Mainstream International Business Research Articles

Multinational corporations and grand challenges: part of the problem, part of the solution?

PurposeThe purpose of this study is to address the relationship between multinational corporations (MNCs) and grand challenges. Stressing the moderating impact of stakeholders and governments, it frames and introduces the six contributions of the special issue, equally divided into those illustrating how MNCs contribute to the existence of grand challenges and those exploring how MNCs contribute to addressing grand challenges.Design/methodology/approachBased on a review of the existing literature on the relationship between MNCs and grand challenges and recent developments in mainstream international business, the viewpoint emphasizes the need to move beyond a one-sided focus on the positive contributions of MNCs to grand challenges.FindingsThe special issue contributions reveal that even established MNCs are actively engaged in strategic efforts to perpetuate unsustainable practices and minimize the impact of societal rules and stakeholders. The contributions also highlight the complications when MNCs aim to tackle grand challenges.Practical implicationsDisplaying positive practices of how MNCs contribute to the solution of grand challenges should not be considered a functional substitute for regulatory action, contrary to the frequent assertion of MNCs and their political representatives.Originality/valueThis special issue is the first one in IB to address the relationship between MNCs and grand challenges from an empirical vantage point.

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.

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.

Global migration: Implications for international business scholarship.

Migration is increasingly viewed as a high-priority policy issue among politicians, intergovernmental organizations, NGOs, and civil society throughout the world. Its implications for the private sector, for economic prosperity, and for the cross-border activities of firms are undeniable and likely to grow in importance. Yet, despite its relevance to International Business, treatment of migration in the mainstream International Business literature has been limited. In this contribution, we set out key aspects of migration that are germane to International Business. Specifically, we suggest recent migratory shifts are transforming important elements of the context in which multinational enterprises operate, with significant implications for their international human resource management practices, for firms' entry modes and market selection approaches, and for the manner in which international strategies are formulated and implemented. We offer a research agenda to motivate International Business scholars to study global migration in more depth and to reevaluate the generalizability of aspects of their theories in light of developments in global migration.

A Review of Language-Sensitive Research in International Business: A Multi-Paradigmatic Reading

This paper reviews language-sensitive research in International Business (IB) by asking how paradigmatic positions affect knowledge production in this field of study. Paradigms refer to the researchers’ assumptions about how research should be conducted and reported. Because they affect the theoretical aim and framing of a study, the data sources, and analysis techniques used, paradigms ultimately shape the kind of knowledge produced. To study how paradigmatic choices influence the knowledge produced, we compared 299 publications in the field of language-sensitive research with 229 publications in mainstream IB by determining the paradigmatic position from which each study had been conducted. Our analysis shows that the paradigmatic diversity of language-sensitive research exceeds that of mainstream IB. Although positivism still dominates language-sensitive research in IB, interpretivist and critical studies have accounted for a growing proportion of research over the years and exceed those in mainstream IB research. We suggest that the norms of the specific research field and of academia in general strongly influence paradigmatic choices, and thus the kind of knowledge researchers produce. The review opens up a novel perspective on knowledge production within language-sensitive IB research.

FIRM RESOURCES FOR INTERNATIONALIZATION OF SMES FROM EMERGING COUNTRIES: A MULTIMETHOD STUDY

ABSTRACT Purpose: This article investigates and classifies firm resources for the internationalization of small and medium enterprises (SMEs) from emerging countries. Originality/value: SMEs from emerging countries in global markets evidence their more restricted access to resources for internationalization. The mainstream international business literature classifies firm’s resources identified in large companies from developed economies. This research classifies firms’ internationalization resources located in different emerging countries based on a systematic literature review (SLR) and interviews. This paper contributes to the theoretical development about the internationalization of SMEs from emerging countries, indicating the importance of organizational resources in this process. Design/methodology/approach: This paper presents an exploratory research developed in two stages: a SLR on emerging countries and interviews with experts, institutions, and SMEs about the Brazilian context. Bibliographic research and an interview with semi-structured script were adopted as data collection techniques. Interviews were analyzed with NVivo software using content analysis technique and providing categorization of resources. Findings: Up to 2016, 15 works mentioned resources for the internationalization of SMEs from emerging countries and seven were done in Asia. We identified 72 resources in ten emerging countries. Organizational resources predominate. The use of financial resources in Brazil contradicts the trend in other emerging countries. More tangible resources seem less strategic for SMEs’ internationalization from emerging countries when compared to more intangible resources, as organizational ones.

