The Impact of Formal and Informal Institutional Distances on MNE Corporate Social Performance

Does country selection affect the corporate social performance (CSP) of multinational enterprises (MNEs)? In this study we suggest that greater institutional diversity within an MNE’s operating environment may adversely affect its ability to maintain higher levels of CSP. Using institutional distance and organizational learning as our theoretical lenses, we investigate the impact of institutional differences on CSP. We conceptualize the MNE as a unique portfolio of locations and use the MNE’s entire operating footprint to explore the effects of average portfolio formal and informal institutional distances on CSP. We hypothesize and find that firms with greater average informal institutional distance within their portfolios have lower overall levels of CSP. Findings also confirm the moderating influence of formal institutional distance; greater formal institutional distance within the MNE portfolio reduces the CSP benefits of international scope

Explaining the National Cultural Distance Paradox

Past studies of the relationship between national cultural distance and entry mode choice have produced conflicting results. Some scholars find cultural distance associated with choosing wholly owned modes; others find cultural distance linked to a preference for joint ventures. In this paper we provide both theoretical and empirical evidence to explain the discrepant findings and thus, help to resolve the national cultural distance paradox.© 2001 JIBS. Journal of International Business Studies (2001) 32, 177–189

Resource-based advantages in an international context

How universal are resource-based advantages? In this study, the authors suggest that differences in nations' institutional environments may influence the applicability of resource-based advantages; for this reason, the effectiveness of such advantages may vary cross-nationally. They hypothesize and find that adding the moderating influence of national institutional environment to a resource-based perspective better explains strategic decisions (entry mode choice) in an international context than does a mere resource-based approach. The analysis also shows that decisions predicted by a model incorporating both perspectives yield better subsidiary performance. Thus, results suggest that, at least in an international setting, resource-based advantages appear to be context specific. Based on these results, the authors conclude that considering country-specific contextual influences on the value of resource-based advantages allows firms to make strategic decisions that improve international subsidiary performance

Real Options, International Entry Mode Choice and Performance

Recent scholarship suggests that combining insights from real option theory with transaction cost economics may improve decision-making models. In response to this suggestion we develop and test a model of international entry mode choice that draws from both perspectives. Examining samples of Dutch and Greek firms entering Central and Eastern European markets, we found that adding real option variables to a transaction cost model significantly improved its explanatory power. Additionally, firms that used the combined real option/transaction cost predicted choices had significantly higher levels of subsidiary performance satisfaction than firms that did not. Our results suggest that effective managerial decision-making may involve more than mere transaction cost minimization considerations; real option value creation insights also appear to influence the success of decision outcomes. Copyright (c) Blackwell Publishing Ltd 2007.

Product Stereotypes, Strategy and Performance Satisfaction: The Case of Chinese Exporters

Does following a product strategy of price leadership result in superior performance satisfaction for Chinese exporters? Does branding products and targeting less developed countries significantly improve Chinese exporters' satisfaction with export performance? Results indicate performance satisfaction decreased when Chinese firms pursued price leadership product strategies. While performance satisfaction increased when Chinese exporters used a branding product strategy, branding products and targeting other less developed countries with these brands significantly increased performance satisfaction over branding alone.© 2002 JIBS. Journal of International Business Studies (2002) 33, 657–677

Generic Product Strategies for Emerging Market Exports into Triad Nation Markets: A Mimetic Isomorphism Approach

Based on the concept of mimetic isomorphism, we theorize that, by imitating the home country MNE modal generic product strategy in each Triad nation, emerging market firms (EMFs) can improve their export performance satisfaction. We hypothesize that EMFs which: (1) target the EU and use a Premium strategy, (2) target Japan and use a Superior Value strategy, or (3) target the USA and use an Economy strategy will, on average, achieve higher levels of satisfaction with export performance than EMFs that enter emerging markets or EMFs that employ other product strategies in Triad nation markets. Our hypothesis is tested and supported on a sample of Romanian and Chinese exporters. Managerial implications of our theory and findings are discussed. Copyright Blackwell Publishing Ltd 2005.