Managerial satisfaction with subsidiary performance; the influence of the parent MNE's capabilities and the subsidiary's environment

Multinational enterprise performance is one of the most researched topics in the strategic management literature over the last thirty years. Despite the proliferation of studies, the dispute over the relation between firms’ international investment activities and corporate performance has not yet reached a consensus. This paper’s contribution is threefold. First, we focus on entry by West European multinational enterprises into Central and East European countries. Second, we develop a multi-theory argument, combining insights from transaction cost, new institutional, behavioral, resource-based and international strategy theories. Third, we estimate the determinants of managerial satisfaction with subsidiary performance with questionnaire data for a sample of 198 subsidiaries.

Managerial satisfaction with subsidiary performance; the influence of the parent MNE's capabilities and the subsidiary's environment

Multinational enterprise performance is one of the most researched topics in the strategic management literature over the last thirty years. Despite the proliferation of studies, the dispute over the relation between firms? international investment activities and corporate performance has not yet reached a consensus. This paper?s contribution is threefold. First, we focus on entry by West European multinational enterprises into Central and East European countries. Second, we develop a multi-theory argument, combining insights from transaction cost, new institutional, behavioral, resource-based and international strategy theories. Third, we estimate the determinants of managerial satisfaction with subsidiary performance with questionnaire data for a sample of 198 subsidiaries.

Acquisition versus greenfield foreign entry : diversification mode choice in Central and Eastern Europe

Departing from the traditional transaction cost approach in diversification mode literature, this study investigates the influence of experimental organizational learning on the choice between acquisition and a greenfield investment. We provide empirical support that prior experience with acquisitions and/or greenfield investments, firm?s predominant international strategy (global or multidomestic) and the technological intensity of the parent play a crucial role in subsequent diversifications. Furthermore, contrary to extant arguments that foreign ownership decision is independent of a diversification mode choice we demonstrate that the type of ownership (joint venture vs. wholly owned subsidiary) is a significant predictor of firms? preference for acquisition or a greenfield. Unlike Caves and Mehra (1986) and Larimo (2002) who found a positive relationship between acquisitions and full ownership, we show that acquisitions in Central and Eastern European (CEE) transition economies are unlikely to be wholly owned subsidiaries. In addition, we contribute to extant diversification literature by introducing another neglected predictor of firms? diversification strategy: We demonstrate the incremental power of hostcountries? institutional structure on investors? diversification choice.

Internationalization from Central and Eastern Europe: A systematic literature review

Economic transition in Central and Eastern Europe (CEE) has led to a dramatic increase in CEE firms' participation in international markets. This applies to different types of firms – from large emerging market multinationals to small international new ventures. In this paper, we systematically review the research on CEE outward internationalization, which we define as internationalization of CEE-based firms in the form of exporting or FDI, and contribute to literature by providing a complete picture of the state of the art and outlining potential avenues for future research. We find that while the CEE region has been described as a fruitful ground for developing new and testing existing theories, it heavily loads on the latter. We suggest that greater reliance on theories and concepts from the field of entrepreneurship and a stronger focus on internationalization decision processes might further enrich our understanding of internationalization from CEE

Export diversity or focus? What strategy is best for first-time internationalizing SMEs from an emerging market?

The question how much internationalization is beneficial for emerging-market small and medium enterprises (EM SMEs) remains challenging to answer for both international business (IB) scholars and managers. We explore export strategies of first time exporters and focus on the scope of EM SMEs internationalization activities. We tackle the question whether more focused or more diversified internationalization through exporting is beneficial for EM SMEs. We examine the impact of foreign market (geographic) diversification, product diversification and export intensity on firm performance of an entire population of EM SMEs from an emerging east European market. In addition, we test whether a complex export strategy-an export strategy of simultaneous product- and geographic export diversification-is beneficial for EM SMEs. We use a panel population data of first time Slovenian exporters in the period 1994-2012. We find that diversified internationalization, both in terms of product and foreign market diversity, significantly improves productivity and sales performance for EM SMEs. Furthermore, EM SMEs with complex export strategies enjoy significantly improved productivity and sales performance.Series: Working Papers / Institute for International Busines

Disentangling resource and mode escalation in the context of emerging markets. Evidence from a sample of manufacturing SMEs

Our research paints a comprehensive picture of manufacturing SMEs' internationalization strategies in EMs that examines two types of escalation of commitment: the first (between modes) occurs through riskier modes of operation, as typically described by the stagebased internationalization theory; the second (within modes) results in the escalation of resource commitment within the initial mode of operation. In line with stage-based internationalization theory, we posit that market-specific experiential knowledge and performance obtained after initial market entry are associated with SMEs' decisions to escalate (reduce) their commitment in EMs. Our distinctive contribution to the literature lays in our assertion that unlike psychic distance, the obstacles created by insufficient institutional development in EMs i.e., institutional voids (IVs) are more difficult to overcome by foreign SMEs over time. IVs create uncertainties and risks for foreign SMEs, which likely hinder them from increasing their local market commitment. Our research follows previous contributions made by Meyer et al. (2009) and Santangelo and Meyer (2011) on the impact of IVs on MNE strategies, and shows that IVs have a negative direct effect on SMEs' mode escalation but not on resource escalation. Resource escalation is significantly affected by the interaction of market performance and IVs while mode escalation is significantly affected by the interaction of market experience and IVs. In sum, this paper extends the stage-based (Uppsala) model with insights from institutional theory (North, 1995) and aims for a more context-specific explanation of SMEs' escalation of commitment (resource and/or mode) in EMs