The
Micro-Foundations of Cluster Stickiness:
Entering
the Mind of the Entrepreneur
Ivo
Zander
Institute
of International Business
Abstract:
This paper offers a micro-level
explanation to the uneven spatial and sectoral concentration of
firms across national boundaries. By focusing on the geographical
movements of (prospective) entrepreneurs and the cognitive processes
that underlie new business formation, it is suggested that powerful
forces work against the entrepreneur’s active response to business
opportunities that present themselves in geographically distant
locations. As a result, clusters tend to evolve in locally distinct
ways and over time maintain their unique business and technological
profiles. The entrepreneurship perspective offers an explanation
to cluster stickiness, which in important respects differs, from
the cost-benefit reasoning that currently dominates the economic
geography literature.
Work
Systems in Heavy Engineering: The Role of National Culture and National
Institutions in Multinational Corporations
Dr.
Dirk Matten
International
Center for Corporate Social Responsibility
Nottingham
University Business School
Dr.
Mike Geppert
European
Business Management School
University
of Wales Swansea
Abstract:
This paper is based on an
Anglo-German Research project of two research groups in both countries.
It is based on data collected by qualitative research in the three
largest MNCs in the lift and escalator industry. The headquarters
of the three corporations are based in the United States, Finland
and Germany respectively and all three MNCs each have subsidiaries
in Germany and Britain. Our main objects of analysis were change
processes in the work systems of these 3 MNCs . We chose the lift
and escalator industry as an example because it has been characterized
by strong concentration processes during the last ten years. Most
of these corporations have grown by acquisition and there are strong
tendencies in the market towards standardized, globally uniform
products. National cultures and institutions, first of all play
a role on the headquarter level. Important areas were the standardization
of products and production technology, the design of management
systems and location and relocation decisions for R&D and manufacturing.
Second, MNC take differences in national cultures into account and
deliberately “use” them in allocating resources and investment within
the multinational group. National cultures and institutions massively
shape the very formulation of manufacturing strategies within the
multinational groups, as well as the research & development
strategies – a particular important field in an industry still relying
heavily on small-batch and unit production. Third, national cultures
play a significant role in implementing the global strategies of
MNCs in different host countries. Our data reveals striking differences
on this level.
Liability
of Foreignness and the Superior Advantages of MNEs: Financial
Service MNEs in the City of London
Lilach
Nachum
Baruch
College, CUNY
Abstract:
This study argues that an
evaluation of the performance of MNEs relative to this of indigenous
firms requires the assessment of the balance between the additional
costs arising as a result of foreign activity and the MNE's superior
advantages. The study advances a theoretical framework that enables
one to take account of the combined impact of these two aspects
of MNE’s performance, and shows that the balance between them is
determining the actual outcome. A comparison between foreign-
and British-owned financial service firms in the City of London
is used to illustrate this approach. The findings show that in
this particular context, the superior advantages of MNEs outweigh
the additional costs associated with foreign activity. Hence,
foreign firms outperform their domestic cohorts. The implications
of these findings for theory developments are outlined.
Globalisation
and Trends in International R&D Alliances
Rajneesh
Narula
Copenhagen
Business School
Abstract:
The growth of collaborative activity is greatly influenced by
the process of globalization. This paper focuses on the narrow area
of collaborative R&D activity, and takes a ‘macro’ view of the
effects of these developments. Globalization has affected the need
of firms to collaborate, in that firms now seek opportunities
to cooperate, rather than identify situations where they can achieve
majority control. The use of collaboration is particularly acute
in capital-intensive and knowledge-intensive sectors. These are
also the sectors where firms have expanded internationally fastest,
as they need to compete in various markets simultaneously, but also
to exploit and acquire assets and technology that may be specific
to particular locations. The increasing similarity of technologies
across countries and cross-fertilisation of technology between sectors,
coupled with the increasing costs and risks associated with innovation
has led firms to consider R&D alliances as a first-best
option in many instances. This has important welfare implications
and impinges directly on the industrial competitiveness of locations.
Knowledge
Intensity, Product and Geographic Diversity, and Organizational
Structure of Multinational Enterprises
Tailan
Chi , University of Illinois at Urbana-Champaign
Paul C. Nystrom, University of Wisconsin-Milwaukee
Philipp Kircher, Universität Karlsruhe
Abstract:
This paper seeks to build an
integrative model of structural determination in MNEs by bringing
together insights from the internalization theory and insights from
past studies on MNE structure. A distinctive feature of the model
is that it treats both a firm’s structural choice and its product
and geographic diversity as outcomes of the firm’s resource-building
activities. The model is tested using simultaneous-equations regression
and data on 102 manufacturing MNEs. Findings support most of our
hypotheses. Structure seems to reflect a dual concern about both
efficient coordination of existing businesses and generation of
new knowledge for sustaining competitive advantage.
A
Technological Contingency Perspective on the Depth and Scope of
International Outsourcing
Lieven
Quintens
Erasmus
University
Abstract:
In this study we
develop and test a technological contingency perspective on two
dimensions of international outsourcing: depth and scope. The depth
of international outsourcing refers to the foreign/total outsourcing
ratio of a firm. The scope of international outsourcing captures
the degree of variety (i.e., aggregated psychic distances) between
the home country and the countries a firm is outsourcing to. Using
multiple regression analysis on a sample of 189 Dutch firms, the
effect of technological and volume uncertainty, asset specificity,
the degree of product innovation and the integration of the outsourcing
function is measured on the depth and scope of international outsourcing.
A most interesting result is that technological uncertainty and
the degree of product innovation turn out to be both positively
correlated with a high scope yet a low depth and negatively correlated
with a low scope and a high depth of international outsourcing.
