INTERNATIONAL MANAGEMENT Conference Paper Abstracts

INTERNATIONAL R&D NETWORKS, HOME COUNTRY ENVIRONMENT, GLOBAL TRADE LINKAGES AND FIRM INNOVATION
Phene, Anupama; George Washington U.; anuphene@gwu.edu Jandhyala, Srividya; George Washington U.; srividya@gwu.edu
Our study evaluates how a firms international R&D network influences its ability to capitalize on the opportunities offered by the home country technological environment and the global trade linkages. We posit technologically rich and diverse home countries and global trade linkages, weighted by technological sophistication of the partner country spur firm innovation. We further propose that the international dispersion of the firms R&D network plays an important role in moderating the effects of the home country and global trade linkages on innovation. We test our hypotheses by examining a sample of firms with international R&D sites in the semiconductor industry. Keywords:None

A CROSS-CULTURAL STUDY OF JOB CHOICE: THE ROLE OF PERSONAL VALUES

Miller, Jane Giacobbe; U. of Massachusetts, Amherst; jkmiller@som.umass.edu Woodard, Melissa S; U. of Massachusetts, Amherst; mwoodard@mgmt.umass.edu Guo, Chun; Merrimack College; guoc@merrimack.edu Jiang, Xueting; U. of Massachusetts, Amherst; jiangxt77@gmail.com Chan, Kwong; U. of Massachusetts, Amherst; kwongchan@mktg.umass.edu Alas, Ruth; Estonian Business School; ruth.alas@ebs.ee Aydin, Mehmet D; Hacettepe U.; mdaydin@hacettepe.edu.tr Lemos, Ana Heloisa da Costa; PUC-Rio; aheloisa@iag.puc-rio.br Kumpikaite, Vilmante; Kaunas U. of Technology; vilmante.kumpikaite@ktu.lt Liu, Ming; Qingdao Technological U.; mingliu100@126.com Nair, Sudhir; U. of Massachusetts, Amherst; snair@som.umass.edu
Globalization has increased the importance of attracting and retaining the best talent in organizations, yet little is known about how job choice decisions are made cross-culturally. Growing evidence suggests that one important influence on job choice is the decision makers values. The bulk of this research, however, has been conducted in the Western context. The present study extends this research by examining the relationships between individuals values and their preferences for job attributes in multiple countries. Drawing on past research on job choice and cross-cultural values, we develop and test hypotheses regarding the influence of individualism, collectivism, materialism, and a set of personal values identified by Schwartz (1992), on the job seekers preferences for pay, job security, meaningful work and opportunities

for skill development. We collected data in 7 countries, from a large sample (1070) of undergraduate business students who are in the final year of their programs and beginning the job search process. The countries Brazil, China, Estonia, India, Lithuania, Turkey and the U.S. represent considerable diversity in cultural values. Consistent with our predictions, we found that job seekers values are significantly related to their preferences for job attributes, both within and across countries. A number of country-based differences in job preferences were also found. Implications for research and practice are discussed. Keywords:personal values, job choice, cross-cultural

A LONGITUDINAL STUDY OF INTERNATIONAL R&D NETWORKS IN THE CONSUMER ELECTRONICS INDUSTRY

Glowik, Mario; Wildau UAS; mario.glowik@tfh-wildau.de Puck, Jonas F; WU Vienna; jonas.puck@wu.ac.at
Asian manufacturers lead the world markets in the liquid crystal display (LCD) and plasma television set industry. Recent literature implies that the competitive strengths of these firms may is founded on their network-based strategic concepts. We, therefore, apply a network perspective to analyze international R&D activities in the electronics industry and describe how these networks have evolved during the last two decades. We applied a snowball-procedure to generate knowledge about all relevant players in the market and their R&D connections to other firms and analyzed the developed networks both qualitatively and quantitatively. Our findings indicate that the firms overall networking intensity has been increasing in recent years, which underlines the importance of the network approach in international business. Additionally, we found that Panasonic and Sharp, which reached the highest networking scores, simultaneously represent the technological market leaders in the LCD and plasma television set markets respectively, thus delivering support for the relevance of the firms integration in R&D networks. Overall, our findings provide strong implication for theory and business practice. Keywords:R&D networks, Asian firms, Consumer electronics

A NOTE ON BICULTURAL IDENTITY INTEGRATION AND SOCIAL CAPITAL CREATION BY IMMIGRANT ENTREPRENEURS
Clarke, Ruth; Nova Southeastern U.; rclarke@huizenga.nova.edu Chandra, Ramdas; Nova Southeastern U.; cramdas@nova.edu Gong, Baiyun; Nova Southeastern U.; baiyun@nova.edu
Potentially, immigrant entrepreneurs build a dual nexus of social identity through social capital creation and bicultural identity integration (BII) but face significant challenges in this process. Immigrants contribute significantly to entrepreneurial activity in host economies and potentially by forming weak dyadic ties, bridge cultures. Conversely, geographic realities may outweigh the capacity of immigrant entrepreneurs to develop and ensure survival of new startups. Integral to our discussion is the concept of duality of structure (social) and the potential for independent thinking and hence individual action within a social structure, including the influence of cultural capital in each country context.

Keywords:social capital, immigrant entrepreneurs, bicultural identity integration

A RESOURCE DEPENDENCE PERSPECTIVE OF EMERGING MARKET MULTINATIONALS

Gaffney, Nolan; U. of Memphis; ntgffney@memphis.edu Kedia, Ben L; U. of Memphis; bkedia@memphis.edu Clampit, Jack; U. of Memphis (CIBER); jclampit@memphis.edu
Using Resource Dependence Theory as a lens, we explore existing explanations of how and why Emerging Market Multinationals seek to compete internationally through Foreign Direct Investment. Whether these firms seek to exploit existing resources, seek to augment their resource base, or pursue a combination of both is reflected by their generic internationalization strategy. Furthermore, this generic strategy is also reflective of the firms strategic focus, as well as predictive of its entry mode and resulting resource dependence. A conceptual model is offered along with testable propositions. Keywords:Emerging Market Multinationals, Resource Dependency Theory, FDI

A THEORETICAL FRAMEWORK TOWARDS THE THIRD CULTURE

Cho, Eunbum; U. of Hawaii at Manoa; eunbum@hawaii.edu
The term third culture has been used with different meanings by various scholars and disciplines. In this paper, I reconcile various approaches to the third culture and build an empirically verifiable theoretical framework of the third culture via thorough literature review. By building a theoretical framework of the third culture, this study will provide a foundation for scientific advancement of the third culture literature. The third cultures managerial, sociological and psychological implications are discussed and future research directions are suggested. Keywords:the third culture, third culture kids, global nomads

A TRANSACTION GOVERNANCE EXPLANATION FOR BUSINESS ENTERTAINMENT IN CHINA

Sun, Yonglin Francis; U. of Western Ontario; ysun89@uwo.ca Chen, Shih-Fen S.; U. of Western Ontario; sfchen@ivey.uwo.ca
The role of business entertainment has remained controversial in management literature. In this study, we take a transaction governance approach to predict the pervasiveness of entertainment activities in business settings. Our basic thesis is that each society features a transaction governance structure representing a unique combination of market, legal, and social sanctions. Business entertainment reinforces social sanctions in regulating the behaviors of economic agents, particularly in societies where market and legal infrastructures are under-developed. Based on a sample of manufacturers listed in the Shanghai Stock Exchange, we have found that, under the conditions where social sanctions play a bigger role in governing business transactions, firms spend more on entertainment-related activities. Our findings confirm the transaction governance approach to business entertainment in China.

Keywords:Transaction governance, Institutions, Entertainment

ADVANCES IN THE INTERNATIONALIZATION OF CHINESE FIRMS: A CRITICAL REVIEW AND RESEARCH AGENDA
Deng, Ping; Maryville U. of St. Louis; pdeng@maryville.edu
The important phenomenon that the internationalization of Chinese firms (ICF) represents has attracted increasing interest from scholars from multiple fields over the past 20 years. Although this proliferation of research has the potential to significantly improve our understanding of Chinese multinationals, absent is the necessary step of consolidating and integrating extant knowledge. We review the scholarship on the ICF and offer our insights into the specific areas in critical need of further development. By focusing on articles published in major scholarly journals during the period 1990-2009, we develop a framework to organize and review conceptual and empirical findings from disciplines as far ranging as management, international business, crossculture, and area studies. Three primary streams of enquiry are identified within the literature, which focus on the antecedents, processes and outcomes of the ICF. Achievements within each of the three research streams are carefully reviewed. In so doing, we identify a number of important issues that have remained consistently untouched, and provide recommendations for future research aimed at developing a more integrated research agenda on the ICF for business and international management scholars. Key words: Chinese firms; Internationalization; Outward FDI; Cross-border mergers and acquisitions (M&As); International expansion Keywords:Internationalization, Chinese firms, Outward FDI

AN EXAMINATION OF MANAGERIAL LOCATION SHUNNING DURING MNC LOCATION CHOICE PROCESSES

Schotter, Andreas P.J.; Thunderbird School of Global Management; andreas.schotter@thunderbird.edu
The relative low R-square results in previous economic-choice studies suggest that there are additional explanations that need to be considered within multinational corporation (MNC) location-choice research. This study investigates the widely overlooked phenomenon of managerial location avoidance. By utilizing a multi-method research design, and drawing on data from 136 countries, the results suggest that in addition to traditional economic factors and psychic distance, MNC location decision-making processes are influenced by how troublesome it is for managers to travel to a specific country or how bothersome it is to spend time in a specific country. A 12-item measure is developed that has a significant and negative moderating effect on the relationship between economic foreign direct investment (FDI) attractiveness and FDI intensity. The effect is stronger for non-resource-seeking MNCs. Keywords:Multinational Corporations, Internationalization Theory, Location Choice

ANGLO-SAXON MULTINATIONAL COMPANIES HRM POLICIES AND SUBSIDIARY CONTEXTS

Newenham-Kahindi, Dr. Aloysius Marcus; U. of Saskatchewan; newenhamkahindi@edwards.usask.ca

This qualitative research paper examines the transfer of human resource management (HRM) policies in the subsidiaries of two Anglo-Saxon multinational enterprise (MNE) banks in a traditional patriarchal society in Tanzania. The paper demonstrates how the corporate governance characteristics of the two Anglo-Saxon global banks serve to centralise, formalise and standardise their organisational and management systems in order to maintain a strong relationship between structure and firm performance across the wide range of their operations. Similarities do exist between the two banks; however, distinctive HRM practices in each MNE do emerge as well, reflecting the unique ways they institutionalise their management systems at the local level to develop high-performance work practices (HPWPs). This article highlights the relevance for MNEs to strategically integrate a variety of cultural functions that reflect the diversity among their employees as a necessary feature in the development of competitive and sustainable HRM practices. Keywords:High performance work practices, Anglo-Saxon business model, HRM

ANTECEDENTS OF LIABILITY OF FOREIGNNESS: A SOCIAL PSYCHOLOGICAL PERSPECTIVE

Nair, Sudhir; U. of Massachusetts, Amherst; snair@som.umass.edu Cohen, David; U. of Massachusetts, Amherst; dcohen@som.umass.edu Sherman, Kimberly; U. of Massachusetts, Amherst; kim_sherman@hotmail.com
That transacting business in a foreign country imposes a liability of foreignness is a phenomenon well-established in the International Management literature. We contribute to this literature by describing the underlying social psychological mechanism that converts foreignness into social costs or benefits. Bounded rationality causes host country partners to conserve their cognitive resources by substituting stable host country stereotypes about the foreign firms home country for individual evaluation of its products and services. If, in context, the stereotype is positive, the firm benefits; otherwise, the firm must compensate host country partners to ignore the stereotype and use their cognitive resources to individually evaluate its products. Keywords:Liability of Foreignness, Social Psychology, Internationalization

ASSESSING THE OPPORTUNITY FOR GLOBAL STANDARDIZATION IN INTERNATIONAL PROFESSIONAL SERVICE FIRMS
Breunig, Karl Joachim; BI Norwegian School of Management; kj.breunig@bi.no Kvlshaugen, Ragnhild; BI Norwegian School of Management; ragnhild.kvalshaugen@bi.no Hydle, Katja; BI Norwegian School of Management; katja.hydle@bi.no
The degrees of pressure for both globally integrated operations and simultaneously being locally responsive to customer needs are two dimensions that need to be carefully balanced. Current

MNC literature fail to identify the micro-level elements required to obtain and maintain a transnational strategy. Our study is based on an in-depth study of organizational routines in two international professional service firms (IPSFs) as an extreme case context. The conventional view on professional services is that they require high degrees of customer interaction in the service delivery process and thus display a very high degree of customization. However, when these services are offered internationally they entail organizational integration to maintain quality and achieve scale advantages. The study identifies three parallel and even conflicting value creation processes: Continuous, repetitious and unique. By assessing routines in these processes with the routines observed in the phases of a service offering we are able to identify when to pursue headquarter initiated global integration and when to choose strategies that ensure local responsiveness and subsidiary competitiveness in local markets. Continuous value creation processes have medium standardization opportunity, while repetitious may highly benefit from global scaling and unique value creation processes mainly serve local customers. Keywords:None

BEYOND CULTURAL VALUE DIMENSIONS: A STUDY OF CROSS-CULTURAL INTERACTIONS IN MULTINATIONAL TEAMS

Hajro, Aida; Brunel U.; aida.hajro@brunel.ac.uk Pudelko, Markus; Tbingen U.; markus.pudelko@uni-tuebingen.de
This paper investigates the functioning of multinational teams (MNTs). It is based on 87 interviews with MNT members from Austria and Central and Eastern Europe across six MNCs. Instead of following the dominant quantitative research paradigm of comparing (static) cultural value dimensions, this qualitative study focuses on (dynamic) cross-cultural team interactions. While MNTs from all companies struggle initially with national cultural differences, MNTs from some companies manage over time to negotiate a cooperative, hybrid team culture. We argue that two factors are crucial for creating a hybrid team culture: the dynamics of internal team interactions and the organizational culture. Keywords:multinational teams, cross-cultural management, qualitative research

BOARD CHARACTERISTICS AND AUDIT FEES: WHY OWNERSHIP STRUCTURE MATTERS

Desender, Kurt; U. Autonoma de Barcelona; kurt.desender@gmail.com Garcia-Cestona, Miguel; U. Autonoma Barcelona; cestona@gmail.com Crespi-Cladera, Rafel; U. of Islas Baleares; rafel.crespi@uib.es Aguilera, Ruth V.; U. of Illinois, Urbana-Champaign; ruth-agu@uiuc.edu
Analyzing 247 French and Spanish listed companies, we evaluate the influence of the ownership structure and the board of directors on the demand for external audit services. We argue that controlling shareholders influence the priorities of the board to focus on the provision of resources rather than monitoring. In contrast, boards in widely-held firms have a stronger focus on monitoring. To test our arguments, we explore how the relationship between the board of directors and the demand for audit is contingent on the firms ownership structure. Our results show that the ownership structure has a significant influence on the boards priorities and the demand for audit. In addition, we uncover that for widely-held firms, board independence and CEO duality are positively related to the audit fees. In contrast, for closely-held firms, the

relationship between board characteristics and the demand for external audit becomes insignificant. Keywords:ownership structure, board of directors, audit demand

BOARD MANDATES IN INTERNATIONAL JOINT VENTURES

Reuer, Jeffrey J.; Purdue U.; jreuer@purdue.edu Klijn, Elko; VU U. Amsterdam; eklijn@feweb.vu.nl Volberda, Henk W.; Erasmus U.; hvolberda@rsm.nl Van den Bosch, Frans A.J.; Erasmus U.; fbosch@rsm.nl
Considerable advances have been made in scholarship and practice on corporate governance in recent years, and important opportunities exist for these developments to be considered within the domain of international joint ventures (IJV). This paper assesses the treatment of boards of directors in theoretical and empirical research on international joint ventures. We investigate the board oversight responsibilities in international joint ventures and offer direct evidence on the roles that IJV board members play. We examine the determinants of IJV board oversight, and the contingency perspective we develop uses the IJV literature to identify factors shaping the benefits and costs of board oversight. The paper concludes with research opportunities on boards as a key governance feature of international joint ventures. Keywords:Board of directors, International joint ventures, oversight

BOUNDARIES OF THE RESOURCE-BASED VIEW IN THE CONTEXT OF EMERGING MARKET MULTINATIONALS

Banalieva, Elitsa R.; Northeastern U.; e.banalieva@neu.edu Sarathy, Ravi; Northeastern U.; r.sarathy@neu.edu
Does a market differentiation strategy enhance the performance of emerging market multinational enterprises (EMNEs)? We analyze the relationship between relative differentiation advantage (RDA) and firm performance of EMNEs, suggesting that the theoretical predictions of the resource based view (RBV) encounter boundaries in an EM context. In other words, whether RDA enhances firm performance depends on whether the EMNE: (1) has a relative cost advantage (RCA), (2) manufactures consumer or producer products, and (3) operates in a home country that underwent significant market liberalization reforms. Our analysis of 670 EMNEs supports the need to develop a contingency RBV for EMNEs. Keywords:Contingency Resource-Based View, EMNEs, Performance

BPO ANNOUNCEMENT EFFECT: A COMPARISON BETWEEN GERMAN AND BRITISH COMPANIES

Wilkens, Christian; Tilburg U.; christianwilkens@gmail.com He, Zi-Lin; Tilburg U.; Z.L.He@uvt.nl

This paper concerns the moderating effect of corporate governance structures on the market value of companies in response to their business process outsourcing (BPO) announcements. By means of an event study, we investigate stock market reactions to BPO announcements in a country with a continental European corporate governance regime (Germany) as compared to a country with an Anglo-Saxon corporate governance regime (Great Britain). The results show that a British company could on average expect a more favorable reaction than a German outsourcer, and that this difference may be attributed to differences in corporate governance regime. Keywords:business process outsourcing, corporate governance, event study

BUSINESS GROUPS, NETWORKS, AND EMBEDDEDNESS: ALLIANCES IN JAPANESE ELECTRONICS, 1985-1998

Lincoln, James R; U. of California, Berkeley; lincoln@haas.berkeley.edu Guillot, Didier; City U. of Hong Kong; dguillot@cityu.edu.hk
This paper examines the changing process of strategic alliance formation in the Japanese electronics industry between 1985 and 1998. With data on 128-137 Japanese electronics/electrical machinery makers, we use a dyad panel regression methodology to address a series of hypotheses drawn largely from embeddedness theory on how the firms horizontal and vertical keiretsu business group affiliations and prior alliance networks supported and constrained partner choice in new R&D (innovation) and nonR&D (implementation) domestic economy alliances. We find that in the first half of our series (1985-91; the preburst period) keiretsu served as infrastructure or platform for new strategic alliances that had both innovation and implementation goals. In the second half of our series (1992-98, the postbubble period) the keiretsu effects on innovation alliance formation were gone, but the groups role in nonR&D or implementation alliances, the purpose of which was often cost reduction, had expanded. Our results suggest that Japanese electronics firms over this interval of time adapted rationally to the heightened uncertainty and stringency of the Japanese domestic economic environment by searching outside their preexisting networks for innovation alliances while at the same time exploiting those networks for implementation alliances addressed to cost-reduction and other operational aims. The study speaks to embeddedness theory in showing that economic actors are not deterministically constrained by business group or other preexisting network ties but may in rational fashion exploit or abandon those ties with an eye to advancing corporate and alliance goals. Keywords:None

BUSINESS MODEL DEVELOPMENT FOR BASE-OFTHE-PYRAMID MARKET ENTRY

London, Ted; U. of Michigan; tlondon@umich.edu
Base-of-the-pyramid (BoP) markets offer the prospect of new growth opportunities for multinational corporations (MNCs). Launching new initiatives that target these markets requires developing a new business model, an important and understudied aspect of business strategy. The effectiveness of business model development can determine whether a new initiative is launched or not. Even if an initiative is launched, the company may change its target market during the models development. This study explores how key components in new business model development influence both the decision to launch and market entry choice. A longitudinal

analysis of 18 initiatives in six MNCs indicates that market entry requires a business model development approach that aligns structure, learning metrics, problem-solving diversity, and access to financial resources. Furthermore, entering BoP markets involves conceptualizing business model development in terms of architectural or component R&D. Keywords:business model development, base of the pyramid, market entry

CAPABILITIES AND COMPETITIVENESS ENHANCEMENT THROUGH JV LEARNING BY RUSSIAN PARENT FIRMS

Jormanainen, Irina; Aalto U. School of Economics; irina.jormanainen@hse.fi
It has been long recognized that joint ventures (JVs) provide parent firms with an excellent opportunity for learning. However, the JV literature to date lacks the empirical evidence of performance implications of learning from JV for local parent firms in transition economies and mainly concentrates on understanding of learning outcomes at the JV level. Thus, the paper examines the performance implications of learning from JVs for local parent firms in Russian empirical context. The study illustrates how learning through JV affects the development of technological and managerial capabilities of Russian parent firms and how it influences their restructuring and long-term competitiveness. Hence, this paper attempts to bridge the JV learning, innovation and strategy literature for the development of comprehensive measurements of JV learning at the parent level. The mixed research methods combining pilot survey with case study approach have been used to acquire reliable and rich empirical evidence for the purpose of this study. Keywords:None

CAUGHT IN THE CROSSFIRE: THE EFFECT OF INTERSTATE WAR ON FDI BY INDUSTRY

Dai, Li; Texas A&M U.; ldai@mays.tamu.edu Eden, Lorraine; Texas A&M U.; leden@tamu.edu
Multinational enterprises (MNEs) often have existing operations in host countries that come to engage in wars with other countries. However, in the international business literature, the risks associated with such destructive contextual changes are typically assumed to be exogenous to firm strategies. Using institutional theory to frame investment changes in the host country, this paper tests the effect of wars on changes in U.S. FDI stock in 26 host countries over the period 1982 to 2006. The results suggest that wars have no effect on services FDI, but decreases overall FDI, as well as FDI in the natural resources and manufacturing industries. Research and practical implications are discussed. Keywords:MNEs, Interstate War, FDI

CEO LEADERSHIP, SOCIAL CAPITAL, AND SUBSIDIARY OUTCOMES

Lee, Jeong-Yeon; U. of Kansas; jaylee@ku.edu Lee, Byung Hee; Hanyang U.; blee@hanyang.ac.kr

In this paper we investigate the relationship between subsidiary Chief Executive Officer (CEO) transformational leadership and two subsidiary outcomes: subsidiary lateral centralization and innovative initiatives of the focal subsidiary. We investigate the possibility that transformational leaders will actively operate a brokerage type of social capital in ties with their headquarters and subsidiary alters. Based on data from 109 Korean subsidiaries and a survey of their CEOs social networks, we found that the centrality and structural holes of the CEO between headquarters-subsidiary information ties mediate transformational leadership and the aforementioned subsidiary outcomes. Implications of these findings in the multinational corporation context are discussed. Keywords:Transformational Leadership, Lateral centralization, Social capital

CHINESE FIRMS FDI ENTRY MODE CHOICES: THE EFFECTS OF ENTRY TIME AND THE CHANGES OF FDI POLICIES
Xie, Qunyong; U. of Agder; ffwmb@hotmail.com
This study examines the effects of entry time and the change of FDI policies on Chinese firms entry mode choices for their outward FDI. We find that entry time and state ownership, independently and jointly, have impacts on entry mode choices. This study makes some contributes to the literature. First, FDI entry mode choice of Chinese firms remains an underaddressed issue in business research. Second, no any prior study has empirically tested the effect of state ownership on the choices between greenfield and acquisition. Thrid, very few studies have examined the effects of entry time on entry mode choices (e.g., the general time trend and the launches of new policies). Moreover, very few studies have examined whether the launches of new policies have changed the entry mode choices made by different types of firms in a similar or different way. Our study pioneers these research areas. Keywords:None

CHINESE FIRMS FDI MODE CHOICES: THE EFFECTS OF INWARD JV EXPERIENCE AND TECHNOLOGYSEEKING MOTIVE
Xie, Qunyong; U. of Agder; ffwmb@hotmail.com
This study examines the effects of joint venture experience in inward FDI and its interaction with technology-seeking motive on Chinese firms entry mode choices for their outward FDI. Our findings suggest that Chinese firms prefer full acquisition rather than wholly-owned greenfield or joint venture if they have more foreign joint venture experience in inward FDI, and Chinese firms with more foreign joint venture experiences in inward FDI are more likely to choose full acquisitions rather than wholly-owned greenfield or joint venture for their technology-seeking FDI. Our study contributes to literature in the following aspects. First, FDI entry mode choice of Chinese firms remains an under-addressed issue in business research. Second, the connection between inward and outward activities and how it affects the internationalization process of the firm has received relatively limited attention in the business literature. Third, only few studies have examined the effects of prior mode experience on entry mode choices. Also, very little literature has examined the effects of inward FDI on outward entry mode choices. Our study pioneers these research areas. Fourth, this study distinguish between positive and negative experience,

overall experience and specific experience, while no any prior research has done so. Fifth, no any prior entry mode research has included outward FDI motives as moderators. Keywords:None

CHINESE PUBLICLY LISTED FIRMS'OUTWARD FDI ENTRY MODE CHOICES: THE EFFECTS OF OWNERSHIP TYPES
Xie, Qunyong; U. of Agder; ffwmb@hotmail.com
Based on institutional theory, this study proposes that state ownership has effects on Chinese firms choices of entry modes, foreign ownership has no significant effects, but foreign ownership in parent firms does help Chinese SOEs to weaken the impacts of their negative images on the choices of entry modes. Our findings support our hypotheses. This study contributes to the literature in the following ways. First, FDI entry mode choice of Chinese firms remains an under-addressed issue in business research. Second, this study suggests that home country institution factors, which are relatively forgotten by prior literature, matter in firms entry mode choices for their outward FDI. Third, very few studies have examined the effects of foreign ownership on entry mode choices. Fourth, no any prior study has examined the joint effects of state ownership and foreign ownership on entry mode choices. Fifth, this study also suggests the involving of foreign shares in Chinese SOEs have impacts on their overseas subsidiaries entry mode choices. Keywords:None

COMMUNICATION AND COLLABORATION IN SUBSIDIARIES IN CHINA CHINESE AND EXPATRIATE ACCOUNTS

Soederberg, Anne-Marie; Copenhagen Business School; ams.ikl@cbs.dk Worm, Verner Ditlev; Copenhagen Business School; vw.int@cbs.dk
The purpose of this paper is to explore how Chinese and expatriate managers, working in subsidiaries of five MNCs, communicate and collaborate, what kind of cultural encounters they tell about and give prominence to in their accounts of critical incidents, how they reflect upon them/ explain them, and how they cope with them. Using an inductive qualitative methodology and thematic analysis, the study draws on in-depth narrative interviews with 29 expatriate and 39 Chinese managers and experts. Some Chinese project managers are interviewed in Mandarin in group of 2-4 persons. The interviews revealed that the dominant perspective on expatriates and local managers as people living in separate worlds and holding significantly different values and opinions must be revised. In both groups we find widely travelled, flexible and open-minded people who are not only ready, but also have the capacities to conduct cross-cultural leadership. Many cross-cultural management studies have focused on differences between Chinese and Western values. The specific value of this paper is that it explores a hitherto under-researched issue and provides insight into well-educated expatriate and Chinese managers accounts of how they perceive themselves and others in a multicultural work context, and how they try to cope with perceived similarities and differences to improve cross-cultural communication and collaboration within a global organization. The findings and theoretical perspectives presented here should also assist multinational companies in their selection and development of culturally intelligent

expatriate and local managers through global talent management programs as well as mentoring and coaching on-site. Keywords:cross-cultural collaboration, cross-cultural learning processes, MNCs in China

CONNECTIVE, COLLECTIVE AND COLLABORATIVE: THE 3CS OF GLOBALEADERSHIP IN THE WORDS OF MULTISECTOR GLOBAL LEADERS
Davis, Elizabeth; George Washington U.; ebdavis@gwu.edu Khilji, Shaista Ehsan; George Washington U.; shaistakhilji@gmail.com Cseh, Maria; George Washington U.; cseh@gwu.edu
This paper responds to the call to view leadership in a new light. Based upon an exploratory research study of in-depth interviews with a diverse sample of multi-sector leaders in global organizations, we show that global leadership revolves around the 3Cs - collective, collaborative and connective. We explain each aspect to provide an analysis of how leaders define the global environment in which they operate, what they understand by global leadership in their practice, and what they list as the primary requirements for leading in this global environment. We conclude with a discussion of limitations and the need for future research. Keywords:None

COORDINATION OF GLOBALLY DISTRIBUTED TEAMS:A CO-EVOLUTION PERSPECTIVE ON OFFSHORING

Sidhu, Jatinder Singh; Rotterdam School of Management, Erasmus U.; jsidhu@rsm.nl
This article examines the coordination of an organizations onshore and offshore units from a coevolution perspective. The insights derived are combined with a case study of a leading ITservices provider to build new theory and a related propositional inventory. Counter-intuitively, our analysis suggests that managerial intent to promote onshore-offshore task coordination, by basing it on a common organization-wide identity and work context, can spark political conflict and result in sub-optimal use of knowledge, skills and tools on individual projects. The analysis also reveals that effective solutions to the coordination problem are likely to emanate bottom-up, from practices that have been distilled from a range of routines and experiences as project teams learn and progressively accumulate knowledge of what works and what does not. The crucial role in this process of the senior management, proper timing of an offshore teams involvement in a project, horizontal communication and a joint onshore-offshore evaluation and reward system is highlighted. Keywords:Onshore-offshore units, shared identity, politics and conflict

CORPORATE GOVERNANCE CODES: UNDERSTANDING COMPLIANCE IN UK, GERMANY AND SPAIN.

