More than intent:A bundling model of MNE-SME interactions

As a counterpoint to Prashantham and Birkinshaw, I present an alternative model of MNE-SME cooperation where either type of firms can take the role of content provider or distributor. I argue that MNEs will interact with SMEs when there are differences in optimal scale between the content creation and distribution stages of the value chain, and it is not feasible or efficient for either party to vertically integrate between these two stages. I then build two 2 x 2 bundling models, one in which the SME provides content and the MNE distributes it, and another with the reverse configuration. In these 2 x 2s the axes are the transactional properties of the two complementary inputs, content and distribution, that MNEs and SMEs bundle to create value. I show that these models can explain the forms taken by MNE-SME cooperation and their dynamics

用FDI 存量衡量国外子公司经营活动存在偏差

研究人员经常将母国在东道国的子公司创造的增加值（VA）称作外国直接投资（FDI）， 并使用国际收支平衡表中的FDI流量和存量进行度量。实际上FDI记录的是国内公司和国外公司之间的长期金融交易，因此FDI存量和流量衡量的范围较窄。例如，法国对澳大利亚的FDI存量，是衡量法国母公司拥有的在澳大利亚的子公司的股份和再投资收益，以及在澳大利亚的子公司对法国母公司的净负债

The Effects of linguistic distance and lingua franca proficiency on the stake taken by acquirers in cross-border acquisitions

We study the effects of linguistic distance and lingua franca proficiency on the equity stake taken by acquirers from 67 countries in 59,092 acquisition targets in 69 host countries. We theorize and find that acquirers take lower equity stakes in foreign targets when linguistic distance and differences in lingua franca proficiency between them are high, and take higher stakes when the combined lingua franca proficiency of the parties is high. We also find that linguistic and cultural distance reduce the impact of the combined lingua franca proficiency of the parties on the level of equity taken, which shows that the effective use of a lingua franca is affected by the native tongues and cultures of the parties. Our results clearly demonstrate that governance research and international business studies can benefit from incorporating language into their explanatory models

Foreign Production: The Weak Link in Tests of the Internationalization Process Model

WP 2003-41 June 2003This paper reviews empirical tests of two of the main implications of the internationalization model: that firms, as they gain international experience, enter markets of increasing psychic distance and that they enter a given market with successive entry modes that reflect increasing commitment. One problem with much of this literature is that it fails to control for economic variables that affect the choice of target market and that of entry mode. Another is the overemphasis on exports, and the relative neglect of foreign production. Yet, because it is more risky and less reversible, foreign production would seem to provide a better test of the model

Commentary: Why and how can Multinational Enterprises be value-creating organizations?

Rugman made the valid point that Multinational Enterprises are value-creating organizations but in this piece I question his explanation of why this is the case. I argue that it is not, as Rugman proposed, because MNEs are better at safeguarding their firm-specific advantages (FSAs) but because having them hold the equity is sometimes the most efficient way to bundle assets. I present a more general model of internalization that shows why MNEs can be the most efficient way to both exploit and acquire FSAs, why a firm does not need to have FSAs to become an MNE, and why internalization is not a question of setting up internal markets but consists instead in the replacement of output by behavior constraints. (C) 2015 Elsevier Inc. All rights reserved

How much is new in Brouthers et al.’s new foreign entry modes, and do they challenge the transaction cost theory of entry mode choice?

Brouthers, Chen, Sali and Shaheer argue that recent increases in economic integration coupled with technological advances, such as digitization, have led to the use of new foreign market entry modes which they say have not been sufficiently acknowledged nor satisfactorily explained by an extant literature dominated by transaction cost theory (TCT). To make sense of these new entry modes, they introduce a framework based on the exploitation–exploration distinction and on embeddedness. I first outline current thinking on the TCT theory of foreign entry modes and then review Brouthers et al.’s four novel entry modes, identifying what is genuinely new about them, and what is similar to what we already know. I conclude that these four modes constitute changes in kind rather than substance, and show that they have already been satisfactorily explained using TCT. In contrast, Brouthers et al.’s exploitation–exploration–embeddedness framework is unconvincing, because (a) exploration is not an appropriate term to describe the motivation of most resource and strategic asset acquisition foreign direct investment; (b) there is considerable variation in embeddedness within some of their four novel entry modes; and (c) the availability of intermediaries breaks the hypothesized one-to-one correspondence between need for embeddedness and entry mode

Springing from where? How emerging market firms become multinational enterprises

Purpose The purpose of this paper is to show that existing theories, principally Dunning’s OLI model, Mathews LLL model and Rugman’s version of internalization theory are unable to explain the rise of emerging market multinationals (EMNEs). The reason is that they over-emphasize the strategic importance of intangibles and ignore that of complementary local assets. Taking complementary local assets into account makes it possible to understand why EMNEs are able to finance their intangible-buying sprees and, often with the help of their governments, to swap market access for technology. Design/methodology/approach This is a conceptual paper based on the bundling model (JIBS 2009) and backed by the case histories of four EMNEs. Findings The author shows that EMNEs have much better prospects vis-à-vis established MNEs than generally thought in Western Europe and the USA and that they will become serious competitors. Originality/value This is, as far as the author knows, the first explanation of why EMNEs have the bargaining power and the resources necessary to swap or buy technology from established MNEs

Some Empirical Dimensions of Countertrade

This paper discusses some of the recent theories of why countries impose countertrade obligations and compares some of the implications of these theories with data obtained from a comprehensive database of countertrade transactions.© 1990 JIBS. Journal of International Business Studies (1990) 21, 243–270