Among others, these findings create a platform for a typology of
international outsourcing that builds upon depth and scope. On its
turn, this typology provides a first insight in possible expansion
paths for international outsourcing.
Mitigating
Risk in International Mergers and Acquisitions
Roberto
Ragozzino
Fisher
College of Business
The
Ohio State University
Abstract:
Previous internationalization
studies have focused on the entry modes employed by multinational
firms, but have not considered the contractual heterogeneity, which
underlies each mode. In the case of international mergers and acquisitions
(M&A), a key contractual variable is whether the parties agree
to a performance-contingent payout that mitigates the risk taken
by the acquirer by transferring a portion of its risk to the target
firm. In this paper, we examine the antecedents of contingent payouts
in the form of earnouts and stock payment. Evidence from a sample
of over one thousand international M&A indicates that firms
lacking international and domestic acquisition experience turn to
contingent payouts when purchasing targets in industries reliant
on intangible assets and human capital. Firms tend to avoid contingent
payouts in target environments characterized by different legal
systems due to enforceability problems.
Contextual
Influences on International Subsidiaries’ Product Technology Strategy
Brent
B. Allred and K. Scott Swan
The
College of William & Mary
Abstract:
We seek to test a broad range
of factors that influence the technology sourcing decision of international
subsidiaries in acquiring product technology from outside the firm
(i.e., outsourcing) versus internal development. A regression
model, used to analyze data from 187 international subsidiaries
in six industries and with parents based in fourteen countries,
identifies environmental, strategic, configurational, and resource
endowment factors that influence the technology sourcing decision.
Specifically, the level of product dynamism in the subsidiary’s
industry, and the distance between the subsidiary’s primary marketing
and R&D operations are associated with a greater reliance on
outsourcing. A differentiation goal, a low cost goal, along with
the level of the subsidiary’s human and financial resources are
associated with a greater reliance on internal development.
Technology
Transfer within MNEs: An Investigation of Inter-Subsidiary Competition
and Cooperation
Dan
Li , Texas A&M University
Manuel Portugal Ferreira ,
Escola
Superior de Tecnologia e Gestao, Leiria, Portugal
Abstract:
Much research that seeks to explain why and how technology
transfers occur within multinational enterprises (MNEs) addresses
the question of how these transfers occur among cooperative subsidiaries,
with the embedded assumption that the subsidiaries cooperate with
one another. However, evidence indicates that subsidiaries do
not always cooperate. Examining the competitive and cooperative
relationships among an MNE’s subsidiaries (i.e. inter-subsidiary)
across different markets, we suggest that the success of technology
transfer among subsidiaries depends on the organizational format
of the multinational firm, the MNE’s international strategy, the
existence of organizational facilitators, and the reward system
established. In the absence of these, there is significant potential
for inter-subsidiary multimarket competition that is originated
from the overlap on the subsidiaries’ product, technology, and markets
portfolios.
Switching
Options and Coordination Costs in Multinational Firms
Tony
Tong
Fisher
College of Business
The
Ohio State University
Abstract:
In this study, we analyze
how foreign direct investment affects firms’ risk levels. We seek
to sort out some of the mixed findings on the relationship between
FDI and risk by accounting for unobserved firm capabilities and
other factors affecting the FDI-risk relationship as well as by
accounting for coordination costs that potentially mitigate the
benefits of switching options available through international diversification.
The empirical evidence illustrates the relevance of unobserved
heterogeneity. We also present two sets of findings that are consistent
with the presence of coordination costs in multinational corporations
(MNCs). First, the relationship between FDI dispersion and organizational
risk is non-monotonic (i.e., U-shaped). Second, a firm’s risk
level reflects the cultural composition of its portfolio of foreign
subsidiaries.
Patterns
of Knowledge Flows and MNE Innovative Performance
M
Yamin and Juliet Otto
Manchester
School of Business
Abstract
: This paper explores cross-border knowledge flows both
across national borders within the multinational enterprise (MNE)
and across organisational borders from external institutions. The
paper’s theoretical base relates to the notion of the differentiated
MNE. A key premise is that MNEs are characterised by a significant
degree of organisational variation and that ceteris paribus the
degree of sub unit diversity in terms of distinctive organisational
and technological capabilities is greater than would be the case
in otherwise similar non -MNEs. The distinctiveness of subs units
is partly a function of their embeddeness in external business and
technology networks suggesting that knowledge flows from external
partners is beneficial to MNE innovative efforts both directly through
their impact on the subunit and indirectly through knowledge flows
from the subsidiary to the rest of the MNE. Another relevant factor
that due to both the tacit nature of subunit knowledge and the organisational
isolation within the MNE the magnitude of knowledge flows will be
kept to relatively low but relatively productive levels.
The
paper uses patent citation and co-patenting data to track cross-border
knowledge flows for a sample of 20 MNEs in the ‘Biopharmaceutical’
Industry. A multivariate statistical approach utilising multiple
regression analysis is used to establish relationships between knowledge
flow variables and innovative performance at the firm level. The
findings confirm that for the MNE, diverse external knowledge flows
are highly beneficial for innovation, especially from local or national
organisations, supporting previous studies emphasising the importance
of local ‘embeddedness’ of MNE units. The findings relating to internal
knowledge flows are in agreement with the argument in the literature
that suggests too much international knowledge transfer within the
MNC may stifle creativity and innovation, but also provide initial
support for the view that benefits can be accrued from cross-border
knowledge creation. While successful innovation requires local differentiation
and knowledge flows from the external environment, for international
knowledge flows between these differentiated foreign MNE units to
be beneficial to innovation, there is likely to be the need for
local capabilities to be complementary to the rest of the MNE, therefore
enabling internal global innovation strategies.
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