Crespi-Cladera, Rafel; U. of Islas Baleares; rafel.crespi@uib.es de Castro, Luiz Ricardo Kabbach; U. Autnoma de Barcelona; luisricardo.kabbach@uab.es
This paper investigates the voluntary compliance of corporate governance codes by listed firms in Germany, Spain and United Kingdom. Its builds on prior research which postulates that higher quality of corporate governance can reduce some market imperfections. First, we ask why firms voluntarily comply with country-specific codes of corporate governance. Second, we aim to understand which factors determine firms compliance of Codes of Corporate Governance. Using a dataset of public-listed firms from three European countries with different characteristics [United Kingdom, Germany and Spain] we test empirically the compared levels of compliance and the factors affecting the observed behavior. Our findings show that firms comply with the codes primarily to reduce the classical owner-manager Agency Problem [Type I] and so, ownership structure and type play an important role to explain firms compliance under different Agency Problems. Moreover, institutional pressure and size seems to influence firms on complying with Corporate Governance Codes. Keywords:corporate governance, ownership, compliance

CORPORATE GOVERNANCE MECHANISMS FOR MONITORING OR EMPOWERING CEOS? A STUDY OF CHINESE LISTED FIRMS
Hu, Helen Wei; U. of Melbourne; hehu@unimelb.edu.au Ng, Julius; U. of Melbourne; helenhuwei@126.com Alon, Ilan; Crummer Graduate School of Business, Rollins College; ialon@rollins.edu
This study examines the impact of governance mechanisms in monitoring or empowering top executives on firm performance. We distinguish between two competing theories, namely agency theory and stewardship theory, which hold conflicting assumptions about CEOs behaviour and hence offer different recommendations concerning corporate governance structure. We conduct an empirical study based on 837 publicly listed companies in China over the period of 2005-2007, the findings of this study provide strong support for stewardship theory. The results suggest that governance mechanisms that can empower CEOs work better in the Chinese context, specifically, a longer CEO tenure and lower board independence can have positive effects on firm performance. Keywords:Corporate governance, CEO, China

CORPORATE KNOWLEDGE SHARING. TURNING CULTURAL 'BLIND SPOTS INTO RESOURCES

Clausen, Lisbeth; Copenhagen Business School; lc.ikl@cbs.dk Zoelner, Mette; Copenhagen Business School; mz.ikl@cbs.dk
In their quest to becoming truly global one of the greatest challenges for Multinational Enterprises (MNE) is collaboration and knowledge sharing across borders. In our study we explore how inpatriates perceive cultural encounters in an organizational environment and how corporations facilitate knowledge sharing and cultural learning. We apply the elements of cultural

intelligence including knowledge, motivation and action as well as learning theory to map knowledge sharing processes between individuals and the organization. Our data indicate that culturally skilled inpatriates may enhance the cultural awareness of international organization by pointing out blind-spots in its cultural self-awareness as well as in its capacity to identify available knowledge internally. Theoretically, we argue that to further our understanding of knowledge sharing processes (tacit and explicit), we will gain from employing a processual and contextual approach to cultural intelligence theory. We draw on the vast literature of situated learning to develop our theoretical framework for this purpose. Keywords:cultural intelligence, knowledge sharing, blind spot

CORPORATE LEGITIMACY ACROSS CONTEXTS: MAPPING THE CULTURAL SCHEMATA OF RELIGIOINSTITUTIONAL ACTORS
Mitchell, Matthew C.; Drake U.; MatthewC_Mitchell@Moore.SC.edu
The broad and complex relationship between religion and global businesses is investigated using the theoretical lens and methodological techniques of cultural schema theory. Specifically, I examine the relationship between the multinational corporation and the religio-cultural environments in which they transact by mapping the cultural schemata of religious leaders and business executives in four countries: Egypt (Islam), Israel (Judaism), Sweden (Secular Humanism) and The United States (Christianity). Participant interviews are used to generate a focused discursive corpus which will is analyzed using a psychoanalytic technique known as the cultural analysis of discourse. The product of this analysis is a description and a preliminary mental map of the socially shared cultural-cognitive schemata used to evaluate the legitimacy of corporate action. Keywords:MNC Legitimacy, Business & Society, Culture & Religion

CORRELATES OF BICULTURAL IDENTITY INTEGRATION OF HOST COUNTRY NATIONAL EMPLOYEES IN MNCS

Huang, Siyuan; Tsinghua U.; siyuan.huang@gmail.com
Multinational Corporations (MNC) provide their employees with a unique work environment of high cultural diversity. Compared with the research attention to the macro-level challenges faced by MNCs in their worldwide operations, little is known about the psychology and behavior of individuals, particularly Host Country National (HCN) employees of local subsidiaries. Based on a literature review of multiple social identities, I introduce the focal construct, bicultural identity integration, which describes HCN employees views regarding the relationships between their identities associated with MNC organizational culture and the culture of local society. Underpinned by the theories on multiple social identities, I developed hypotheses on the association between organizational attitudes (i.e. cultural distance, organizational identification, and continuance commitment) and bicultural identity integration. I conducted analyses on survey data from employees in local subsidiaries of multi-national corporations across China to test my hypotheses. Results of a pilot study indicated that cultural distance, organizational identification and continuance commitment were related to bicultural identity integration of MNC employees. Moreover, my empirical results provided evidence to my argument regarding the moderating role of continuance commitment: for HCN employees with high continuance commitment, the negative relationships bicultural identity integration had with the other two constructs (cultural distance, organizational identification) were stronger.

Keywords:biculturalism, Host Country National Employee, continuance commitment

CORRUPTION IN EASTERN EUROPE: AN ANOMIE PERSPECTIVE

Stan, Ciprian; U. of Texas, Dallas; cvs041000@utdallas.edu
This study looks at one of the main components of corruption, bribery, through the lens of anomie theory. I will focus on the transition economies of Central and Eastern Europe to show how the radical change in social institutions, and the quickly evolving national cultural factors determined some firms to adopt a do whatever it takes attitude to get ahead. Although there is variation among the countries regarding their level of corruption, this can be explained by the level of state ownership of enterprises during socialist times and by their geographic location. A mediating factor on the level of corruption has been the level of education as well as their integration into the European Union. Keywords:Anomie theory, Bribery, CEE transition economies

COUNTERING THE CENTRIPETAL FORCE OF AGGLOMERATION: INTERCLUSTERAL CROSS-BORDER ALLIANCES

Goerzen, Anthony; U. of Victoria; agoerzen@uvic.ca
Economic agglomeration theory posits that physical proximity creates net benefits for firms. An alternative point of view is that close relations with geographically proximate firms limits exposure to the wealth of knowledge that circulates outside of the local cluster of firms. Recent research has suggested that interfirm alliances with distant firms can remedy this problem; yet this solution remains beyond the organizational capabilities of most small and medium-sized firms. To remedy this problem, interclusteral alliances have emerged as an important phenomenon in which local clusters establish formal alliances with other clusters based in foreign countries. We analyze this emerging phenomenonthat is counter to the centripetal force of agglomerationby combining theory on economic agglomerations, interorganizational networks, and alliances. Our theory is guided also by a series of semi-structured interviews to create a richer understanding of our primary research question of the conditions under which alliances between clusters develop. Keywords:cluster, alliance, location

COUNTRY RISK, INTERNATIONAL MULTIMARKET CONTACT AND MNES' COMPETITIVE ACTION

Chiao, Yu-Ching; National Chung Hsing U.; chiaoy@dragon.nchu.edu.tw Chang, Hung-Wei; National Chung Hsing U.; hwchang0824@gmail.com
In light of the lack of empirical evidence on discussing international business issue by integrating MNEs competitive dynamics. This study investigates the moderating role that international multimarket contact play in MNEs country risk and competitive action. Examining a sample of top 20 liner shipping MNEs in terms of collecting 2,117 competitive actions from Shipping Digest, we find that when MNEs face higher country risks, they undertake fewer competitive actions. On the other hand, we find that MNEs with higher degrees of international multimarket contact

between MNEs weaken the negative relationship between country risk and a focal firms competitive actions. This study extends mutual forbearance theory to international context by investigating how international multimarket contact impacts the relationship between country risk and a focal firms competitive actions. The implications of these findings for research and practice are discussed. Keywords:competitive action, country risk, multimarket contact

COUNTRY SELECTION IN INTERNATIONAL BUSINESS: A TRANSACTION COST APPROACH

Brouthers, Lance; Kennesaw State U.; lbrouthe@kennesaw.edu Wilkinson, Timothy Jon; Montana State U. Billings; timothy.wilkinson@msubillings.edu Mukhopadhyay, Somnath; U. of Texas, El Paso; smukhopadhyay@utep.edu Brouthers, Keith D.; North Carolina State U.; keith_brouthers@ncsu.edu
Our paper makes two contributions to the literature. First, although country selection is a strategic decision (Papadopoulos, Chen and Thomas, 2002), most of the work that has been done in this area has been atheoretical. In contrast we use a theory (Transaction Cost Theory), a robust set of ideas that has been previously used to examine a large array of issues in economics and business, to predict a sample of MNEs country selection. Second, we hypothesize that the theory is normative as well as predictive; those firms with country selections predicted by our transaction cost model will have superior performance relative to those with country selections that are not predicted by the model. Keywords:country selection, transaction cost theory

CROSS-BORDER ACQUISITIONS VS. GREENFIELDS: THE ROLE OF OWNERSHIP AND CEO COMPENSATION STRUCTURE
Datta, Deepak K; U. of Texas, Arlington; ddatta@uta.edu Musteen, Martina; San Diego State U.; mmusteen@mail.sdsu.edu
Based on 404 cross-border acquisitions and 160 greenfield ventures undertaken by 149 U.S. manufacturing firms between 1991-99, our study examines the implications of institutional and managerial ownership on the choice between the two foreign market entry modes. In addition, we explore the relationship between the CEO compensation structure and such choice. The study draws on the literatures in the areas of agency theory, behavioral decision theory, corporate governance, and international business to develop the above relationships. Findings indicate that while institutional ownership is positively associated with a preference for greenfield ventures, managerial ownership has the opposite effect. In addition, contrary to our expectations, results indicate that CEOs with a greater proportion of pay tied to firm long-term performance are more inclined to choose acquisitions over greenfield ventures. Keywords:entry mode choice, corporate governance, agency theory

CULTURAL POSITIONS, NOT CULTURAL DISTANCE, AFFECT HQ SUBSIDIARY RELATIONS

Drogendijk, Rian; Uppsala U.; rian.drogendijk@fek.uu.se Holm, Ulf; Uppsala U.; Ulf.Holm@fek.uu.se
We study how national cultural differences affect the managerial relationship between MNC headquarters and their subsidiaries. We argue that it is not just the cultural distance between the headquarters and its subsidiaries, but rather the actual cultural characteristics of both parties, and their related cultural positions that affect the relation between them. We investigate this empirically, focusing on the positions of headquarters and subsidiaries on the cultural dimension of power distance (the acceptance of unequal distribution of power in a society), which we relate to headquarters influence on the competence development of the subsidiary. Our dataset is comprised of 1552 subsidiaries in six European countries and their corresponding headquarters in 27 countries distributed throughout the world. ANCOVA analysis shows that the cultural positions of both headquarters and subsidiaries matter in explaining the role of culture in the relationship between them. Our findings confirm that the cultural distance metaphor should be replaced with a concept that does more justice to the actual cultural interface in a managerial relationship. Keywords:Cultural distance, HQ-subsidiary, power distance

CULTURE, COGNITION AND TRUST: THE RELATIONSHIP BETWEEN COGNITIVE ORIENTATIONS AND TRUSTWORTHINESS
Muethel, Miriam; WHU - Otto Beisheim School of Management; miriam.muethel@whu.edu Hoegl, Martin; WHU - Otto Beisheim School of Management; hoegl@whu.edu
Research on trust has predominantly relied on Western conceptualizations and measures. With cross-cultural research pointing to differences between Confucian Asian and Modern Western thinking, we argue cognitive orientations to influence the interpretation of trustworthiness. Building on prior conceptualizations of cognitive orientations in Confucian Asian and Modern Western cultures, i.e. holistic versus analytic thinking, we develop propositions on how such cognitive orientations affect the interpretation and thus the measurement of trustworthiness (at the factor and the construct level). We then discuss implications for future research. With trust being the central driver of interpersonal relationships, this manuscript directly addresses compassion for people, which is this years conference overall theme. Keywords:Culture, Cognitive Orientations, Cross-cultural research

DESIGNING GLOBAL LEADERSHIP PROGRAMS THAT PROMOTE SOCIAL CAPITAL AND KNOWLEDGE SHARING
Stensaker, Inger G.; NHH Norw.Schl of Economics and Business Adm.; inger.stensaker@nhh.no Gooderham, Paul; Norwegian School of Econ. and Bus. Admin.; paul.gooderham@nhh.no

This paper explores if Global Leadership Programs can be a vehicle for developing the social capital of MNEs and ultimately enhance knowledge sharing across corporate divisions and national borders. Drawing on both qualitative interview and survey data, we argue that Global Leadership Programs can be a means for promoting cross-border knowledge sharing, however, the effects of such programs depend on how the programs are designed. In particular we find two factors crucial for social capital development and knowledge sharing: the participants previous experience with leadership programs (a selection issue) and the quality of the social interaction in group work (a process issue). Keywords:MNEs, Knowledge sharing, Social capital

DETERMINANTS OF EXPATRIATE ROI IN GLOBAL FIRMS: ADVANCING THE CONCEPTUAL FRAMEWORK

McNulty, Yvonne; Monash U.; yvonne.mcnulty@buseco.monash.edu.au DeCieri, Helen; Monash U.; helen.decieri@buseco.monash.edu.au
The aim of this paper is to contribute to the extant literature on expatriation by providing a more comprehensive picture of the combination of strategic, contextual, and operational factors that contribute towards the return on investment (ROI) that is sought from long-term international assignments. Systems theory and psychological contract theory are adopted in a revised conceptual framework which builds on frameworks established previously by McNulty and Tharenou (2004) and Welch, Steen, and Tahvanainen (2009). In doing so, the revised conceptual framework to explain expatriate ROI in global firms depicts a more complete picture of long-term international assignments than has been offered in prior studies. Implications arising from the conceptual framework are discussed for theory, research, and practice, including directions for future research. Keywords:expatriation, ROI

DISTANCE, SUBSIDIARY AUTONOMY, AND THE MODERATING EFFECT OF OWNERSHIP MODE: A TCE PERSPECTIVE
Puck, Jonas F; WU Vienna; jonas.puck@wu.ac.at Hdl, Markus K; WU Vienna; markus.hoedl@wu.ac.at Wolff, Hans-Georg; U. of Erlangen-Nuernberg; hans-georg.wolff@wiso.unierlangen.de
Previous studies produced conflicting findings on the relationship between distance and subsidiary autonomy: One stream of research argues that parent firms increase subsidiary autonomy with increasing distance between the subsidiary and the parent firm; the other stream suggests that greater distance is associated with reduced subsidiary autonomy. Applying transaction cost reasoning, we argue that the effect of distance on subsidiary autonomy depends on the ownership mode of the subsidiary (i.e. the contractual relation between the subsidiary and the parent firm). We test our hypotheses against data from a sample of 156 foreign subsidiaries in the Peoples Republic of China (PRC) and find strong support for our argument. Our findings show that greater cultural distance reduces the subsidiary autonomy of international joint ventures (IJVs), but has a positive effect on the autonomy of wholly owned subsidiaries (WoS). Limited evidence was found for a moderating effect of political distance, while effects of economic distance were insignificant in all analyses. Our findings have strong implications for both theory

and practice. From a theoretical viewpoint, they may in fact contribute to explain the cultural distance paradox. Keywords:None

DIVERGENCE OF SUBSIDIARY OWNERSHIP STRATEGY: A COMPARATIVE STUDY OF THE US AND JAPANESE MNES
Jung, Jae; U. of Missouri, Kansas City; jungjc@umkc.edu
Despite its long research history, how MNEs nationality affects their ownership strategy has not been fully clarified. This study aims to explore what underlies the country-of-origin effect and how each factor influences MNE ownership strategy. Our interviews with 36 managers revealed eight explanatory factors for the divergent ownership patterns of US and Japanese MNEs. First, the degrees of individualism, time orientation, average cultural distance and cultural diversity reflected the home countrys culture. Second, as a resource depository, the home country provides firms with international human resources, language capability, and international experience. Last, the home countrys tax regulations, especially tax haven laws, make difference in MNE ownership strategy. Keywords:Ownership, FDI, Home country

DO EXPATRIATES BECOME MORE COGNITIVELY COMPLEX? EVIDENCE FROM A LONGITUDINAL FIELD STUDY
Fee, Anthony; U. of Sydney; A.Fee@econ.usyd.edu.au Lu, Steven; Sydney U.; S.Lu@sydney.edu.au Gray, Sid; U. of Sydney; S.gray@econ.usyd.edu.au
The question of whether (and how) cognitive complexity can be developed in adults remains unanswered. This paper presents results of a longitudinal panel study which examined cognitive changes in a sample of Australian and New Zealand expatriates working in 18 different countries. The findings show that the expatriates developed significantly higher levels of cognitive complexity during the 12-month study period than a control group of non-expatriates. Expatriates whose cognitive complexity increase the most were those who interacted most frequently with host culture nationals Keywords:expatriates, expatriate development, cognitive complexity

DO HEADQUARTER-DESIGNED PERFORMANCE MEASUREMENT SYSTEMS INFLUENCE SUBSIDIARY DECISIONS?

Mahlendorf, Matthias D.; WHU - Otto Beisheim School of Management; matthias.mahlendorf@whu.edu Rehring, Jochen; Institute of Management Accounting and Control (IMC), WHU -

Otto Beisheim School of Management; jochen.rehring@whu.edu Schffer, Utz; WHU Otto Beisheim School of Management, Vallendar; utz.schaeffer@whu.edu Wyszomirski, Elmar; Institute of Management Accounting and Control (IMC), WHU - Otto Beisheim School of Management; elmar.wyszomirski@whu.edu
Based on survey data from 148 subsidiaries of multinational enterprises in China, this study examines the determinants of the decision-influencing use (DIU) of headquarter-designed performance measurement systems (or parent-PMS). Building on Dossi and Patellis (2008) pioneering work, we find that the decision-influencing use is higher when managerial compensation is linked to parent-PMS, and when parent-PMS are more comprehensive. In addition, the decision-influencing use is higher when parent-PMS are affected by external events, when parent-PMS are complemented by additional formal control mechanisms, and when subsidiary external embeddedness is high. However, our data does not support the hypotheses that subsidiary corporate embeddedness, and parent-PMS that change as a results of managerial effort, are positively related to the decision-influencing use. Overall, these findings contribute to our understanding of the relationship between central characteristics of the parent-PMS, the subsidiary, and decision-influencing use. Keywords:Management Accounting, Performance Measurement Systems, Multinational Companies

DOES BOARDS EXPERIENCE MATTER? EVIDENCE FROM THE EVENT OF FOREIGN DIRECT INVESTMENT
Lai, Jung-Ho; National Taipei College of Business; lai.julia@gmail.com
This study contributes to the growing literatures on the importance of board expertise to their provision of counsel for management. By demonstrating that the criticality of a firms liabilities of foreignness when announcing overseas investments can be alleviated when directors possess relevant investment experiences, the present work addresses the long-standing critical issue of what renders board of directors most effective. Relying solely on director incentive, as the agency theory argues, can be limiting in serving boards role because diligence per se is unlikely to ensure board effectiveness. With investigations into the decisions of foreign direct investment, we derive consistent evidences showing that incentivised directors rich in proper experiences are associated with superior investment outcomes. In particular, both specific learning which exploit directors relevant experiences and heterogeneous learning to explore strategic alternatives complementary facilitate the value maximization from directors experiences to contribute to firm performance. Keywords:board of director, foreign director investment, director experience

DOES INTERNATIONALIZATION GIVE FIRMS A SECOND LIFE? AN EMPIRICAL EXAMINATION

Zhang, Shujuan; Northwestern Polytechnical U.; zsjnpu@126.com Liang, Xin; U. of Minnesota, Duluth; xliang@d.umn.edu Zhou, Mi; Xi'an Jiaotong U.; zhoumi@mail.xjtu.edu.cn Wu, Sibin; U. of Texas Pan American; sibinwu@utpa.edu

Based on a sample of 97 US public firms that experienced performance decline during a period between 1997 and 2003, we tested the influence of internationalization on the outcomes of turnaround attempts of firms. We found that internationalized firms had a better chance to recover from performance decline than their non-diversified domestic counterparts. In addition, the greater the degree of internationalization, the better chance a firm would recover from performance drop. The chances of recovery did not demonstrate a tendency to decrease even as firms move into very high stages of internationalization. Keywords:Degree of Internationalization, Firm Decline, Turnaround

DOES INWARD FOREIGN DIRECT INVESTMENT INCREASE LOCAL FIRMS INNOVATIVE PRODUCTIVITY?
Salomon, Robert; New York U.; rsalomon@stern.nyu.edu Jin, Byungchae; U. of Maryland, College Park; bjin@rhsmith.umd.edu Garcia, Francisco; U.Oviedo; fgarciap@uniovi.es
Over the past several decades, research in the fields of international business and strategy has devoted increasing attention to foreign direct investment (FDI). It is now well documented that firms engage in FDI either to exploit existing knowledge-based assets, or to seek new knowledge. Despite extensive scrutiny of the motivations for firms to engage in FDI, we know relatively little about the impact of FDI on host country firms, and especially, how inward FDI affects the innovative productivity of those firms. Extant theoretical arguments predict contrasting effects. One line of research suggests positive externalities to host country firms resulting in increased learning. Another line of research highlights the deleterious consequences to host country firms resulting from increased competition. Utilizing data from 1,836 Spanish manufacturing firms from 19902002, we investigate the impact of industry-level and firm-level inward FDI on the innovative productivity of host country firms. We find that FDI inflows into Spain at both the industry- and firm- levels negatively influence the ex post innovation of local firms. We contrast these findings with those using measures of labor productivity. Keywords:Foreign Direct Investment, Inward FDI, Spillovers

DOWNSCOPING OF BUSINESS GROUPS UNDER INSTITUTIONAL DEVELOPMENT - A RESOURCE-BASED PERSPECTIVE

Tan, Danchi; National Chengchi U.; dctan@nccu.edu.tw Meyer, Klaus; U. of Bath; k.meyer@bath.ac.uk
Institutional development in many emerging economies has reduced the benefits of unrelated diversification. While some business groups begin to restructure their product portfolios and become more focused, others remain highly diversified. Drawing from dynamic resource-based and institutional perspectives, this paper proposes that group-level resources and capabilities play an important role in determining how much business groups downscope in response to liberalization of markets. Empirical results based on a sample of Taiwanese business groups support that diversified business groups whose resources and capabilities are specific to prechange institutional era are less likely to downscope. In contrast, business groups who had invested in market-based competencies are more likely to downsize their scope during the time of institutional change.

