International experience and imitation of location choices: The role of experience interpretation and assessment and its board‐level microfoundations

Drawing on the information-based imitation and information-processing perspectives, we examine how experience interpretation and assessment—and in particular its board-level microfoundations—affects the relationship between a firm's international experience and its decision to imitate the market leader's location choices. Our results show that the negative relationship between international experience and imitation of location choices is positively moderated by board turnover, board age, and board equity ownership but not influenced by board gender diversity. These findings advance our understanding of the interplay between information-based motives for imitation and firms' information processing and organizational learning. Specifically, we contribute to research on the effect of international experience on firms' mimetic behavior by pointing out the relevance of experience interpretation and assessment from a microfoundations perspective

International experience and imitation of location choices: The role of experience interpretation and assessment and its board‐level microfoundations

Research summary Drawing on the information-based imitation and information-processing perspectives, we examine how experience interpretation and assessment—and in particular its board-level microfoundations—affects the relationship between a firm's international experience and its decision to imitate the market leader's location choices. Our results show that the negative relationship between international experience and imitation of location choices is positively moderated by board turnover, board age, and board equity ownership but not influenced by board gender diversity. These findings advance our understanding of the interplay between information-based motives for imitation and firms' information processing and organizational learning. Specifically, we contribute to research on the effect of international experience on firms' mimetic behavior by pointing out the relevance of experience interpretation and assessment from a microfoundations perspective. Managerial summary Our study provides indications for executives attempting to predict competitors' global strategy. When it comes to location choices, we find that companies with less international experience are more likely to follow the market leader, while those internationally experienced are more likely to follow their own path. Moreover, lower board turnover, relatively younger directors, and smaller equity ownership can favor the articulation and exploitation of the lessons offered by prior international experiences, thus further reducing the company's inclination to imitate the leader's location choices. Firms seeking an independent path toward internationalization can therefore use corporate governance—and in particular board-level factors—to enhance their ability to interpret and assess their international experience

Nonmarket strategy and legitimacy in institutionally voided environments: the case of Jumia, an African e-commerce giant

This paper examines how a newly established multinational enterprise (MNE) leverages nonmarket strategy (NMS) to deal with legitimacy problems posed by institutional voids in institutionally challenging contexts to gain legitimacy. Using a rich dataset from in-depth interviews, observations, and archival data on Jumia, an African e-commerce giant, we identify three types of institutional void (i.e., infrastructural, regulatory and legal, and cognitive cultural voids) that hinder the implementation of the e-commerce business model. We further unpack the MNE's specific NMS to validate, consolidate, and diffuse the new business model to gain legitimacy accordingly. Importantly, we theorize how MNEs, under various conditions of unstable institutional structures and mechanisms, employ NMS to achieve three kinds of legitimacy in the process—i.e., cognitive, regulative and normative legitimacies. Altogether, we integrate three prominent streams of literature in IB—NMS, institutional voids, and legitimacy literature—to build a theory on how MNEs deploy NMS to establish legitimacy in response to environmental uncertainty to validate their activities and consolidate trust by gaining political and regulatory support

Nonmarket strategy and legitimacy in institutionally voided environments: the case of Jumia, an African e-commerce giant

This paper examines how a newly established multinational enterprise (MNE) leverages nonmarket strategy (NMS) to deal with legitimacy problems posed by institutional voids in institutionally challenging contexts to gain legitimacy. Using a rich dataset from in-depth interviews, observations, and archival data on Jumia, an African e-commerce giant, we identify three types of institutional void (i.e., infrastructural, regulatory and legal, and cognitive cultural voids) that hinder the implementation of the e-commerce business model. We further unpack the MNE's specific NMS to validate, consolidate, and diffuse the new business model to gain legitimacy accordingly. Importantly, we theorize how MNEs, under various conditions of unstable institutional structures and mechanisms, employ NMS to achieve three kinds of legitimacy in the process—i.e., cognitive, regulative and normative legitimacies. Altogether, we integrate three prominent streams of literature in IB—NMS, institutional voids, and legitimacy literature—to build a theory on how MNEs deploy NMS to establish legitimacy in response to environmental uncertainty to validate their activities and consolidate trust by gaining political and regulatory support.</p

Board independence and firm internationalization: a meta-analysis

Purpose: Despite agency theory and resource dependence theory suggesting that – albeit through different mechanisms – board independence positively influences firm internationalization, empirical evidence on this relationship has been mixed and inconclusive. Based on this, the purpose of the present study is twofold: first, to analyze and synthesize the existing empirical literature and, second, to develop new theoretical insights on the effect of board independence on firm internationalization. Design/methodology/approach: The authors used advanced meta-analytic techniques that allowed them, first, to synthesize the existing empirical literature on the board independence–firm internationalization relationship and, second, to examine the effect of several contingencies on such relationship. This study relies on data from 87 primary studies (published and unpublished) carried out in multiple academic fields in the period 1998–2021 and covering 49 countries. Findings: The results confirm the established agency and resource-dependence arguments, suggesting that higher board independence is associated with greater firm internationalization. Moreover, the results show that the focal relationship is moderated by home-country formal and informal institutional factors, and in particular, the legal protection of minority shareholders and family business legitimacy. The authors do not find evidence that CEO duality and board size moderate the focal relationship or that board independence has a stronger effect on breadth than on depth of internationalization. Originality/value: This study lies at the intersection of the literatures on corporate governance and firm internationalization and on comparative corporate governance of the multinational firm, shedding further light on the role played by institutional environments in determining the effectiveness of corporate governance mechanisms