Decision-making in international business

This paper distinguishes three domains of international business theory: the boundaries of the multinational enterprise, the external environment of the enterprise and its internal structure. The central concern of internalisation theory is the boundaries of the firm. Any general theory of international business must analyse the external environment and internal structure as well. Competition dominates the external environment whilst co-operation dominates internal structure. Different models of decision-making are required for each. Different theories of decision-making must therefore be integrated in order to transform internalisation theory into a general theory of international business. This paper examines how this can be done

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

Balancing private and state ownership in emerging markets' telecommunications infrastructure: country, industry, and firm influences

Bargaining between host states and investors over the terms of investment in sensitive sectors of the economy generates political and economic tensions. In this study, we investigate the factors that contribute to the outcomes of those negotiations as measured by the private (vs state-owned) share of newly consummated telecommunications infrastructure projects. We find that private ownership is positively associated with overall economic development and investment liberalization in the host country and with greenfield (vs divestiture) and joint venture (vs wholly owned) projects. Private ownership is negatively associated with existing telecommunications infrastructure, higher levels of state ownership of foreign investing firms, and the technological sophistication of the projects. Our analysis also shows a curvilinear (inverted U-shaped) relationship between investment policy hazards and private ownership. This finding supports the insight from transaction cost economics that potential gains from internalization are greatest at intermediate levels of uncertainty. Journal of International Business Studies (2004) 35, 233–250. doi:10.1057/palgrave.jibs.8400082

Within-country product diversification and foreign subsidiary performance

We examine the product diversification of a multinational firm within each of its host-country markets. Based on a sample of 12,992 foreign subsidiaries of Japanese multinational firms, we find that higher levels of within-country product diversity led to higher subsidiary performance where the institutional strength of the local market was weak, and where a firm's corporate product diversity level was high. Our study highlights the importance of examining a multinational firm's strategy in its individual host-country markets, as influenced by the institutional characteristics of a host-country market and the corporate-level strategy of the multinational firm. Journal of International Business Studies (2008) 39, 706–724. doi:10.1057/palgrave.jibs.8400378