Performance Of Multinational Enterprises Research Articles

A meta-analysis of international experience and performance: exploring the role of global mobility and national sentiments

Purpose International experience has long been recognized as a crucial determinant for firms’ knowledge management in the existing literature. However, within a global context, the relationship between international experience and the performance of multinational enterprises is intricate and remains ambiguous. While the impact of people mobility has been extensively studied, limited understanding exists regarding how global mobility of people and evolving external environments reshape the relationship. This study aims to integrate existing empirical evidence on this relationship and examines the contingencies posed by environmental factors. Design/methodology/approach This study conducted a multilevel meta-analysis based on a sample of 231 effect sizes collected from 167 articles to systematically examine the international experience–performance relationship, considering the moderating effect of the global mobility of people and the rise of national sentiments (including authoritarianism and protectionism). A two-stage procedure comprising Hedges-Olkin-type meta-analysis and random-effects meta-analytic regression was adopted. Findings The findings demonstrate a predominantly positive international experience–performance relationship that varies across studies owing to differences in research design, variable measurements and firm characteristics. The relationship is positively moderated by the global mobility of people, yet the positive effect is contingent upon the level of national sentiments within home countries. The beneficial effect of inbound mobility on this relationship is attenuated by authoritarianism and protectionism, while the effect of outbound mobility is positively influenced by authoritarianism and less affected by protectionism. Originality/value This study offers novel theoretical insights into multinationals’ knowledge accumulation in the internationalization process. It contributes to the existing literature by presenting an integrated framework elucidating the international experience–performance relationship. Building upon the knowledge-based view, it integrates environmental dynamics and national sentiments to investigate the performance implications of multinationals’ international experience, thereby providing valuable practical insights for effective global knowledge management.

Geopolitical risk and foreign subsidiary performance of emerging market multinationals

In recent years, enterprises have faced increasing uncertainty due to rising geopolitical risks. This paper examines the impact of geopolitical risk (GPR) in host countries on the performance of foreign subsidiaries of A-share-listed Chinese multinational enterprises (MNEs) from 2003 to 2020. The results show that the GPR of host countries negatively affects the foreign subsidiary performance of Chinese MNEs. The deteriorated local business environment acts as a channel for this negative relationship. Moreover, such a negative relationship is mitigated for listed firms with more international experience and senior executives with an overseas background, when the foreign subsidiaries do not operate in sensitive industries or when there is a better institutional environment in the host countries. This study extends the literature on how external uncertainty affects the performance of foreign subsidiaries of emerging market multinational enterprises. It also sheds light on the internationalization of firms through the management of international uncertainty.

An Empirical Study of the Impact of Cross-Cultural Management Strategies on Performance in Multinational Enterprises

An Empirical Study of the Impact of Cross-Cultural Management Strategies on Performance in Multinational Enterprises

Developing resilience of MNEs: From global value chain (GVC) capability and performance perspectives

External shocks create various risks for enterprises. Multinational enterprises (MNEs) work to develop resilience and improve their global risk management capability. The COVID-19 pandemic has compelled MNEs to improve their global value chain (GVC) capability to enhance their global risk management and operational performance, which could eventually impact their overall performance. Developing GVC capability is a challenge for MNEs. This study aims to examine the influence of global risk management capability on MNEs’ GVC capability to become more resilient to withstand such crises and further enhance their performance. Building on the resource-based view (RBV), dynamic capability view (DCV), and the existing literature, a conceptual research model was prepared. The model was then validated using the PLS-SEM technique to analyze the responses of the 323 managers at different MNEs. The study found a significant positive impact of global risk management capability on GVC capability, which eventually impacted MNE performance.

Sustainable value creation in multinational enterprises: The role of corporate governance actors

Multinational enterprises (MNEs) are increasingly expected to make their global operations sustainable, while overcoming important obstacles in a rugged global landscape. In this perspective article, we argue that a focus on their corporate governance (CG) actors – i.e., owners, directors, and executives – is key for understanding the premises of MNEs’ sustainable value creation. We develop an actor-centered perspective on MNEs whereby factors inherent to and surrounding CG actors – e.g., their cognition, personality, and values, as well as their interactions and governance – will determine the pervasiveness of their bounded rationality and bounded reliability, thus influencing whether, how, and under what conditions these key actors will contribute through their decisions to sustainable value creation. Our perspective advances nascent actor-centered research on MNEs’ non-market strategies, including corporate social responsibility and sustainability. Exploring the underlying mechanisms at the source of individual-level variation (next to firm-, industry-, and country-level variation) related to sustainable value creation may support theory development that can ultimately break new ground in explaining the strategic behavior and sustainable performance of MNEs. We formulate future research suggestions toward that end.

