International Business Theory Research Articles

Hymer and the theory of the MNE: A commentary

AbstractThis article provides a commentary on the paper by Pitelis and Piteli on Hymer as the pioneer of the theory of the multinational enterprise (MNE). I suggest that Stephen Hymer and his contemporary, John Dunning, also laid the foundation for an analysis of an international business (IB) system, which reaches well beyond the theory of the MNE and its strategy. I argue firstly that early IB theories, including Hymer's, which emerged from the late 1950s onwards, mostly had a holistic view of the IB system, of which the MNE was just one element. Secondly, I contend that both Hymer and Dunning developed from the outset some seminal ideas on the interrelationships that exist between the MNE and its strategy, on the one hand, and the wider economic and social environment in which firms are embedded, on the other. I suggest that Dunning's eclectic paradigm was intended as a framework for the study of the IB system in its entirety as a complex, relational system. Thirdly, while Hymer's ideas on cross‐border geographic hierarchy, uneven development and IB were highly original and remain relevant today, they need to be substantially updated and revised in the current IB context, as opposed to the context which prevailed in the IB system of the 1950s through to the 1970s.

International entrepreneurial culture of born global and non-born global family firms: a configurational approach

PurposeDelving into family business heterogeneity, this study applies fuzzy-set qualitative comparative analyses (fsQCA) to explain overlooked differences in the international performance of born global family firms (BGFFs) and non-born global family firms (n-BGFFs); through the lens of assemblage theory of family business internationalization, the study develops distinctive configurations of international entrepreneurial culture (IEC) for BGFFs and n-BGFFs.Design/methodology/approachThis study compares the theoretical tenets of IEC among 167 BGFFs versus 192 n-BGFFs in Malaysia using fsQCA – a configurational method. The study further deploys necessity analysis of fsQCA (NCA) to determine the necessity conditions within the identified configurations.FindingsBGFFs manifest elevated levels of international entrepreneurial orientation, international motivation and international non-competitor network orientation. In contrast, n-BGFFs rely on international markets, learning and competitor network orientations to secure international performance. Furthermore, necessary condition analysis (NCA) reveals that international entrepreneurial orientation and international motivation are the necessity conditions for BGFFs. In contrast, international market, learning and competitor network orientation are all required for n-BGFFs’ international performance.Originality/valueThis study is timely and contributes to advancing the international business theory of family firm internationalization. It also offers better theorizing for family firms’ heterogeneity, locating the source of that heterogeneity not just in the speed of internationalization but also in the composition of their different IECs.

Internationalization ecosystems: a systematic literature review in search of a new theoretical framework

Objectives: This study systematically investigates the concept of internationalization ecosystems (INT-E) to evaluate the depth of existing research and assess the feasibility of a new theoretical framework that incorporates an ecosystemic perspective into contemporary International Business (IB) theories. Methodology: Utilizing a systematic literature review (SLR) and thematic analysis, the study examined 67 articles from Science Direct, Scopus, and Web of Science to understand the dynamics, actors, and characteristics of internationalization ecosystems. Relevance / originality: The concept of INT-E is nascent in the IB literature, with a noticeable lack of an ecosystemic approach to studying internationalization. This study validates existing models while identifying conceptual gaps, suggesting new research directions. Main Results: Significant gaps were identified in the IB literature regarding internationalization ecosystems. However, the study supports a previously proposed conceptual framework that integrates business, entrepreneurial, innovation, and platform ecosystems. Theoretical / methodological contributions: This study contributes theoretically by applying an SLR to the emerging concept of internationalization ecosystems, encouraging further research within IB Theory by focusing on INT-E as an independent entity. Management Contributions: Practically, this study lays the groundwork for a future conceptual framework that can help organizations strategically position themselves within the context of internationalization. While the INT-E framework is still developing, these preliminary insights can enhance internationalization strategies across various dimensions.

Family firms and the governance of global value chains

The current evolution of global value chains (GVCs) calls for moving beyond the “unipolar” view of lead multinational enterprises (MNEs) as sole rulers to examine how their characteristics and those of partner firms affect GVC governance. In response to this call, we focus on family firms, which are the most ubiquitous organizational form worldwide and represent the majority of firms participating in GVCs. Unlike non-family firms, these organizations face distinct mixed gambles, driven by both economic and non-economic goals. However, internalization theory and the associated global factory model, which explain GVC governance, rely solely on economic assessments, limiting our understanding and predictability of MNE behavior. Therefore, in this study, we show how location decisions, degree of internalization, and relationship management in GVCs differ from the conventional global factory model when family firms are involved as lead MNEs and/or partners. By analyzing how comparative efficiency considerations change when family firms are involved, we offer implications for internalization theory and provide a more comprehensive framework for understanding control and trust dynamics in GVCs. Thus, we pave the way for future research to revise and enrich international business theories, taking into account the distinctiveness and heterogeneity of family firms.