Practice coordination by principles: a contemporary MNC approach to coordinating global practices

PurposeIn the mainstream international business literature on multinational corporations (MNCs), an authoritative central headquarter (HQ) that transfers standardised practices to its subsidiaries remains the norm. This study aims to explore how MNCs coordinate their management practices through principles.Design/methodology/approachThe paper draws on empirical findings from a qualitative in-depth single case study based on evidence-rich qualitative data including observations from how a high-tech MNC headquartered in Sweden coordinates its development practices.FindingsAn alternative informal coordination approach (i.e. coordination by principles) is identified. Additionally, antecedents and implications of the approach are presented.Practical implicationsCoordination by Principles may facilitate the internalisation of practices and be a feasible compromise between context adaptation and traditional standardisation, particularly for MNCs with highly heterogeneous research and development operations.Originality/valueThis paper highlights the importance of acknowledging that firm practices often are based on management ideas that HQs adopt to prevent loss of legitimacy. As such, this study contributes to the scarce literature that critically questions the assumption that HQs solely transfer practices to subsidiaries to improve subsidiary efficiency and performance.

Global Migration: Implications for International Business Scholarship

Migration is increasingly viewed as a high-priority policy issue among politicians, intergovernmental organizations, NGOs and civil society throughout the world. Its implications for the private sector, for economic prosperity and for the cross-border activities of firms are undeniable and will remain a top priority for the foreseeable future. Yet despite its relevance to International Business (IB), migration has been subject to only limited discussion in the mainstream IB literature. In this contribution, we examine key aspects of migration germane to IB. In particular, we suggest that recent migratory shifts are transforming important elements of the context within which multinational enterprises (MNEs) operate with significant implications for the international human resource management practices of MNEs, for the way cross-border activities of firms are managed, and for the manner in which international strategies are formulated and implemented. We offer a research agenda to motivate IB scholars to study global migration in more depth and reevaluate the generalizability of aspects of their theories in light of developments in global migration.

The survival of the fittest in the global markets: multinational corporation challenge, evolution and decline

PurposeThe purpose of this perspective paper is to answer the question of why some multinational corporations (MNCs) do not evolve and fail to avoid retrogression by natural selection in international business (IB) and to introduce eight papers selected for this special issue.Design/methodology/approachThe authors conceptually discuss the reasons for MNC failure by illustrating key motivations behind foreign direct investment (FDI) undertaken by MNCs based on internalization theory, the OLI paradigm and the OILL (i.e. OLI plus the learning motivation) paradigm. Then, the authors develop an evolutionary perspective to explore the survival of the fittest in the global markets and the natural selection of MNCs.FindingsThe eight papers selected for this special issue expand the authors’ understanding of globalized organizations' challenges, evolution and decline as well as offering a distinct opportunity to reconsider diverse extant theories about MNCs by suggesting an extension that accounts for the rise of various globalized organizations particularly in and from emerging markets.Originality/valueDespite increased numbers of MNCs, which struggle to survive and are faced with great risk of failure, the authors’ understanding of them still remains in infancy. While scholars have investigated diverse topics related to MNCs, existing studies have developed theories predominantly emphasizing MNC success. Thus, conventional theories in IB such as internalization theory and the OLI paradigm may not be sufficiently applicable to explain the phenomenon of MNC failure (i.e. MNC decline). Based on authors’ discussions, the authors believe this is an appropriate time to refine mainstream IB theories by concurrently considering both evolution and retrogression.

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.

Managerial governance adaptation in the multinational enterprise: In honour of Mira Wilkins

We propose an analytical business history approach, informed by new internalisation theory, to study managerial governance adaptation in the multinational enterprise (MNE). We shed new light on the timing and the scale of managerial governance adaptation. These two issues have remained largely unaddressed in mainstream international business theory. We uncover the importance of delayed, larger-scale governance adaptation as a response to cumulative, localised commitment failures. We illustrate our new perspective on managerial governance adaptation by providing a short retrospective of Wilkins and Hill’s (American business abroad: Ford on six continents, Cambridge University Press, Cambridge, 1964) classic historical account of Ford Motor Company’s expansion across six continents between 1903 and 1963. Our brief retrospective highlights the value of in-depth historical analysis, informed by umbrella behavioural assumptions, such as those adopted in new internalisation theory-based research, to gain improved understanding of international strategy and governance trajectories of large MNEs.