Keywords:None

EARLY AND RAPID INTERNATIONALIZATION: A REPLICATION APPROACH

Dunford, Richard; U. of Sydney; R.Dunford@econ.usyd.edu.au Palmer, Ian; RMIT U.; Ian.Palmer@rmit.edu.au
One of the key characteristics of established multinational enterprises (MNEs) is their capacity to be formidable networks for the creation and sharing of knowledge. However, knowledge creation and sharing are not just processes available to established MNEs, they are also means by which new ventures becomes international. Where a replication strategy is used knowledge creation and transfer is central to the fine-tuning of its business model. In this article we link MNE growth, early and rapid internationalization, and replication through a study of the international expansion of the new venture ING Direct and identify the contribution of four processes: clarification, localization, experimentation and co-option. Keywords:rapid internationalization, replication, MNCs

EAST MEETS WEST? DETERMINANTS OF CHINESE FIRMS CORPORATE GOVERNANCE ORIENTATION

Wang, Zhengjun; LSU; zwang2@lsu.edu McGuire, Jean; Louisiana State U.; mcguire@lsu.edu
Corporate governance has become an important topic in the context of emerging economies as they attempt to promote market development and investment. These issues are particularly difficult in the Chinese context of government control and intervention. This study examines the role of CEO and board characteristics, ownership, and prior firm performance in acceptance of international corporate governance standards. Results indicate that (1) firms with better prior performance measured by ROA in China are more likely to be early adopters of Americanized governance model; (2) in general, CEO and board characteristics are not significant predictors of adoption of international governance standards; (3) links to the Chinese government play important roles in influencing firms governance standards; and (4) the proportion of tradable shares and presence of foreign ownership are significant predictors of firms corporate governance orientation, while ownership concentration is not. Keywords:corporate governance, institutional theory, China

ECONOMIC GEOGRAPHY AND REGIONAL MULTINATIONALS

Rugman, Alan M; U. of Reading; a.rugman@henley.reading.ac.uk Oh, Chang Hoon; Brock U.; coh@brocku.ca
Much of the literature in international business analyzing the multinational enterprise uses the country as the relevant environmental parameter. Similarly, work in economic geography often defines geographic space at the country level. In this paper we present both theoretical and empirical evidence which demonstrates that country level analysis now needs to be

supplemented by analysis at the regional level of the broad triad markets of Europe, North America and the Asia Pacific. The great majority of the worlds 500 largest firms concentrate their activities within their home region of the triad (indeed, they average approximately 75 percent of both their sales and assets in their home region). Essentially most MNEs operate home region networks in both production and sales: there are regional, not global, supply chains. The new data on the activities of these large MNEs reported here suggest that new thinking is required about the importance of large regions of the triad as the relevant unit of analysis for both geography and business. Indeed both international business and economic geography need to move on from country level analysis to the broad region as the unit of analysis. Keywords:regional multinationals, multinationality, geography

EMERGING MARKETS AND BUSINESS GROUP EFFECTS: AN EMPIRICAL ANALYSIS OF CORPORATE ACQUISITIONS
Marisetty, Vijaya B.; Monash U.; Vijay.marisetty@buseco.monash.edu.au Seth, Anju; Virginia Tech; aseth@vt.edu
In this paper we argue that, when assessing the wealth effects of business group affiliated firms investment decisions, firm level estimates (as normally used in the literature) can lead to incomplete results since such investments are mainly group level decisions. Hence, we propose that it is important to examine the group level wealth effects of investment decisions. We explore the implications of this argument by using a sample of 109 corporate acquisitions made by business group affiliated firms during 1997-2007, which belong to 55 family controlled business groups in India with 1345 affiliated firms. We show that the wealth effects of the focal acquiring firm are highly correlated with those of other affiliates in the same business group. We also show that, on average, the benefits of group affiliation through co-insurance outweigh the cost of tunnelling by the controlling family owners. However, the benefits of group affiliation are lower for complex pyramidal groups with high ownership by the controlling family. Keywords:Emerging markets, Business groups, Acquisitions

ENVIRONMENTAL UNCERTAINTY AND MARKETING CONTROL IN INTERNATIONAL HQS-SUBSIDIARY RELATIONSHIPS

Helm, Roland; Friedrich-Schiller, U. of Jena; roland.helm@wiwi.uni-jena.de Schmitz, Christian; U. of St. Gallen; christian.schmitz@unisg.ch Kreiter, Susanne; Friedrich Schiller U. of Jena; s.kreiter@wiwi.uni-jena.de Dowling, Michael; U. of Regensburg; michael.dowling@wiwi.uniregensburg.de
The use of management controls is one of the core management activities. Though its importance is widely acknowledged, the topic has received little attention in the international marketing literature. The present research adapts Jaworskis framework of marketing control to an international setting. The focus is put on environmental uncertainty as an antecedent of marketing control. Of particular importance is the test of rival conceptual models. The superior model includes a) a direct negative effect of environmental uncertainty on the level of control, b)

mixed effects of marketing control on individual and organizational outcomes, c) no moderating effect of environmental uncertainty. Keywords:International Management, Marketing control, Output control

EXPANDING THE BOUNDARIES OF THE WORK AND FAMILY INTERFACE: A REVIEW AND AGENDA FOR FUTURE RESEARCH
Hsu, Yu-Shan; U. of Wisconsin Milwaukee; yhsu@uwm.edu Joplin, Janice R.; Southern Illinois U., Edwardsville; jjoplin@siue.edu
We review and synthesize empirical work-family studies targeted employees outside of the United States and answer four questions about international work-family research. First, what constitutes the work-family interface and is there consensus about how to measure it? Second, what theories have researchers used to explain the work-family interface? Third, which antecedents and consequences of the work-family interface are common across countries and which are unique to particular countries? Fourth, what can we learn from this review? Based on our review, a universal theoretical framework integrating both work-family conflict and facilitation is provided. Future research directions are also discussed. Keywords:international, work-family interface, review

EXPERIENTIAL AND COMPETENCY DETERMINANTS OF TRANSNATIONAL SOCIAL CAPITAL

Levy, Orly; IMD; orly.levy@imd.ch Peiperl, Maury; IMD; Maury.Peiperl@IMD.ch Bouquet, Cyril Daniel; IMD; Cyril.Bouquet@imd.ch
This study examines experiential and competency determinants of transnational social capital of executives. Using detailed survey data on 248 executives, our analysis revealed three significant findings. First, international work assignments and international relocations have a curvilinear (inverted U-shaped) relationship with transnational social capital. Second, core global competencies, specifically cosmopolitan attitude and foreign language skills, positively affect transnational social capital. Third, international work assignments most significantly increase the transnational social capital of managers whose foreign language skills are limited. Keywords:Transnational social capital, Global career, Cosmopolitan attitude

EXPLAINING THE ALIGNMENT BETWEEN INTENDED VS. ACTUAL PARENT RESEMBLANCE OF HRM PRACTICES IN MNCS
Ahlvik, Catarina Anita; Hanken School of Economics; catarina.ahlvik@hanken.fi Hglund, Mathias; Hanken School of Economics; mathias.hoglund@hanken.fi

Smale, Adam; U. of Vaasa, Finland; adam.smale@uwasa.fi Sumelius, Jennie; Hanken School of Economics; jennie.sumelius@hanken.fi
Whilst many studies on human resource management (HRM) in multinational corporations (MNCs) attempt to explain the degree of parent resemblance (or standardization) of subsidiary HRM practices, to the best of our knowledge none have explicitly sought to compare the degree of actual parent resemblance with corporate intentions. This paper goes beyond attempts at explaining the existence of parent HRM practices in subsidiaries by shedding light on what factors influence the extent to which corporate HR intentions and subsidiary HR realities are aligned. Hypotheses are developed and tested on a sample of 122 subsidiaries from 12 Nordic MNCs. The results show that formalization, relational social capital, and subsidiary strategic HRM capabilities have a significant influence on the parent resemblance of subsidiary HRM practices. However, in terms of factors that influence the degree of alignment between corporate intentions and actual parent resemblance, the number of expatriates and the level of relational social capital were found to be significantly related. Further post-hoc analyses are conducted and discussed which differentiate between those factors that lead to intended parent resemblance, excessive resemblance and insufficient resemblance. Keywords:Human resource management (HRM), transfer, multinational corporations (MNC)

EXPLOITING AND RENEWING DYNAMIC INNOVATION CAPABILITIES GLOBALLY

Sambharya, Rakesh B.; Rutgers U., Camden; sambhary@camden.rutgers.edu Lee, Jooh; Rowan U.; lee@rowan.edu
Todays multinational companies (MNCs) compete in a rapidly changing global market. In this dynamic environment, MNCs need to pursue continuous innovation to achieve a competitive advantage. The evolutionary and dynamic capability perspectives suggest that firms use existing resources to renew and build new resources. This study empirically tests whether MNCs leverage existing innovative capabilities over future international markets. MNCs then utilize these international diversification strategies to develop future new knowledge resources and skills being increasingly developed around the globe. To test this proposition, this study examined the lagged effects of MNCs innovative capabilities on future international diversification strategies which, in turn, leads to future MNCs innovative capabilities on three key indicators of future innovation: changes in R&D intensity, number of patents, and technological strengths after controlling for product diversification strategies. The analyses used a sample of the largest 210 MNCs from Europe, Japan and North America representing nine industries. Results indicate that MNCs initial innovative capabilities are positively related to future international diversification. Our analyses showed that international diversification, in turn was positively and significantly related to the MNCs future R&D intensity, number of patents, and technological impact index. Keywords:Dynamic capabilities, innovation, international diversification

EXPLORING DIVERSITY IN THE OFFSHORING LITERATURE: NOTORIOUS THREATS AND UNDETECTED OPPORTUNITIES

Peeters, Carine; ULB - Solvay Brussels School of Economics and Management; carine.peeters@ulb.ac.be Point, Sebastien; U. of Franche-Comte; s.point@free.fr Garcia-Prieto, Patricia; U. Libre de Bruxelles; pgarciap@ulb.ac.be
Through an extensive content analysis of 76 articles published in 26 management journals between 1996 and 2009 the paper shows that extant literature on offshoring focuses exclusively on the managerial challenges associated with increased diversity, disregarding recent developments in the diversity management literature that show the positive effect diversity can have on organizational outcomes. Building on this we develop a framework that proposes a more positive view of diversity as an opportunity for increased innovativeness in offshoring projects, and that identifies the project and team levels conditions for the business case for diversity to hold true in the context of offshoring. Keywords:diversity, offshoring, offshore outsourcing

EXTERNAL-INTERNAL GUANXI CONTAGION AND EMPLOYEES' RESPONSES TO MANAGERIAL GUANXI PRACTICES

Jiang, Han; Tulane U.; hjiang2@tulane.edu Cannella, Albert; Tulane U.; acannell@tulane.edu Gao, Lifang; U. at Buffalo, SUNY; lifangga@buffalo.edu Jiao, Jie; economics and management schools ,Tsinghua U.; jiaoj@sem.tsinghua.edu.cn
In the present study, we build up a new conceptual framework in which guanxi practices are anatomized by their foci (external and internal) and guanxi bases (familiar-based and familybased). Using this framework, our study showed that using external guanxi practices can arouse certain internal guanxi practices which can incur the negative perceptions and reactions of employees. Furthermore, favoring certain people through familiar guanxi can incur less negative responses of employees. Besides, employees tend to accept managers external guanxi practices relatively well, especially the familiar-based ones. Our study has provided exploratory perspectives into managerial guanxi practices and their consequences and implications. Keywords:managerial guanxi practices, Employees' response, Chinese management

FAMILY MEMBERS AS A CONTROL MECHANISM IN LARGE ETHNIC CHINESE BUSINESS GROUPS

Chung, Hsi-Mei; I-Shou U.; smchung@isu.edu.tw Bruton, Garry D; Texas Christian U.; g.bruton@tcu.edu
By utilizing agency and institutional theory viewpoints, this research tries to shed light on family members as a control mechanism by examining ethnic Chinese family controlled business groups in Taiwan, and their placement of family members as head of international subsidiaries as the firm expands internationally. The research finds that the resource commitment in host country and the institutional distances between the home country/host country influence the placement of

family members as the head of foreign subsidiaries in international settings. The implications for future research on the internationalization of ethnic Chinese family business are discussed. Keywords:institutional theory, agency theory, family business groups

FIRM EXPERIENCE, DISCONTINUOUS RISK, AND MULTINATIONAL SUBSIDIARY ENTRY AND EXPANSION
Oetzel, Jennifer; American U.; oetzelj@american.edu Oh, Chang Hoon; Brock U.; coh@brocku.ca
Building on research examining the relationship between firm experience and subsidiary entry and expansion, we examine whether firm experience with discontinuous risks risks that can create major temporal shocks and are often hard to predict is associated with entry and expansion into countries experiencing similar risks. Using a panel dataset of 116 large European MNCs and their subsidiaries (2001- 2007) with 70,853 total observations, we find that although discontinuous risks negatively impact foreign entry and expansion, firms with experience in highrisk disasters are more likely to enter and expand into other countries experiencing disasters than other firms. Keywords:firm experience, discontinuous risk, foreign entry and expansion

FIRM LEVEL DETERMINANTS OF OFFSHORING AND OUTSOURCING OF CORE ACTIVITIES

Thakur, Pooja; Rutgers U., Newark; thakur@pegasus.rutgers.edu Contractor, Farok J.; Rutgers U.; farok@andromeda.rutgers.edu
This study examines the determinants of the externalization of core activities and their geographic spread. Specifically, we look at factors that influence the decision to relocate clinical trials both organizationally (in-house versus external vendors) and geographically (trials conducted in home nation versus trials in foreign countries). Clinical trials are a core activity in the pharmaceutical industry. The determinants of the spread of core activities are examined for the four sourcing strategies adopted by MNEs which are: in-house, domestic outsourcing, offshore outsourcing, and foreign affiliates. The firm level determinants examined in this study are firm size, age, R& D intensity, prior performance and international experience. Keywords:Outsourcing, Offshoring, Pharmaceuticals

FOREIGN AFFILIATE PERFORMANCE: AN INSTITUTIONAL PERSPECTIVE

Chan, Christine M.; Hong Kong U.; mkchan@business.hku.hk
Drawing on the institutional perspective, this paper shows that the performance of foreign affiliates varies greatly in host country and local industry markets where there are a few foreign affiliates, which signal a strong institutional pressure in the markets and that the variation in foreign affiliate performance will be greater in the markets where there are many foreign affiliates, which signal that the institutional pressures give way to the competitive pressures. Our

longitudinal analysis of 8,313 affiliates shows that the relative strength of the local industry-level institutional and competitive pressures is stronger than that of the host country-level pressures. Keywords:FOREIGN AFFILIATE PERFORMANCE, INSTITUTIONAL PERSPECTIVE

FOREIGN MARKET COMMITMENT REVISITED THE NEGLECTED ROLE OF NETWORK RESOURCES

Ref, Ohad; Hebrew U. of Jerusalem; refo@mscc.huji.ac.il Hashai, Niron; Hebrew U.; nironh@huji.ac.il Bakman, Leonid; Hebrew U.; bakman@012.net.il
Different strands in International Business literature associate foreign market commitment with the allocation of internal resources to foreign markets. This paper expands the notion of foreign market commitment by arguing that firms may also exhibit foreign market commitment through the utilization of their "network resources". This assertion derives from the fact that just like internal resources the accumulation of network resources is durable and costly and their allocation to foreign markets is often irreversible. By distinguishing between "relational"- and "structural"- network commitments the paper demonstrates how firms may exhibit different types of foreign market commitment through their network resources and change them over time. Keywords:Foreign Market Commitment, Network resources, Internationalization

FRESH EVIDENCE ON LEARNING BY EXPORTING FROM INDIAN PHARMACEUTICAL PRODUCERS, 1994-2007

Chatterjee, Chirantan; Carnegie Mellon U.; chirantan@cmu.edu Nandkumar, Anand; Indian School of Business; anand_nandkumar@isb.edu
This paper offers new insights on learning by exporting in emerging economy firms based on a novel dataset of Indian pharmaceutical producers between 1994 and 2007. We find that, exporting per se, results in enhanced firm level technical efficiency as measured through reduced costs. Exporting also betters firm- level ability to launch new products in domestic markets. These broad gains in addition to improved R&D efficiency are manifested especially when firms export to US rather than to non-US destinations. Finally, among exporting firms, ones with a higher level of absorptive capacity and firm-capability ( in manufacturing or in marketing) were the ones who gained most from exporting activity than others. Keywords:Learning by exporting, Absorptive Capacity, Destination effects

GEOGRAPHIC PROXIMITY AND INNOVATION TYPE: THE MODERATING ROLE OF POTENTIAL ABSORPTIVE CAPACITY
Olie, Rene; Rotterdam School of Management, Erasmus U.; rolie@rsm.nl Klijn, Elko; VU U. Amsterdam; eklijn@feweb.vu.nl
This paper examines two central issues in the debate on multinational subsidiary innovation: (1) the relevance of geographic proximity of foreign subsidiaries to related firms in the host country

for two distinct types of innovation, i.e. exploitative and exploratory innovation; and (2) the role of potential absorptive capacity in this process. We hypothesize that geographic proximity to related firms is more relevant for exploration than for exploitative innovation, and that firms with higher potential absorptive capacity will benefit more from geographic agglomeration when pursuing explorative or exploitative innovations. We find general support for both ideas in our empirical research. Keywords:Absorptive capacity, knowledge spillovers, innovation

GLOBAL CITIES: BEACHHEADS, SUPPLY POINTS, AND MULTINATIONAL ENTERPRISE LOCATION DECISIONS
Goerzen, Anthony; U. of Victoria; agoerzen@uvic.ca Asmussen, Christian Geisler; Copenhagen Business School; cga.smg@cbs.dk
Nation states are the most common geographic unit of analysis in international business research. Yet, it is becoming increasingly acknowledged that sub-national units (e.g., regions, industrial clusters, and cities) are perhaps more relevant to managers and scholars interested in the behavior and performance of multinational enterprises (MNEs). Although the global city concept has become an important topic in several diverse fields of study, the influence of global cities on MNE location decisions has not been examined. This research, therefore, is designed to combine the literature on global cities with process theories of MNE internationalization in order to provide new insights into MNEs international location strategies on a sub-country level. The main argument of our paper is that global cities are distinct in terms of their location-specific advantages which, in turn, influence the liability of foreignness that internationalizing firms face when investing in them. This suggests that MNEs foreign subsidiaries not only gravitate towards global cities but also that the degree to which they do so is determined by a nuanced interaction of subsidiary, firm, and country-level factors. Keywords:global cities, location strategy, MNE

GLOBAL PRODUCTION OF TECHNOLOGY IN CHINA: ASSESSMENT OF COINVENTED PATENTS

Chen, Jennifer H.; Nanhua U.; chen.huiru@gmail.com Chang, Chiao-hui; National Taiwan U.; b93303018@ntu.edu.tw Jang, Show-Ling; National Taiwan U.; sl.jang@msa.hinet.net
This study examines inventor data by country of residence, and by analyzing main collaborating countries with China in global technology production during 1997-2007, we demonstrate the evolving trend of an emerging market in the collaborative patenting network. In addition to exploring the pattern of cross-border joint inventions, by linking patent data and other macroeconomic factors, we model the propensity of China and other countries in engaging co-inventing activities. We find that China currently plays a supporting role in the international coinventorship. Keywords:co-invention, RD collaboration, patenting

GLOBAL TECHNOLOGICAL RESOURCES AND MNC BREAKTHROUGH INNOVATION

Peters, Lois S.; Rensselaer Polytechnic Institute; peterl@rpi.edu

The research reported in this paper draws on an ongoing (start date-1995) prospective study of Multinational Enterprise (MNE) Breakthrough Innovation(BI). We employ multiple case study techniques to identify global management practices in multinational firms for technology discovery and application in breakthrough new product/process and business development. The results of this investigation of more than 30 MNEs indicate that the global reach of Multinational Corporations allows experimentation and exploration with technology application in multiple settings and therefore can be critical to building a breakthrough innovation dynamic capability, particularly when efforts are aimed at knowledge transformation. Global resources, provide knowledge richness in terms of future markets, and technology application, but global technical resources of the MNEs appear to be underutilized. Multinational firms with consistent global investment in new technologies and sufficient patience and resources to incubate multiple innovation projects and or technology applications may be more likely to eventually capitalize on investment breakthrough innovation because of more robust absorptive dynamic capability and breakthrough innovation capability both of which depend to some extent on transformative knowledge. Keywords:Breakthrough Innovation, Dynamic Capability, International

GLOBALIZATION THROUGH ALLIANCE PORTFOLIOS:COUNTRY CONFIGURATION AND KNOWLEDGE POSITIONING

Vasudeva, Gurneeta; U. of Minnesota; gurneeta@umn.edu Almeida, Paul; Georgetown U.; almeidap@georgetown.edu
We suggest that to fully understand the configuration of firms international technology alliance portfolios, one must look beyond partner and country characteristics, to the extent to which countries in the portfolio are technologically homogenous and inter-connected in terms of knowledge flows. We propose that the technological homogeneity and connectedness of countries spanned by a firms portfolio influences its knowledge position in the industry, and subsequent internationalization. Our analysis suggests that firms that span countries that are technologically homogenous but not well-connected, achieve centrality in the industry. Centrality allows firms greater knowledge access and permits less internationalization in subsequent years. Keywords:alliance portfolio, globalization, technology and innovation

GOVERNMENT CORPORATION AND GLOBALIZATION: EVIDENCE FROM CHINA

Zhou, Nan; U. of Pennsylvania; zhounan@wharton.upenn.edu
This paper argues that state-owned enterprises (SOEs), partially privatized firms and firms without state ownership behave differently when they globalize. SOEs are more risk-averse while partially privatized firms and firms without state ownership are more risk-taking. Therefore, SOEs are hypothesized to be less likely than the other two types of firms to go abroad. Moreover, when they do go abroad, SOEs will rely on government resources rather than firm-specific ownership advantages. On the contrary, partially privatized firms will reply on firm-specific ownership advantages rather than government resource to invest abroad. An empirical investigation of the

FDI activities of Chinese listed firms in high-tech industries between 1991 and 2007 supports the arguments. Keywords:globalization, emerging economic, SOE

HOFSTEDES MASCULINITY AS A HIERARCHICAL CONSTRUCT

Pierce, Jason R; Indiana U., Bloomington; jrpierce@indiana.edu
Management scholars routinely develop and use individual-level measures of Hofstedes cultural taxonomy to test theories pertaining to individual and organizational performance. While researchers have had considerable success exploring cultural values such as individualismcollectivism, uncertainty avoidance, and power distance at the individual-level of analysis, they have experienced more difficulty operationalizing Hofstedes masculinity dimension. Building on extant discussions of the masculinity construct, I propose and demonstrate that masculinity is best measured as a second order construct. The second-order latent variable demonstrates reasonable psychometric properties and theoretically consistent relationships with other constructs. Implications and recommendations for future research are discussed. Keywords:Cultural Values, International Management, Cross-cultural Organizational Behavior

HOME COUNTRY INSTITUTIONS, RELATIONAL TIES, AND EXPORTING STRATEGY OF TRANSITION ECONOMY FIRMS
Hong, Sungjin J.; U. of Texas, Dallas; sungjin@utdallas.edu
Under what conditions are transition economy firms likely to reduce their dependence upon domestic markets as compared to foreign markets? Drawing upon institutional economics and resource dependence perspective, we conduct two-stage analysis of transition economy firms exporting strategy, while controlling for firm size and age. Our hypotheses are mainly based on the moderating effects of relational ties. When a transition economy firm possesses relational ties with other firms and with government officials, its high level of sales dependence upon government sector may be an outcome of the firms political investments over time. In contrast, when a transition economy firm does not possess relational ties, its high level of sales dependence upon government sector may be a source of vulnerability. Empirical results using Heckman two-stage procedure partially supports our hypotheses. Future research agenda includes the longitudinal analysis of transition economy firms exporting strategy with refined measurements for relational ties. Keywords:transition economies, policy discretion, vulnerability to corruption

HOME REGION BIAS IN MULTINATIONAL ENTERPRISES: WHAT, WHY, AND HOW?

Banalieva, Elitsa R.; Northeastern U.; e.banalieva@neu.edu Dhanaraj, Charles; Indiana U., Bloomington; dhanaraj@iupui.edu

Recent observations on the geographic scope of multinational enterprises (MNEs) suggest that their sales come largely from their home regions, which has emerged as an intriguing puzzle in global strategy research. What is the extent of this home region bias? If indeed this is prevalent, why does this bias exist? And does this bias impact the MNEs financial performance? Building on internalization theory, we present a conceptual framework with three overarching factors that drive international expansion: technological intensity, industrys home region bias, and institutional diversity. We deviate from extant theory by hypothesizing an increasing returns effect of technological intensity on geographic scope, and provide empirical support with a panel dataset of 767 MNEs geographic expansion from 1997 to 2006. Our study advances the theory by recognizing the multilevel considerations of MNE scope, focusing particularly on the mechanisms of the increasing returns effect of technology. Interestingly, HRB, after controlling for antecedents, has no significant impact on performance. Keywords:MNEs home region bias, geographic scope, performance

HOME-COUNTRY ENVIRONMENT AND THE EXPANSION OF DOMESTIC FIRMS INTO OVERSEAS MARKETS
Cheng, Hsiang-Lin; Feng-Chia U./National Chung Cheng U.; francois@alumni.nccu.edu.tw Yang, Kuo-Pin; National Dong Hwa U.; kpyang@mail.ndhu.edu.tw
This study explores how executives recognition of volatility in the domestic environment within a newly industrialised country (NIC) influences the international expansion by native firms. Empirically testing data collected from 2,912 Taiwanese firms in 2006, this study found a Ushaped curvilinear relationship between Taiwanese firms expansion into overseas markets and the product-customer volatility and competitive volatility of Taiwan, revealing a two-stage approach to coping with domestic environmental volatility. However, political volatility can steadily increase firms attempts to expand into overseas markets. The findings thus show the dynamic-fitting nature of NIC multinational enterprises (MNEs) contingent responses to domestic conditions in expanding into foreign markets. Keywords:domestic environment, international expansion, U-shaped curvilinear relationship

HOW ABSORPTIVE CAPACITY DRIVES EXPLORATORY INNOVATION: THE MODERATING EFFECT OF OFFSHORING
Correia-Lima, Bernardo Silveira Barbosa; Rotterdam School of Management, Erasmus U.; blima@rsm.nl
Offshoring has become an important organizational strategy. In addition to low-added value functions, organizations are also increasingly relocating high-added value functions abroad. In this paper, we contribute to the emerging dialogue between offshoring and firm innovativeness by investigating how the offshore of core functions and the governance mode used in this process impact companies ability to leverage their absorptive capacity into radical innovation. Our findings suggest that, while the offshoring of core functions negatively moderates firms R&D effectiveness in terms of realizing home-based exploratory innovation, the involvement of third parties in this process have a positive moderating effect on it.

Keywords:Offshoring High-Value Activities, Exploratory Innovation, Absorptive Capacity

HOW DOES CROSS-BORDER ARBITRATION REDUCE TRANSACTION COSTS?

Pinkham, Brian; U. of Texas, Dallas; bpinkham@gmail.com Peng, Mike; U. of Texas, Dallas; mikepeng@utdallas.edu
This article addresses a gap in the management literature by introducing binding international commercial arbitration (BICA) to the discussion of institutionalism through a transaction costs framework. We identify the enforcement stage of contracting as a key component in the transaction cost literature, and develop propositions to demonstrate BICA's ability to overcome enforcement complications when faced with failing or weak formal institutions. Overall, we propose that the importance of BICA is its ability to reduce transaction costs and facilitate market exchange, making it of particular interest in transition economies and contexts where formal institutional mechanisms may fail to support market transactions. Keywords:Transaction costs, International commercial arbitration, Instiutions

HOW DOES HOME-COUNTRY MATTER FOR INTERNATIONALIZATION?LOCATION CHOICE AND LEGITIMACY SPILLOVERS
Vasudeva, Gurneeta; U. of Minnesota; gurneeta@umn.edu
Research on firms foreign investment location choices has focused primarily on host country factors. I propose that home country factorsparticularly, the emergence of national governments as foreign investorsinfluences these choices. I argue that countries that receive large investments from the home government are more attractive for firms, due to perceived legitimacy spillover benefits in those host countries. As government investments continue to increase, however, the resulting politicization in host countries and potential illegitimacy spillovers, weaken this positive relationship. Less internationalized firmsthat are more embedded in the home countryrespond more strongly to these legitimacy and illegitimacy effects. Keywords:location choice, legitimacy, institutions

HOW GERMAN, JAPANESE, AND U.S. EXECUTIVES VIEW MARKETS AND PLANNING AS COORDINATING MECHANISMS
Egelhoff, William G; Fordham U.; egelhoff@fordham.edu Frese, Erich; U. of Cologne; frese@wiso.uni-koeln.de
Markets and central planning are alternative mechanisms for coordinating economic activity within economies and firms. While some theory about when to use each exists, we do not know to what extent the views of top business executives follow such theory, or to what extent these views vary across cultures. The study tests hypotheses based on markets and planning theory with samples of top executives in German, Japanese, and U.S. firms. The results indicate

executives preferences are significantly influenced by their understanding of the coordination characteristics of markets and planning. Going beyond the hypotheses, the study explores the preferences and underlying logic of executives across nationalities. German and U.S. executives share a similar cognitive structure which reflects the high level of individualism inherent in existing markets and planning theory. Japanese executives exhibit a different cognitive structure which reflects a more collectivistic culture. While the results are exploratory and require additional testing and refinement, the study is the first to explore the substitutability of markets and planning within the strategic decision process of top executives, close to where it becomes reality. Keywords:Markets, Planning, Executive preferences

HOW MUCH DOES GEOGRAPHIC DIVERSIFICATION IMPACT ON FIRM PERFORMANCE?

