Strategy antecedents of modes of entry into foreign markets

Although a firm's choice of mode of entry to a foreign market is central to the implementation of international strategy, we have only limited understanding of the effects of international strategy on the choice. This study explores the effects of business relatedness and corporate international experience. Data were collected on 173 ventures of Swedish manufacturing firms that were present on the German market, and multivariate techniques were applied to test hypotheses. It was found that product/market relatedness and intangible resource relatedness between the foreign business unit and the industrial firm's core business unit favored a full control entry mode based on sole ownership. This finding was also valid for importance of foreign markets. Further, market importance moderated the two relationships regarding business relatedness. Contributions to the literature are discussed.     

Acquisition Entry Strategy of Nordic Multinational Enterprises in China: An Analysis of Key Determinants

ABSTRACT

This article addresses the key determinants of acquisition entry strategy (i.e., the choice between full versus partial acquisition) of Nordic multinational enterprises (MNEs) in China. Although general establishment and entry mode strategies have been a highly researched area in international business studies, acquisitions as a specific entry strategy and its different aspects have been scarcely researched. Therefore, the current study aims to fill the gap in literature by analyzing determinants of acquisition entry strategy based on three important theoretical bases: transaction cost economics, resource-based view, and institutional theory. Our study is one of the first to analyze acquisition entry strategy of MNEs from all four Nordic economies (Denmark, Finland, Norway, and Sweden) in China during 1987 through 2012, and this unique empirical context adds further value to the study findings. The empirical results show that high target country experience, high cultural distance, high level of product diversification, and subsidiary location in institutionally developed and open cities of China were positively associated with choice of full acquisitions by Nordic MNEs. On the other hand, high industry research and development intensity and timing of acquisition led to the choice of partial acquisitions by the investing Nordic MNEs.     

Local enablers of business models: The experience of Brazilian multinationals acquiring in North America

Despite the rapid growth of South–North investments, the literature is still incipient to look into the broad range of issues associated with them. This article focuses on reverse takeovers and discusses the reasons why emerging-country firms, Brazilian multinationals in particular, are able to profitably acquire firms in developed countries, chiefly in the United States. The research addresses two specific subjects in international business literature: country-choice and entry-mode. The analytical approach assumes that reverse takeovers are part of the dynamic reconfiguration of global production systems which, in turn, are influenced by shifting conditions in countries' business environments. Changes in business environments impact local firms' business models and their positioning in global production networks and international markets as well. Reverse takeovers are facilitated when both the simultaneous evolution of the developed country multinational and the emerging country multinational business models establish a common ground for the transaction. Through the analysis of Brazilian multinationals' acquisitions in North America, relevant insights pertaining to the realms of firm-specific advantages, country-choice and entry mode in reverse takeovers are unveiled.     

The search for global competence: From international HR to talent management

This article describes the evolution of the search for global competence through a 50-year content analysis and review of published research in the field of International HR Management (IHRM), and more recently, Talent Management (TM), with special emphasis on the Journal of World Business. We present a detailed examination of the IHRM/TM content of the Journal of World Business from its inception in 1965 through 2014. To put the results of that review into perspective, we review key themes in global business and strategy from 1965 to the present, noting where IHRM/TM research and business trends correspond, diverge, and lag. Next, we present a brief history of IHRM and TM, showing how the emerging theme of TM offers challenges and promise for connecting future IHRM/TM research with emerging business, strategy, and social trends. We conclude with the implications of our findings for future research, and the importance of the search for global competence.     

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.     

Mergers & acquisitions research: A bibliometric study of top strategy and international business journals, 1980–2010

Mergers and acquisitions (M&As) are important modes through which firms carry out their domestic and international strategies and have been noted as the CEOs favorite strategy. As a significant field of study, M&A-research has accumulated substantial knowledge. This bibliometric study examines the extant strategy and international business literature on M&As. Methodologically, we examined a sample of 334 articles published in sixteen leading management/business journals, during a 31 year period — from 1980 to 2010. The results provide a global perspective of the field, identifying the works that have had the greater impact, the intellectual interconnections among authors and works, the main research traditions, or themes, delved upon on M&A-related research. Structural and longitudinal analyses reveal the changes in the intellectual structure of the field over time. A discussion on the accumulated knowledge and future research avenues concludes this paper.     