The impact of degree of internationalization of MNEs on green innovation performance: The moderating role of absorptive capacity and global dynamic management capability

AbstractWith the increasing attention given to resource scarcity and environmental destruction, growing pressure is imposed upon MNEs (multinational enterprises) by a wide range of stakeholders to exert green innovation. Although an emerging body of research has explored the contributing factors of green innovation, little attention has been paid to the impact of internationalization, especially the different dimensions of internationalization, on green innovation performance. To address this research gap, this research aims to examine the role of both the breadth (geographical range) and depth (intensity) of internationalization on green innovation performance of MNEs, and investigate the moderating roles of MNEs' global dynamic management capability and absorptive capacity. Based on organizational learning theory, this study used secondary data from Chinese listed companies and established econometric models to test the proposed research framework. The results indicated that the breadth of internationalization could enhance MNEs' green innovation performance. Alternatively, the depth of internationalization could inhibit green innovation performance. In addition, the results also revealed that global dynamic managerial and absorptive capacities can both enhance the positive effect between internationalization breadth and green innovation performance while weakening the negative effect of internationalization depth on green innovation performance. This study has implications for strengthening our knowledge of green innovation performance as well as enhancing policy design for sustainable development.

Firm- and Country-Specific Advantages: Towards a Better Understanding of MNEs’ Environmental Performance in the International Arena

International diversification is predominantly assumed to have a mixed (either positive or negative) linear relationship with environmental performance in multinational enterprises (MNEs). Departing from this assumption, we use firm-specific advantages (FSA) and institutional theory to hypothesise that international diversification, due to recombination barriers, has a curvilinear U-shaped relationship with MNEs’ environmental performance. Because of their key roles as boosters of country-specific advantages (CSA), we also examine whether home country competitiveness and environmental levels moderate the proposed curvilinear relationship. Results from panel data of 298 MNEs between 2006 and 2017 from 21 different countries in 11 sectors provide support for the main curvilinear relationship and the moderating influence of home country competitiveness. Our study contributes to the international business literature by casting doubt on the widely held assumption that international diversification always carries either positive or negative effects on environmental records.

Modeling analysis of the correlation between duality innovation and multinational enterprise performance.

In this study, we investigate how the influence of dual innovation affects the productivity of multinational enterprises (MNEs). Because of the rise of the knowledge-based economy, the capacity of multinational corporations (MNCs) to innovate technologically has become an increasingly important component in determining the extent to which they can compete in the global market. Models of Duality Innovation and Multinational Enterprise Performance with a Measurement of Corporate Risks from 2000 to 2015 were developed using corporate finance literature and data. The models show positive relationships between duality innovations and multinational enterprise performance. Furthermore, there has been an increasing level of corporate risks over the years when measured by both the duality innovation and multinational enterprise performance metrics. This article discusses the findings of this research project. It explains how they can help understand international enterprise performance while also explaining how to determine a potential risk profile for an individual or multiple companies. This knowledge is valuable because it helps us understand why some corporations succeed while others fail.

The moderating effects of power distance on corporate social responsibility and multinational enterprises performance

The moderating effects of power distance on corporate social responsibility and multinational enterprises performance

Business environment distance and innovation performance of EMNEs: The mediating effect of R&D internationalization

Sustainable business environment plays an important role in creating conditions favorable to innovation. However, is this the case for all types of multinational enterprises (MNEs)? While recognizing the importance of sustainable business environment in innovation, we address this question by examining the impact of sustainable business environment distance on the innovation performance of emerging market multinational enterprises (EMNEs). A panel dataset of Chinese MNEs listed on the Shenzhen and Shanghai stock exchanges between 2005 and 2018 is employed. Our findings suggest that sustainable business environment distance positively affect the innovation performance of MNEs. R&D internationalization plays a mediating role in the relationship between business environment distance and innovation performance. Migrant networks can strengthen the positive impact of business environment distance on the parent company's R&D internationalization. Highly skilled migrants have a greater strengthening effect than do less skilled migrants on the relationship between business environment distance and R&D internationalization. Our study contributes to the literature by providing new insights into the relationship between business environment distance and outward foreign direct investment (OFDI).

