Bribery in International Business Transactions

Globalization leads to cross-border business transactions between societies with very different norms and regulations regarding bribery. Bribery in international business transactions can be seen as a function of not only the demand for such bribes in different countries, but the supply, or willingness to provide bribes by multinational firms and their representatives. This study addresses the propensity of firms from 30 different countries to engage in international bribery. The study incorporates both domestic (economic development, culture, and domestic corruption in the supplying country) and international factors (those countries’ patterns of trade and involvement in international accords) in explaining the willingness to bribe abroad. The propensity to provide bribes was the lowest when corruption was not tolerated in the multinational firms’ home countries, when the firms’ countries were signatories of the Organization for Economic Cooperation and Development (OECD) anti-bribery convention, and when those countries traded heavily with wealthier nations. Further, these findings are maintained when controlling for levels of economic development and cultural values in the supplying country. In terms of culture, firms from high power distance countries showed a somewhat greater propensity for providing bribes in transactions with less-developed nations.     

What leads to cultural intelligence?

The ability to interact effectively in multiple cultures is not a skill possessed by all; yet, it is becoming more important in today's global business world. Recently, this skill has been labeled cultural intelligence (CQ), and has caught the attention of business leaders and researchers alike. While previous studies have examined potential outcomes of cultural intelligence, possible antecedents are examined herein. This investigation generates some insight regarding the impact of cultural exposure on CQ, as well as developing an understanding of how the depth of cultural exposure influences a person's cultural intelligence. Findings indicate that certain types of exposures to other cultures (such as education abroad and employment abroad) and the level of exposure from these experiences increases cultural intelligence. These findings are critical for multinational firms as managers hire, promote, train, and prepare employees for international assignments. Additionally, some have discussed how cultural intelligence is a critical skill for global business leaders, and it seems likely that CQ will become increasingly important due to the rise of diversity in the workforce.     

Antecedents to international student inflows to UK higher education: A comparative analysis

This study explores the antecedents of international student flows into UK higher education and the variations in the antecedents between home countries of origin. The results suggest that home country economic wealth and demographics, historic/linguistic link and UK government preferential policies are the important antecedents for international students from worldwide flows into the UK. However, a comparative analysis shows that a wide variety of economic, social and political factors are all important to the UK international students originally from developing economies, while home country economic wealth and population, and bilateral trade are more important than other factors in determining the students from developed countries studying in the UK. The UK government should formulate effective and flexible policies and UK HEIs should develop specific marketing strategies to attract a growing number of international students in general and from key target countries and regions in particular.     

The increasing internationalization of the international business classroom: Cultural and generational considerations

This article reviews the dynamic demographics of the international business classroom across five Anglo countries: the U.S.A., the UK, Australia, New Zealand, and Canada. Figures indicate that business education is becoming increasingly international, and that the countries of origin of international business students are changing. Cultural impacts of this increasing internationalization upon international business pedagogy—as well as issues of generational expectations of the classroom experience—are considered, benefits and challenges of the increased cultural diversity in the classroom are discussed, and practical suggestions for instructors teaching in future international business classrooms are detailed.     

Knowledge Management in Central and Eastern Europe Through Network Development and Boundary Spanners

ABSTRACT

Central and Eastern European (CEE) countries have become a popular research venue due to their transitioning into market based economies. For international business scholars this represents a unique opportunity, as one of the key driving forces is the privatization of state-owned enterprises. Due to the market's great potential, many multinational enterprises are entering CEE countries and realizing that a transfer of market knowledge (i.e., customer tastes, distribution methods/channels, etc.) from the host country to the multinational, as well as from the multinational to the host country (i.e. technology, management/marketing capabilities, etc.), is essential.

The lack of host country skills have made knowledge transfer difficult. Also, the tacit nature of some of the most important knowledge embedded within the host country's organization and the multinational makes knowledge diffusion a daunting task to manage. However, successful knowledge management will assist in positive performance measures so researchers are examining knowledge management and its constructs (acquisition, transfer, conversion, and application).

Our research explores the linkage between knowledge management and performance in host country firms in a CEE country, Croatia. We also explored antecedents of successful knowledge management that of networks and human resources (boundary spanners). Finally we explored whether cultural distance moderates these relationships in the knowledge management process.     

Commitment to the Study of International Business and Cultural Intelligence: A Multilevel Model

Adopting a multilevel theoretical framework, we examined how metacognitive and motivational cultural intelligence influence an individual’s commitment to the study of international business (IB). Data from 292 undergraduate and graduate business students nested in 12 U.S. business school classes demonstrated that individuals’ metacognitive and motivational cultural intelligence are positively related to their commitment to the study of IB. Furthermore, there is additional commitment when the classrooms’ cultural intelligence climate is high. We discuss the implications of these findings within a classroom context that involves cross-cultural interactions.     