Antecedents and consequences of effectuation and causation in the international new venture creation process

The selection of the entry mode in an international market is of key importance for the venture. A process-based perspective on entry mode selection can add to the International Business and International Entrepreneurship literature. Framing the international market entry as an entrepreneurial process, this paper analyzes the antecedents and consequences of causation and effectuation in the entry mode selection. For the analysis, regression-based techniques were used on a sample of 65 gazelles. The results indicate that experienced entrepreneurs tend to apply effectuation rather than causation, while uncertainty does not have a systematic influence. Entrepreneurs using causation-based international new venture creation processes tend to engage in export-type entry modes, while effectuation-based international new venture creation processes do not predetermine the entry mode.     

Influence of country and company characteristics on international business decisions: A review,conceptual model,and propositions

This research advances four propositions and a conceptual model of country and company characteristics influencing key International Business Decisions (IBDs). The IBDs in this study are country selection and evaluation, entry mode, segmentation-targeting-positioning, and the marketing mix – the first two in the international business domain, and the latter two in the international marketing field. The conceptual model and related four propositions are advanced, based on an extensive literature review and subsequent in-depth review of 169 published research papers on major IBDs and their determinants, namely, country characteristics, including opportunities, risks, and various distances between the host country and home country, and company characteristics, which include international business experience, assets/resources, and expansion/growth strategies. Managerial implications and directions for future research are discussed.     

The Ukraine/Russia conflict: Geopolitical and international business strategies

The Ukraine and Russian conflict is one of the most pressing current global business issues. It has become a political and social issue that is influencing business practices around the world. While the topic is popular in the mainstream business press, there has been relatively little academic work on the topic. To address this gap, this article discusses the impact of the conflict on international business in terms of the perception by society about Ukrainian or Russian business activities. This means highlighting how a conflict can involve direct military intervention but also social interaction. This article reveals that there are many effects on global business stemming from the Ukraine–Russian conflict many of which are currently known, but others will be known in the future. Managerial implications are stated in the article that highlights the cultural and social impact of the crisis as well as future research suggestions for international business researchers that stress the importance of the conflict.     

Internationalization through business model innovation: In search of relevant design dimensions and elements

Internationalization through business model innovation involves the creation, or reinvention, of the business itself. This paper aims to integrate basic insight from the literature on business model innovation, internationalization of the firm, international entrepreneurship, and global marketing into a conceptual model. Our model illustrates that internationalization through business model innovation includes design dimensions, which are domestic or globalized in upstream production as well as in downstream markets. The outcome of this paper is four international business model types each with a specific resource allocation for dealing with differences across geographical locations and entry mode elements. We address the interrelation of these dimensions and elements in firms’ international activities.     

Institutional dimensions and entrepreneurial activity: an international study

The purpose of this article is to examine the influence of institutional dimensions (regulative, normative and cultural-cognitive) on the probability of becoming an entrepreneur. The main findings demonstrate, through logistic regression, that a favourable regulative dimension (fewer procedures to start a business), normative dimension (higher media attention for new business) and cultural-cognitive dimension (better entrepreneurial skills, less fear of business failure and better knowing of entrepreneurs) increase the probability of being an entrepreneur. Data were obtained from both the Global Entrepreneurship Monitor and the International Institute for Management and Development for the year 2008, considering a sample of 30 countries and 36,525 individuals. The study advances the literature by providing new information on the environmental factors that affect entrepreneurial activity in the light of institutional economics. Also, the research could be useful for designing policies to foster entrepreneurship in different environments.     

SME foreign market entry mode choice and foreign venture performance: The moderating effect of international experience and product adaptation

Firms’ foreign market entry mode choice attracts considerable research attention. However, the performance implications of this choice remain inconclusive, particularly in the context of small and medium-sized enterprises (SMEs). The present paper draws on the resource-based view (RBV) and develops a theoretical model specifically tailored to the context of SMEs in order to study the relationship between entry mode choice and foreign venture performance. Testing hypotheses on 133 German SMEs, we show that international experience as a resource and product adaptation as a capability improve the performance of non-equity entry modes by mitigating liabilities of smallness inherent to SMEs. We furthermore find empirical support for the joint moderating effect of international experience and product adaptation on the focal relation. Our findings contribute to the SME foreign market entry mode literature and have implications for practitioners and future research.     

Motivations and risks in international licensing: a review and implications for licensing to transitional and emerging economies

In the light of changes in technology and today’s global business environment, recent contributions in the literature regarding international licensing, particularly the reasons, risks, and management of licensing are reviewed. The main reasons that firms choose licensing over other methods of international market entry are examined, and the risks associated with licensing are synthesized and updated, along with perspectives on managing those risks. Finally, areas are suggested for further inquiry that may help to enrich this field of study. Throughout, particular attention is paid to the issues of international licensing that affect emerging and transitional economies, particularly from the perspective of small firms.     

