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

Rapid increases in obesity in Jamaica, compared to Nigeria and the United States

<p>Abstract</p> <p>Background</p> <p>Weight gain in adulthood is now common in many populations, ranging from modest gains in developing countries to a substantial percentage of body weight in some Western societies. To examine the rate of change across the spectrum of low to high-income countries we compared rates of weight change in samples drawn from three countries, Nigeria, Jamaica and the United States.</p> <p>Methods</p> <p>Population samples from Nigeria (n = 1,242), Jamaica (n = 1,409), and the US (n = 809) were selected during the period 1995–1999 in adults over the age of 19; participation rates in the original survey were 96%, 60%, and 60%, respectively. Weight in (kg) was measured on 3 different occasions, ending in 2005. Multi-level regression models were used to estimate weight change over time and pattern-mixture models were applied to assess the potential effect of missing data on estimates of the model parameters.</p> <p>Results</p> <p>The unadjusted weight gain rate (standard error) was 0.34(0.06), 1.26(0.12), 0.34(0.19) kg/year among men and 0.43(0.06), 1.28(0.10), 0.40(0.15) kg/year among women in Nigeria, Jamaica, US, respectively. Regression-adjusted weight change rates were significantly different across country, sex, and baseline BMI. Adjusted weight gain in Nigeria, Jamaica and US was 0.31(0.05), 1.37(.04), and 0.52(0.05) kg/year respectively. Women in Nigeria and the US had higher weight gains than men, with the converse observed among Jamaicans. The obese experienced weight loss across all three samples, whereas the normal weight (BMI < 25) had significant weight gains. Missing data patterns had an effect on the rates of weight change.</p> <p>Conclusion</p> <p>Weight change in sample cohorts from a middle-income country was greater than in cohorts from either of the low- or high-income countries. The steep trajectory of weight gain in Jamaica, relative to Nigeria and the US, is most likely attributable to the accelerating effects of the cultural and behavioral shifts which have come to bear on transitional societies.</p

Industry agglomeration, sub-national institutions and the profitability of foreign subsidiaries

This study investigates the impact of agglomeration and its interaction with subnational institutions on the profitability of multinational enterprises (MNEs) subsidiaries operating in an emerging economy. We argue that in an emerging economy like China, competition in product and factor markets is more intense between foreign firms than between foreign and domestic firms owing to market segmentation. Consequently, agglomerating with other foreign firms has negative impact on the profitability of foreign subsidiaries. In contrast, foreign firms agglomerating with domestic firms may reap gains owing to less competition and improved access to local resources and knowledge. We find that these effects are more pronounced to domestic-market-oriented foreign firms. Furthermore, sub-national institutions moderate the above relationships. Our arguments are supported by the empirical analysis based on a comprehensive dataset of foreign firms operating in China over the period of 1999-2005

Ex-post Performance Implications of Divergence of Managers’ Perceptions of ‘Distance’ From ‘Reality’ in International Business

Despite much research on “distance”, little attention has been paid to the effect of divergence of managers’ perceptions of distance from reality (i.e. distance divergence) and its implications for firm performance. This knowledge is highly important since managerial perceptions of the firm’s environment do not always coincide with the actual environmental characteristics. Consequently, strategies based on inaccurate data may result in erroneous forecasts, missed opportunities and business failure. Using survey data from senior managers of Swedish exporters and corresponding objective data, this study is a first attempt to explore the ex-post performance implications of “distance divergence” when expanding into foreign markets. Our results demonstrate that the larger the divergence between managers’ perceptions of cultural distance and corresponding “objective” distance, the lower the performance expressed in companies’ sales. However, over/underestimation of cultural distance does not have differential effects on firm performance.“Stiftelsen Olle Hakelius Stipendiefond”, Grant no: 1165001

Changing perspectives on the internationalization of R&D and innovation by multinational enterprises: a review of the literature

Internationalization of R&D and innovation by Multinational Enterprises (MNEs) has undergone a gradual and comprehensive change in perspective over the past 50 years. From sporadic works in the late 1950s and in the 1960s, it became a systematically analysed topic in the 1970s, starting with pioneering reports and “foundation texts”. Our review unfolds the theoretical and empirical evolution of the literature from dyadic interpretations of centralization versus decentralization of R&D by MNEs to more comprehensive frameworks, wherein established MNEs from Advanced Economies still play a pivotal role, but new players and places also emerge in the global generation and diffusion of knowledge. Hence views of R&D internationalization increasingly rely on concepts, ideas and methods from IB and other related disciplines such as industrial organization, international economics and economic geography. Two main findings are highlighted. First, scholarly research pays an increasing attention to the network-like characteristics of international R&D activities. Second, different streams of literature have emphasized the role of location- specific factors in R&D internationalization. The increasing emphasis on these aspects has created new research opportunities in some key areas, including inter alia: cross-border knowledge sourcing strategies, changes in the geography of R&D and innovation, and the international fragmentation of production and R&D activities

Manufactured exports and FDI

In this chapter we investigated the evolution and determinants of manufactured exports and FDI in SEMC from 1985 to 2009 and their future prospects. Our econometric analysis confirmed that exchange rate depreciation, the openness of an economy, as well as the quality of its institutions and infrastructure foster manufactured exports and FDI inflows in the region. We found that deeper integration with the EU would increase manufactured exports and FDI to a greater degree compared to the status quo or compared to greater regional integration.SCOPUS: ch.binfo:eu-repo/semantics/publishe

Breaking the wave: The contested legitimation of an alien organizational form

Organizational forms imbued with values of modernity – that is, rationality, efficiency and equity – diffuse rapidly around the world. Nonetheless, when sustained by beliefs, norms and regulations contrasting with those prevalent in the receiving country, their adoption may be delayed, and within-country legitimation may not proceed smoothly. We study the diffusion of multiplex cinemas – a form conceived in the US and attuned to the cinema-as-commerce logic – across Europe, where the cinema-as-art logic prevails. Our findings reveal that the cultural meanings embodied by multiplexes shaped the founding rates of this organizational form in three ways. First, countries with larger normative and regulative distance from the US retarded the adoption of the first multiplex. Second, camouflaged entries and, at increasing density, opposition from local interest groups were observed. Third, the embodiment of global cultural scripts of progress and modernity allowed multiplexes to overcome local opposition. The normative distance of the country from the US amplified the fluctuating dynamics of within-country legitimacy. A new specification of density-dependent legitimation is presented to model the cultural-cognitive legitimacy of rationalized but alien organizational forms