Critical and mainstream international business research

PurposeThis paper aims to address the relationship between critical and mainstream international business (IB) research and discuss the ways forward for the former.Design/methodology/approachThe paper empirically maps critical IB scholarship by analysing more than 250 academic articles published in critical perspectives on international business (cpoib) from 2005 to 2017. The paper also includes a citation analysis that uncovers how critical IB research is recognized and discussed in mainstream IB studies.FindingsThe extant critical IB research can be broken into five main topical clusters: positioning critical IB research, postcolonial IB studies, effects of international business activities, financialization and the global financial crisis and “Black IB” and corporate social responsibility. The citation analysis demonstrates that critical IB research is rarely recognized in mainstream IB academic outlets.Originality/valueThis paper is the first to empirically map critical IB research and to measure its impact on mainstream IB research. Based on these insights, as well as discussions of the more critical voices within mainstream IB studies and the debate over critical performativity in critical management studies, ways of developing critical IB research are examined.

Value co‐creation between foreign firms and indigenous small‐ and medium‐sized enterprises (SMEs) in Kazakhstan's oil and gas industry: The role of information technology spillovers

AbstractStudy related to the extractive sector still plays a limited role in the mainstream international business (IB) and management literature, with even less focus on ongoing liberalization and digitalization in the industry. This article was motivated by the question of how collaboration between foreign and indigenous oil and gas (O&G) companies can support small‐sized and medium‐sized indigenous technological development. The main contribution of this article is the development of a model that explains how different actors can cocreate value in the ecosystem of the O&G industry through digital technologies. A three‐stage qualitative–interpretive method based on interviews with industry experts was adopted to build three vignette case studies. This article proposes what companies and the government could do to increase the competitiveness of the local economy, diversify from O&G into high technological industries, and support industrial development through information and communication technologies (ICT).

Emerging market multinationals, international knowledge flows and innovation

International knowledge flows and innovation are becoming ever more important to the competitiveness of multinational corporations. Emerging market multinationals (EMNCs) in specific are deploying increasingly activist measures to harness foreign sources of knowledge and innovation as a strategy to build up their firm-specific resources and capabilities. In the following, we argue that EMNCs' strategic asset-seeking investments constitute a particularly interesting class of investments, as it presents important challenges to international business theory, firm strategy and public policy. We argue that outward investment to acquire strategic assets abroad at the scale we observe today is a recent addition to the instrument set deployed by emerging economies for development. We proceed to discuss how this type of investments does not sit well with mainstream international business theory and propose ways in which this disagreement can be reconciled through recognition of other EMNC advantages, particularly abilities to leverage country-specific assets, and possession and development of dynamic capabilities. Finally, we identify a set of core themes in the recent literature on strategic asset-seeking investments and relate them to the contributions in the current special issue. We conclude with outlining an agenda of future research.

Why Firms Invest Abroad? A Bibliometric Study on OFDI Determinants from Developing Economies

While a substantial body of literature has grown around the developing economies as the world’s main recipient of foreign direct investment (FDI) and its economic development and management practice consequences, much less attention has been paid to the determinants of outward FDI (OFDI) from developing economies becoming multinationals. Our aim is to assess whether OFDI from developing countries conforms to the mainstream international business literature of OFDI by comparing with new evidences for the character and evolution of recent OFDI found for developing economies. Our results suggest that while the mainstream FDI theories and frameworks regarding OFDI are suitable for developed economies, some important theoretical adjustments and refinements are needed in order to better explain the internationalization strategies of multinational corporations (MNCs) from developing economies.