Interactions Matter: Revisiting Intra- and Inter-Regional Diversification and MNE Performance

This study theorizes internationalization patterns of multinational enterprises (MNEs) considering the interaction of intra- and inter-regional diversification and explores how the levels of intra- and inter-regional diversification affect firm performance, respectively as well as collectively. We argue that the effects of intra- and inter-regional diversification are not linear but orthogonal and that intra- and inter-regional diversification moderates each other’s effects on firm performance. This study finds that both intra- and inter-regional diversification has inverted U-shape relationships with MNE performance. However, the impact of inter-regional diversification on performance is much stronger than that of intra-regional diversification. The result also uncovers that MNEs with moderated levels of both intra- and inter-regional diversification outperform other MNEs with different internationalization patterns. This implies that better firm performance can be achieved through ‘balanced’ intra- and inter-regional diversification. Our findings conclude that it is not so much the degrees of intra- and inter-regional diversification as the internationalization patterns that matter to MNE performance.

CSRbest practices for global multi‐tier sustainable supply chain integration ofChinese MNEs

AbstractThe interest in global multi‐tier sustainable supply chains is growing proportionally to its increase in developing countries. Developing countries are considered the new fertile territory for developing global chains for multinational enterprises (MNEs). Despite the positive outcomes derived from this global development, it also induces negative impacts in the domain of domestic firms' competition, education, welfare and infrastructure system. A way to overcome this pessimistic view has been found in corporate social responsibility (CSR) best practices. MNEs seek to involve local stakeholders in their social activities to show their commitment and generate innovations. It calls for a multi‐tier domestic involvement integrated into a global supply chain to create value. This study builds its empirical analysis exploring a range of 1547 Chinese manufacturing multinational enterprises listed in the Shanghai and Shenzhen stock exchanges between 2010 and 2018. The findings revealed that multi‐tier supply chain integration (SCI) practices positively moderate the relationship between CSR and MNE performance. In turn, it implies benefits for developing sustainable development goals, generating new job opportunities mostly in the developing countries guaranteeing wealth employment conditions. The sense of involvement and engagement towards their employees requires more development of CSR practices, which can be moderated by multi‐tier SCI, as shown in the present study.

National culture moderators of pay for individual performance and the financial performance of multinational enterprises

AbstractWe examined the effectiveness of pay for individual performance (PFIP) in companies operating in multiple cultures. With the use of data from 308 multinational enterprises (MNEs) collected by IBM's WorkTrends™ project, we tested hypotheses regarding the moderating influence of the nine dimensions of the GLOBE country culture model on the relationship between PFIP and changes in financial performance over time. Multiple employees per firm (mean N = 24.7 employees) reported the extent there was a PFIP climate (PFIPc) in their firm. We matched these data at the firm level to changes in net income per employee over 4 years from the Wharton Research Data Service (WRDS). Consistent with predictions developed from contingency and cross‐cultural theories, after including relevant controls, we found the positive relationship between PFIPc and subsequent MNE performance is greater in cultures higher in future orientation, institutional collectivism and uncertainty avoidance and also lower in in‐group collectivism, power distance and humane orientation.

Financial Performance of Multinational Enterprises: A Historical Review and Future Research Trends

Financial Performance of Multinational Enterprises: A Historical Review and Future Research Trends

Is there an advantage of emergingness? A politico-regulatory perspective

The source(s) of competitive advantage of emerging-economy multinational enterprises (MNEs) remains a puzzle in international strategy scholarship, with some arguing that such firms are at a disadvantage compared to developed-economy rivals. Drawing on the concept of institutional advantage and using a sample of 233 foreign subsidiaries operating in 25 emerging economies over the period of 2000–2017, we find that foreign subsidiaries of emerging-economy MNEs are more adept than foreign subsidiaries of developed-economy MNEs at deploying their fixed asset management capabilities in emerging-economy host countries, especially when host-country politico-regulatory institutions are underdeveloped. Likewise, we find that subsidiaries of emerging-economy MNEs are more adept at deploying their tax planning capabilities when host-country politico-regulatory institutions become increasingly volatile. We discuss how these findings contribute to scholarly thought regarding the performance of emerging-economy MNEs.

Unintended consequences of promotions: Importance of annual incentives for performance management systems

AbstractWith increased globalization, multinational enterprises (MNEs) have become pervasive in emerging economies such as India. Given that employee performance is multidimensional and culture‐bound, the management of performance in MNEs is very critical for the successful implementation of their business strategy. We focus on promotions and incentives as they are considered the two crucial aspects of any performance management system. Based on a multisource, temporal study spanning over 19 months, we tested the interaction effect of promotion and annual incentive on employee outcomes. We conducted interviews of 15 senior officers in phase 2 to understand the inconsistencies in our findings. The contribution of the study to industry and academia are discussed.