Moraes, Edmilson Alves de; Centro U. da FEI; edmilson@fei.edu.br Vasconcelos, Flavio; Fundacao Getulio Vargas EAESP-FGV; fvasconcelos@fgvsp.br Goldszmidt, Rafael Burstein; EBAPE-FGV; rafael.goldszmidt@fgv.br Belmude, Sandro; Centro U. da FEI; sandrobelmude@hotmail.com
The relative importance of the different sources of firm performance heterogeneity has been discussed at length in theoretical terms and tested empirically. This study has focused on the relation between geographic diversity and performance. A linear hierarchical (multilevel) model with three levels allowed us to identify a threshold of internationalization on which the performance of firms experienced significant growth. This result has allowed us to put forward an alternative model to existing models that associate firm performance with their level of internationalization, denominated the Inverted J Curve and the Normal U Curve. Keywords:Internationalization, Performance, Competitive advantage

HOW PRESTIGIOUS ARE YOU AND WHERE DO YOU HAIL FROM? THE INTERNATIONALIZATION OF US LAW FIRMS
Powell, K. Skylar; U. of Hawaii & East-West Center; skylarp@hotmail.com
This research looks at large US law firms to assess factors that influence the propensity to establish offices in foreign markets. Specifically, the roles of firm status, home location, and business model are analyzed with regards to the overall number of foreign markets operated in, as well location patterns. Findings suggest that higher status firms enter fewer foreign markets, and firms from New York tend to enter more foreign markets. Additionally, firms tend to enter foreign markets known for industries that are prevalent in their own home markets; such that New York firms enter more foreign banking markets and Texas firms enter more oil producing markets. This emphasis on specific home locations within a firms home country is new and findings have unique implications for research on internationalization. Hence, where there is an agglomeration of international firms in a specific industry, there may be a secondary build up of professional service firms from their home locations. This finding goes beyond the idea that professional service firms will follow their clients abroad and offers insights into the specific patterns of investment. Keywords:Internationalization, Professional Service, Law Firms

HOW SUBSIDIARY TOP MANAGEMENT TEAMS INFLUENCE STRATEGIC CHANGE AND ORGANISATIONAL PERFORMANCE IN TRANSITION ECONOMIES (WITHDRAWN)
Mitchell, Rebecca; U. of Newcastle; rebecca.mitchell@newcastle.edu.au Boyle, Brendan; U. of Newcastle; brendan.boyle@newcastle.edu.au Maitland, Elizabeth; U. of New South Wales; e.maitland@unsw.edu.au Nicholas, Stephen; U. of Newcastle; stephen.nicholas@newcastle.edu.au Zhao, Shuming; Nanjing U.; zhaosm@nju.edu.cn
This paper theoretically investigates the role of top management team composition on the restructuring decisions and consequent performance of subsidiaries in transition economies. Subsidiary top management teams (TMTs) have a critical role in performing complex decisionmaking in response to perceived environmental dynamism, and we argue that the environmental dynamism of transition economies increases the value of access to knowledge in decisionmaking. Consequently, we predict that functional heterogeneity of subsidiary top management teams will enhance subsidiary performance, mediated by subsidiary-initiated strategic change. We further argue that the extent to which heterogeneous membership influences performance will be moderated by subsidiary autonomy. Keywords:Strategic Change, Top Management Teams, Subsidiaries

HOW THE EFFECTS OF MANAGERS MOBILITY ON MARKET TIE DISSOLUTION VARY ACROSS COUNTRIES
McCormick, Marleen; U. of Illinois, Urbana-Champaign; marleenmccormick@gmail.com Broschak, Joseph; U. of Arizona; broschak@email.arizona.edu
This is a multi-level study that examines the dissolution of exchange relationships between individuals and firms in the context of advertising firms in 22 countries over two decades. Drawing on social capital and institutional theory, we observe the importance of relationships and management mobility on market ties. A unique aspect of this study is that we look at how social and institutional capital varies in importance across different institutional environments. Our results at the country level show that institutional capital matters while the subjective construct of social capital, generalized as trust, is not significant. Our study confirms that when a firm loses social capital (a manager) there is an increased chance that it will also lose the managers client but it also demonstrates that the institutional environment will have a moderating effect on this likelihood of tie dissolution which it is a new finding in the organizational and international business literature. Keywords:exchange relationships, social capital, institutional theory

HUMAN FACTOR, ORGANIZATIONAL JUSTICE AND ORGANIZATIONAL EFFECTIVENESS IN SUBSAHARAN AFRICA

Acquaah, Moses; U. of North Carolina, Greensboro; acquaah@uncg.edu Tukamushaba, Eddy Kurobuza; Makerere U.; ek_tukamushaba@yahoo.com
It has been argued that the effectiveness and performance of organizations in developing countries is dependent on the human factor which is comprised of the attitudes, behaviors, knowledge and capabilities of employees. This paper examines the effect of the human factor, organizational justice, and the interaction between the two on employees perception of organizational effectiveness. The relationships are tested using data collected from two samples containing public sector and private sector organizations from two Sub-Saharan African economies Ghana and Uganda. In general, the findings indicated that the human factor and organizational justice were related to organizational effectiveness in both studies. In addition, organizational justice positively moderated the relationship between the human factor and perceived organizational effectiveness. In particular, higher perception of organizational justice at the workplace enhanced the impact of the human factor on perceived organizational effectiveness. Keywords:human factor, organizational justice, organizational effectiveness

IMMIGRANT ENTREPRENEURSHIP AND FOREIGNERS LIABILITY

Zimmermann, Jrg; Max Planck Institute of Economics; zimmermann@econ.mpg.de Urbig, Diemo; U. of Antwerp; urbig@diemo.de
Considering individual cognitions, this study adds a new perspective to research on liability of foreignness by using the context of immigrant entrepreneurship. Based on Fox and Tverskys (2001) comparative ignorance hypothesis, we argue that independent of their actual level of knowledge foreigners tend to perceive situations under uncertainty as more ambiguous than locals, which, everything else kept equal, results in a more accentuated avoidance of uncertain situations and a smaller influence of attitudes towards risk in contrast to ambiguity. Moreover, based on dual process theories we argue that foreigners perceptions of ambiguity are less hurting in situations where they do not need to make substantial commitments, such as mere statements of interest. Empirical findings based on two independent datasets support our hypotheses on the smaller influence of foreigners risk attitudes on the decision to become an entrepreneur and the moderating impact of personal commitment. The results confirm that the perception of ambiguity depends on an individuals degree of embeddedness and the personal involvement mirrored by the commitment made. Keywords:Liability of Foreignness, perception of risk and ambiguity, commitment

IMPACT OF CHOICE AND MANDATE ON CROSS-BORDER PRACTICE ADOPTION: AN INSTITUTIONAL THEORY APPROACH (WITHDRAWN)
Norder, Kurt; U. of South Carolina; kurt_norder@moore.sc.edu
I assess the impacts of hierarchical motivation on the adoption patterns for a cross-border strategic organizational practice. Using an Institutional Theory perspective within the multinational enterprise (MNE), I consider the influence of mandate and/or choice for both the sender and the

receiver simultaneously as it affects the implementation and adaptation of cross-border practices. First, I look at the complexity within the MNE to assess the critical institutional pressures for legitimacy. Then I discuss a 2-by-2 typology of hierarchical direction in form of choice or mandate for the sender and receiver simultaneously. I suggest several propositions to further explore the impacts of each combination on both the likelihood of implementation of a strategic business practice within the MNE and the subsequent likelihood for adaptation as part of the implementation process. Finally, I assess the MNE moderating effects of institutional distance on the adoption patterns. Keywords:Choice, Adoption, Cross-Border

IN PURSUIT OF THE MUSE: A TEMPORAL APPROACH TO CREATIVITY IN INTERNATIONAL ASSIGNMENTS

Yunlu, Dilek; U. of Wisconsin Milwaukee; dyunlu@yahoo.com
This paper provides a temporal model for creativity during international assignments. By using the u-curve model of adjustment, we identify two points in time when the creativity of an expatriate is most salient, albeit in two different forms. By employing the identity theory and the punctuated equilibrium model, we make an argument for a divergent thinking rich creative period during the honeymoon stage. For the second point, we propose that the mastery stage during the adjustment period is most conducive to incremental creativity that is sponsored by more convergent thinking expertise. We support this argument by employing the social identity theory and the componential theory of individual creativity. Keywords:Creativity, International Assignments, Expatriates

INDIVIDUALISM-COLLECTIVISM IN HOFSTEDE AND GLOBE.

Venaik, Sunil; U. of Queensland; s.venaik@business.uq.edu.au Brewer, Paul Anthony; U. of Queensland; p.brewer@business.uq.edu.au
This paper examines the Individualism-Collectivism (I-C) dimension of national culture in the Hofstede and GLOBE models. We identify major contradictions within and between the two culture models, which result in contradictory relationships with external variables such as economic prosperity. We critically evaluate the content validity of the items used to measure this construct in both models. Based on our analysis, we suggest that Hofstedes IndividualismCollectivism index be relabelled as Self-orientation versus Work-orientation, GLOBEs Institutional Collectivism as Organizational Collectivism, and GLOBEs In-group Collectivism as Family Collectivism. We demonstrate how the proposed alternative conceptualizations of the Individualism-Collectivism dimensions in both Hofstede and GLOBE models can help reconcile the anomalous relationships between these two models of national culture, and between their dimension scores and other external variables of interest to researchers, such as economic prosperity. Keywords:Culture, Collectivism, GLOBE

INSTITUTIONAL DISTANCE, EXPERIENCE, AND FOREIGN

SUBSIDIARY OWNERSHIP STRUCTURE

Powell, K. Skylar; U. of Hawaii & East-West Center; skylarp@hotmail.com Rhee, Mooweon; U. of Hawaii; mooweon@hawaii.edu
Operating in institutionally distant environments is a key concern for multinational enterprises. Incorporating institutional theories and learning theories in existing international business research, this study aims to provide a novel explanation of the relationship between institutional distance and foreign subsidiary ownership structure, and the roles organizational experience with institutional distance takes in moderating the relationship. Using data on the global automotive industry, this analysis finds support for a negative association between regulatory institutional distance and the pursuit of a wholly-owned foreign subsidiary ownership structure. This relationship is also reduced by both a parent firms cumulative experience with institutional distance, and variance in a parents experiences with institutional distance. Finally, our results illustrate a mutually enhancing effect of cumulative experience and variance in experiences in weakening the negative association between institutional distance and wholly-owned ownership structures. Keywords:Institutional Distance, Exploration and Exploitation, Subsidiary Ownership

INSTITUTIONAL DISTANCE, INTERNATIONAL EXPERIENCE, AND STAFFING POLICY FOR FOREIGN SUBSIDIARIES
Ando, Naoki; Hosei U.; nando@hosei.ac.jp Paik, Yongsun; Loyola Marymount U.; yspaik@lmu.edu
This study examines how institutional distance between a home and a host country influences the staffing policy of an MNCs foreign subsidiaries and how their international business experiences moderate the impact of institutional distance. Hypotheses regarding the effect of institutional distance on foreign subsidiary staffing are developed based on the institution theory and the organizational learning perspective. Using a sample of 2,984 foreign subsidiaries of Japanese firms, these hypotheses are empirically tested. The results of this study suggest that Japanese firms rely on host country nationals to manage foreign subsidiaries when facing greater institutional distance. This study also shows that firms with more international business experiences tend to replace host country nationals with parent country nationals under greater institutional distance. Keywords:expatriate, institutional distance, international experience

INSTITUTIONAL PRESSURES AND OWNERSHIP-BASED ENTRY MODE: INTERNATIONAL M&AS BY CHINESE FIRMS
Xie, Zhenzhen; Hong Kong U. of Science and Technology; xiezz@ust.hk
With data of 588 cross-border mergers and acquisitions made by Chinese firms during 19872008, the relationship between institutional pressures and ownership-based entry mode choice is investigated empirically. Two types of institutional pressures are studied: institutional freedom and peer effects. The results show that Chinese investors are more likely to acquire majority ownership of the target in countries with less policy constrain and smaller institutional distance. In

addition, in countries where many Chinese investors get control over foreign subsidiaries in prior transactions, the Chinese investors tend to adopt similar practice. The imitation is due to both social and economic considerations. Keywords:institutional pressure, entry mode, international mergers and acquisitions

INTERCULTURAL TRUST AND TRUSTBUILDING:ADAPTIVE LEARNING IN ACCULTURATION

Li, Peter Ping; Copenhagen Business School; pli.int@cbs.dk
The extant research on the so-called cross-cultural trust has primarily focused on the comparative study of intra-cultural trust for within-cultural behavior and relationship, rather than intercultural trust for between-cultural behavior and relationship. To fill in the gap in the literature, we seek to address four key questions regarding trust and trust-building via cultural interface (highlighting intercultural interaction) beyond cultural distance (comparing intra-cultural interaction) due to adaptive learning: (1) Does intercultural trust differ categorically from intra-cultural trust? (2) Why does intercultural trust differ from intra-cultural trust? (3) How is intercultural trust built as compared to intra-cultural trust-building? (4) Is the process of intercultural trust-building a linear pattern over time? By addressing the four critical questions, we intend to make three primary contributions, include providing the theoretical rationale for distinguishing between intercultural and intra-cultural trust; developing a central theme toward an integrative framework with the dynamic constructs of intercultural interface (trust-building) and adaptive learning, and building two typologies to specify four trust-building contexts as well as four trust-building strategies. Keywords:Intercultural, Trust, Learning

INTERNAL CAPABILITIES AND OPEN INNOVATION AS SOURCES OF EXPORT PERFORMANCE

Pohjola, Mikko; Turku School of Economics; mikko.pohjola@tse.fi Clausen, Tommy; Nordland Research Institute; tommy.clausen@nforsk.no
Open Innovation (OI) is a new paradigm for understanding innovation. No prior study in the OI tradition has analyzed whether and to what extent open innovation practices influence firms international success. Although firms export performance is important to the International Business (IB) literature, this literature has not examined the role of Open Innovation. Instead internal capabilities have been highlighted. In this paper we combine the literature on OI and IB and ask the following overarching research question: Whether and to what extent is firms international success influenced by the use of open innovation practices and internal capabilities? Keywords:Innovation, exports, open innovation

INTERNATIONAL AMBIDEXTERITY AND PERFORMANCE IN FOREIGN DIRECT INVESTMENT

Hsu, Chia-Wen; National Chung Cheng U.; kevinjubi@yahoo.com.tw Chen, Homin; National Taiwan U.; hmchen@management.ntu.edu.tw

Do multinational corporations balance exploitation and exploration in their foreign direct investment and, if so, how exploitation and exploration can jointly influence firm performance? We drew on the literature on organizational ambidexterity and conceptualize a new construct, international ambidexterity, which reflects MNCs concurrently pursue exploitative FDI and explorative FDI, can enhance firm performance. Based on a sample of 207 Taiwanese firms, we find evidence consist with the organizational ambidexterity hypothesis by showing that MNCs have to balance exploitative FDI and explorative FDI to achieve superior firm performance. We also find that international ambidexterity is more beneficial to MNCs with higher degree of internationalization. Keywords:International Ambidexterity, Exploitative FDI, Explorative FDI

INTERNATIONAL CLUSTERING AND SUBSIDIARY PERFORMANCE

Tang, Jing'an; Sacred Heart U.; tangj3@sacredheart.edu
This study investigates the process of international clustering and its impact on foreign subsidiary performance. We focus on one form of international cluster, foreign peer network (FPN), which is formed by a group of foreign subsidiaries that are from the same home country and operate the same or similar businesses within a common geographic boundary in the host country. Driven by the various institutional, social and economic forces, a FPN develops through several distinctive stages, which in turn, partly explain variations in foreign subsidiary performance. Our analysis of 1,685 FPNs involving 26,439 Japanese foreign subsidiaries worldwide confirmed our arguments. The development stage at which a foreign subsidiary entered a FPN has an S-shaped relationship with subsidiary survival and a U-shaped relationship with subsidiary profitability. Keywords:Cluster, Subsidiary performance, network

INTERNATIONAL COLLABORATION FOR KNOWLEDGE CREATION: A MULTI-METHOD STUDY

Ou, Amy Y.; Arizona State U.; yi.ou@asu.edu Varriale, Luisa; U. OF NAPLES PARTHENOPE; varriale@uniparthenope.it
International collaboration has been recognized as an important driver of knowledge creation, but little is known regarding the factors embedded in a collaboration team that contributes to publication success. Drawing on the international entry mode literature, we propose that international collaboration succeeds by increasing complementary resources and reducing transaction costs. Study 1 used a sample of 153 papers and supported the existence of complementary resources but not the transaction costs. Study 2 used eight semi-structured interviews and found four factors to explain why transaction costs were transformed into resources. We provide practical advices to international scholars based on our findings. Keywords:International academic collaboration, Knowledge creation, Publication success

INTERNATIONAL EXPANSION OF SMES FROM CHINA. EVIDENCE FROM JIANGSU PROVINCE

Xu, Ning; Nanjing U.; xuning@nju.edu.cn Fornes, Gaston; ESIC BUSINESS & MARKETING SCHOOL; gaston.fornes@esic.es Cardoza, Guillermo; Instituto de Empresa Business School; guillermo.cardoza@ie.edu
This paper is a continuation of the study by Cardoza and Fornes (2009) on the international expansion of Ningxia Hui SMEs. It follows a similar structure, conceptual framework and research methodology. The data was collected from 137 SMEs operating in Jiangsu Province, China, and then analysed using multivariate regressions; the models used the firms export intensity at the regional, national, and international level as dependent variables. Five models were run: two analysing the internal and external factors promoting/hindering the firms international expansion, one analysing the relation between industry and international activities, and the other two models studying institutional factors (state funding and ownership). The results show that 17 factors are hindering the expansion of the SMEs in the sample, that there seems not to be a relation between industry and international operations, and that ownership by the state does not seem to play a relevant role in international expansion. The paper concludes with an analysis of the fit of the findings with recently published conceptual frameworks on emerging markets companies. Keywords:None

INTERNATIONALIZATION LOCATIONS AND PERFORMANCE OF DEVELOPING COUNTRY MNCS

Yuan, Lin; National U. of Singapore; g0403305@nus.edu.sg Pangarkar, Nitin; National U. of Singapore; bizpn@nus.edu.sg
Combining resource-based view and institutional theory, this paper adopts a dynamic view to analyze the performance implication of location choice in internationalization. We argue that two sets of conditions will lead to higher degree of internationalization in developed rather than developing countries: strong resource-based ownership advantages at the firm level and/ or institution-based ownership disadvantage imbedded in home country. We consider immediate performance after entry as well as the performance improvement after a few years. We find that entries into developing countries have positive effect on immediate performance, while the effect of entries into developed countries is negative. But entries into developed countries result in longer term performance improvement. Our analysis of Chinese listed MNCs between 1992 and 2005 strongly supported our hypotheses. This study shows that it is important for developing country MNCs to balance the immediate benefits with the potential longer-term gains of different internationalization strategies. Keywords:Internationalization, Location choice, Developing country MNCs

INTERNATIONALIZATION OF EMERGING-ECONOMY FIRMS: THE EFFECT OF INSTITUTIONAL AND FOREIGN OWNERSHIP

Cui, Lin; Australian National U.; lin.cui@anu.edu.au Hu, Helen Wei; U. of Melbourne; hehu@unimelb.edu.au

This study investigates the roles of secondary shareholder ownership in the outward foreign direct investment (OFDI) decisions of emerging-economy (EE) firms. Recognizing corporate governance as an important determinant of the internationalization strategy of EE firms, we develop a conceptual framework that incorporates institutional and foreign shareholder ownership and the moderating effects of CEO compensation. Based on an empirical study of 224 Chinese publicly listed companies, we found that both institutional and foreign shareholder ownership are positively related to the OFDI propensity of firms. The positive relationship between OFDI propensity and institutional shareholder ownership is weaker when CEO pay is high, whereas the positive relationship with foreign shareholder ownership is stronger in this situation. Keywords:Corporate Governance, FDI, Ownership

INTERNATIONALIZATION, ACQUISITIONS AND THE EMERGING ECONOMY MULTINATIONAL

Madhok, Anoop; Schulich School of Business; amadhok@schulich.yorku.ca
Outward direct investment by multinational enterprises from emerging economies has witnessed a sudden surge in recent years. In particular, observers have been surprised at the extent of acquisition activity, especially in the advanced economies. I argue that understanding EE MNE direct investments into the advanced economies requires a departure from established concepts which emphasize the existence of firm advantage prior to internationalization. Instead, outward internationalization through acquisition can be explained by a search for advantage creation when firms possess mainly ordinary resources. In explaining such internationalization through acquisition, I emphasize how acquisitions can help these firms overcome what I term as the liability of emergingness and, moreover, how they serve as a mechanism for learning and competitive catchup. Austrian notions of entrepreneurship provides the basis for such learning. Keywords:Internationalization, Acquisition, Emerging Economy

INTERORGANIZATIONAL TRUST: THE ROLE OF PARTNER SELECTION AND HOST COUNTRY RULE OF LAW
Roy, Jean-Paul; Queen's School of Business, Canada; Jroy@business.queensu.ca
This study provides new insight into how partner selection criteria and host country rule of law influence the development of trust between international joint venture (IJV) partners. Empirical results based on novel survey and archival data collected on 151 IJVs across six Asian countries revealed that benevolence and competence trust is determined by the importance attributed to specific partner selection criteria when establishing the IJV. This study also found that the two types of trust are facilitated by different criteria, and that rule of law in the host country positively moderates the influence of most, but not all, criteria. The implications of these results for the establishment and management of IJVs are discussed. Keywords:International joint ventures, Trust, Partner selection

INWARD ACTIVITIES AND THE INTERNATIONALIZATION

OF FIRMS: EVIDENCE FROM CHINA'S EMERGING MARKET

Cui, Geng; Lingnan U., Hong Kong; gcui@ln.edu.hk Li, Haiyang; Rice U.; haiyang@rice.edu
This study examines the role of inward activities in internationalization of firms in emerging markets. We argue inward activities play an important preparatory role in a firms internationalization process. We propose and a firms involvement and diversity of inward activities will contribute to the firms internationalization performance. With a sample of firms in Chinas emerging market, our results provide evidence for the hypotheses. Keywords:internationalization, inward activities, China

IS FOREIGN INVESTMENT FOR OUTPERFORMERS OR UNDERPERFORMERS? EVIDENCE FROM JAPANESE MACHINERY FIRMS
Jiang, Guo-Liang Frank; Dalhousie U.; fjiang@ivey.ca Holburn, Guy; U. of Western Ontario; Gholburn@ivey.uwo.ca
Drawing on performance feedback theory, this study examines the relationship between corporate performance and subsequent foreign investment decisions. It is argued that a firms performance relative to its aspiration levels influences its propensity to engage in foreign investment as well as its choice of investment location. We propose that an improvement in performance relative to aspiration levels of performance reduces the propensity for international investment and that the deterrent impact of country distance on foreign entry is contingent on relative performance. Consistent with the theory, an analysis of investments in foreign manufacturing facilities made by 206 Japanese machinery firms between 1986 and 2002 shows that foreign investment propensity is overall negatively related to prior firm performance relative to aspiration levels. The likelihood of foreign investment decreases when firm performance exceeds historical and social aspirations. The probability of foreign entry does not significantly increase as performance falls below aspirations, however is still greater than when performance exceeds aspirations. In addition, outperforming and underperforming firms were more likely to enter host countries with larger geographic and institutional distances from Japan, implying extended search efforts and/or greater risk-taking behavior. Keywords:Performance feedback, Location Choice, FDI

ISOMORPHIC INFLUENCES AND ASPIRATION: REFERENCE GROUP CHOICE IN ENTRY MODE DECISIONS
Zheng, Congcong; San Diego State U.; czheng@mail.sdsu.edu
Neo-institutional theory and international business scholars have investigated the isomorphic influences on a firms entry mode decisions. Previous research has shown the prevalence and importance of isomorphic influences from country, industry peers and MNC parents when managers make entry decisions. Under conditions of uncertainty, firms could model themselves after behaviors of host country entrants, industry norms or their own past behaviors. However,

previous research has not discussed the relative significance of institutional influences exerted from those different reference groups. Our paper develops a model regarding the firms appropriate reference group when making entry mode choices based on the sources of institutional influence and firms own aspiration. The addition of aspiration variable helps us to understand the priorities of reference groups. The paper contributes to institutional theory and international business literature by examining the interaction between institutional environment and decision makers preference and emphasizing decision makers initiatives and options when facing institutional influences. Keywords:Isomorphism, Foreign entry, Entry mode

JOINT VENTURE TERMINATION IN EMERGING ECONOMIES

Meschi, Pierre-Xavier; IAE Aix-en-Provence & SKEMA Business School; pierrexavier.meschi@iae-aix.com Wassmer, Ulrich; Concordia U.; uwassmer@jmsb.concordia.ca
A critical factor for joint venture (JV) stability and success in emerging economies is access to information about potential local partners. By building on social network theory, we examine whether foreign firms can benefit from embeddedness in an alliance network by accessing more reliable information concerning the availability, resources, and behavior of potential local JV partners. We argue that such network benefits can help foreign firms to mitigate behavioral uncertainty in international JVs and thus reduces the likelihood of JV termination. We use data on 275 JVs formed by European firms in emerging economies during 1996 and survival analysis to test our hypotheses. Our findings indicate that simply being part of an alliance network is not sufficient to enable foreign investors to minimize behavioral uncertainty and thus significantly enhance their ability to select better local partners. Only large and sparse networks offer their members the internal market and benefits of reliable, relevant information on potential local partners that ensure the survival of future JVs. Keywords:joint venture, alliance network, event history analysis

KNOWLEDGE ACCUMULATION OF MNC SUBSIDIARIES IN HOST COUNTRIES AND EVOLUTION OF INNOVATION CENTERS
Qiu, Ranfeng; Rutgers U.; rqiu@pegasus.rutgers.edu Cantwell, John; Rutgers U.; cantwell@business.rutgers.edu
The aim of this study is to explain the change in technological and geographical pattern of a multinational corporation (MNC)s innovative activities in host locations and the evolution of regional innovation system, by bringing in the concept of General Purpose Technologies (GPTs) and primary technology fields. Given pervasive and connective natures, local development of GPTs enables localized knowledge to be accessed and transferred more readily between geographically and technologically diversified facilities. Based on a USPTO database covering innovative activities of large industrial firms from 20 foreign countries in the U.S from 1969 to 1995, our study suggests that development of technologies in GPT fields as peripheral technologies is positively associated with the degree of technological diversification of that subsidiary, and degree of geographical dispersion of technology creation activities of firms in host

countries. Moreover, the local specialization of innovations in non-primary GPT fields tends to increase the industrial (sectoral) dispersion of a regional innovation center. Keywords:Knowledge accumulation, Innovation clusters, General Purpose Technology

KNOWLEDGE CREATION IN MULTINATIONALS AND RETURN MIGRATION OF INVENTORS: EVIDENCE FROM MICRO DATA
Choudhury, Prithwiraj; Harvard U.; prithwic@hotmail.com
Do multinational firms leverage their internal labor resources (e.g. returnees) in conducting cross border R&D? Local inventors at emerging market R&D centers of MNCs face constraints in securing resources for knowledge creation projects. Two mechanisms can be employed to overcome this leveraging returnee managers and/or socializing ideas by traveling to the headquarters. I test this using hand-collected employment, travel, demographic similarity and patent data for 1315 inventors in a Fortune 50 multinational R&D center in India. To test for the contribution of returnee managers, I consider new graduates, for whom manager assignment is plausibly random. To test for the effect of travel, I consider employees who could not travel because they got married/had children and match them to similar employees without such constraints. Both mechanisms lead to higher patenting. However the marginal effect of the compensating mechanism (travel) is about half the returnee effect. Keywords:Multinationals, Return Migration, Knowledge Creation

LEADERS FOLLOW THE FOLLOWERS: MULTINATIONALITY & DOMESTIC COMPETITIVE POSITION AMONG JAPANESE FIRMS
Ito, Kiyohiko; U. of Hawaii at Manoa; k.ito@hawaii.edu Rose, Elizabeth L.; Helsinki School of Economics; Elizabeth.Rose@hse.fi Cho, Eunbum; U. of Hawaii at Manoa; eunbum@hawaii.edu
We investigate the relationship between a firms domestic competitive position and its multinationality, based on the notions of ownership, first-movers advantages, and economies of scale. Theoretical frameworks suggest that, because larger MNCs have more resources available to support foreign operations, they will tend to display higher degrees of multinationality, relative to smaller competitors. However, many MNCs from Japan provide counter-examples to this assumption. Using Japanese firms data from 1975 to 2004, we investigate the relationship between multinationality and both size and domestic competitive position. Our empirical evidence suggests that multinationality, measured as the numbers of both foreign subsidiaries and countries in which Japanese MNCs operate, is positively related to firm size. However, firms that are leaders in the Japanese domestic market tend to have lower degrees of multinationality, after controlling for size and experience, relative to their non-dominant competitors. Our findings suggest that, in terms of multinationality, the leaders are following the followers. Keywords:multinationality, FDI, domestic competitive position

LEADERSHIP TASK AND RELATIONSHIP ORIENTATIONS

OF UGANDANS AND AMERICANS

Manyak, Terrell G.; Nova Southeastern U.; manyak@huizenga.nova.edu Mujtaba, Bahaudin; Nova Southeastern U.; mujtaba@nova.edu
Uganda is emerging as a significant political and economic force on the African continent, but this landlocked nation remains largely a mystery within the international business community. This research seeks to bring some understanding of Uganda by comparing the leadership orientations of Ugandans and Americans. The findings show that Ugandans are not only more relationship oriented than Americans, but their task orientation scores are also higher. The findings also show that Ugandan women are somewhat more task oriented than Ugandan men. Therefore, American managers should feel comfortable in knowing that Ugandan employees, if given proper leadership, are sufficiently task oriented to get their work done while maintaining healthy relationships with their colleagues, peers, customers, and superiors. Keywords:Leadership, Cross-cultural Management, Uganda