Nationality biases in peer evaluations: The country-of-origin effect in global virtual teams

In a post-COVID-19 world, due to the increasing reliance on virtual work, global virtual teams (GVTs) are critical for the international success of firms. A fundamental challenge that firms face in this new remote work context is the need to measure the performance of individuals in GVTs. Peer evaluations are advocated as a way to improve the validity of performance appraisals. Peers work closely with one another and, presumably, are better positioned to observe and evaluate fellow team members’ performance. Even when completed in good faith, however, a fair evaluation of individual contributions and performance in GVTs could be distorted by subjectivity, bias, cultural and institutional differences, and the limitations of online communication tools. Based on a sample of 6634 GVTs comprised of 33,271 people in 79 countries that worked on an international business (IB) project, we tested the country-of-origin (COO) effect in peer evaluations within the context of GVTs. Results indicate that the nationality of the team member is a source of significant bias in peer evaluations. Our tests show that the prestige and the level of economic development of the country that a team member is from is a better predictor of peer evaluations received than objective measures of individual skills and competencies, including English proficiency, technical ability, and cultural intelligence, or national per-capita spending on education, suggesting that a COO effect based on personal bias may affect performance ratings more than actual contributions. We conclude that the COO effect in peer evaluations in GVTs has to be taken into account when designing evaluation systems and discuss implications for theory, practice and future research.     

Towards a Strategic Model of Global Franchise Expansion

This paper develops the first global index of international franchise expansion that ranks countries according to their attractiveness to US-based franchise firms. A quantitative model combining insights from academic research and business practice generates a ranking of 143 potential expansion target countries according to their risk/opportunity profiles. The rankings suggest that countries with large markets and strong political and legal systems (large European countries, and Canada, Japan, and Australia) are the most attractive for US-based franchisors, while the small, unstable African countries are the least attractive. China (and the other BRIC countries—Brazil, Russia, India) though attractive from a market opportunity perspective, is nevertheless not highly ranked due to their significant risks and large cultural and geographic distances. This study reaffirms the importance of a strategic approach to international franchising decisions, underscores the importance of properly assessing the relative importance of key determinants in internationalization decisions, highlights the importance of a comprehensive and systematic assessment of the various risks in international franchising decisions, shows the usefulness of quantitative modeling in international franchising, and advocates the development of effective risk management methods in order to cope with rapid changes in the global marketplace.     

Global marketing strategy modeling of high tech products

This study considers the role of global marketing strategy and its relation to market orientation, international experience, and performance in the high tech products context. Knowledge of this important domain of global marketing strategy and performance remains limited. In this respect, the study raises a number of important questions concerning how market orientation, international experience and global marketing strategy impact performance. The study empirically tests predictions of relationships by using mail survey data from 172 business units of high tech firms. Findings from the research sample support the argument that market orientation, international experience, and global marketing strategy are the key antecedents of organizational performance. Market orientation and international experience influence global marketing. The article concludes with theoretical and managerial implications of the research findings.     

Emerging‐Market Firms Venturing into Advanced Economies: The Role of Context

Sociocultural, economic, political, and institutional differences between countries increase uncertainty and complexity in today's highly competitive international business environment. Moreover, the “West‐Leads‐East” to “West‐Meets‐East” shift in the global economy requires firms in both advanced economies and emerging markets to seek sustainable solutions by collaborating across geographic boundaries. Such novel collaborative partnerships may help build a stable, resilient, and sustainable world economy by leveraging the resources and capabilities of firms from both advanced and emerging economies. This article has three general objectives. First, we seek to show that context has been a long‐standing issue in management, organization, and international business research and provide an overview of the puzzles that informed and motivated this special issue. Second, we highlight the key insights and contributions of the articles included in this special issue by reviewing their theoretical underpinnings, methodological approaches, and empirical findings. Finally, we outline a future research agenda on emerging‐market firms venturing into advanced economies that can help advance international business and management studies. © 2017 Wiley Periodicals, Inc.     