Post-acquisition control strategy and cross-border acquisition performance of Chinese MNEs: a fsQCA approach

PurposePost-acquisition control is a crucial factor affecting acquisition performance. We investigate how post-acquisition control strategy affects cross-border acquisition performance of Chinese multinational enterprises (MNEs) through a configurational perspective.Design/methodology/approachBased on 70 cross-border acquisition cases by Chinese MNEs, we adopt fuzzy-set qualitative comparative analysis (fsQCA) to study the combined effects of strategic control, operational control, institutional distance, cultural distance, relative capacity and business relatedness on the cross-border acquisition performance.FindingsOn the basis of fuzzy set analysis of multiple interdependent factors, we identify six configurations that are conductive to achieving high cross-border acquisition performance and two configurations that relate to the absence of high performance, thus shedding light on the casually complex nature of performance drivers of acquisitions.Originality/valueThis study provides a holistic, configurational approach to investigating cross-border acquisition performance by emerging market firms. Our results provide some compelling evidence that accounts for the causal complexity of post-acquisition control strategies and acquisition outcomes in the context of emerging economies.

Using the Resource-Based View in Multinational Enterprise Research

The resource-based view (RBV) has evolved into a preeminent theory of strategic management. It is widely used by international business (IB) scholars since there is considerable synergy in core research questions pursued by IB and strategy researchers. However, in research on multinational enterprise (MNE) behavior, the use of RBV remains limited relative to other influential perspectives, such as the eclectic paradigm, the Uppsala model, and institutional theory. This is not surprising since the RBV was developed to explain performance differentials between country-centric firms with dominant product businesses rather than large MNEs with an expansive product-geographic scope. We describe how these limitations arise from the wider range of outcomes and explanatory variables, multiple levels of analysis, and the spatial, economic, and institutional barriers that are relevant to MNEs. We discuss the application of RBV to MNE research by the first author and other IB scholars. We then provide directions on how future research could use RBV more fruitfully to examine MNE performance and sources of competitive advantage in several areas. These include diversified corporations, subsidiary agglomeration, emerging market MNE internationalization, subsidiary autonomy, international joint ventures and alliances, and corporate social responsibility. Drawing upon teaching case examples from the first author’s work, we also point to the effectiveness of RBV in teaching with business cases, given its focus on firm performance (strategy).

Network embeddedness, headquarters entrepreneurial orientation, and MNE international performance

The aim of this paper is to examine the role played by external and internal network embeddedness in the headquarters entrepreneurial orientation of multinational enterprises (MNEs), and the role of the latter in MNE performance. Drawing on responses from CEOs in a sample of 143 European MNEs, our study offers evidence for the antecedent role of network embeddedness on headquarters entrepreneurial orientation on the one hand, and for the positive impact of headquarters entrepreneurial orientation on international performance on the other. Our findings contribute to the network view of MNEs in the international business and international entrepreneurship literature by disentangling the complex phenomenon of entrepreneurship in MNEs, partly explained by its multiple embeddedness in external and internal networks, and by studying its impact on international performance.

조직시민행동에 영향을 미치는 긍정심리자본의 매개효과 분석

This study investigates antecedents and consequences positive psychological capital(PsyCap), and the mediating effect of PsyCap on organizational citizenship behavior(OCB-O). Specifically, this study suggests that preceding variables(Job characteristics, leader-member exchange, and corporate social responsibility) positively influence on the PsyCap. The PsyCap positively influence on the OCB-O and it mediates on antecedents and the OCB-O of multinational enterprises(MNEs) subsidiaries’ employees in Korea. In other words, this study want to confirm that the PsyCap, which is a parameter, sufficiently reflects the mediated verification process suggested by Baron and Kenny(1986). In order to achieve the above objectives, four research hypotheses were established. The hypothesis tests using structural equations model were conducted for 9 countries, 24 MNE’s subsidiaries, and 220 employees. The results of this are as follows. All antecedent positively influence on the PsyCap, and the PsyCap mediates preceding variables and the OCB-O. This study confirms the PsyCap as a core research subject in international business. The practical implication suggests effectiveness of the PsyCap to enhance the OCB-O of employees that have a great influence on the performance of MNEs.