LEGAL SYSTEM CONTINGENCIES AND DETERMINANTS OF WOFS RELATION-BASED STRATEGIES

White III, George O.; Old Dominion U.; gowhite@umflint.edu Hemphill, Thomas A.; U. of Michigan - Flint; thomashe@umflint.edu Joplin, Janice R.; Southern Illinois U., Edwardsville; jjoplin@siue.edu
This study examines the determinants of wholly owned foreign subsidiary (WOFS) relation-based strategies (RBSs) and whether or not dimensions of an emerging markets legal system will moderate these relationships. Our analysis of 181 WOFSs in the Philippines suggests that managerial adaptation and strategic positioning are antecedents to both business and government RBS implementation. In addition, we find that the positive association of managerial adaptation and strategic positioning on business and government RBSs become stronger when WOFS perceptions of commercial law inadequacy and judicial arbitrariness are high. Keywords:relation-based strategies, legal environment, emerging market

LEGAL SYSTEM VOIDS AND WOFS PERFORMANCE: THE MEDIATING ROLE OF GOVERNMENT RBSS
White III, George O.; Old Dominion U.; gowhite@umflint.edu Canabal, Anne; U. of Maine; anne.canabal@maine.edu Hemphill, Thomas A.; U. of Michigan - Flint; thomashe@umflint.edu
In this study we develop and test a model concerning how wholly owned foreign subsidiaries (WOFSs) create positive performance outcomes when operating in an emerging market legal system with inherent voids. Our analysis of 181 WOFSs in the Philippines suggests that legal system voids are positively related to government relation-based strategies (RBSs). Our findings suggest that the positive relationship between legal system voids and government RBSs deployment strengthened for WOFSs that are manufacturing intensive, and that government RBS deployment mediated the negative relationship between legal system voids and WOFS performance. Keywords:legal system voids, relation-based strategies, emerging market

LIABILITY OF "HOMENESS": FRICTION, INSTITUTIONS, AND FIRMS' DISADVANTAGES ABROAD

Stevens, Charles Edward; Ohio State U.; stevens.316@osu.edu Shenkar, Oded; Ohio State U.; shenkar_1@cob.osu.edu
The international business literature has long acknowledged that firms face certain disadvantages when they engage in business activities abroad. As the literature on firms costs of doing business abroad (CDBA) evolved into that of firms liabilities of foreignness (LOF), researchers increasingly used the metaphor of distance to explain and predict these disadvantages. Yet, empirical results and conceptual limitations suggest that a change in metaphor from distance to friction will provide new and more nuanced insights. We develop a new construct, liability of homeness, using the metaphor of friction and find that doing so produces new and sometimes counter-intuitive observations about this phenomenon. We believe that the liability of homeness construct will allow a greater understanding as to when and why firms face liabilities due to operating abroad and open new avenues for conceptual development and empirical testing. Keywords:liability of foreignness, institutions, friction

LIABILITY OF FOREIGNNESS AND THE GROWTH OF AN INDUSTRY: A DYNAMIC APPROACH

Yu, Jisun; John Molson School of Business, Concordia U.; jisunyu@jmsb.concordia.ca Kim, Sung Soo; McGill U.; sungsoo.kim@mail.mcgill.ca
Building upon studies on the liability of foreignness (LOF) in the international business literature, this study examines how the temporal growth of an industry (i.e., early versus late periods of industry growth) in a given host country affects the advantages and disadvantages of foreign firms competing in the host countrys market. Considering the dynamic aspects of industry growth is important in that the sources of competitive advantage change over time as an industry grows, thereby affecting the competitive positions of foreign firms in a host countrys market. We collected and analyzed 5-year panel data of the Korean asset management industry, and our data show that possessing firm-specific resources and capabilities becomes more important for firm performance as the industry grows. Additionally, we find that foreign firms disadvantageous position in accessing location-specific resources diminishes while the advantageous position of foreign firms in firm-specific capabilities strengthens as the industry grows. Our study findings provide a complementary understanding to the current knowledge base of LOF, as well as helpful managerial insight into managing firms involved in international competition. Keywords:Liability of Foreignness, Managing MNE Subsidiaries, Firm-specific/Locationspecific advantages

LIABITLY OR ASSET? AN EMPIRICAL ANALYSIS ON THE IMPACT OF MULTINATIONALITY ON PERFORMANCE

Eckert, Stefan; Internationales Hochschulinstitut; eckert@ihi-zittau.de Dittfeld, Marcus; International Graduate School Zittau; dittfeld@ihi-zittau.de Rassler, Susanne; U. of Bamberg; susanne.raessler@sowi.uni-bamberg.de

We analyze the impact of multinationality on performance for a sample of listed firms stemming from Continental European countries, namely France, Germany, and Italy for the period from 1990 to 2006 (sample size ranging from 1,056 to 2,654 firm-year-observations). In accordance with recent research we were able to show that there is a non-linear effect of multinationality on performance. Yet, unlike Lu and Beamish (2004) but in accordance with Ruigrok et al. (2007) we found that in the case of our sample, the S-shaped curve between multinationality and performance was inverted in a way that a first stage of multinationality is accompanied by increasing performance, while in a second stage multinationality implies a performance decline and in a third stage increasing multinationality is again accompanied by increasing performance. In line with previous studies, our findings support arguments from the intangible asset theory and theories of industrial organization: the effect multina-tionality exerts on performance obviously depends to a large extent on the existence of firm specific intangible assets (especially related to R&D) and/or the potential to reap economies of scale through internationalization. Furthermore, our findings documents distinct differences regarding the multina-tionality-performancerelationship between RD-intensive and less RD-intensive firms. Keywords:Multinationality, Performance, Inverted S-Curve

LIMITATIONS OF THE NETWORK ORGANIZATION IN MNCS

Wolf, Joachim; Christian-Albrechts-U. of Kiel; wolf@bwl.uni-kiel.de Egelhoff, William G; Fordham U.; egelhoff@fordham.edu
This paper discusses the limitations of the network organization in MNCs. Since many IB/IM publications have concentrated on the advantages of this organizational form, the focus of the paper is on limitations that might occur if MNCs use a network organization. Four types of problems are identified: (1) problems referring to knowledge transfers between MNCs subunits, (2) problems referring to trust-building and corporate culture within MNCs, (3) problems referring to subsidiary development and subsidiary managers stress, and (4) further problems of a more general nature. Due to the relevance of these problems, it is expected that, at least on the long run, the network organization will not be able to replace formal organizational structures for MNCs. Instead, the network organization will more likely serve as an additive organizational instrument supporting the information-processing capacity of MNCs formal organizational structure. Further, because of the ongoing importance of the formal organizational structure for MNCs, the paper specifies in which ways it can help to reduce the limitations of the network organization. Finally, the paper argues that the formal matrix structure should be considered more intensively in the future. Keywords:Network Organization, MNCs, Organizational Structure

LINCHPINS OF THE MULTINATIONAL: FUNCTIONS, RESOURCES AND TYPES OF BOUNDARY SPANNERS WITHIN THE MNC
Barner-Rasmussen, Wilhelm; Hanken School of Economics; wilhelm.barnerrasmussen@hanken.fi Ehrnrooth, Mats; Hanken School of Economics; mats.ehrnrooth@hanken.fi Koveshnikov, Alexei; Hanken School of Economics;

alexei.koveshnikov@hanken.fi Mkel, Kristiina; Hanken School of Economics; kristiina.makela@hanken.fi

In this hypothesis-testing multiple case study, we empirically examine the role of individual boundary spanners in the micro-level dynamics of interunit interaction in multinational corporations (MNCs). Our analysis demonstrates that boundary spanners in MNCs may perform four functions of key importance for interunit knowledge transfer transacting, linking, facilitating and intervening and that the extent to which they perform these functions is strongly related to their social capital and linguistic and cultural skills. Based on these findings, we present a typology which highlights the existence of a hierarchy of boundary-spanning roles, implying that future research may do well to approach boundary spanners in terms of degrees or levels of boundary spanning rather than a homogenous group. We note that while previous research has focused on the role of group leaders, we find important boundary spanners also at other hierarchical levels. By focusing on boundary spanners, we also contribute to the literature by helping redress the severe lack of empirical research on individuals in MNCs. Keywords:boundary spanners, multinational corporations, individual level

LOCATION ASYMMETRY VERSUS KNOWLEDGE ASYMMETRY: GOVERNANCE DETERMINANTS OF INTERNATIONAL ALLIANCES

Wen, Sonya H; Tamkang U.; sonya.wen@gmail.com Chuang, Cheng-Min; National Taiwan U.; cmchuang@mba.ntu.edu.tw
How do location and knowledge factors interactively impact the alliance strategies between international partners? To approach such an inquiry, this paper blends the perspectives of knowledge-based view (KBV) and transaction-costs economics (TCE) in a hypothesized governance model. Theoretically, we develop a governance driver, incentives-to-teach of knowledge owners, and then incorporate it in a hypothesized model explaining why international partners to choose equity-based or contractual mode governing their alliance. Empirically, seven hypotheses are devised and then tested by a sample of 7,030 international alliances participated by at least a partner from two major emerging economies, China and South Korea. This empirical sample is intentionally selected in order to further demonstrate the strategic importance of location asymmetry and knowledge asymmetry, two key constructs derived from our theoretical elaboration of incentives-to-teach. Our test results support three governance determinants toward equity-based mode, including co-emerging partners from the dimension of partner-locationsymmetry, foreign diversification from the dimension of partner-location-asymmetry, and emerging-learning alliances from the dimension of alliance-knowledge-asymmetry. In addition, our research also find three boundary conditions of knowledge determinants, whose governance effect on equity-based mode becomes more significant for the international alliances located in the host country of an emerging partner, consisting of non-competing partners, and formed in the more recent period than their counter-alliances. Keywords:International alliance, Governance mode, Emerging economies

LOGICS AND LIMITS IN ETHICAL OUTSOURCING AND OFFSHORING IN THE GLOBAL FINANCIAL SERVICES INDUSTRY

Hollinshead, Graham; U. of Hertfordshire; g.hollinshead@herts.ac.uk Park, Kathleen; Massachusetts Institute of Technology; kmpark@mit.edu
The offshoring of financial and other services has generated considerable political heat in western countries over the past decade. The emotive issues surrounding job loss and status deterioration have frequently been imbued with a polemical and ideological tenor. In this paper we expose the realities of offshoring to an intensive forensic treatment by unpacking the strategies underlying the offshoring decision and related ethical considerations, in respect of a flagship financial services firm renowned as exemplary in international business process engineering and corporate social responsibility. Through in-depth interviews with senior executives in the case organization and a comparator organization and with leading management consultants in the field, we build a picture of the evolving logics and limits which have guided the approach to offshoring in the company over more than a decade. In examining the delicate balance between cost and risk in the management of offshore outsourcing and the ethical treatment of key constituencies of shareholders, customers and employees, we find a phased progression in the history of offshoring with an increased emphasis on a constrained compassion consistent with corporate profitability imperatives, yet pragmatically reversible under performance pressures in the global financial crisis aftermath. Keywords:financial services offshoring, corporate social responsibility, cost and risk

MAIN TRENDS IN THE STUDY OF REGIONAL INNOVATION SYSTEMS: AN AUTHOR CO-CITATION ANALYSIS
D'Allura, Giorgia Maria; U. of Catania; gdallura@unict.it Galvagno, Marco; U. of Catania; mgalvagno@unict.it Mocciaro Li Destri, Arabella; U. of Palermo; a.mocciaro@libero.it
Though various authors have offered reviews of the RIS literature and some have described their personal intellectual voyage amongst the building blocks that constitute this area of scientific enquiry (for example, Cooke 2008), these often illuminating illustrations are nonetheless subjective and, thus, suffer from biases which pertain to the actor performing the analysis. The study proposed in this paper aims to overcome the aforementioned limitation by elaborating an objective review of the main contributions to the RIS field of research, highlighting the main themes studied and the principal approaches followed. The analysis has been conducted following the Author Co-citation method, applied to the literature regarding RIS present in the Social Science Citation Index (SSCI) of Thomson-ISI in the time span from 1990 to 2009. The initial data set counted 211 contributions, but the application of criteria which allow to screen out the research pieces which actually characterize and shaped the field left 24 foundational papers. The use of the ACA method of analysis has allowed to trace an overview of how the RIS research area is actually composed, identifying the main research themes which characterize the field and the varied perspectives adopted. The former are: (A) System of Innovation, with 8 papers; (B) Regional System of Innovation, with 3 papers; (C) Innovation and Cluster, with 9 papers; (D) Regional Competitiveness, with 2 papers and (E) learning and innovation, with 2 papers; the latter are: (1) Regional Science; (2) Economics of Innovation; (3) Social Embeddedness; (4) Evolutionary Economic Geography; (5) Knowledge and Organizational Learning; (6) International Business. Keywords:Innovation system, knowledge, Co-citation

MANAGERIAL IMPACT OF ANALYST FORECASTING ACCURACY AND BIAS: A STUDY OF MULTINATIONAL COMPANIES
Lin, Jing; Saint Joseph's U.; jlin@sju.edu Mauri, Alfredo J; Saint Joseph's U.; amauri@sju.edu Neiva De Figueiredo, Joao; Saint Joseph's U.; jneiva@aol.com
This paper examines how the financial analyst earnings per share forecasts are affected by strategic patterns that international firms have used to expand abroad. We empirically show that geographic dispersion contributes to an increase in forecasting accuracy while global integration contributes to a decrease thereof. We further investigate the effect of these strategic patterns of cross-border expansion on analyst forecasting optimism and find that geographic dispersion contributes to somewhat less optimistic forecasting estimates. The results are important to managers, investors and shareholders as they indicate the desirability for more transparency in financial disclosures. Keywords:Multinationals, Patterns of Internationalization, International Strategy

MANAGING POLICY RISK BY SHIFTING CASH FLOW SENIORITY: A RESOURCE BASED VIEW
Sawant, Rajeev J; Northeastern U.; ra.sawant@neu.edu James, Barclay; Louisiana State U.; bjames@lsu.edu
This paper theoretically develops and empirically tests a model of MNC mitigation of political appropriation hazards. The paper draws on RBV and corporate political activity theory to analyze how MNCs deploy industry operational expertise to manage policy risk by shifting cash flow seniority. MNC parents as equity providers are residual claimants but claim cash flows directly from revenues by entering into operations and maintenance (O&M) contracts with their foreign subsidiaries. The empirical findings indicate, consistent with our developed hypotheses, that MNCs are more likely to enter into O&M contracts with their own subsidiaries as country risk increases and as MNC operational expertise increases. Keywords:MNC Strategy, Country Risk, Resource-based view

MARGINALIZATION AND ATTRACTION TO FOREIGN AND INTERNATIONAL FIRMS

Newburry, William; Florida International U.; newburry@fiu.edu Gardberg, Naomi A; Baruch College; naomi.gardberg@baruch.cuny.edu
Despite a global need to attract qualified talent, few studies examine the attraction of talent outside developed nation contexts. We integrate literature on organizational attractiveness, liabilities of foreignness and marginalization to predict workplace attractiveness of foreign firms in five developing Latin American nations and Spain. Overall, we find foreign-headquartered firms to be less attractive employers in Latin America, although this relationship is not consistent across all countries, and as expected, is not present in Spain. Moreover, gender, education, income, and social class significantly interact with foreignness in predicting company attractiveness,

particularly in Latin America - suggesting that marginalization is an important component of organizational attractiveness perceptions in this context. Keywords:marginalization, Latin America, foreignness

MNC PRACTICE TRANSFER: INSTITUTIONAL THEORY, STRATEGIC OPPORTUNITIES, & SUBSIDIARY HR CONFIGURATION
Clark, Kim; U. of Texas, San Antonio; kim.clark@utsa.edu
In the context of transnational transfer of practices, institutional theory and international business literature have emphasized the challenges arising from the institutional distance between the home and the host country. However, potential opportunities due to this distance have been largely overlooked. Shifting the focus away from looking at institutional distance as a constraint, this paper examines the possibilities of strategic opportunities that exist because of institutional distance, and argues that MNC subsidiaries can exploit these opportunities to gain competitive advantages. This paper extends the assertion in the specific domain of human resource (HR) practice transfer. Building upon institutional theory, resource-based view (RBV), and strategic international human resource management (SIHRM), this paper proposes a theoretical framework to explain how the institutional environments present strategic opportunities for MNC subsidiaries. Strategic opportunities are examined in the context of institutional distance between the home country and the host country, and this paper suggests that strategic opportunities are most abundant in the case of moderate institutional distance between the two countries. In addition, as an approach of utilizing the strategic opportunities, this paper proposes a model of subsidiary HR configurations that creates synergistic effects, and explains how a HR configuration could be a source of competitive advantage. Furthermore, the role of MNCs overall SIHRM orientations in relations to institutional distance and HR configurations is examined. With the strategic opportunity framework and the development of a subsidiary HR configuration model, this paper makes theoretical contributions to institutional theory, international business literature, and SIHRM. Keywords:strategic opportunities, institutional distance, subsidiary HR configuration

MNE/NGO STRATEGIC ALLIANCES AND THE LEGITIMACY OF THE FIRM

Marano, Valentina; U. of South Carolina; valentina.marano@gmail.com Tashman, Pete; George Washington U.; ptashman@gwu.edu
The present paper investigates the legitimating function of Multinational Enterprise (MNE)/NonGovernmental Organization (NGO) strategic alliances. First, it reviews the complexities inherent in the MNEs quest for legitimacy. Then it discusses the characteristics of MNE/NGO strategic alliances, and the growing anecdotal evidence about their positive contribution to corporate legitimacy. Propositions are then advanced to suggest how the complex legitimating environment of the MNE may drive its decision to partner with an NGO. Several examples of MNE/NGO alliances are presented to illustrate the legitimation potential of MNE/NGO alliances. Keywords:MNE, NGO, Alliances

MODES OF INTERNATIONAL EXTERNAL TECHNOLOGY INNOVATION: EVIDENCE FROM A GLOBAL SAMPLE

Richards, Malika; Pennsylvania State U.; mur12@psu.edu Yang, Yi; U. of Massachusetts, Lowell; yi_yang@uml.edu
We investigate the factors that may influence a firms choice of external technology innovation in foreign countries based on the eclectic theory. With a sample of 1094 overseas R&D collaborations in 42 countries by U.S. companies, we examine the impact of three firm-level ownership endowments: technological competency, organizational slack, as well as location factors on such decisions. Our results show that cultural distance does not play an important role in moderating the above relationships, but is an important factor by itself. Instead, industry relatedness between U.S. companies and their overseas partners demonstrates significant moderator effects. Keywords:International R&D collaboration, Governance mode, Eclectic theory

MULTINATIONALS FROM DEVELOPING COUNTRIES: TOWARDS AN "INSTITUTIONAL COMPARATIVE ADVANTAGE" CONCEPT?

Taleb, Ali; HEC Montreal; ali.taleb@hec.ca
This conceptual paper is concerned with institutional comparative advantages of multinationals from developing economies (EM-MNEs). It makes three complementary contributions. First, it provides a high-level overview of the most recent trends in research on EM-MNEs. Second, it proposes a conceptual model that clusters institutional environments into four ideal-types depending on countries level of development. Third, it introduces the concept of institutional competitive advantage based on the ideal-types identified. Forth, it suggests that developing markets represent a unique opportunity for local firms to learn how to operate in a variety of institutional settings. Overall, we argue that EM-MNEs may gain a comparative advantage by developing an eclectic repertoire of strategies that can serve not only in other developing countries but also in developed and least-developed markets. Keywords:Emerging MNEs, Institutional Competitive Advantage, MNE Strategy

MULTIPARTY INTERNATIONAL JOINT VENTURES AND MULTIPLE CHANGE PROCESSES

Chung, Chris Changwha; Korea U.; chungc21@gmail.com Beamish, Paul; U. of Western Ontario; pbeamish@ivey.uwo.ca
Three or more partners form multiparty international joint ventures (IJVs) in order to pool more heterogeneous resources, yet the greater number of partners also represents a greater degree of complexity. The causes and consequences of complexity unique to multiparty IJVs have been underexplored. Drawing on self categorization theory, we examine how unique characteristics of multiparty IJVs are manifested in the process of multiple equity changes and investigate their evolving influences on IJV performance. Our analysis of 2,652 multiparty IJVs suggests that the greater the number of partners and nationalities and the greater the proportion of shared ownership control between unrelated versus related partners, the more likely partners are to

engage in out-group discriminatory behaviors and in-group biases. These behaviors exacerbate the dysfunctional repetition of rearranging ownership control structures. Keywords:Multiparty International Joint Ventures, Multiple Equity Change Processes, Outgroup Discrimination

NATIONAL CULTURE AND CORPORATE GOVERNANCE

Froese, Fabian Jintae; Korea U.; fabian.froese@gmail.com O'Connell, Vincent; U. College Dublin; vincent.oconnell@ucd.ie
Corporate governance has been an important and popular topic for research and practice since the 1970s. However, systematic research on international corporate governance has begun only in recent years. Prior research consistently demonstrated that corporate governance varies significantly across countries. Differences in legal environment, economic and financial development could only explain a small fraction of the variance why corporate governance differs across countries. Analyzing more than 800 firms across 23 countries from 2003 to 2008, this study explains and demonstrates that national culture is the missing factor that can explain the majority of variance of corporate governance. Keywords:international corporate governance, national culture

NORDIC BOARD DIVERSITY AND CORPORATE ECONOMIC PERFORMANCE

Gregogoric, Aleksandra; Copenhagen Business School; ag.int@cbs.dk Thomsen, Steen; Copenhagen Business School; st.int@cbs.dk Randoy, Trond; Agder U. College; trond.randoy@uia.no Oxelheim, Lars; Lund U.; lars.oxelheim@fek.lu.se
Corporate boards in the Nordic countries (Denmark, Norway, Sweden, Finland) are becoming increasingly diverse as a consequence of legal changes, globalization and social trends. A mandatory gender quota in Norway has generated a large scale natural experiment. A similar quota was announced, but later cancelled in Sweden up to 2005. In this paper we examine the business case for these changes. We analyze effect of board diversity on the economic performance of publicly listed Scandinavian companies over the period 2001-2007. Keywords:diversity, governance, performance

OFFSHORING AND FIRM INNOVATIVENESS: THE MODERATING ROLE OF TOP MANAGEMENT TEAM ATTRIBUTES
Mihalache, Oli Radu; Rotterdam School of Management, Erasmus U.; omihalache@rsm.nl
Despite offshorings increased prominence, research provides contradictory arguments about its implications for firm innovativeness. Our study attempts to reconcile existing assertions by proposing that offshoring has an inverted U-shaped impact on firm innovativeness. Using a cross-

industry sample with lagged data, we find empirical support for our prediction. Additionally, we propose and find empirical evidence that top management team (TMT) attributes (i.e. TMT diversity and TMT shared vision) moderate this relationship. Keywords:offshoring, innovation, top management team

ONLINE ADVERTISING EFFECTIVENESS - ANALYZING CROSS-CULTURAL DIFFERENCES IN AN INTERNET COMPANY

Grassmann, Johannes; RWTH Aachen U.; grassmann@win.rwth-aachen.de
Advertising activities aiming on specific customer segments appear to be more efficient than others. Accordingly, nations are a generally acknowledged segmentation criterion. The study attempts to explore which influence national culture has on sales effects of advertising in the Internet. The respective theoretical foundations are Hofstede's four cultural dimensions, which imply different reactions on online advertising in different cultures. Comprehensive data including 3.103 million online transactions have been analyzed by applying a structural equation model. Our findings extend existing research on offline advertising effectiveness to an online context and provide guidance for targeting particular countries with specific online advertising activities. Keywords:advertising effectiveness, online advertising, cross-cultural

ORGANIZATIONAL BEHAVIOUR IN CHINA, AFRICA AND LATIN AMERICA

Kragh, Simon Ulrik; Copenhagen Business School; suk.ikl@cbs.dk
The paper identifies and explains the basic similarities in organizational behaviour in three modernizing regions: China, Africa and Latin America. The argument is that the organizational behaviours which these societies have in common are due to the existence of premodern morals of social distance and reciprocity which continue to influence not only informal relations but also the formal structures, rules and regulations. The paper analyzes a number of observations from the literature on management and organizational behaviour in the three regions to support the argument. Keywords:developing countries, organizational behaviour, anthropology sociology

OUTWARD DIRECT INVESTMENT BY CHINAS PRIVATE FIRMS: DO FIRM OWNERSHIP AND SIZE MATTER?
Huang, Xueli; Edith Cowan U.; x.huang@ecu.edu.au Chi, Renyong; Zhejiang U. of Technology; chirenyong@mail.hz.zj.cn
Chinas outward direct investment (ODI) has increased from US$270 million in 2002 to US$55.9 billion in 2008. Chinese privately-owned enterprises (POEs) play a significant role on this. It is well acknowledged that Chinas institutional environment is vastly different from that of Western countries. Moreover, such institutional environment varies with a firms size and ownership. So, do such institutional differences affect ODI motives and behaviours of Chinese POEs? This paper

uses a combined method of in-depth interviews, participative observation and secondary data analysis to address these questions. We have found that Chinese POEs have a wide range of ODI motives, including seeking strategic asset, efficiency and market, depending on the industry within which they operate. They also tend to invest in competitive industries. These differ from those of Chinese state-owned enterprises (SOEs), which are primarily seeking natural resources in their ODI. These differences can be explained by the level of Chinese POEs resources, the nature of their competences, and the differences in their institutional environment, such as governments financing support and services. Implications are suggested for business executives and policy-makers in both China and host countries. Keywords:outward direct investment (ODI), China, private firms,, foreign direct investment (FDI)

OVERSEAS ACQUISITIONS BY EMERGING MULTINATIONALS: CREATING VALUE THROUGH A PARTNERING APPROACH

Kale, Prashant; Rice U.; kale@rice.edu
International management scholars have recently called for more research on emerging or thirdworld multinational corporations (TMNCs) which refer to firms from developing economies that are becoming bigger and more visible players in the global business landscape. This study addresses that call by examining TMNCs recent trend of doing overseas acquisitions and going inside the black-box to study how they manage the acquisitions they do, and its implications for performance. TMNCs purportedly acquire overseas companies for their extant capabilities (i.e. for what they do) as well to acquire their know-how to upgrade their own resources (i.e. for what they know). Using the context of TMNCs from India we argue, and find, that given their acquisition objectives Indian TMNCs that keep the acquired firm structurally separate (so as to minimize disruption to its extant capabilities) and retain most of its senior executives (to retain the know-how and social capital of these individuals) exhibit better performance. But structural separation does not mean forfeiting synergies based on the interdependence between the two firms TMNCs that use linking mechanisms to selectively coordinate areas of interdependence achieve greater acquisition performance. This approach to manage acquisitions seems quite different compared to the acquisition management practices usually adopted by MNCs from developed countries. We term this novel approach as a partnering approach to acquisitions because despite acquiring majority ownership in another firm, the TMNC acquirer manages its relationship with that firm like it would with an otherwise independent alliance partner. Keywords:Acquisitions, Emerging Multinationals, Partnering

OWNERSHIP STRUCTURE, BOARD STRUCTURE AND INTERNATIONALIZATION: A MULTI-THEORETIC PERSPECTIVE

George, Rejie; Indian Institute of Management, Bangalore; rejieg@iimb.ernet.in Singla, Chitra; Indian Institute of Management, Bangalore; chitrasingla@gmail.com