Reciprocity and informal institutions in international market entry

This article first identifies two gaps in the literature: (1) the need to expand international market entry research beyond contractual modes of “make, buy, and ally;” and (2) the need to address the imbalance in the institution-based view that has paid inadequate attention to informal institutions. To help close the two gaps, we identify reciprocity—the mutually contingent exchange of gratifications that is supported by informal institutions—to be a non-contractual mode of international market entry. We focus on how informal institutions provide some of the conditions, motivations, and precipitating circumstances behind the use of reciprocity.     

Knowing your boundaries: Integration opportunities in international professional service firms

This study presents three different business models (continuous, repetitious, and unique) identified in international professional service firms that pursue a transnational strategy. These business models have varying opportunities for global integration. We extend the integration–responsiveness framework by offering a framework for analyzing how to balance global integration with local responsiveness when pursuing a transnational strategy. By identifying the content, structure, and governance transactions of the three business models, we can determine when to pursue headquarters-initiated global integration and when to choose strategies that ensure local responsiveness and subsidiary competitiveness in local markets.     

Determinants of international retail operation mode choice: Towards a conceptual framework based on evidence from French specialised retail chains

Abstract

More and more retailers have expanded internationally. Because of its impact on the success of a retailer's international operations, a critical aspect of an internationalisation strategy consists of choosing the appropriate entry and expansion modes. The phenomenon remains misunderstood as little research in international retailing has focused on this question and findings from international management literature find limited application to services.

This paper draws upon a literature review and six case-studies from French specialised retailers to provide an exploratory framework for examining key determinants of operation mode choice. It is found that retailers consider four underlying dimensions of operation modes. These dimensions are affected by situational, individual and marketing factors whose explanatory impacts are moderated by the motives for internationalisation and relationship networks.     

Market entry barriers in China

Although industrial economists and strategy theorists provide a considerable amount of research regarding market entry barriers in the context of industrialized countries such as those in North America and Western Europe, few studies focus on entry barriers in the business context of China. Consequently, an understanding of the barriers to entry to Chinese markets as perceived by Chinese business executives is limited in the marketing literature. This research, based on the development and administration of a self-completed survey of one hundred and ninety three Chinese executives, attempts to ascertain the dimensions and order of importance of market entry barriers in this context. The findings of the research indicate seven dimensions of marketing entry barriers and show that business executives in China perceive advertising effects as the most important entry barrier and capital requirements as the least important.     

International vertical alliances within the international business field: A systematic literature review and future research agenda

International vertical alliances (IVAs) have garnered increasing scholarly interest in the strategy and international business (IB) literature. Our review of 111 papers published in major IB journals from 2000 to 2020 sheds light on the antecedents, key mediators, moderators and outcomes of IVAs. To generate insights, we juxtaposed forward and backward alliances and compared IVAs with their domestic vertical and horizontal counterparts. In this paper, we highlight key areas for future IVA research, including—but not limited to—broadening the scope of the investigation in order to integrate new theories and methods suited to examine such alliances in the IB field.     

The impact of manager's animosity and ethnocentrism on multinational enterprise (MNE) international entry‐mode decision

For MNEs, entry‐mode decision is undeniably critical. While the literature has identified several determinants of foreign entry‐mode choice, few have examined the impact of manager's animosity and ethnocentrism. This article is an attempt to fill this gap by examining the independent effect of manager animosity and ethnocentrism as well as the moderating effect of cultural intelligence on entry mode. Data were collected through surveys targeting upper‐level managers in the U.S., U.K., and Germany to examine how animosity and ethnocentrism would shape their decision to enter Iran, a host market largely perceived negatively in the West. Multivariate multiple regression was used to test the hypothesized effects and to capture the multidimensional aspect of entry modes. We found that, in general, manager's animosity and ethnocentrism do negatively affect the choice of an entry mode and that cultural intelligence has the potential to neutralize that negative effect.     

The domain of international business: Futures and future relevance of international business

Using data generated by a global Delphi study involving international business (IB) scholars and practitioners, this article reflects on the core and domain of a discipline that, on one side, has to deal with increasing competition from related disciplines, which internationalize their research focus, and, on the other side, is trying to develop conceptual knowledge to explain ever more complex international phenomena. Generating a multilevel framework of important issues for IB leads to propositions, which may widen the focus of the discipline to go beyond the firm, which, comparing IB to related disciplines, can provide pathways that maintain IB highly relevant for most diverse communities affected by international business. ©2011 Wiley Periodicals, Inc.