Asymmetric effects of cultural institutes on trade and foreign direct investment

The purpose of a cultural institute is to improve international relations with other countries by promoting language familiarity and cultural awareness. In addition, cultural institutes can provide additional business opportunities that lead to positive economic side effects such as increases in trade and foreign direct investment (FDI). In this study, gravity models were used to analyse the data for the Goethe Institut (Germany), the Cervantes Institute (Spain) and the Confucius Institute (China) to identify any stylised international patterns of the documented economic effects. The study finds significant positive effects on bilateral trade and FDI outflows for all three programmes, along with two important (i) the effects are stronger for non‐advanced economies and (ii) the effects are substantially larger on FDI than on trade. These results suggest that cultural institutes can be an effective policy tool in promoting FDI outflows, with the strongest effect realised when a home country locates its cultural institutes in host countries with developing economies. Importantly, results also suggest that the Chinese government's approach to extend its soft power through rapid expansion of Confucius Institutes worldwide has not been as successful as the efforts by the German Goethe Institut in increasing trade and FDI.     

FDI and Welfare Dynamics in Africa

This article examines the welfare impact of foreign direct investment (FDI) in a panel of 20 African countries over the period 2000–2013. We explore the multifactor and nonmonetary measures of welfare and the nonlinear effect of FDI on welfare. We used the Driscoll and Kraay standard errors and augmented mean group (AMG) estimator by Eberhardt and Teal (2010) to account for cross‐sectional dependency, endogeneity, and heterogeneity within panel units. The results indicate that although FDI is welfare enhancing, the nonlinear terms report mixed findings. When a multifactor indicator is employed, the increase in the nonlinear term is lower than the linear part. However, there is strong evidence that FDI is ultimately welfare enhancing when a nonmonetary indicator is employed. From an international business perspective, the findings have unlocked the welfare effects of international business on African host economies. International businesses through FDI can enhance welfare in Africa countries. However, the optimal efficacy of FDI‐welfare impact differs across the various dimensions of welfare. © 2017 Wiley Periodicals, Inc.     

The effect of culture on consumers' willingness to punish irresponsible corporate behaviour: applying Hofstede's typology to the punishment aspect of corporate social responsibility

This paper explores the relationship between attitudes to corporate social responsibility (CSR) and the cultural dimensions of business activity identified by Hofstede & Hofstede using a sample of nearly 90,000 stakeholders drawn from 28 countries. We develop five general propositions relating attitudes to CSR to aspects of culture. We show that the propensity of consumers to punish firms for bad behaviour varies in ways that appear to relate closely to the cultural characteristics identified by Hofstede. Furthermore, this variation appears to be understandable in terms of the standard interpretation of the Hofstede dimensions, suggesting that cultural variation in the attitudes of consumers may play an important role in helping us to understand variations in CSR across countries. This in turn has implications for how managers of multinational companies should implement CSR strategies in different cultural contexts.     

The Effect of Business Regulations on Nascent and Young Business Entrepreneurship

We examine the relationship, across 39 countries, between regulation and entrepreneurship using a new two-equation model. We find the minimum capital requirement required to start a business lowers entrepreneurship rates across countries, as do labour market regulations. However the administrative considerations of starting a business – such as the time, the cost, or the number of procedures required – are unrelated to the formation rate of either nascent or young businesses. Given the explicit link made by Djankov et al. [Djankov et al. 2002, ‹The Regulation of Entry’, Quarterly Journal of Economics 117(1), 1–37] between the speed and ease with which businesses may be established in a country and its economic performance – and the enthusiasm with which this link has been grasped by European Union policy makers – our findings imply this link needs reconsidering. Prepared for: Small Business Economics (2007), Special issue GEM conference 2005     

Determinants of Bribery in International Business: The Cultural and Economic Factors

Corruption Perceptions Index (CPI) scores for 47 countries reported by Transparency International were used to ascertain determinants of bribe taking in international business. Two sets of independent variables – economic and cultural – were used in a multiple regression analysis. Results indicate that bribe taking was more likely to be prevalent in countries with low per capita income and lower disparities in income distribution. Cultural factors such as high power distance and high masculinity in a country were also likely to be associated with high level of bribe taking. Both economic and cultural factors were important explanatory factors of bribery. Implications of the findings for combating bribery are discussed. Rajib Sanyal is an American Council of Education Fellow at George Mason University for 2004–2005, on leave from The College of New Jersey, where he is a professor of management. Dr. Sanyal has published widely, and is the author of a textbook on International Management.     