The Internationalization of Small and Medium-Sized Family Enterprises

This article assesses the role of human asset quality in the internationalization of small and medium-sized family enterprises. Building on mainstream international business theory, we propose a model with three “states” of human asset quality (low, medium, and high) available to the firm that can be linked to particular levels of export intensity. Importantly, achieving higher export intensity is not always associated with higher human asset quality across the board: There is a key difference between generic (generally available) and specialized (highly firm-specific) human asset quality. We empirically test our model through Tobit panel data analyses with random effects, whereby we study a sample of 610 Spanish firms for the period 2006 to 2010. This research represents the first-ever work conceptualizing and empirically testing a nonlinear, cubic relationship between human asset quality and small and medium-sized family enterprises’ internationalization levels. We find an S-shaped relationship between both general and specialized human assets and the level of export intensity.

International Hotel Strategy and Institutional Distance: A Conceptual Framework

In recent international hotel strategy literature, institutional differences between home and host country have been mostly neglected. Although concepts such as institutional distance have become more prevalent as analytical tools in the mainstream international business literature, not much of it has so far been adopted in the wider field of international hospitality management. The objective of this article is to propose a conceptual framework that is based on insights from new institutional economics in order to further our understanding of international strategies for hotels. It introduces the concept of institutional distance as a supplement to Yip’s popular global strategy framework. This article aims at providing a template for active researchers in the field to embed their empirical contributions within the wider international business literature.

International Hotel Strategy and Institutional Distance: A Conceptual Framework

In recent international hotel strategy literature, institutional differences between home and host country have been mostly neglected. Although concepts such as institutional distance have become more prevalent as analytical tools in the mainstream international business literature, not much of it has so far been adopted in the wider field of international hospitality management. The objective of this article is to propose a conceptual framework that is based on insights from new institutional economics in order to further our understanding of international strategies for hotels. It introduces the concept of institutional distance as a supplement to Yip’s popular global strategy framework. This article aims at providing a template for active researchers in the field to embed their empirical contributions within the wider international business literature.

Challenging the orthodox: a decade of critical perspectives on international business

Purpose – This article reflects on the development and impact of critical perspectives on international business (CPoIB) during its first decade of existence. The influence that the journal has had through its efforts to challenge orthodox understandings of international business (IB) is considered. The evolution of CPoIB is set against the changing global environment. The contributions to this 10th anniversary issue are outlined. Design/methodology/approach – The journal's contents are reviewed and their impact assessed through an analysis of download and citation data. The position of the journal in various journal quality rankings is also examined. The contents of mainstream IB journals are compared to those of CPoIB. Findings – During its short life, CPoIB has had an important impact on the field of IB both directly through the consideration of issues from a critical perspective in the pages of the journal and through its influence on the field of IB and critical management studies. Research limitations/implications – The conclusions of the research are based on nine years of citation and download data as well as journal quality lists. Practical implications – The findings of this paper provide valuable information for authors seeking a quality and impactful outlet for their research in the field of critical perspectives on IB and related disciplines. Academic and political activists in the field of IB will find theoretical backgrounds supporting their political campaigns. Originality/value – This is the only paper to undertake an assessment of the first decade of CPoIB's development, content, and impact.

Politics and Power within Multinational Corporations: Mainstream Studies, Emerging Critical Approaches and Suggestions for Future Research

Given the increased public interest in the use and misuse of power in multinationals in the aftermath of the financial crisis, it is notable that power relations in multinational corporations (MNCs) have not gained enhanced attention in the academic community. What is missing so far in the study ofMNCs is a systematic examination of how power and politics withinMNCs have been addressed in mainstream international business (IB) and sociological research studying theMNC. This paper starts by critically reviewing these two mainstream approaches in the study ofMNCs as organizations and seeking to understand the shortcomings of former research. Next, it reviews new emergent critical perspectives, which the authors call socio‐political studies ofMNCs, where power and politics are addressed not just more prominently, but also differently, from a more bottom‐up and actor‐centred perspective. After reviewing this emergent stream of research, the authors propose that future studies should take a more micro‐political perspective and focus in more detail on the micro‐foundations of power relations. In the concluding section, the authors show how future studies ofMNCs can learn from both critical interactionist and discursive theories when analysing organizational politics and power relations. A framework is proposed for the study of micro‐level political game‐playing inMNCs, based on a three‐dimensional framework for organizational power (episodic, rules of the game and domination), and some key research questions for future studies are suggested.