A Look into the Future: The Impact of Metaverse on Traditional Theories and Thinking in International Business

Recent advances in technology (e.g., the Internet of Things, Augmented Reality, Virtual Reality, Cloud Services, Artificial Intelligence, and Blockchain), the shift towards digital products, and the increased use of digitalisation by firms have enhanced consumers’ experience and transformed how companies operate, create products/services, and offer value to multiple stakeholders on a global scale. These technological innovations have led to the phenomenon known as the Metaverse. The Metaverse does not refer to any one type of technology but is a broad (and often speculative) shift in how we interact with different technologies in the same space. In the context of International Business (IB), the recent emergence of Metaverse appears to make geographical, sectoral, and operational barriers less relevant, raising complex questions about how current IB theories can explain the world-spanning, sectorally fluid, and centrifugal behaviour of firms in the era of digital globalisation. In this paper, we obtain a critical understanding of the important opportunities and challenges that the Metaverse and the fluidity of digital technologies bring to the IB field. Specifically, we discuss how traditional theories can be effectively utilised to explain firms’ internationalisation, and adapted to reflect the new technological era. We propose a framework for new approaches to IB research to help advance research on Metaverse and IB, which can provide important opportunities for future work in this field.

International business theory and the criminal multinational enterprise

Criminal syndicates have been around for millennia. While some were founded to undertake cross-border activities, others have expanded internationally, evolving into sophisticated organizations that mimic multinational enterprises. The growing prevalence of criminal multinational enterprises (CMNEs) provides an opportunity to revisit international business theory, particularly internalization theory. We start by defining the CMNE, explaining its rise and interface with legitimate multinationals, and establishing similarities and differences with legitimate multinational enterprises. Then, we use the CMNE to “stress-test” the internalization theory of the multinational enterprise, set its boundaries, and offer theoretical development by way of extension, qualification, and refinement.

Unlocking subsidiary performance: exploring the impact of subsidiary TMT composition, PCN tenure and subsidiary age

PurposeThe purpose of this paper is to study the relationship between subsidiary manager’s demographic characteristics and performance, while incorporating the subsidiary context. We draw upon upper echelon theories and International Business theories to understand this relationship.Design/methodology/approachUsing a dataset based on listed Multinational subsidiaries in India we use linear regression to establish the relationship between subsidiary external performance (host market performance), subsidiary internal performance and subsidiary manager’s demographic characteristics.FindingsWith our data set we find a positive relationship between percentage of host country nationals (HCN) in the Top Management Team (TMT) and subsidiary host market performance and that subsidiary age moderates this relationship. We also find an inverted U-shaped relationship between parent country nationals (PCN) tenure and subsidiary performance.Research limitations/implicationsOne of the limitations is that our study views the strategy process through the Upper Echelons (UE) theory lens, as a clearly specified planning process that associates strategy with intentionality. The opportunity that emanates at lower levels can turn an intended strategy into something different than what was started.Practical implicationsThe findings in this paper can be the basis for decision making on the constitution of leadership teams.Originality/valueThere is a dearth of empirical evidence and studies on TMTs in the subsidiary, particularly from the non-North American context. Using a unique data set of listed multinational subsidiaries in India, the paper explores the impact of TMT demographics such as tenure of the TMT and age of the subsidiary operations on the performance of the subsidiary.

Internationalization ecosystems: a framework proposal for the international business theory

Objective: The research proposes an original theoretical framework to explain the nature, uniqueness, and dynamics of the Internationalization Ecosystem (INT-E), streamlining the integration of contemporary International Business (IB) theories into an ecosystemic perspective. Method: A systematic literature review (SLR) was carried out to identify the different types of studies focused on internationalization from an ecosystemic perspective, followed by a thematic analysis, which determined the framework’s key conceptual constructs. Main Results: An INT-E framework was conceptualized, integrating business, entrepreneurial, innovation, and platform ecosystems, extracting pivotal elements to enhance its theoretical and practical dimensions within the realm of IB studies. Relevance/Originality: The INT-E concept is underexplored in IB literature, especially in an ecosystemic context. It is typically seen as part of broader ecosystems like entrepreneurship or digital platforms, but here a new conceptual perspective is proposed, opening avenues for further inquiry. Theoretical / Methodological Contributions: Theoretically, by conceiving the INT-E framework, the research encourages the pursuit of studies on ecosystem integration and replication, which is still incipient in most IB literature. Methodologically, the application of the thematic analysis enhances the qualitative aspect of studies in IB theory. Social / Managerial Contributions: The framework serves as a tool for enhancing internationalization strategies across various dimensions, including export promotion, foreign direct investment (FDI) attraction and ecosystem integration.

