Entry mode deviation: a behavioral approach to internalization theory

We explore when and why decision makers choose international entry modes (e.g., hierarchies or markets) that deviate from internalization theory’s predictions. By applying a cognitive perspective on entry mode decision making, we propose that the performance of prior international activities influences decision makers’ behavior in different ways than assumed in internalization theory. More specifically, due to a representativeness bias, underperforming (overperforming) past ventures influence the decision to change (continue using) the previous entry mode choice, which may result in an entry mode deviation. In addition, the propensity to deviate from theoretical predictions is stronger when the experience is recent and/or salient due to an availability bias. In conclusion, we argue that internalization theory can benefit from incorporating more systematically important behavioral assumptions on how firms enter international markets. In so doing, we contribute to the recent conversation on how variations in human behavior influence internalization theory

Internalisation Theory and outward direct investment by emerging market multinationals

The rise of multinational enterprises from emerging countries (EMNEs) poses an important test for theories of the multinational enterprise such as internalisation theory. It has been contended that new phenomena need new theory. This paper proposes that internalisation theory is appropriate to analyse EMNEs. This paper examines four approaches to EMNEs—international investment strategies, domestic market imperfections, international corporate networks and domestic institutions—and three case studies—Chinese outward FDI, Indian foreign acquisitions and investment in tax havens—to show the enduring relevance and predictive power of internalisation theory. This analysis encompasses many other approaches as special cases of internalisation theory. The use of internalisation theory to analyse EMNEs is to be commended, not only because of its theoretical inclusivity, but also because it has the ability to connect and to explain seemingly desperate phenomena

Global delivery models: the role of talent, speed and time zones in the global outsourcing industry

Global delivery models (GDMs) are transforming the global IT and business process outsourcing industry. GDMs are a new form of client-specific investment promoting service integration with clients by combining client proximity with time-zone spread for 24/7 service operations. We investigate antecedents and contingencies of setting up GDM structures. Based on comprehensive data we show that providers are likely to establish GDM location configurations when clients value access to globally distributed talent and speed of service delivery, in particular when services are highly commoditized. Findings imply that coordination across time zones increasingly affects international operations in business-to-business and born-global industries

The Economies and Diseconomies of Industrial Clustering:Multinational Enterprises versus Uninational Enterprises

This study’s objective is to compare cluster economies and diseconomies for multinational enterprises (MNEs) and uninational enterprises (UNEs) within the London financial services cluster. In contrast to the implicit assumption of the cluster participation literature that the economies and diseconomies of clusters are valued similarly by all firms, we find that economies relating to social capital and labour market pooling are equally important to MNEs and UNEs, economies relating to local competition and diseconomies relating to congestion costs are more important to MNEs than to UNEs, and economies relating to the reputational effects of locating in a world-leading cluster and access to specialised suppliers are more important to UNEs than to MNEs. That MNEs and UNEs do not experience cluster economies and diseconomies in the same way indicates that both cluster participation theory and international business theory need augmentation to recognise that cluster incumbents benefit and suffer from cluster membership differently

Entry Mode Degree of Control, Firm Performance and Host Country Institutional Development: A Meta-Analysis

Among studies on performance outcomes of entry mode choices disagreement fueled by ambiguous research findings is apparent as regards whether the best per- formers are those firms that enter foreign countries with high or low entry mode degree of control. To solve this dilemma and test new hypotheses, the relationship between entry mode degree of control and firm performance is examined by meta- analyzing 133 studies (740,114 observations) covering entry mode choices from 1980 to 2010. We find that (a) overall high-control entry modes lead to higher per- formance, and (b) adopting high-control entry modes is particularly important for firms entering developing countries

A composite nodal finite element for hexagons

A nodal algorithm for the solution of the multigroup diffusion equations in hexagonal arrays is analyzed. Basically, the method consists of dividing each hexagon into four quarters and mapping the hexagon quarters onto squares. The resulting boundary value problem on a quadrangular domain is solved in primal weak formulation. Nodal finite element methods like the Raviart-Thomas RTk schemes provide accurate analytical expansions of the solution in the hexagons. Transverse integration cannot be performed on the equations in the quadrangular domain as simply as it is usually done on squares because these equations have essentially variable coefficients. However, by considering an auxiliary problem with constant coefficients (on the same quadrangular domain) and by using a ''preconditioning'' approach, transverse integration can be performed as for rectangular geometry. A description of the algorithm is given for a one-group diffusion equation. Numerical results are presented for a simple model problem with a known analytical solution and for k(eff) evaluations of some benchmark problems proposed in the literature. For the analytical problem, the results indicate that the theoretical convergence orders of RTk schemes (k = 0,1) are obtained, yielding accurate solutions at the expense of a few preconditioning iterations

Mesh-centered finite differences from unconventional mixed-hybrid nodal finite elements

It is shown how mesh-centered finite differences can be obtained from unconventional mixed-hybrid nodal finite elements. The classical Raviart-Thomas schemes of index k (RTk) are based on interpolation parameters that are cell and/or edge moments. For the unconventional form (URTk), they become point values at Gaussian points. In particular, the scheme URT1 is fully described. (C) 2006 Wiley Periodicals, Inc

Third order nodal finite element methods with transverse and reduced integration for elliptic problems

This paper describes a solution technique for multidimensional elliptic problems based on the use of some third order nodal finite elements and on a reduction of the basic (multidimensional) problem to a set of coupled one-dimensional problems. This solution technique, developed rather heuristically in the framework of nuclear reactor computations in conjunction with early nodal methods, gets on a much firmer ground when applied with nodal finite elements. The first part of the paper deals with the general context of variational nodal finite element methods. The so-called "Transverse and Reduced Integration Method" is then described in the second part of the paper. Its numerical properties are illustrated by some examples. (C) 2003 IMACS. Published by Elsevier B.V. All rights reserved