This paper examines the relationship between corporate governance characteristics such as ownership identity (a feature of ownership structure) and board structure and the firms degree of internationalization (DOI), in a longitudinal sample of Indian firms. We analyze this relationship using two different modes of internationalization, namely, exports and foreign direct investment (FDI) and contribute to both the governance and international business literature streams in the following manner. Firstly, drawing from agency theory and the resource based view of the firm; we argue that foreign corporate and foreign institutional shareholding is positively related to internationalization whereas domestic corporate shareholding is negatively related to DOI. These apply for both exports and FDI. On the other hand, family ownership is argued to have an interesting dichotomy, in that, it is positively related to the firms degree of exports intensity but negatively related to the firms degree of FDI. The empirical results indicate support for our conjectures. Secondly, in addition to ownership identities, we explore the influence of board structure on internationalization. In particular, outside directors are found to positively influence internationalization efforts when coupled with the presence of foreign institutional shareholding, indicating a positive reinforcing effect as far the monitoring efforts from an agency perspective are concerned. Finally, the use of multiple theoretical lenses stemming from the agency, resource based view and resource dependence streams enables us to provide a more composite understanding of the underlying nature of the relationship between corporate governance and internationalization and discern their mutually reinforcing or mitigating effects. Keywords:Internationalization, Ownership structure, Emerging markets

PARENT COMPANY'S BENEFITS FROM REVERSE KNOWLEDGE TRANSFER: THE ROLE OF THE LIABILITY OF NEWNESS
Rabbiosi, Larissa; Copenhagen Business School; lr.smg@cbs.dk Santangelo, Grazia D.; U. of Catania; grsanta@unict.it
This study develops a liability of newness argument with regard to reverse knowledge transfer (RKT) within MNEs by drawing on organizational ecology theory. Unlike prior research on RKT which has looked at subsidiary age as a control, our theoretical argument suggests, and our findings confirm, that, as subsidiaries age, they accumulate knowledge and capabilities stocks, and develop trusting relationships and shared values. As a result, knowledge transferred from older subsidiaries is more beneficial to parent companies. In addition, we find that subsidiary age has positively moderating effects on transfer channels based on face-to-face interactions as social interaction displays decreasing returns to the fixed factor time. The study offers contributions to IB theory and the management literature on knowledge transfer. It also bears significant implications for managers. Keywords:reverse knowledge transfer, liability of newness, person-based communication mechanisms

PERCEIVED CORRUPTION AND FOREIGN SUBSIDIARY OWNERSHIP STRUCTURE

Powell, K. Skylar; U. of Hawaii & East-West Center; skylarp@hotmail.com
This study looks at perceived levels of host-nation corruption and the ownership structure of foreign subsidiaries. The analysis uses data from 557 Japanese foreign subsidiaries in the automotive industry and logistic regression models. The results suggest that higher levels of

perceived corruption in a host country lead Japanese firms in the automotive industry to operate through joint ventures as opposed to wholly-owned subsidiaries. Additionally, this relationship appears to be stronger when considering subsidiaries in developing, non-OECD, countries. This paper offers insights into how one location factor influences entry decisions. This research is unique in that it confirms the associations between perceived host-country corruption and foreign subsidiary ownership structure while considering one home nation of multinational corporations. In addition, the use of Japanese multinationals in the automotive industry is a unique contribution. Keywords:Corruption, Market Entry, Ownership Structure

PERCEPTION OF ETHICALLY CONTROVERSIAL HRM PRACTICES: DEVELOPMENT AND APPLICATION OF A MEASUREMENT

Yavuz, Serap; Bahcesehir U.; serap.yavuz@bahcesehir.edu.tr Sondergaard, Mikael; U. of Arhaus; msoendergaard@econ.au.dk
The present study examined the employees perception of ethically controversial HRM practices in the context of multinational companies (MNCs) operating in developing countries and emerging economies (DCEEs) as well as how individuals ethical reasoning as well as their cultural values predicted the rating of ethically controversial practices. Data were collected via self-administered questionnaire from employees working in MNCs in Turkey and Romania (N=290). Scenarious depicting various HRM practices were used to measure the perception with regard to ethicality of these practices. Not only did results revealed the approval of ethically controversial HRM implementation including nepotism in the context of DCEEs studied, additionally to the stronger impact of values (mainly collectivism) rather than ethical ideologies of relativism and idealism in individuals decision of ethically controversial practices. Keywords:ethics, developing countries, culture

PERFORMANCE IMPLICATIONS OF A FIRM'S MULTINATIONAL STRATEGY

Dau, Luis Alfonso; U. of South Carolina; luis_dau@moore.sc.edu
I study the relationship between pro-market reforms and the multinationalization strategy and profitability of firms. Building on Knowledge-Based Theory, I develop the Market InstitutionalKnowledge Model, which argues that firms establish foreign operations either to acquire new market knowledge, to exploit their extant market knowledge, or both. I identify three multinationalization strategies that a firm may pursue: (1) downward-multinationalization strategy, whereby it establishes operations primarily in less institutionally-developed markets vis--vis its home market, (2) upward-multinationalization strategy, whereby it establishes operations primarily in more institutionally-developed markets, and (3) balanced-multinationalization strategy, whereby it establishes operations in both. I argue that downward multinationalization increases the firms home-market profitability in the short-term and decreases it in the long-term; that upward multinationalization decreases profitability in the short-term and increases it in the longterm; and that balanced multinationalization has a positive effect both in the short-term and longterm. This is because downward multinationalization allows firms to exploit their extant knowledge in less institutionally-developed markets, enhancing their home-market profitability in the shortterm, but as the knowledge becomes obsolete and competition increases, their profitability wanes. On the other hand, upward multinationalization forces firms to learn how to compete in a

more sophisticated market environment, which hurts their short-term profitability at home, but this knowledge then strengthens the firms home operations and those of its entire network of subsidiaries, allowing it to become more competitive and profitable in the long-term. Finally, balanced multinationalization allows firms to balance the costs and benefits of both approaches, allowing them to learn while exploiting their extant knowledge in the short-term, and to become increasingly profitable in the long-term. However, I argue that the relationship between firm multinationalization strategy and profitability is contingent on the timing, sequence, and distance of such multinationalization efforts as well as the degree of pro-market reforms implemented in the home market. Keywords:Multinationalization Strategy, Pro-Market Reforms, Profitability

PERFORMANCE OUTCOMES OF OFFSHORING: THE MODERATING ROLE OF FIRM STRATEGY

Srivastava, Shirish C; HEC, Paris; srivastava@hec.fr
Using the resource-based view and resource dependence theory, this paper conceptualizes offshoring as a strategic resource sourcing decision for enhancing firm performance. Specifically, using data from offshoring firms, we assess the impact of offshoring intensity (OI) on financial performance metrics of the firm. Further, the moderating effect of firm strategy on the relationship between OI and firm performance is also examined. Results indicate positive relationship of OI with parameters of firm performance, suggesting offshoring as a viable strategic option for firms. Results also show that the impact of offshoring on certain performance parameters is significantly moderated by firm level strategies, thereby reiterating the importance of aligning the firm strategy with offshoring strategy for effective results. This research makes some important contributions and offers implications for research and practice. Keywords:outsourcing intensity, financial metrics, number of jobs

PILOTING STRATEGIC INITIATIVES WITHIN MULTINATIONAL FIRMS: THEIR ROLE IN ADOPTION

Davidson, Rhoda; IMD; rhoda.davidson@imd.ch Buchel, Bettina; IMD; Bettina.Buchel@imd.ch
We investigated the role of piloting in the adoption of strategic initiatives mandated within MNCs. Drawing on theories of strategy implementation, adoption and knowledge transfer we found that the role of a pilot is to provide a template which acts as a social influencer to enable strategic initiative adoption in other MNC subsidiaries. Firstly, our qualitative analysis identified three piloting constructs: (a) pilot credibility (b) pilot replicability and (c) pilot feasibility. Secondly, we demonstrated that these three piloting constructs impact the adoption response of subsidiaries to new organizational practices through building commitment to change. Multiple pilots were found to increase the adoption response. Keywords:piloting, adoption, strategic initiatives

POWER MOTIVE: A COMPARISON BETWEEN THE US AND CHINA

Ng, Isabel W.; Shanghai Fudan U.; ngwingchun@gmail.com Winter, David; U. of Michigan; dgwinter@umich.edu Cardona, Pablo; IESE Business School; cardona@iese.edu
Although power motive has been defined as the need to have impact on others, previous research suggests that the conceptualization of power may be culturally specific. We propose that Americans tend to associate power with action and prestige, while Chinese tend to associate power with prestige more than action. We also propose that having control over resources increases power motive among Americans but not that of Chinese, while status elevation increases power motive among both American and Chinese people. We tested our hypotheses with two experimental conditions. All our hypotheses were supported. In sum, our findings show that the conceptualization of power and power motive arousal stimuli could be related. In particular, we suggest that the relationship between the cognitive and emotional dimensions of power motive may be culturally specific. We suggest future studies should examine the relationship between conceptualization of power and power motive in different cultures. Keywords:Power Motive, conceptualization of power, status

PREDICTORS OF INDIVIDUAL KNOWLEDGE ACQUISITION COMMITMENT IN A POST-SOVIET SETTING

May, Ruth C; U. of Dallas; rmay@gsm.udallas.edu Stewart, Wayne; Clemson U.; waynes@clemson.edu Puffer, Sheila M.; Northeastern U.; s.puffer@neu.edu McCarthy, Daniel J; Northeastern U.; Da.mccarthy@neu.edu Ledgerwood, Donna; U. of North Texas; ledgerwo@unt.edu
We created a measure of individual commitment to knowledge acquisition and tested three sets of predictors proposed by Nonaka (1994): personality traits underlying intentions, organizational context, and environmental fluctuation. The results from 1,949 Ukrainian employees showed that five personality traits explained nearly 44 percent of the variance in knowledge acquisition commitment, while perceptions of organizational context and environmental fluctuation were not significant. The findings provide a useful specification of a profile of traits linked to individual knowledge acquisition and affirm the value of drawing on neo-institutional theory and indigenous research to contextualize theoretical models of knowledge creation. Keywords:contextualizing theory, knowledge acquisition, transition economies

PREVIOUS INTERNATIONAL EXPERIENCE, CROSSCULTURAL TRAINING, AND CQ: THE ROLE OF GOAL ORIENTATION
Choi, Byoung Kwon; Korea U. Business School; jrpfeffer@korea.ac.kr Moon, Hyoung Koo; Korea U.; hkmoon@korea.ac.kr Jung, Jae Shik; Korea U. Business School; jjsos@korea.ac.kr
Expatriate cross-cultural adjustment and cultural intelligence (CQ) has been topics of great interest in the field of expatriate management. However, few studies have been conducted to understand the relationship between CQ and cross-cultural adjustment. Moreover, though

previous international experience and cross-cultural training is regarded as an important antecedent of cross-cultural adjustment, the empirical result on this relationship is inconsistent. In this study, we attempt to investigate: the relationship among previous international experience (e.g., work and non-work), pre-departure cross-cultural training (e.g., length and comprehensiveness) on CQ; the moderating effects of goal orientation of the expatriate in this relationship; the mediating role of CQ in the relationship between previous international experience, pre-departure cross-cultural training, and cross-cultural adjustment. Our result, using 141 Korean expatriates currently working overseas, generally supported the hypothesis. Especially, expatriates previous non-work experience rather than work experience, and the comprehensiveness rather than length of cross-cultural training was positively related to CQ. In addition, our results indicated that expatriates goal orientation moderates the relationship between previous international experience, cross-cultural training and CQ. Finally, we found that cognitive, behavioral and motivational CQ mediated the relationship between previous international experience, cross-cultural training and cross-cultural adjustment. Keywords:Cross-Cultural Adjustment, Goal Orientation, Cultural Intelligence

PSYCHIC DISTANCE, INTERNATIONAL COMMITMENT, MARKETING STRATEGIES AND EXPORT PERFORMANCE IN SMES?
Koestner, Mariella; Ph D Student; mariella.koestner@edu.uni-graz.at Fuchs, Manfred; U. of Graz, Austria; manfred.fuchs@uni-graz.at
This study examines the influence of firm-specific factors, such as international marketing strategy, firm experience, psychic distance, and international commitment, on export performance in Austrian small and medium-sized enterprises (SMEs). Using survey data from 220 export ventures, this paper tests causal-effect-relationships in the proposed conceptual model, using structural equation modelling. The results of the study show that there is a twofold influence of psychic distance, commitment, and firm experience. There is evidence that this relationship is an inverted u-curve. In addition, we found that competition in foreign target markets exerts a positive effect on the adaption of marketing strategies. The results confirm that psychic distance has an impact on all measured dimensions of export success in SMEs. We found evidence that the degree of product adaptation positively influences the overall success and the profitability of export ventures, whereas the degree of price adaptation is positively related to sales growth and profitability. Keywords:Export Performance, Psychic Distance, Foreign Market Adaptation

REACTING TO PERFORMANCE IN INTERNATIONAL MARKETS: THE RIGIDITY AND LEARNING PARADOX

Lages, Luis Filipe; U. Nova de Lisboa; lflages@fe.unl.pt Mata, Jos; U. Nova de Lisboa; jmata@fe.unl.pt
The authors use threat-rigidity and organizational learning theories to analyze firm reaction to performance change in foreign markets. Based on survey data from exporting firms, the findings indicate that firms are more likely to change their international strategy when performance declines. Specifically, in low competitive markets, firms tend to react to performance decline by adapting their strategy to the foreign market, whereas in more competitive markets, firms tend to react by standardizing their strategy. Thus, depending on competitive circumstances, both threat-

rigidity and organizational learning theories may apply. These theories should be regarded as complements to each other, not as alternatives. Keywords:Organizational Learning, Adaptation/Standardization, International Management

REGIONAL EFFECTS IN THE INTERNATIONALIZATIONPERFORMANCE RELATIONSHIP IN CHINESE FIRMS

Chen, Stephen; Macquarie U.; stephen.chen@mq.edu.au Tan, Hao; Macquarie U.; haotan1@gmail.com
This paper examines the relationship between internationalization and performance in Chinese MNEs using panel data on 887 publicly-listed Chinese firms over the period 2000-8. Secondly, we test for the effects of the regions where Chinese firms internationalize on their performance. The results show that the internationalization-performance relationship varies significantly depending on whether internationalization takes place within the Greater China region, within Asia or outside Asia. The best results were obtained with internationalization within the Greater China region, a strong positive effect remaining significant even after taking into account reverse causality effects. Keywords:internationalization, China, regionalization

REGIONAL INTEGRATION, HOME REGION FOCUS, AND OPERATIONAL EFFICIENCY OF MULTINATIONAL ENTERPRISES
Banalieva, Elitsa R.; Northeastern U.; e.banalieva@neu.edu Jiang, Ruihua Joy; Oakland U.; jiang@oakland.edu Santoro, Michael D; Lehigh U.; mds8@lehigh.edu
In this study we examine the way in which the type and degree of regional integration affect the geographic scope (regional or global expansion) and operational efficiency of multinational enterprises (MNEs). We advance a conceptual model grounded in Transaction Costs Economics in which we propose that type and degree of regional integration increase MNEs home regional focus (HRF) and modify the relationship between HRF and firms operational efficiency. Using data on 644 Triad MNEs during 2000-2006, we tested our framework with the time-varying stochastic cost frontier model and found overall support for our treatise. We conclude by discussing implications of our findings for international business theory, policy, and management practice. Keywords:regional integration, home regional focus, TCE

RESOURCE DEPENDENCE IN MNC SUBSIDIARY KNOWLEDGE PROTECTION DO MANDATES AND RECIPROCITY MATTER?
Sofka, Wolfgang; Tilburg U.; W.E.J.Sofka@uvt.nl Shehu, Edlira; U. of Hamburg; edashehu@yahoo.de

Faria, Pedro; U. of Groningen and Instituto Superior Tcnico; p.m.m.de.faria@rug.nl

International knowledge spillovers, especially through multinational companies (MNCs), have recently been a major topic of the academic and management discussion. However, most studies treat MNC subsidiaries as relatively passive actors without clear knowledge protection strategies. We challenge this assumption by investigating both market-based (e.g. secrecy, lead time) as well as legal knowledge protection strategies (e.g. patents, trademarks) of MNC subsidiaries. We argue that these strategies are endogenously determined by the subsidiary mandate and exogenously by the opportunities and challenges of the host country. We hypothesize that competence creating mandates increase the importance of legal knowledge protection while competence exploiting ones lead to market-based knowledge protection. Besides, technologically leading host country industries can be expected to provide opportunities for knowledge sourcing which may benefit from reciprocity. The latter can be signaled through lower levels of knowledge protection. However, the importance of legal knowledge protection may increase if key employees have multiple job opportunities in technologically leading host country regions. We test our hypotheses for a broad panel dataset of more than 918 firms in Germany between 1997 and 2005. Our hypotheses are largely supported. We develop recommendations for managers and policy makers based on these results. Keywords:MNC subsidiary, knowledge protection, reciprocity

RESPONSE STYLE DIFFERENCES IN CROSS-NATIONAL RESEARCH: DISPOSITIONAL & SITUATIONAL DETERMINANTS

Harzing, Anne-Wil; U. of Melbourne; harzing@unimelb.edu.au Brown, Michelle; U. of Melbourne; brownm@unimelb.edu.au Koester, Kathrin; U. of Heilbronn; koester@hs-heilbronn.de Zhao, Shuming; Nanjing U.; zhaosm@nju.edu.cn
Response styles vary but there is limited systematic research that investigates why they vary. We focus on middle (MRS) versus extreme (ERS) response styles and examine the relation-ship between MRS/ERS and culture, response anchors and the level of topic knowledge. Par-ticipants from three countries first rated several types of behaviour as more Australian or Chi-nese and then assessed the performance of employees demonstrating these behaviours. Asian respondents displayed higher MRS in their scores for both behaviour and performance than did Western respondents. When scale anchors refer to naturally opposing and mutually exclu-sive constructs, there is greater ERS. Knowledge of cross national differences promotes higher ERS on behaviour but not performance. Keywords:response styles, cross-national research, culture

SCIENTIFIC MINDFULNESS: A FOUNDATION FOR FUTURE THEMES IN INTERNATIONAL BUSINESS

Jonsen, Karsten; IMD; karsten.jonsen@imd.ch McDonough, Edward; Northeastern U.; e.mcdonough@neu.edu Maznevski, Martha L; IMD; maznevski@imd.ch Thomas, David C.; Simon Fraser U.; dcthomas@sfu.ca

Berdrow, Iris; Bentley U.; iberdrow@bentley.edu Dietz, Joerg; U. of Lausanne; jorg.dietz@unil.ch Kwantes, Catherine T; U. of Windsor; ckwantes@uwindsor.ca Madzar, Svjetlana; U. of Minnesota; smadzar@umn.edu Taylor, Sully; Portland State U.; sullyt@sba.pdx.edu Weber, Todd J.; U. of Nebraska-Lincoln; todd.weber@gmail.com Lazarova, Mila B.; Simon Fraser U.; mbl@sfu.ca Maloney, Mary M.; U. of St. Thomas; mmmaloney@stthomas.edu Gluesing, Julia; Wayne State U.; j.gluesing@wayne.edu Davison, Sue Canney; Pipal International; sue@pipal.com Boyacigiller, Nakiye; Sabanci U.; nakiye@sbanciuniv.edu
In this paper, we conceptualize new ways to qualify what themes should dominate the future IB research agenda by examining three questions: Whom should we ask? What should we ask and which selection criteria should we apply? What are the contextual forces? Our main findings are: (1) wider perspectives from academia and practice would benefit both rigor and relevance; (2) four key forces are climate change, globalization, technology gap and inequality, and sustainability; and (3) we propose scientific mindfulness as the way forward for generating themes in IB research. Scientific mindfulness is a holistic, cross-disciplinary, ecological and contextual approach. Keywords:International Business, Future Research Themes, Research Methods

SEARCH DIVERSITY VERSUS FOCUS - AN INDUCTIVE ANALYSIS OF 10 EUROPEAN MARKET AND TRANSITION ECONOMIES
Sofka, Wolfgang; Tilburg U.; W.E.J.Sofka@uvt.nl Grimpe, Christoph; ZEW Centre for European Economic Research; grimpe@zew.de
Searching for external knowledge is crucial for modern innovation processes. However, little is known on how differences in the institutional infrastructures shape firms search strategies. We suggest that these effects are particularly pronounced in transition economies, leading to distinct patterns of search strategies that moderate R&D performance. We argue that institutional transition will increase the diversity of search strategies while shortages of management capacities will reward focused ones. A sample of more than 4,500 firms from ten European countries provides support for our inductive reasoning: Search in transition economies is more diverse while focused search strategies are more successful. Keywords:search strategy, transition, open innovation

SEEKING HELP FROM HOST COUNTRY NATIONALS: DOES IT IMPACT EXPATRIATE ADJUSTMENT?
Mahajan, Ashish; U. of Windsor; amahajan@uwindsor.ca

The present study highlights the importance of host country nationals (HCNs) in helping expatriates better adjust in the host nation. Based on qualitative interviews with expatriates, a theoretical framework was developed that described the types of help expatriates seek from HCNs and its usefulness in facilitating expatriate adjustment. Two types of help, work-related and nonwork-related, emerged as important in facilitating expatriate adjustment. In order to test the qualitative findings, survey data from 499 expatriates working in the United States was collected. The findings revealed that expatriates propensity to seek work-related help from their HCN colleagues was significantly related to expatriate general and interaction adjustment. Among the factors affecting expatriates propensity to seek help from HCNs, credibility of HCNs was found to be significant. Several other findings along with the implications of the present research are also discussed. Keywords:expatriates, host country nationals

SELF-INITIATED EXPATRIATES: ACQUIRED DEMOGRAPHICS AND REASONS TO RELOCATE

Selmer, Jan; Aarhus U.; selmer@asb.dk Lauring, Jakob; Aarhus U.; jala@asb.dk Klitmller, Anders; Aarhus U.; ankl@asb.dk
Organizational expatriates, who have been assigned by their parent companies to the foreign location have been thoroughly investigated as compared to self-initiated expatriates, who themselves have decided to expatriate to work abroad. Consequently, much less is known about the latter type of expatriates. To help alleviate this dearth of research findings, data was collected from 428 self-initiated expatriate academics from 60 countries employed in 35 universities in five northern European countries. Four acquired demographic characteristics were investigated: marital status, nationality, previous expatriate experience and seniority as well as five individual reasons to expatriate: Adventure/travel, career, family, financial incentives, and life change/escape. The results indicated support for the research propositions suggesting that SIEs reasons to expatriate differ in terms of acquired personal characteristics. Implications of these findings are discussed in detail. Keywords:Self-initiated expatriates, Reasons to relocate, Demographics

SHAPING CROSS-FUNCTIONAL INTEGRATION IN NEW PRODUCT DEVELOPMENT: A CROSS-CULTURAL PERSPECTIVE

Wiest, Gregor; RWTH Aachen U.; wiest@win.rwth-aachen.de
Cross-functional integration (CFI) is a key success factor in new product development. Several management levers have been suggested as facilitating integration between functions; however, many of these suggestions have been developed in a single culture environment. The question is whether there is one right way to foster and shape CFI, regardless of national culture? To answer this question, a conceptual framework is developed with six different CFI dimensions. After the overall effect of each CFI dimension on new product development is discussed, the impact of national culture is examined with regard to Hofstedes cultural dimensions. Keywords:Cross-functional Integration, National Culture, New Product Development

SHAREHOLDER ORIENTATION IN CG REVISITED: AN ORGANIZATIONAL PERSPECTIVE FOR SUSTAINED FAMILY CONTROL

Yoo, Taeyoung; Hankuk U. of Foreign Studies; taeyoungyoo@hufs.ac.kr Sung, Taeyoun; Yonsei U.; tsung@yonsei.ac.kr
This paper examines the implications of corporate governance reform on innovation activities, in contrasting terms of shareholder-orientated and traditional governance mechanisms. With longitudinal data of large Korean firms from 1998 to 2005, we show that the persistence of a traditional governance mechanism, family control, is positively related to innovation activities, while shareholder-orientated mechanisms, such as foreign ownership, are not. However, we note that the disciplining role of outside directors is also valid to facilitate innovation activities particularly in the interaction with ownership-control discrepancy in family control. Thus, we argue that the efficiency of a corporate governance system can rely on the organizational traditions of a society, by interacting in complementary fashion with newly-adopted monitoring mechanisms. Keywords:corporate governance, family control, shareholder orientation

SHIFT PARAMETERS AND POLITICAL RISK IN DEVELOPING COUNTRIES: AN ARGUMENT FOR INFORMAL INSTITUTIONS
Verhaal, J. Cameron; U. of Utah; cameron.verhaal@business.utah.edu
This paper examines the role of shift parameters in international strategic management. I argue that the shift parameter literature has historically focused on formal institutions and should evolve to reflect an emphasis on informal institutions. Furthermore, I contend that informal institutions serve as a more effective lens than formal institutions through which to analyze and make foreign investment decisions, specifically in developing countries and countries with high levels of political risk. Finally I extend the analysis of two studies, (Henisz and Williamson, 1999) and (Delios and Henisz, 2000), by incorporating this new perspective on informal institutions and shift parameters. Keywords:Shift Parameters, Institutions, Political Risk

SHIFTING FROM SHEEP TO SHEPHERDS:SEEKING A CONTEXT-FOCUSED PARADIGM FOR INTERNATIONAL BUSINESS

Calhoun, Mikelle A.; Georgia Southern U.; prof.calhoun@gmail.com
A critical look at the field of international business (IB) reveals lack of identity, confusion and frustration. Over a decade after Toyne and Nigh (1997) addressed the problem, there is little progress. Many have searched for the holy grail theory, unique to IB that justifies the fields existence and steers its future course. However, IBs origins thwart this effort. Prior research identifies symptoms and encourages collaborative efforts to overcome field deficiencies; this paper explores the source of IBs challenges. Comprehensive diagnosis clarifies why the solution cannot be found in traditional thinking that treats IB as an extension of other disciplines. To

achieve legitimacy and recognition as an independent domain, IB must embrace its core contribution of context and build theory not from the perspective of the firm but from the perspective of the business environment context. To claim our domain involves a paradigm shift nothing short of intellectual revolution. Keywords:international business, context, paradigm shift

SOCIAL AXIOMS, VALUES, AND REWARD ALLOCATION ACROSS CULTURES

Rosenblatt, Valerie; U. of Hawaii at Manoa; valerie6@hawaii.edu
Reward allocation is an important motivational tool that influences employee behavior and organizational performance. For multinational firms operating in multicultural environments it is essential to understand how culture influences reward allocation decisions and preferences. Much of the research to date has focused on the influence of values on reward allocation. This work conceptually examines the relationships between the five universal social beliefs, or social axioms (social cynicism, fate control, reward for application, religiosity, and social complexity) and the four reward allocation principles (equity, equality, need, and seniority). I propose that individual differences in endorsement of the five social axioms are likely to lead to different preferences for reward allocation principles. The five general social beliefs are argued to explain and predict personal reward allocation preferences in addition to individuals values. Keywords:social axioms, reward allocation, human resource management practices

SOCIAL CAPITAL AS THE SOURCE OF SUPERIOR MARKETING CAPABILITIES: A CROSS-CULTURAL COMPARISON

Kemper, Jan; RWTH Aachen U.; kemper@win.rwth-aachen.de
Prior research has improved our understanding of the performance-enhancing consequences of marketing capabilities, but current knowledge on their origins is limited. Consequently, the main purpose of this research paper is to investigate the role of social capital as an important microlevel origin of four marketing capabilities: pricing, product development, distribution and marketing communication. Further, the moderating effect of national culture on the social capitalorganizational capability link is investigated through examination of survey data from 891 firms from four countries (China, Germany, Hong Kong and the USA). Keywords:Social Capital, Resource-Based View, Cross-Cultural Study

SOCIAL SUPPORT, SOCIAL COMPETENCY, SELFEFFICACY IN NETWORK MARKETING BUSINESS: CHINESE IMMIGRANTS (WITHDRAWN)
Dai, Fu; U. of Technology, Sydney; fu.dai@optusnet.com.au Wang, Karen Yuan; U. of Technology, Sydney; karen.yuan.wang@uts.edu.au