Critical perspectives on GVC theory: uncovering GVC resilience through non-lead power

Critical perspectives on GVC theory: uncovering GVC resilience through non-lead power

Advancing Theory Development in Emerging and Frontier Markets: Embracing Indigenous and Historical Perspectives in International Business Scholarship

Existing international business theories primarily focus on developed markets, prompting calls to use emerging and frontier markets as laboratories for theory development. These markets’ distinct cultural and institutional settings offer opportunities for novel theories. However, there has been limited theory development in these contexts. The purpose of this paper is to discuss the challenges associated with theory development in emerging and frontier markets and provide guidance on effectively building theories using these contexts. It proposes embracing indigenous and historical theorizing to gain profound insights specific to each context and offers practical guidance for developing novel theories.

Not gone away: how domestic terrorism impacts multinationals in foreign markets

PurposeThe paper aims to understand how state and non-state domestic terrorism impacts MNEs in foreign markets. Despite the burgeoning literature on terrorism within international business (IB), most research has focused on international terrorism, or terrorism generally. Consequently, there has been limited research examining how domestic or local based terrorism impacts foreign firms.Design/methodology/approachThis is a conceptual paper.FindingsDomestic terrorism is the most common form of terrorism in the world today and involves the state and non-state actors. Non-state domestic terrorism can be low intensity or high intensity. High intensity non-state-domestic terrorism typically involves regular and protracted political violence, along with inter-communal violence. This can expose MNEs to considerable operational, governance and legitimacy pressures.Originality/valueThe paper contributes to the gap in IB terrorism research with regards domestic or local based terrorism. Drawing on IB theory and critical terrorism research, the paper addresses the nature and impact of domestic terrorism within IB. The authors’ paper shows the operational, governance and legitimacy pressures of both state and non-state domestic terrorism for MNEs in host markets. While most IB scholars consider the threat of non-state terrorism for international firms, this study shows how domestic state terrorism benefits and constrains foreign firms.

Institutional theory and multinational corporation internationalization strategy: a systematic review and future research agenda

PurposeThis study reviews the literature on institutional theory in international business and examines the institutional factors behind the success or failure of multinational corporations (MNCs) in emerging markets.Design/methodology/approachThis systematic literature review analysed 116 peer-reviewed articles published in leading journals between 2005 and 2022. The R package Bibliometrix and VOSviewer visualization software were used for analysis. A hybrid methodology combining bibliometric and content analyses was utilized to obtain a descriptive evaluation of the publication impact along with a keyword co-occurrence map, context-specific institutional effects and subsidiary strategies.FindingsThe Journal of International Business Studies, along with influential authors such as Mike W. Peng, Klaus Meyer, and Mehmet Demirbag, have taken the lead in advancing institutional theories for MNC internationalization in emerging markets. The clusters from the co-word analysis revealed dominant MNC entry modes, institutional distances and MNC localization strategies. The content analysis highlights how the institutional environment is operationalized across the macro-, micro- and meso-institutional contexts and how the MNC subsidiary responds in emerging markets. Meso-level interactions emphasize the relational aspects of business strategies in emerging markets.Practical implicationsContextualizing subsidiary strategies and institutional forms can help managers align their strategic responses to the dynamic relationship between subsidiaries and the institutional environment. The review findings will enable policymakers to simplify regulatory policies and encourage MNC subsidiary networks with local stakeholders in emerging markets.Social implicationsLegitimacy strategies such as corporate community involvement in emerging markets are crucial for enhancing societal support and removing stakeholders' scepticism for MNC business operations in emerging markets. Moral legitimacy should be implemented by managers, such as lending support to disaster management efforts and humanitarian crises, as they expand to new business environments of emerging markets.Originality/valueThis study is the first to explore institutional diversity and subsidiary strategic responses in a three-layered institutional context. The findings highlight the relevance of contextualizing institutional perspectives for international business scholars and practitioners as they help build context-specific theoretical frameworks and business strategies. Future research recommendations are suggested in the macro-, micro- and meso-institutional contexts.

