organisation design and outcomes.Originality/valueThe study extends IB theory by indicating that mainstream IB perspectives may not fully explain intraorganisational outcomes in cross-border contexts characterised by extreme political volatility. Notably, the study suggests that complementary constructs such as intergovernmental engagement are needed to account for the additional costs incurred by such settings.

Digital Transformation and International Strategies

This paper reflects on the implications of digital transformation for international business (IB) theory and research. We briefly discuss its potential impact and stress that how digitalization affects traditional firms' international strategies remains under-studied. We provide an overview of the papers in this Special Issue which aspire to answer this important question through various angles. Finally, we shed light on avenues for future research, focusing specifically on how the Internet of Things and demand-side innovation in ecosystems offer opportunities to extend internalization theory.