Many Chinese immigrants have been attracted to major network marketing organizations. The willingness of Chinese immigrants to undertake network marketing business rests on social environmental influences in the network marketing organization. Network marketing specific selfefficacy, social competence and motivation for establishing ones own business play key roles in eliciting those entrepreneurial actions. Drawing upon social cognitive theory and the literature of immigrant entrepreneurship, this study investigates whether social environmental influence in a network marketing organization affects the degree to which Chinese immigrants have the selfefficacy, social competence and motivation to establish their own business and how these variables affect the actions undertaken by Chinese immigrants in conducting their network marketing business. The results of a survey of Chinese immigrant network marketers suggest that both effects occur or have partly occurred. Social environmental influence positively affects self-efficacy, which positively affects the entrepreneurial actions undertaken by Chinese immigrants in conducting their network marketing business. Although social environmental influence positively affected motivation to establish ones own business and social competence, the effects of motivation and social competence on entrepreneurial action were not supported. Keywords:Network marketing business, Social Support, Self-Efficacy

STAKEHOLDER ENGAGEMENT: TRANSFORMING CSR FROM PRINCIPLED RHETORIC TO THEORETICALLY GROUNDED PRACTICE
Nartey, Lite; U. of Pennsylvania; lnartey@wharton.upenn.edu
Multinational firms seeking to directly address stakeholders suspicion in their overseas operations often implement Corporate Social Responsibility initiatives in a bid to engender cooperative relations and form ties. However, scholars and practitioners alike lack theoretical guidance on how and when to approach which stakeholders. Drawing from network theory, I develop propositions regarding four drivers of change in the relations between local stakeholders and foreign firms and the structure of network ties linking them. First, network ties serve as prisms that enable third parties to cognitively ascribe characteristics of known stakeholders to an unknown foreign firm with whom that known stakeholder associates, thus who the firm initially associates with impacts subsequent cooperative relations and tie formation. Second, as ties convey information about actors in the network, foreign firms should seek ties to local stakeholders that maximize the volume, diversity and richness of information afforded the firm to engender cooperative relations and increase tie formation. Third, as the content of a network tie impacts stakeholder perceptions, foreign firms whose engagement of local stakeholders is characterized by greater involvement and collaboration should engender greater cooperation and increase tie formation. Finally, as certain network structures are inherently more stable than others, the evolution of stakeholder relations with the foreign firm should take into account network properties of transitivity and differential power. Drawing on these four mechanisms, I derive propositions regarding the engendering of cooperation and increased tie formation between foreign firms and local stakeholders. Keywords:CSR, political risk, stakeholder management

STATE-OF-THE-ART THEMES IN CROSS-CULTURAL COMMUNICATION RESEARCH: A META-ANALYTIC REVIEW

Merkin, Rebecca; Baruch College; rebecca.merkin@baruch.cuny.edu Taras, Vas; U. of North Carolina, Greensboro; v_taras@uncg.edu Steel, Piers; U. of Calgary; steel@ucalgary.ca
This article provides a meta-analytic summary of cross-cultural communication research. Direct and moderated effects of individualism, power distance, masculinity, and uncertainty avoidance are provided in the following communication areas: propensity to indirectness, self-promotion, openness, and deception, sensitivity to others and face-saving concerns, and the tendency to dramatize. Results indicate that individualism relates negatively to indirect communication, sensitivity and face saving concerns, and propensity to deception but positively to self promotion, and openness; power distance is positively related to sensitivity and face saving concerns; masculinity is positively related to self-promotion; and uncertainty avoidance is positively related to sensitivity and face saving concerns. Significant moderator effects indicated the relationship between cultural values and communication is stronger for men and culturally tight societies. Keywords:meta analysis, culture, communication

STRATEGIC PLANNING IN SUBSIDIARIES OF MULTINATIONALS IN CHINA: AN ANALYSIS OF KNOWLEDGE TRANSFER

Hemminger, Tilmann; U. of Regensburg; Tilmann.Hemminger@gmx.de Dowling, Michael; U. of Regensburg; michael.dowling@wiwi.uniregensburg.de Helm, Roland; Friedrich-Schiller, U. of Jena; roland.helm@wiwi.uni-jena.de
This paper examines knowledge transfer for strategic planning competencies in subsidiaries of multinational companies (MNCs) in China. Based on an extensive literature review, personal interviews, and a survey of managers, six influencing factors were identified: the proven value of the transferred knowledge, the management support by the MNC parent, the relationship between the MNC parent and the subsidiary, the size of the MNC parent, the size of the Chinese subsidiary, and the duration of the subsidiarys business operations. Our research findings show that decentralized strategic planning has a positive effect on key dimensions of the Chinese subsidiaries performance. Keywords:Strategic Planning, Knowledge Transfer, China

SUBSIDIARY CAPITAL AND KNOWLEDGE FLOWS IN THE MNC: MODERATING EFFECTS OF HRM PRACTICES
Williams, Christopher; Richard Ivey School of Business, The U. of Western Ontario; cwilliams@ivey.uwo.ca Lee, Soo Hee; U. of London, Birkbeck; s.lee@bbk.ac.uk
We develop a model of knowledge flows in the multinational corporation (MNC) based on the interaction of human resource management (HRM) practices with human and social capital in overseas subsidiaries. The links between human and social capital and knowledge flows in the MNC are well established in the literature. However, there has been little research into the moderating impact that HRM practices in the subsidiary have on the relationship between human

and social capital, and knowledge flows. We investigate this issue using a questionnaire survey to senior managers in 86 subsidiaries of Korean MNCs in the UK, France and Germany. After controlling for subsidiary age and size, host country and industry, we find that HRM practices exhibit differentiated direct and moderating effects. We find that practices based on formal procedures weaken the effect of social capital, but strengthen human capital, whilst empowering practices (encouraging employee participation within the subsidiary) weaken the effect of human capital, but strengthen social capital. Overall, establishing a participative climate within the subsidiary enhances both knowledge in- and outflows at the level of the subsidiary. Keywords:MNC, knowledge flows, HRM practices

SUCCESSFUL DIFFUSION OF LOCAL STRATEGIC PRACTICES WITHIN MULTINATIONAL ENTERPRISES

Taleb, Ali; HEC Montreal; ali.taleb@hec.ca Hebert, Louis; HEC Montreal; louis.hebert@hec.ca
This qualitative study examines how local strategic practices diffuse to sister organizational units across multinational enterprises (MNE) and how such transfers influence corporate global strategies. We use a case-based approach to investigate the diffusion of multiple strategic practices developed by the Canadian subsidiary of a large MNE. The results of our fine-grained analysis make three key contributions. First, the study attends to the practice diffusion phenomenon from a bottom-up perspective and thus complements the existing literature which dealt essentially with top-down transfers of knowledge. Second, our findings shed some light on how institutional isomorphic forces interplay to facilitate intra-organizational transfers and influence corporate global strategies. Finally, five propositions are provided for future empirical testing. Overall, this article fosters our understanding of the emergence of MNEs global strategies from a practice diffusion perspective. The formalization of subjacent isomorphic dynamics has important theoretical and practical implications. Keywords:Practice escalation, intra-organizational isomorphism, corporate strategy evolution

TASK NATURE AND PROCESS INTEGRATION IN BUSINESS PROCESS OFFSHORING: EVIDENCE FROM INDIA AND CHINA
Luo, Yadong; U. of Miami; yadong@miami.edu Lu, Stephanie C; U. of Miami; stephalu@gmail.com Zheng, Qinqin; Fudan U.; qqzheng@fudan.edu.cn Jayaraman, Vaidy; U. of Miami; vaidy@miami.edu
This study addresses an important issue in designing and managing business process offshoring (BPO) business process integration between a global client and its offshore service provider. Consistent with information processing and dynamic capability theories, we developed the logic that this integration is an optimal decision, requiring a fit between process integration and BPOs task characteristics (i.e., task complexity and security) and interdependence (task connectivity and dependency). This alignment is further moderated by task context, such as the codifiability of knowledge embodied in the business process and the geographic diversity of global endcustomers. Our analysis of 308 BPO companies in India and China generally confirms our

argument. We discussed the theoretical and managerial implications in the context of international management and global strategy. Keywords:Global BPO, Offshore and Outsourcing, Integration

TECHNOLOGICAL CAPABILITIES AND THE SELECTION BETWEEN TECHNOLOGY OFFSHORE AND ONSHORE OUTSOURCING
Un, C. Annique; U. of South Carolina; annique_un@moore.sc.edu
This paper analyzes how firms choose between onshore and offshore outsourcing of technology. I extend the knowledge-based view to argue that there is a tension between the ability and the need to offshore outsource technologies. I propose that firms with higher technological capabilities are more likely to onshore than offshore outsource the development of their technologies, because they have less need for different technologies for upgrading their learning capabilities. However, firms with lower technological capabilities that outsource the development of their technologies are more likely to offshore than onshore because offshore technologies provide greater dissimilarity than those available in the home country that can help them develop their learning capabilities and better compete with home-country competitors that have higher technological capabilities. Keywords:technological capabilities, offshore outsourcing, onshore outsourcing

TESTING FOR MEASUREMENT INVARIANCE IN CULTURAL VALUE ORIENTATION: A MULTI-COUNTRY COMPARISON

Gupta, Vishal K.; State U. of New York, Binghamton; vgupta@binghamton.edu Goktan, Ayse Banu; U. of North Texas; banu.goktan@unt.edu Niranjan, Suman; SUNY Binghamton; sniranja@binghamton.edu Gunay, Gonca; Izmir U. of Economics; gonca.gunay@ieu.edu.tr Cheung, Yu Ha; Hong Kong Baptist U.; yhcheung@hkbu.edu.hk Pareek, Ashish; DMS, MDS U.; ashpareek@yahoo.com
Transferability of measures across countries is critical in international cultural studies due to its impact on the validity and reliability of scholarly work. Thus, this study attempted to assess the measurement invariance of a cultural value orientation measure at the individual level. Study data was collected from 1577 young adults from four different countries including the United States, Hong Kong, India and Turkey. Data was analyzed using structural equation modeling (SEM) utilizing the US sample as a referent. Results indicated that although the measure was transferable to some countries, it was not transferable to others. Keywords:measurement invariance, national culture

THE CORE-PERIPHERY STRUCTURE OF THE INTER-

ORGANIZATIONAL INVENTOR NETWORK IN INDIA

Alnuaimi, Tufool; Imperial College Business School; t.alnuaimi08@imperial.ac.uk George, Gerard; Imperial College London; g.george@imperial.ac.uk
This paper studies the evolution and impact of inventor networks in India. We construct collaboration networks using patent data from 1984 to 2004, and find the topology of the evolving network displays a core-periphery structure. We identify five distinct Indian organizations as network anchors that connect the majority of the networks members. In addition to the anchors, large multinational corporations constitute a substantial proportion of the networks core. In contrast, the periphery appears as a diverse set of organizations, including universities and research institutions. By empirically analyzing the density of network ties in the networks three regions, we quantify the importance of peripheries and reveal their positive impact on subsequent innovation. We find empirical support for the importance of collaboration on innovation in an emerging economy context, and present evidence of a curvilinear relationship between core density and innovation. Keywords:None

THE DARK SIDE OF SUBSIDIARY INNOVATION: KNOWLEDGE CREATION AND CONTROL IN MNES
Asmussen, Christian Geisler; Copenhagen Business School; cga.smg@cbs.dk Mudambi, Ram; Temple U.; ram.mudambi@temple.edu Andersson, Ulf; Copenhagen Business School; ua.smg@cbs.dk
In a competitive global business environment, multinational enterprises (MNEs) often want to encourage innovation activities in their foreign subsidiaries. At the same time, we know that subsidiaries may sometimes engage in activities that aim at enhancing their internal power in the MNE network and thereby extract rents from peer units. Fusing these conflicting views, this paper develops a model that draws on agency theory and captures both the benefits and the dangers of subsidiary innovation seen from an MNE perspective. Unlike most economic models of the MNE where knowledge and innovation are treated as exogenouos, we endogenize knowledge production in a geographically distributed network. We show that a complex interaction between the cost of innovation and the relative bargaining strength provided by upstream and downstream competences determines the equilibrium level of innovation, which may deviate from the optimal level by being either too small or too large. We demonstrate the conditions that lead the subsidiaries to engage in free-riding behavior (innovating too little) or in a power struggle (innovating too much). Keywords:None

THE DYNAMICS OF EXTRINSIC MOTIVATION AND AFFECT: A DIARY STUDY OF EAST ASIAN CANADIAN BICULTURALS
Heller, Daniel; Tel Aviv U.; dheller@post.tau.ac.il Perunovic, Wei Qi Elaine; U. of New Brunswick; eperunov@unb.ca

Ross, Michael; U. of Waterloo; mross@uwaterloo.ca Komar, Shawn; U. of Waterloo; sgkomar@watarts.uwaterloo.ca

This study investigates the intra-individual link between motivational and affective states in EastAsian Canadian bicultural individuals. Using a diary design, we examined the role of cultural identification in the dynamic goal-affect association in bicultural individuals. Results indicate that momentary cultural identification systematically moderated the association between extrinsic motivation and Negative Affect (NA). Similar to monocultural Westerners, biculturals showed a negative association between extrinsic motivation and NA when they identified with Western culture. However, when they identified with Asian culture, biculturals extrinsic motivation was not linked to NA, suggesting that when their Asian identity is salient, they are less negatively influenced by extrinsic goal pursuit than Westerners or times when they identified with Western culture. Findings indicate the importance of within-individual variations in cultural identity for understanding the affective implications of extrinsic motivation in the lives of bicultural individuals. Keywords:Biculturals, Extrinsic motivation, Affect

THE EFFECT OF INSTITUTIONAL FACTORS ON M&AS: EVIDENCE FROM THE EUROPEAN MARKET
Moschieri, Caterina; Catholic U. of Portugal; cmoschieri@fcee.ucp.pt Campa, Jose; IESE Business School; jcampa@iese.edu
This paper evaluates the characteristics of M&As in Europe and, more broadly, the extent at which the development of a homogeneous institutional framework for acquisitions facilitates their execution and completion. The setting is the European Union M&A market from 1995 to 2007 to analyze cross-border and domestic deals, especially before and after the 2001 regulatory and economic changes. Our analysis underscores some idiosyncrasies of M&As in Europe. Results also show that institutional factors can foment the creation of a common, homogeneous market for corporate control, where the importance of country effects and biases diminishes. Keywords:Cross-border M&As, International expansion, European integration

THE EFFECT OF LEGITIMACY ON POLITICAL RISK: A CROSS-NATIONAL STUDY OF U.S. MNE SUBSIDIARIES
Stevens, Charles Edward; Ohio State U.; stevens.316@osu.edu Makhija, Mona V; Ohio State U.; Makhija_2@cob.osu.edu
Political risk has long been a topic of interest in the international business literature. Two theoretical perspectives, bargaining theory and political institutions theory, have been developed in this research stream to explain and predict political risk. However, both are limited in their ability to explain the systematic variance in political risk that occurs at the industry level of analysis. This paper develops and tests a new conceptual framework for explaining and predicting political risk based on the legitimacy of the foreign participants operating in a host country industry. Tests of hypotheses conducted on the activities of U.S. multinationals in 13 industries and 53 host countries provide broad support for this legitimacy-based theoretical perspective on political risk. Keywords:political risk, legitimacy, FDI

THE EFFECTS OF MARKET ORIENTATION AND EXPORT CHANNEL SELECTION ON EXPORT PERFORMANCE
Filatotchev, Igor; City U. London; igor.filatotchev@city.ac.uk Brouthers, Keith D.; North Carolina State U.; keith_brouthers@ncsu.edu He, Xinming; Newcastle Business School; xmhexm@xmu.edu.cn
The resource-based view maintains that firms that choose an organizational structure that complements their resource-based advantages capture greater value from existing advantages. Extending this theoretical argument we hypothesize that exporting firms relying on a market orientation advantage need to structure their export channels in a way that helps them exploit this advantage. We test this theory using a unique database of Chinese manufacturing firms entering international markets. We note that firms with higher market orientation advantages tend to prefer hierarchical exporting channels while those with lower level market orientation advantages prefer hybrid channels. Moreover, the analysis indicates that decisions that create a fit between market orientation advantages and export channel choice yield better export performance. Thus our study shows one way in which firms can have a significant impact in the global marketplace. Keywords:Marketing, Export, Channel

THE EFFECTS OF REGIONAL SOCIAL CAPITAL ON INTERNATIONALIZATION

Masciarelli, Francesca; "G. D'Annunzio" U.; f.masciarelli@unich.it Laursen, Keld; Copenhagen Business School; kl.ino@cbs.dk Prencipe, Andrea; U. G. d'Annunzio; a.prencipe@unich.it
Drawing on social capital theory and international business literature, we argue that firms home region social capital increases the degree of firms internationalization for both goods and knowledge. Beyond a certain level of social capital, however, firms become over- embedded in their home region social relationships so that the degree of internationalization decreases. We also conjecture that firms investment in research and development moderates the relationship between home region social capital and the degree of internationalization for goods and knowledge in a positive fashion. Combining data on social capital at the level of 21 regions with a large-scale data set on internationalization activities by a representative sample of around 2000 Italian manufacturing firms, we findafter controlling for a large set of firm and regional characteristicsoverall support for our theoretical arguments. Keywords:Social Capital, Internationalization, R&D

THE EVOLUTION OF LOCAL EXPLORATORY NETWORKS IN THE BANGALORE IT CLUSTER

Angeli, Federica; Maastricht U. India Institute; federica.angeli@maastrichtuniversity.nl Grimaldi, Rosa; U. of Bologna; rosa.grimaldi@unibo.it Lipparini, Andrea; U. of Bologna; andrea.lipparini@unibo.it

This work explores how inter-firm networks evolve within high-tech clusters in emerging economies. We analyze the evolution of local and global networks of six companies located in the Bangalore IT cluster. We leverage a case-based approach and present in-depth evidence on network formation and evolution, considering both the relational and the structural dimension. Important results emerge: exploitative local networks are likely to evolve toward increasing exploration. Moreover, this evolution is paced by the long-term orientation and the dispersion of global networks. Our research has broad implications for future theoretical and empirical research on international networks and strategic alliances. Keywords:networks, high-tech cluster, emerging economies

THE EXPATRIATES WORK ROLE AS AN ANTECEDENT OF WORK ADJUSTMENT IN EMERGING MARKETS

Kittler, Markus; U. of Stirling; Markus.Kittler@stir.ac.uk Rygl, David; Friedrich-Alexander-U. Erlangen-Nuremberg; david.rygl@wiso.uni-erlangen.de
The expatriates work role as an antecedent of work adjustment in emerging markets. A study of German expatriates in CEE-countries and Russia. Abstract: Central and Eastern Europe (CEE) and Russia have emerged as an increasingly attractive region for Western investors over the past two decades. The rising amount of FDI in this region is accompanied by a growing number of Western expatriates who are assigned into this region. Based on data of 113 German expatriates, this paper analyzes how four different aspects of work roles influence work adjustment in CEE. The results show that particularly the absence of role conflicts can be understood as a major antecedent of expatriate work adjustment in the selected emerging market context. The results of the regression analysis provide support for the detrimental impact of role conflicts on work adjustment at a high level of statistical significance. Furthermore, less significant evidence is found for a positive impact of role. The assumed impact of role flexibility and role novelty on work adjustment is not supported. The empirical results challenge prevailing theoretical perspectives on the relationship between work role and adjustment. Results, limitations and implications are discussed. Keywords:Expatriates, Work Adjustment, Emerging Markets

THE FOCUSED INTERNATIONAL STRATEGY

Mascarenhas, Briance; Rutgers U.; mascaren@crab.rutgers.edu
Many firms facing global competition may benefit from identifying and repositioning into a viable niche. This study examines one type of focused strategy - that of international focused firms, which are companies that produce, sell, and expand internationally within one industry. Analysis of firms in the worldwide pharmaceutical industry suggests that this type of focus strategy is practiced by about 20 per cent of the firms studied. In order to develop this strategy, firms need to develop coordinated capabilities in equity financing and research intensity. The findings suggest that the focused international strategy is shaped by firm capabilities in bringing in, developing, and coordinating multiple resources, as well as the ability to transfer and augment these capabilities through international expansion. Keywords:niche, strategy, capabilities

THE IMPACT OF GLOBAL LEADERSHIP PROGRAMS ON SOCIAL CAPITAL AND KNOWLEDGE SHARING IN MNES
Gooderham, Paul; Norwegian School of Econ. and Bus. Admin.; paul.gooderham@nhh.no Espedal, Bjarne; Norwegian School of Econ. and Bus. Admin.; bjarne.espedal@nhh.no Evensen, Heidimarie; Norwegian School of Economics; heidimarie.evensen@nhh.no
Taking as its starting point the significance of social capital for knowledge sharing in multinational enterprises (MNEs), this paper has a particular focus on the role global leadership development programs have on both social capital and knowledge sharing in MNEs. Our data is derived from Norfert, a Scandinavian MNE, which in 2007 introduced its first such program, LEAD. In order to examine the impact of LEAD we deploy both quantitative and qualitative data. The longitudinal quantitative data suggest that LEAD had a negative effect on knowledge sharing. Employing qualitative data enables us to explain this finding in terms of the particular cultural and organizational context in which LEAD was created. Keywords:None

THE IMPACT OF POLICY UNCERTAINTY ON ENTRY MODE CHOICE: A BEHAVIORAL REAL OPTIONS PERSPECTIVE
Slangen, Arjen; Amsterdam U.; a.h.l.slangen@uva.nl
This study uses real options theory to examine how host-country policy uncertainty influences the choice by multinationals between wholly-owned greenfield and full acquisition entry. I argue that greenfields usually allow multinationals to buy the external assets required for entry sequentially while acquisitions generally require multinationals to buy all these assets immediately upon entry, causing greenfields to have a real options advantage over acquisitions. I expect the value of this advantage, and hence the likelihood of greenfield entry, to increase with policy uncertainty. I also expect managers perceptions of the additional options value of greenfields at a given policy uncertainty level, and hence their preference for greenfield entry at that uncertainty level, to vary with their subsidiary autonomy plans and demand growth forecasts. These expectations are confirmed by an analysis of 169 foreign entries by Dutch multinationals. My findings show that policy uncertainty influences the relative options value of rival full control entry modes, and that the magnitude of this influence depends on behavioral factors. Keywords:entry mode choice, real options, policy uncertainty

THE INFLUENCE OF PRO-BUSINESS REFORMS AND CORRUPTION ON ENTREPRENEURSHIP

Martinez, Candace Agrella; Saint Louis U.; cmarti58@slu.edu Allard, Gayle; IE Business School; gayle.allard@ie.edu

This paper examines the impact of pro-business reforms and corruption on entrepreneurial activities in 68 countries. We test whether reforms foster entrepreneurship within a country and whether corruption is a deterrent, directly or indirectly. Our findings suggest that corruption does have a negative impact on new density, the number of newly registered start-ups that occur in a given country, but it does not have an indirect influence. Partitioning the sample between developed and developing countries reveals that pro-business reforms are associated with positive outcomes in developing countries only, while corruption has no effect on entrepreneurial activities in the same sub-sample. Keywords:Entrepreneurship, corruption,, reforms

THE INFLUENCE OF PRO-SOCIAL POLICIES & NGOS ON FDI IN DEVELOPING COUNTRIES

Martinez, Candace Agrella; Saint Louis U.; cmarti58@slu.edu Allard, Gayle; IE Business School; gayle.allard@ie.edu
Our paper builds on institutional economics theory to examine the relationship between foreign direct investment and pro-social policies and the indirect influence that nongovernmental organizations (NGOs) might have on this relationship. We tested two hypotheses on a sample of 75 developing countries and the findings reveal that while some host government social inclusion policies are statistically significant, their association with FDI stock runs in both directions. We argue that the differentiating factor may be whether or not the policies represent costs for investing multinational enterprises (MNEs). NGO presence influences only the association between FDI and government policies that protect the environment. Despite the mixed results, this empirical study casts light on the interwoven roles of MNEs, NGOs, and social policy in developing countries. Keywords:NGOs, institutions, FDI

THE INFLUENCE OF PSYCHIC DISTANCE ON ENTRY MODE AND LOCATION CHOICE FOR TRANSITION ECONOMY FIRMS
Mockaitis, Audra I.; Victoria U. of Wellington; audra.mockaitis@vuw.ac.nz Rose, Elizabeth L.; Helsinki School of Economics; Elizabeth.Rose@hse.fi Kriauciunas, Aldas Pranas; Purdue U.; akriauci@purdue.edu
Although psychic distance is believed to influence internationalization decisions, the empirical evidence remains inconclusive. We address this issue by investigating the relationship between two components of psychic distance stimuli and perceptions with entry mode and location choices for firms from six transition economies in Central and Eastern Europe. The results indicate that psychic distance stimuli are predictors of entry mode choice, and that psychic distance perceptions contribute to explaining location choice. Thus, both objective and subjective measures are important, albeit not strongly related to each other, which suggests that traditional psychic distance indicators should be supplemented with decision-makers perceptions. Keywords:Psychic distance, entry modes, location choice

THE INTERNALIZATION OF SOCIETAL FAILURES: STRATEGIC, SELECTIVE AND RESPONSIBLE

Boddewyn, Jean J; Baruch College; jean.boddewyn@baruch.cuny.edu
This paper presents the intriguing idea that the market-internalization framework can be applied to non-market institutions as well. That is, societys nonmarket subsystems political, social and cultural are subject to failures just like markets, and MNEs can contribute to their repair by selectively, strategically and responsibly internalizing them. Therefore, internalization theory can be applied to the joint failures of economic and non-economic institutions, and be used to explain the growing political role of MNEs in economies in transition as well as the phenomenon of increasing FDI into emerging markets despite their problematic distances from developed economies. Keywords:Internalization, societal failures, nonmarket strategies

THE MULTINATIONALITY-PERFORMANCE RELATIONSHIP IN AN INFORMATION COST VIEW A PANEL STUDY

Fisch, Jan Hendrik; U. of Augsburg; Jan.Hendrik.Fisch@wiwi.uniaugsburg.de Zschoche, Miriam; U. of Augsburg; Miriam.Zschoche@wiwi.uni-augsburg.de Morschett, Dirk; U. of Fribourg; dirk.morschett@unifr.ch
Different theoretical arguments in distinct empirical settings have prevented the convergence of findings on the multinationality-performance relationship so far. This paper develops an information cost model to integrate those factors of multinationality which may influence the performance of international business in any type of firm. The panel analysis of 3247 investors of all industry sectors, sizes, and levels of multinationality supports the S-shaped relationship predicted by the model. Analyses of different subsamples show that the relationship is stable and also applies to different types of foreign subsidiaries. Changes in multinationality do not seem to affect the performance of international business. Keywords:None

THE ROLE FIRMS POLITICAL CONNECTIONS PLAY IN ACCESS TO FINANCE: COERCION OR PROP. RIGHTS PROTECTION
Richter, Brian Kelleher; U. of California, Los Angeles; brian.richter.2010@anderson.ucla.edu
What role does political influence play in access to finance? Does this role differ across markets? Using a comprehensive cross-country dataset, I characterize how and why domestic political connections affect firms propensities to cross-list securities abroad. Connected firms have better access to foreign capital markets; moreover, the effect of connections is magnified for firms located in countries with weak property rights. Hence, domestic political connections, at the firmlevel, serve as a strategic substitute for strong national property rights protections. This paper extends the interdisciplinary literature on political influence, institutions, and finance, as its

findings require us to update our understanding from existing single-country studies: (i) political connections matter not only in domestic financial markets, but also in foreign financial markets; and, (ii) the primary reason politically connected firms receive better access to finance is not government-ownership or coercion of domestic banks, but rather implicit firm-level property rights protections that reduce privileged firms risk premiums vis--vis unconnected peers. Keywords:Cross-listing, political connections, property rights