ІНТЕРНАЦІОНАЛІЗАЦІЯ МАЛИХ ВЕНЧУРНИХ КОМПАНІЙ: 30 РОКІВ ДОСЛІДЖЕНЬ

The article highlights the evolution of research of small venture companies from the inception of international business studies in the 1960s to the present time with an emphasis on 1993-2024 as a period of isolated research on small firms. It provides an overview of the commonly used terminology in the field of international entrepreneurship and analyses the state of research on the topic in Ukrainian literature, which leads to identification of a research gap – internationalisation of small and medium-sized enterprises appears to fall out of the scope of international entrepreneurship and international business research. Based on the existing empirical research in the field, the article highlights the need for isolated studies on small venture enterprises and addresses this research gap in Ukrainian literature by providing a systematic review of internationalisation literature aimed at small venture companies as opposed to the multinational companies. A systematic review of the literature establishes a link between early research on international business and the current literature on international entrepreneurship, while providing the overview of international business theories that were adapted for the use in international entrepreneurship. It outlines a trending research direction in international entrepreneurship literature – international entrepreneurial opportunities. It discusses the characteristics of the entrepreneur, company and environment that form the basis of international opportunity. The article defines the place of international marketing and strategic management in the system of small business internationalization research and outlines promising future research directions recognised in international scientific literature. It follows the developments of G. Knight and S. T. Cavusgil in discussing integrationresponsiveness paradigm – originating from international business – and effectuation theory – coming from strategic management – as future research directions. Finally, it provides arguments for development of internationalisation of small venture companies research in Ukrainian literature.

Why corporate social responsibility should be recognized as an integral stream of international corporate governance

<abstract> <p>This paper reviews the existing corporate social responsibility (CSR) content in the field of international corporate governance (ICG) and suggests specific lines of potential integration of existing theory and research on topics such as green finance, sustainability, and bottom-of-the-pyramid studies. The approach began with an extensive review of the literature in ICG culminating in a review by <xref ref-type="bibr" rid="b1">Aguilera et al. (2019)</xref> in which three streams of ICG research were identified. Examples of existing elements of CSR were subsumed in these dimensions, and an argument was made for more integration. CSR was not an important part of international business theory and research in the early days of the field. However, sufficient research exists now in CSR and of CSR topics in the field of international business to justify that CSR should be recognized as an important stream in ICG. This integration would be beneficial since calling attention to the development of theory and research and data availability in CSR can inform international business (IB) and ICG researchers and enable them to tackle previously under-researched issues from other disciplines and areas of the world.</p> </abstract>

INTERNATIONALIZATION OF EMERGING MARKET MULTINATIONALS: A CONVERSATION BETWEEN THE UPPSALA MODEL AND THE SPRINGBOARD PERSPECTIVE

Objective: This study focuses on the internationalization process of an important emerging markets multinational (EMM), aiming to understand how such companies manage to achieve relevant positions in the global economy. In seeking to understand its strategy and internationalization process, we tackle the debate on whether traditional behavioral international business theories are adequate to explain EMM internationalization processes. Method: An in-depth case study was performed with one of the largest global players in the beauty industry, Natura & Co. The case study method was selected given that an in-depth data collection involving multiple sources of information was needed to investigate the phenomenon. Primary and secondary data were collected, analyzed, and triangulated. Main Results: This study brings the construct of organizational psychic distance to the discussion and how can it impact internationalization choices. Moreover, it illustrates how some EMMs are successfully applying concepts described by both traditional and EMM theories in their internationalization strategies Relevance / Originality: The study illustrates an empirical case from Latin America, a region poorly explored academically. Additionally, the case explains how a Brazilian company has managed to compete globally and become one of the biggest global players in the beauty industry. Theoretical / Methodological Contributions: The case discusses, for the first time, the construct of organizational psychic distance and its impact on internationalization choices. It also defies the boundaries of the existing theories and enriches the literature by portraying the springboard perspective as complementary to the Uppsala model so that both theories can dialogue and be extended.