Global supply network embeddedness and power: An analysis of international joint venture formations

As a subset of the international business literature, cross-border equity based partnerships have drawn significant academic attention. In the context of inter-firm partnerships, the power dynamics between parties and the implications that power has on the relational dynamics between firms is an important consideration. Research that connects power with network theory has recently emerged, suggesting that the network, as a source of power, plays a significant role in inter-firm dynamics. Yet, while there has been a substantial body of work either articulating the antecedents and consequences of power, little research has paid attention to the role that power plays in international JV formations; this presents a significant gap in the international business literature. Consequently, this study investigates the role that global network structure plays in the formation of new equity based international partnerships. Secondly, it contributes to the international JV literature by developing and testing a theoretical framework that examines inter-firm power dynamics as derived from the network position of each firm in the global network. Global network prominence, brokerage and weakness are key factors utilized in the analysis. The hypotheses are tested using a global manufacturing joint venture longitudinal dataset that contains 985,689 observations from 1985 to 2003. The results of the event history analysis indicate that for the manufacturer global network prominence, brokerage and weakness play an important role in new joint venture formations. On the other hand, only global network prominence is a significant factor for the potential partner.     

Drivers of importer trust and commitment: Evidence from a developing country

This study investigates the interrelationships between antecedents of importers' trust and commitment to their foreign suppliers in an Asian country. This area has been under-researched in comparison to exporters' behavioral perspectives as well as in comparison to developed countries. A theoretical model is developed based on theories of transaction cost (TC) and the internationalization process (IP), and studies examined regarding the context of relationship trust and commitment. The model is tested using SEM on a sample of 238 importers in Bangladesh. The findings suggest that importer trust leads to commitment but that foreign supplier's opportunistic inclination affects both their trust and commitment. Overall, the findings indicate that cultural similarity, effective communication, knowledge and experience, opportunism and environmental uncertainty are vital antecedents of trust and commitment. The findings have important implications for academics and practitioners.     

Factors influencing the propensity to export: A study of UK and Portuguese textile firms

The purpose of this paper is to determine which particular organisational and managerial factors contribute to the propensity to export in a declining sector. For this purpose the textile and clothing sector in Portugal and the United Kingdom is chosen for investigation. This study analyses firms’ resources and capabilities, as well as decision-makers’ objective and subjective characteristics in a sample of 167 Portuguese and 165 UK firms in the textile and clothing industry. The fundamental research questions are: which characteristics of the firm are associated with stronger export propensity, and is it possible to identify a profile of decision-makers associated with export propensity? For Portugal, the size of firm and the educational level of managers are the key determinants of export propensity. As to the UK, age and perception of costs are the key factors. In addition, we also investigated managers’ commitment to exporting, for which the important determinants of export propensity in the textile and clothing sector were found to be planning, advertising and promotion. When combining the two country data-sets, particular firm characteristics, namely, firm size, competitive advantage, and technology, and a specific objective characteristic, namely, the number of languages spoken, are the key factors associated with the propensity to export in this declining sector.     

Cross‐sector alliances in the global refugee crisis: An institutional theory approach

The global refugee crisis has posed severe challenges to social stability and sustainable development around the world. While the business sector is expected to shoulder social responsibility in crisis relief efforts, our initial assessment shows that refugee‐related corporate social responsibility (CSR) significantly diverged across the Global Fortune 500 corporations. To advance scholars and managers' understanding of this complex CSR issue, this study draws upon National Business System Theory to explore how country‐level factors influence the multinational corporations' CSR communication about the refugee issue. Specifically, the study focuses on the strategic cross‐sector alliances between corporations, NGOs, and IGOs. The analysis shows that in this controversial global crisis, the following factors of corporations' countries‐of‐origin can significantly affect the level of cross‐sector CSR alliances: democracy levels, economic inequality levels, and unemployment rates. Findings of this study provide practical guidelines that can help managers to anticipate societal expectations when dealing with controversial social issues in an international setting. Our findings could also assist policymakers, NGOs, and IGOs to better design strategies to mobilize the corporate resources.     

Consequences of deindustrialisation for globalisation: Insights for international business

Literature suggests many countries across the world are facing a growing political backlash against the consequences of deindustrialisation. Intensifying anti-globalisation sentiment associated with this backlash has important implications for international business. In the absence of empirical evidence, it is however unclear to what extent deindustrialisation has contributed to a recent slowdown in the rate of growth of globalisation. Considering the importance of this knowledge, this paper tests predictions in the literature that this slowdown has to some extent been caused by deindustrialisation (declining country shares of manufacturing’s output in gross domestic product). Granger and generalised method of moments findings suggest some support for these predictions. On the basis of the findings, it is argued that compensation should be prioritised for those that stand to lose due to deindustrialisation. Further research is also called for, to explore other ‘root’ causes of current anti-globalisation movements, and to address them, before consequences spill over into a post COVID-19 era of uncertainty for international business.