THE ROLE OF EXPERIENTIAL LEARNING IN THE DEVELOPMENT OF CULTURAL INTELLIGENCE

Li, Ming; ESC Rennes School of Business; lilyliming@hotmail.com Mobley, William H; Mobley Group Pacific Ltd.; WilliamM@MobleyGroupPacific.com
In recent years, the concept of Cultural Intelligence (CQ) (Earley & Ang, 2003) has attracted increased interest among scholars and practitioners in global leadership research. This paper aims to contribute to the understanding of the impact of Experiential Learning Theory (Kolb, 1984) on the development of cultural intelligence in global leaders through a quantitative study. It tests a model that hypothesizes experiential learning styles exercise a moderating effect on the relationship between international experience and cultural intelligence. Keywords:Cultural Intelligence, Experiential Learning, Moderation

THE SIXTH MERGER WAVE: EVIDENCE OF GLOBAL SIGNIFICANCE AND LOCAL DIFFERENCE
McCarthy, Killian J; RijksU. Groningen; k.j.mccarthy@rug.nl Weitzel, Utz; U. Utrecht School of Economics; u.weitzel@econ.uu.nl Dolfsma, Wilfred; Groningen U.; w.a.dolfsma@rug.nl
This paper: (1) proves the existence of a sixth merger wave; (2) profiles it in terms of its (performance impacting) characteristics, first by comparing it to the fifth wave, and then by contrasting it with the inter-wave lull; and finally (3) evaluates it in terms of its outcomes. In doing so, we evidence the existence of a global sixth wave, which for the first time, we suggest, centered in Europe and Asia and not North America. We find that while certain characteristics run common across regions such as the preferred method of payment different regions experienced the wave differently. North American mergers, for example, were driven by large and friendly acquirers, using externally sourced cash to domestically diversify. European mergers were about integration, and were financed with internally generated cash. Just as Asian mergers used the sixth wave to focus on core competence building, and were increasingly hostile and increasingly expensive. The rise of both hostility and premiums paid in Asia runs contrary to the experience of Europe and North America, just as the rising popularity of a diversification strategy in North America runs contrary to the strategies employed in Europe and Asia. Both, however, are trends with important business implications. Keywords:Mergers and Acquisitions, Merger Waves, Merger Performance

THE THREE-STAGE PARADIGM OF INTERNATIONAL

EXPANSION REVISITED
Oh, Chang Hoon; Brock U.; coh@brocku.ca Contractor, Farok J.; Rutgers U.; farok@andromeda.rutgers.edu
Empirical studies on international expansion, that have followed the six years since the publication of the 3-stage paradigm for international expansion, have shown only limited support for the S-curve hypothesis. But while the basic concept is unassailable, the very generality of the paradigm is its weakness in empirical studies. A studys sample has to include firms in all three stages to have empirical verification. The field needs more fine-grained distinctions, such as territorial coverage, product diversification and other firm-specific variables. This research note shows that the territorial scope covered by the firm makes a substantial difference to the relationship between multinationality and performance. Moreover, the effect of multinationality on performance can be overwhelmed by other firm-specific variables, such as product diversification. The path of international expansion is a much more complex process than is shown by existing studies. The results also suggest three generic types of international expansion strategies with which a MNE can increase its market value. Keywords:performance, multinationality, three-stage paradigm

THE TRADE-OFF EFFECT OF INFORMAL AND FORMAL INSTITUTIONAL DISTANCE ON CROSS-BORDER M&A ACTIVITIES
Yang, Kun; Florida International U.; kyang001@fiu.edu He, Wei; Florida International U.; whe001@fiu.edu
Previous research on the impact of institutional distance on cross-border M&A has looked at each individual part of the institutional distance separately. This paper views the two parts (formal and informal institutional distance) simultaneously and tests their interaction. It has found a trade-off effect of informal institutional distance on the overall institutional distance. Applying institution theory and transaction cost theory, the paper further seeks factors such as trade, travel and international education that might serve to shrink informal institutional distance, and examines their moderating effects on the relationships between institutional distance and cross-border M&A transaction value, as well as volume. Keywords:cross-border M&A, institutional distance, trade-off effect

THE TRANSITION FROM A MULTI-DOMESTIC TO GLOBALLY INTEGRATED MULTINATIONAL ENTERPRISE

Gooderham, Paul; Norwegian School of Econ. and Bus. Admin.; paul.gooderham@nhh.no Rnning, Rune; Norwegian School of Econ. and Bus. Admin.; rune.roenning@aff.no
The purpose of this case-based study is to examine the constraints faced by multi-domestic multinational enterprises (MNEs) when they attempt to integrate key functions such as procurement. The study describes the progress Scandinavian Foods (SCF), a Norwegian MNE, had made with the initial phase of its purchasing integration project. On the one hand SCF operates in an industry that requires local responsiveness in terms of its end-products, on the

other hand its viability depends on achieving purchasing savings. We employ the case of SCF to illustrate the political and knowedge and social capital barriers to making this the transformation from the multi-domestic to the global state. Keywords:MNE, Multi-domestic, Integration

TOLERANCE IS NOT ENOUGH: THE MODERATOR ROLE OF OPTIMISM ON PERCEPTIONS OF ECONOMIC PERFORMANCE
Lopes, Miguel Pereira; U. Nova de Lisboa; mlopes@fe.unl.pt Cunha, Miguel Pina; U. Nova de Lisboa; mpc@fe.unl.pt Palma, Patrcia Jardim Da; ISPA; ppalma@ispa.pt
Current theories on economic growth are stressing the important role of creativity and innovation as a main driver of regional development. Some perspectives, like Richard Floridas creative class theory, have elected tolerance and diversity as a core concept in explaining differential development between different places, but his assumptions are challenged by other empirical and theoretical studies. In this article, we raise the possibility that tolerance is a necessary yet not a sufficient ingredient to trigger economic development in regions, and explore the role of subjective well-being (life-satisfaction, happiness and optimism) as a moderator. Using a nationwide survey of 3.757 respondents from 21 different Municipalities, the results show that optimism played the role of moderator, thus evidencing that psychological variables should be taken into account when trying to understand regional economic development. Keywords:creative class, tolerance, life-satisfaction

TORTOISE AND HARE: REGIONAL PRODUCTION AND THE RETREAT OF GLOBAL LIBERALIZATION
Guy, Frederick; Birkbeck College, U. of London; f.guy@bbk.ac.uk
Collinson, Rugman and Verbeke have argued that multi-national corporations are more regional than global. Their strongest evidence for this is the regional concentration of investment in production networks. This concentration is consistent with the fact that intra-regional trade has increased faster than inter-regional trade over the past several decades. The argument of this paper is that a regional scale of production networks (regional in the sense of super-regions, on the scale of Europe, North America, and China or East Asia) is providing the basis for political and market integration at the regional level. This regional integration comes at the expense of global liberalization. Rugman and Verbeke have argued that multi-national corporations are more regional than global. Their strongest evidence is for the regional scale of international production networks. This is consistent with the fact that intra-regional trade has increased faster than interregional trade over the past several decades. The argument of this paper is that a regional scale of production networks (regional in the sense of super-regions, on the scale of Europe, North America, and China or East Asia) is providing the basis for regional political and market integration. Global liberalization and regional integration are seen here as alternative methods for the achievement of market enlargement. Pressure for market enlargement comes from changes in production technologies and organization, which have accentuated increasing returns. The ascendancy of global liberalization after 1980 recapitulates the flowering of free trade in the mid 19th century. In both cases, international liberalization occurred in parallel with the enlargement and consolidation of sub-global markets - the national and imperial markets that emerged in the

19th century, and the super-regional markets that are consolidating today. Global liberalization proceeds more quickly because it is institutionally minimal, and because it offers a fallback position for actors engaged in the politics and institution building of national / regional market consolidation. As a stable outcome, however, a global liberal market is a mirage. Integrated regional systems are torturous to develop, but offer powerful attractions; like national systems in the 19th century, they are likely to prevail. Keywords:regional, international, increasing returns

TOWARDS A SOCIAL IDENTITY AND FAULTLINES UNDERSTANDING OF CULTURAL CHANGE

Chiou, Andy Yu-Yen; Baruch College; andy.chiou@baruch.cuny.edu Gardberg, Naomi A; Baruch College; naomi.gardberg@baruch.cuny.edu
Although the convergence and divergence of cultural change need not be mutually exclusive, much research continues to treat culture as a concept held in isolation and stasis. However in the real world this is hardly the case as societies influence each other. Furthermore, relative differences between various aspects of cultural differences have not been actively studied. In this theoretical discussion we propose using social identity theory and faultlines theory to explain why and how cultures interact and change in relation to each other and further provide an overview on how these theories apply to culture research. Keywords:Cultural change, Social identity, Faultlines

TRACKING A MOVING ARROW CORE: REPLICATION-ASSTRATEGY IN IKEA

Jonsson, Anna; Lund U.; anna.jonsson@fek.lu.se Foss, Nicolai; Copenhagen Business School; njf.smg@cbs.dk
Based on a qualitative study of Swedish home furnishing giant, IKEA, we discuss the role of replication as a strategy for international expansion. As conventionally described, this strategy is based on two phases, one of exploration and a subsequent one of exploitation by means of replication. We describe the evolution of a template for replication in IKEA, and describe how IKEA has moved beyond the two-phase strategy. Thus, IKEA has developed organizational mechanisms and principles that enable an ongoing learning process that result in frequent modifications of the template. IKEA may thus be seen as a successful example of an ambidextrous MNC. Keywords:replication, internationalization, mnc

TRADITIONAL SMES: RAPID INTERNATIONALIZATION DESPITE LIMITED KNOWLEDGE AND INTERNATIONAL EXPERIENC
Kalinic, Igor; U. of Padua; igor.kalinic@unipd.it Forza, Cipriano; U. of Padova; cipriano.forza@unipd.it

In the last years, several traditional Small-Medium Enterprises (SMEs) internationalized rapidly operations in psychic distant countries with limited market knowledge, limited use of networks, and limited international experience. The overall purpose of this paper is to draw research attention to this internationalization phenomenon that we call Production-Oriented Internationalization (POI) of traditional SMEs. We describe the peculiar path followed by SMEs during POI by analyzing five case-firms from Italy, and show that the leading literature does not contemplate it. We argue that traditional SMEs are able to speed up their internationalization process (from gradual to rapid) thus, becoming actual international players. Keywords:Internationalization, SMEs, rapid

UNDERSTANDING THE 'PULL' OF TRANSNATIONAL ENTREPRENEURSHIP

Schlosser, Francine; U. of Windsor; fschloss@uwindsor.ca Kerr, Gerry; U. of Windsor; gkerr@uwindsor.ca
This study profiles nascent transnational entrepreneurs. We focus on key transforming institutions, universities, and on a central group, international students, which are uniquely prepared to link countries through venture creation. First we present a model that discusses the entrepreneurial attitude inherent or developed in many internationalhttp://submissions.aomonline.org/2010/new_submission.asp?mode=titleabstract students as they make human and social investments in their new university and country and adapt to national differences in personal and business routines and expectations. We consider how students ability to function within each distinct culture and yet conceptualise the whole facilitates the recognition of opportunities and the development of creative transnational business propositions. A cross-sectional study of international students revealed some differences in entrepreneurial intentions and profiles, and permitted us to distinguish 'pull-oriented' characteristics of nascent transnational entrepreneurs from other nascent entrepreneurs and nonentrepreneurs. Keywords:international student, nascent entrepreneur, transnational entrepreneur

UNDERSTANDING THE CHANGING TERRORIST THREAT TO MNES: A CONCEPTUAL MODEL AND FRAMEWORK FOR RESEARCH
Wernick, David; Florida International U.; wernick@gmail.com Kundu, Sumit Kumar; Florida International U.; kundus@fiu.edu Schneper, William D; Florida International U.; schneper@fiu.edu
Research on terrorisms impact on management and international business has increased substantially since 9/11. Yet theoretical and conceptual thinking about the nature of the terrorist threat and its implications for MNEs, their stakeholders, and the international business environment remains underdeveloped. We offer a new conceptualization of the terrorist threat that takes into account its enduring features as well as its new dimensions and detail the implications for MNE strategy. Rather than constituting a micro-level political risk, the threat posed by global terrorist networks, we contend, is best understood as a type of macro-level uncertainty. A series of propositions informed by theories of environmental uncertainty and complexity are put forth and the paper concludes with implications and directions for future research.

Keywords:terrorism, political risk, MNE strategy

UNDESIRED INDIVIDUAL-LEVEL OUTCOMES IN CROSS-BORDER MERGERS AND ACQUISITIONS: A PROCESS APPROACH

Hajro, Aida; Brunel U.; aida.hajro@brunel.ac.uk Mandal, Abhijit; Middlesex U.; A.Mandal@mdx.ac.uk
This study explores the processes that lead to undesired individual-level outcomes in the context of cross-border mergers and acquisitions (M&As) by distinguishing between cross-cultural and general post-acquisition issues. Based on the empirical findings from an in-depth longitudinal case study that describes the unsuccessful integrative efforts of a German multinational and a leading Austrian technology and service provider, we develop a process narrative. We then assemble the various events of the case-study in terms of cause-and-effect to present a generic model of post-merger integration dynamics (for absorption). We explain why conventional strategies fail and indicate what alternate strategies could be used for success. Keywords:cross-border mergers and acquisitions, post-merger integration, organizational culture

UNRAVELLING CULTURAL DISTANCE AFRESH: FUNDAMENTAL HOST COUNTRY EFFECTS ON ENTRY MODE OF INDIAN FIRMS
Tarakad Venkateswaran, Ramya; Indian Institute of Management, Bangalore; ramya.tv08@iimb.ernet.in
Cultural distance as an aggregate, unidimensional construct to capture the complex phenomenon of culture has received much criticism in the entry mode literature. Disentangling the effects of the individual dimensions of Hofstedes (2001) dimensions of national culture has been attempted, but has focussed on either home country effects or home-host differences, rarely isolating host country effects. This study argues how host country national cultural dimensions can matter for the mode of entry adopted in cross-border mergers and acquisitions. It is proposed that each of the five dimensions of Hofstedes national culture can be treated as causing parametric shifts in the informal institutional environment of the comparative economic organization framework provided by Williamson (1991), thus impacting governance costs, and observably, entry mode. Pegging home country of analysis at India, the results of analysing 830 deals between 1980 to 2009 show that host country values for individualism, adjusted for percapita national income, and long-term-orientation, proxied by the countrys marginal propensity to save, are positively associated with the adoption of hierarchical over hybrid modes. Keywords:entry mode, cultural distance, national culture, comparative economic organization, transaction cost economics

USING GLOBE TO UNDERSTAND HR IN PAKISTAN

Nadeem, Sadia; FAST_NU; sadia.nadeem@nu.edu.pk

Despite its ample business opportunities, increasing foreign direct investments, and an extensive labor force, the national culture of Pakistan has received limited attention from management literature. Using data collected from 152 middle managers, this research compares the national culture of Pakistan with 61 societies from the GLOBE study, using GLOBEs instruments and findings. The results indicate that Pakistani society reflects higher power distance than any other society measured as a part of the original GLOBE study. However, there exists a strong desire to have a more equitable distribution of power. Ranked last among the 62 societies on gender egalitarianism, the study indicates that women are not provided with the same opportunities as men. It is also a society with high group collectivism but lower assertiveness i.e. people express pride in and loyalty to their families and in-groups, and avoid confrontational and aggressive behavior. Comparing with other countries, Pakistan does not fall into any one GLOBE clusters, as there are similarities between Pakistan and geographical neighbors like India as well as Muslim countries like Kuwait, Egypt, Morocco and Nigeria. Scores on the dimension of uncertainty avoidance are similar to Japan and United States. As national cultures influence human resource management, the authors offer some implications for management in Pakistan. Overall, the study provides an overview of Pakistani culture for businesses operating or planning to start trade relations with Pakistan. It also provides a framework for empirical studies in the future to compare practices in Pakistan with other societies. Keywords:Cross-cultural human resource management, national culture, GLOBE

VARIATIONS IN BUSINESS ETHICS IDEOLOGIES IN THE SOUTH PACIFIC

Robertson, Chris; Northeastern U.; c.robertson@neu.edu Born, Jeffery; Northeastern U.; j.born@neu.edu Blevins, Dane; The U. of Texas at Dallas; blevins.dane@gmail.com
As globalization continues to reach even the most remote areas of the world obtaining an understanding of how residents of emerging economies view traditional Western business practices will become increasingly important. In particular, perceptions of ethical business dealings and the driving forces behind differences in moral paradigms will enable MNC managers to develop stronger policies for operations worldwide. One world region that has received very little attention in the international business literature is the island region of the South Pacific. In this study, data collected from 80 managers from Fiji and the Cook Islands reveals some intriguing patterns across these two diverse economies. Managerial implications and future research directions are also discussed. Keywords:Ethical Ideologies, South Pacific, Fiji

WHAT DRIVE GLOBAL BRAND BUILDING STRATEGIES OF HI-TECH FIRMS FROM NEWLY-INDUSTRIALIZED ECONOMIES?
Kittilaksanawong, Wiboon; Zhejiang U.; zjuwbk@gmail.com
This paper provides case study research aiming at building a conceptual framework for the entry strategies of high-tech firms from newly-industrialized economies. The cases are drawn from Taiwanese firms in electronics and computer industry that are ranked within the top ten performers in the global brand building. The study reviews and analyzes each firms internationalization path from the archival data and in-depth interviews with their executives and

industry experts, then derives several propositions for future quantitative research. The results indicate that the parent firms perceptions of institutions between the home and the host countries, possession of resources and experienced personnel, as well as internal corporate governance influence the choices of the host country and the entry strategies during their internationalization for the global brand building. The choices of the host country and the entry strategies are adjusted from time to time based on their experiential knowledge and resources gained from the host countries. Keywords: Global Brand Building; Institutions; Resources; Corporate Governance; Choices of Host Country; Entry Strategies; High-Tech Firms; Taiwan Keywords:Global Brand Building, Choices of Host Country, Entry Strategies

WHEN DO OVERSEAS R&D CENTERS CONDUCT EXPLORATORY RESEARCH?:EVIDENCE FROM JAPANESE MULTINATIONALS
Asakawa, Kazuhiro; Keio U.; asakawa@kbs.keio.ac.jp
This paper identifies the determinants of the exploratory research role assigned to overseas R&D subsidiaries of multinational firms. Analyzing the sample of 99 overseas R&D subsidiaries of Japanese multinational firms, we test the embeddedness and absorptive capacity theories by utilizing the binomial logistic regression method. The result shows that local subsidiaryfs absorptive capacity is indispensable for conducting the exploratory research role; that external collaborations with local universities contribute to the exploratory research role of a particular R&D subsidiary. The external collaborations with universities located in other countries may not necessarily contribute to the exploratory research role of an overseas R&D subsidiary; but its interaction effect with absorptive capacity is positive and significant, meaning that only those capable R&D subsidiaries engaged in cross-border external collaborations are likely to play the exploratory research role. While firms are tightening the control of exploratory research abroad under the economic recession, our findings imply that firms should commit themselves to enhance the technological competency of their overseas R&D centers and to foster their external collaborations with local and overseas R&D communities. Keywords:global R&D, exploratory research, subsidiary

WHEN KNOWLEDGE FLOWS GLOBALLY - LOCATION CHOICE FOR STANDARD DEVELOPING ACTIVITIES
Piepenbrink, Anke; Rutgers U.; anke@pegasus.rutgers.edu
In recent years IB scholars put their attention to the location choice of competence creating (CC) activities, where knowledge-seeking motives play a major role. This study looks at a specific CC activity, participation in standard developing organizations. This is characterized by rather freely flowing knowledge across the globe, while adaptations to local market needs are inhibited by the global standard itself. These traits are at odds with the assumptions of rather localized knowledge. They not only offer an interesting setting to study location choice of R&D activities, but the mechanisms of setting a global standard is relevant in itself as it has important implications for MNC's strategies and countries' innovation policies. The findings of this studies are, that SDO participations are a dynamic process, largely driven by participations in the past and the market of the host country. The host country's technological capabilities have no significant influence.

Keywords:None

WHO ARE WE HERE, THERE, AND ELSEWHERE? THE INFLUENCE OF SOCIETAL CULTURE ON ORGANIZATIONAL IDENTITY
Ekmekci, Ozgur; George Washington U.; ekmekci@gwu.edu Casey, Andrea; George Washington U.; acasey@gwu.edu Byington, Linda L.; George Washington U.; lbyington@cox.net Rosenbusch, Katie; George Washington U.; katie@gwu.edu Cataldo, Christina G; George Washington U.; ccataldo@gwmail.gwu.edu
Todays global organizations are facing questions regarding their organizational identity (Albert & Whetten, 1985) across different locations. Understanding diverse cultural perspectives is critical (House, Javidan, & Dorfman, 2001) for effective recruitment and retention, and maximizing employees contributions to and identification with the organization. This paper explores how societal culture influences organizational identity in a global organization and offers a set of propositions for future theory development. The discussion focuses on how the local societal cultures in which regional offices are located as defined by the relative strengths and priorities of the nine cultural dimensions for the GLOBE study (House et al., 2006) may influence the way the employees of a global organization perceive their organizations identity. Keywords:cross cultural management, organizational identity, societal culture

WHO TALKS TO WHOM IN WORKGROUPS: THE IMPACT OF CULTURAL COMPOSITION ON COMMUNICATION NETWORKS
Khorram, Sigrid; German U. in Cairo; ziggywest@yahoo.com Vora, Davina E.; State U. of New York, New Paltz; vorad@newpaltz.edu Dakhli, Mourad; American U. of Kuwait; mdakhli@auk.edu.kw
In this conceptual paper, we draw upon research on cultural values and network theory to develop a model of how group cultural diversity and members cultural orientations influence communication networks in workgroups. Specifically, we suggest that the cultural composition of workgroups in terms of horizontal and vertical individualism and collectivism relates to group members tendency to cluster into subgroups and to serve as bridges. These subgroups and bridges, in turn, are likely to influence group performance. We argue that a networks approach provides a useful alternative conceptualization of group diversity and discuss the implications of our model. Keywords:cultural diversity, social networks, individualism-collectivism

WHOEVER LOVES MONEY IS NEVER SATISFIED WITH HIS OR HER PAY: INCOME AND CPI AS MODERATORS
Tang, Thomas Li-Ping; Middle Tennessee State U.; ttang@mtsu.edu Sutarso, Toto; Middle Tennessee State U.; tsutarso@mtsu.edu

Ansari, Mahfooz Alam; U. of Lethbridge; mahfooz.ansari@uleth.ca Garber, Ilya; Saratov State Socio-Economic U.; garber@mail.saratov.ru Vlerick, Peter; Ghent U.; peter.vlerick@ugent.be Arias-Galicia, Fernando; U. Autnoma del Estado de Morelos; ariasgalicia1969@prodigy.net.mx Lim, Vivien KG; National U. of Singapore; bizlimv@nus.edu.sg Teo, Thompson SH; National U. of Singapore; bizteosh@nus.edu.sg Akande, Adebowale; International Institute of Research; deboakande@yahoo.com Allen, Michael W.; U. of Sydney; m.allen@econ.usyd.edu.au Alzubaidi, Abdulgawi Salim; Sultan Qaboos U.; zubaidi@squ.edu.om Borg, Mark G.; U. of Malta; mark.borg@um.edu.mt Canova, Luigina; U. of Padua; canoval@psy.unipd.it Charles Pauvers, Brigitte; U. of Nantes; desschine@iae.univ-nantes.fr Cheng, Bor-Shiuan; National Taiwan U.; chengbor@ntu.edu.tw Chiu, Randy Ki-Kwan; Hong Kong Baptist U.; randychiu@hkbu.edu.hk Du, Linzhi; Nankai U.; lzd6613_nj@163.com Garcia-de-la-Torre, Consuelo Adelaida; EGADE-ITESM; cogarcia@itesm.mx Higgs, Rosario Correia; Polytechnic Institute of Lisbon, Portugal; mhiggs@escs.ipl.pt Ibrahim, Abdul Hamid Safwat; Iman U.; safwatibrahim60@hotmail.com Jen, Chin-Kang; National Sun Yat-sen U.; ckjen@cm.nsysu.edu.tw Kazem, Ali Mahdi; Sultan Qaboos U.; amkazem@squ.edu.om Kim, Kilsun; Sogang U.; kilsunkim@sogang.ac.kr Luna-Arocas, Roberto; U. of Valencia; roberto.luna@uv.es Malovics, Eva; U. of Szeged; malovics@eco.u-szeged.hu Manganelli, Anna Maria; U. of Padua; annamaria.manganelli@unipd.it Moreira, Alice S.; Federal U. of Para; alicesm@ufpa.br Mpoyi, Richard T; Middle Tennessee State U.; rmpoyi@mtsu.edu Nnedum, Anthony Ugochukwu Obiajulu; Nnamdi Azikiwe U.; nneduma@yahoo.com Osagie, Johnsto E.; Florida A & M U.; jsqie@yahoo.com Osman-Gani, AAhad; UIA International U.; aosmangani@gmail.com Pereira, Francisco Costa; Polytechnic Institute of Lisbon, Portugal; fpereira@escs.ipl.pt Pholsward, Ruja; Rangsit U.; info@sbs.ac.th Pitariu, Horia; Babes-Bolyai U.; horia_pitariu@yahoo.om Polic, Marko; U. of Ljubljana; marko.polic@ff.uni-lj.si Sardzoska, Elisaveta; U. St. Cyril and Methodius; elisa@ukim.edu.mk Skobic, Petar; Middle Tennessee State U.; skobic@gmail.com Stembridge, Allen F.; Andrews U.; stem@andrews.edu Tang, Theresa Li-Na; Tang Global Consulting; tltang@bellsouth.net Tombolani, Marco; U. of Padua; iltombo@yahoo.it

Trontelj, Martina; U. of Ljubljana; martinatrontelj@hotmail.com Urbain, Caroline; U. of Nantes; urbain@iae.univ-nantes.fr

We investigate the relationship between love of money and pay level satisfaction among 6,375 managers in 31 geopolitical entities across six continents around the world. After achieving measurement invariance across three Corruption Perceptions Index (CPI) groups, we found that income and CPI were moderators of the love of money-pay level satisfaction relationship. After controlling sex, age, education, self-reported annual income (Z income), and GDP per capita, regression results revealed three significant interaction effects: First, managers with high income and low love of money had the highest pay satisfaction, those with low income and high love of money had the lowest. Second, high-income managers in low CPI entities had the highest pay satisfaction; whereas low- income managers in medium CPI entities had the lowest. Finally, in high CPI entities, high (low) love-of-money managers had the lowest (highest) pay level satisfaction, as expected. Our counterintuitive results showed that in low CPI entities, managers with high love of money had the highest pay level satisfaction. Results are discussed in light of ethical culture, power, corruption, and unethical behavior intention. Keywords:Love of Money, Pay Satisfaction, CPI

WHY SOME COUNTRIES TRADE MORE, SOME TRADE LESS, SOME TRADE ALMOST NOTHING
Wu, Jun; Old Dominion U.; judyjunwu@gmail.com Li, Shaomin; Old Dominion U.; sli@odu.edu Samsell, Darryl; Guilford College; samselld@guilford.edu
We examine the effect of a countrys governance environment on its propensity to trade. Using an updated framework of governance environment, we classify countries based on the dominant mode of governance into three types: (1) rule-based (strong public rule of law), (2) relation-based (weak rule of law and strong informal network based on private relations), and (3) neither-based (absence of both public rules and private network). We then examine how different governance types affect trade patterns among 44 countries representing 89 per cent of world trade. We find that overall, rule-based countries trade more than relation-based or neither-based countries. A large positive effect on trade flows exists between two highly rule-based countries and between two relation-based countries. Any trade relationship involving a neither-based country negatively affects trade flows, even between two neither-based countries. Our study contributes to the trade literature by examining the effects of different types of governance environment on trade flows and more successfully explaining why some countries still trade almost nothing even after scholars and policy makers have convincingly proved all along that freer trade leads to higher welfare for a country. Keywords:Governance Environment, International Trade, Neither-based

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Copyright of Academy of Management Annual Meeting Proceedings is the property of Academy of Management and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.