Global Value Chain Governance Dynamics: A Co-Evolutionary Perspective on the Transition from Relational to Modular Governance in Construction

Global value chain (GVC) governance theory explains how GVCs are controlled and organised. A large body of research examines how GVC governance varies across industries, however, GVC governance dynamics within industries receive less attention. This study bridges the gap between GVC and international business theories to focus on GVC governance heterogeneity as a source of competitive advantage. Through mixed-methods including grounded theory, structural equation modelling, and comparative case studies, the research reveals the interplay between network-orchestration and network-dependence as lead firms shape GVC governance transitions. Insights can help managers optimise complex GVC governance structures, particularly in the context of digitalisation.

The impact of digitalization on internationalization from an internalization theory lens

Digitalization is challenging traditional international business theories, shifting emphasis from the flows of goods and services to the flows of data, information, and knowledge, changing the distribution of international activity. From the internalization theory lens, we suggest that digitalization is reducing market imperfections, but this effect varies across industries, positing a linkage between industry digital intensity and internationalization. Digitalization effects can also influence the location-bound constraints of FSAs. Examining one non location-bound FSA, innovation, and one location-bound FSA, brand, we argue that it is the moderating effects, or interaction, of these FSAs and industry digital intensity that drive internationalization. Furthermore, we highlight that these interaction effects change over time, as digital innovations have diffused. We test these arguments on a sample of 2370 U.S. firms over an 18-year period. The findings support our arguments that the conditions under which MNEs increase internationalization is dependent upon the combination of industry digital intensity and innovation and brand. In addition, these interaction effects appear to change over time as digitalization has evolved and become more widespread. Our findings indicate a more nuanced set of relationships within internalization theory in a digital world.

Structural Modifications of International Business Theory and Policy in the Time of Covid-19

The main aim of this work is the presentation of the structural modifications of contemporary international business. International trade in the XXI century has been strongly affected by the force of the economic crisis and COVID-19. The changes are evident in the growing importance of international trade to national economies and to domestic groups within those economies, in the closer linkages between trade and other international issues. Despite the undeniable benefits of the multilateral WTO forum for trade liberalization, the rapid increase of North-South bilateral and multilateral Free Trade Areas (FTAs) begs a systematic explanation for why some forums are prioritized relative to others. This work presents the mercantilist tendencies in the international trade policy, the theory of public choice in foreign trade policy, protectionist pressures in different political systems, the level of protectionist pressures, food producers’ pressure, and conflicts between the tendencies to sustainable international trade liberalization and environmental protection, the increasing importance bilateral agreements in the foreign trade policy and international economy in the time of COVID-19.

A growth pattern of foreign investment motivations by individuals

PurposeThis paper aims to introduce a growth comprehensive pattern to explain the phenomenon of individual foreign investment, first at the global level and then at the regional level. The patterns are developed based on a number of main theories with grounded theory (GT) as the foundation, distributed on the two pull and push forces of international business theory and migration theory; simultaneously, it is classified on the three levels (attribute–consequence–value [ACV]) of means-end theory.Design/methodology/approachAn embedded method is applied to generate two complementary datasets from two approaches: in-depth interviews and secondary data analysis.FindingsIn this structure, the investor plays a central role as the decision-maker based on the entrepreneur's motives for internationalization (economics-driven and psychology-driven factors) and the householders' motives for emigration (aspiration and access capabilities). The external forces considered are a push from the home country (structures) and pull from the host country (immigrant investment programs [IIPs]), in which the factor of (dis)trust/misconception as a moderator has an additional impact on this mobility. Demographic factors such as gender, region, generation/age, level of education, religion and occupation generally describe the characteristics of each specific target group.Research limitations/implicationsThis paper is to develop a conceptual framework.Originality/valueThe results of this study, in addition to fulfilling its own objectives, will also serve as the foundation for further research in several scientific fields such as economics, sociology and politics.Peer reviewThe peer review history for this article is available at https://publons.com/publon/10.1108/IJSE-12-2022-0786

Subsidiary performance measurement in international business research: A systematic review and future directions

Subsidiary Performance (SP) remains central to International Business (IB) research. Yet, exactly how to measure SP is a matter of some confusion in the academic literature. Indeed, to date, no review has offered a systematic overview of the variety of SP measures deployed in the IB literature. Based on a bibliometric study of 193 quantitative research articles published in top-tier journals from 1982 to 2022, this review provides a science mapping overview of SP measurements. By use of bibliographic coupling analyses, the review finds high variability of measurements within thematic clusters of research, for example within studies of knowledge transfer. This variation hampers the ability to both build and test IB theory. Furthermore, it is highly problematic in view of recent debates about replication within the social sciences. Therefore, the review proposes a range of questions to guide researchers in selecting the most appropriate SP measure(s) for future studies.