Where Do We Go from Here?: Globalizing Subsidiaries Moving Up the Value Chain

This paper studies the international expansion of local subsidiaries of multinational enterprises (MNEs). The main questions asked are why and how MNEs' local subsidiaries in developing economies undertake international expansion. Drawing from the global value chain (GVC) perspective, I argue that local subsidiaries that were initially established to undertake production activities for export-oriented industries do not want to remain at the lowest-value-added position forever. They therefore undertake initiatives to get out of that position. The literature on initiative-taking subsidiary has predominantly focused on them becoming centers of excellence via R&D and innovation in the host country. I propose a different route of local subsidiary upgrading via foreign direct investment in more advanced countries. This strategy helps not only to gain internal prominence within the MNE network, but also to improve its external position within the GVC vis-à-vis the lead firms. The paper uses an in-depth case study of a Thai subsidiary of a Taiwanese electronic MNE to explore the transformation of the subsidiary from simply manufacturing for exports to becoming a strategic international expansion arm for the parent MNE.     

高科技人才国际争夺态势分析与对策

新一轮高技术人才争夺战正在全球范围内展开,并呈现为三大态势：对信息技术人才的国际争夺异常激烈;发达国家“争抢”发展中国家的高科技人才;发展中国家高科技人才严重流失。培养人才、吸引人才、善待人才,是我国科学技术实现跨越式发展的需要。本文从高科技人才的特点出发,从企业的角度提出我国企业在全球高科技人才争夺战中取得主动权,构建新世纪企业竞争力的对策建议。     

Knowledge sharing dynamics in international subcontracting arrangements: The case of Finnish high-tech SMEs

This paper focuses on an under-researched topic of knowledge sharing dynamics in international subcontracting relationships of SMEs. Based on in-depth qualitative analysis of three Finnish high-tech firms, our findings reveal that not only cost and performance expectations motivate SMEs for international subcontracting, but also the factors like lack of in-house alternatives, the volatility of workload, and need for speed in growth-related activities such as deliveries play an important role. We further found that the SMEs try to balance internal risks/uncertainty and external risks/uncertainty throughout international subcontracting. Our paper contributes to the extant literature by being one of the first studies to specifically highlight the range of knowledge sharing and knowledge protection mechanisms used in international subcontracting in SME-SME relationships in which partners come from different institutional settings and physical locations. Moreover, this paper is one of the few studies to specifically highlight the role of time in knowledge sharing from the buyer's point of view as well, specifically by emphasizing the need to balance the internal and external risks during the life-cycle of international subcontracting while balancing short-term challenges and long-term strategic development plans.     

Developing high-technology latecomer firms to compete internationally: A three-sector growth model

In contrast to the mainstream approach, which focuses exclusively on how foreign multinational enterprises move into developing countries, this paper researches how high-technology latecomer multinational enterprises grow from the domestic institutional context into the international market. It draws on the economic development theory and the dynamic capabilities perspective to present a three-sector growth model to understand how high-technology latecomer firms establish themselves in international competition through the interplay of the social sector, the state, and the market. The three sectors may work together when they are pushed by external threats or pulled by internal interests. High-technology latecomer firms, at the stage of “getting there,” would call for the caring hand of the social sector; at the stage of “staying there,” would need the competition of the market; and between these two stages, the discipline of the state.     

Does International Economic Integration Lead to a Cleaner Production in China?

In contrast to the Pollution Haven Hypothesis, the Trade‐Up Hypothesis holds that international integration helps improve firms' environmental performance in developing countries. Using firm‐level data from Shanghai, this article examines how international linkages, in the form of foreign direct investment or international trade, affect firms' environmental compliance and performance. We find that firms with international linkage via ownership exhibit better compliance with environmental regulation and emit less pollution than firms with no international linkage. We also find that firms with international linkage via market exposure are more likely to exhibit better compliance with environmental regulation than firms with no international linkage, but find no evidence that the former emit less pollution than the latter. This provides a piece of empirical evidence for the Trade‐Up Hypothesis.     

Toward an integrated theory of multinational evolution: The evidence of Chinese multinational enterprises as latecomers

This paper seeks to address the fundamental question of how much we can modify and enhance the ownership–location–internalization (OLI) Model of multinational enterprise (MNE) formation to reflect the new evidence of MNE latecomers from the developing countries. The evidence of three longitudinal cases from China suggests that the traditional OLI and the newly proposed linkage–leverage–learning (LLL) Model of MNE formation can be readily integrated within a content-process framework of MNE evolution so as to better explain all types of MNE from both the developed and the developing countries.     

Subsidiary embeddedness as a determinant of divisional headquarters involvement in innovation transfer processes

This paper conceptualizes divisional headquarters as an important hub-firm within the MNE, orchestrating innovation transfer processes between subsidiaries. It is argued that the internal and external embeddedness of a subsidiary hosting an innovation development project subsequently influences divisional headquarters involvement in the transfer of that innovation. In this way, embeddedness, i.e., the relationships that firms have with each other in the innovation development phase, is brought to the fore as an important factor for MNE subsidiaries hosting innovation development projects for explaining the involvement of divisional headquarters in a subsequent transfer. This highlights divisional headquarters as an active orchestrator of innovation transfers within the MNE. Data from 169 innovation transfer projects as well as 146 internal and 121 external embedded relationships at subsidiary level support the argument of embeddedness as a driver of divisional headquarters involvement in subsidiary innovation transfer projects. From a business network perspective, the findings highlight the role of internal and external embeddedness during innovation development in the subsequent involvement of divisional headquarters in the transfer phase. Embeddedness is not only important for subsidiaries in the innovation development phase but also for divisional headquarters involvement in, and orchestration of, innovation transfer.     

Transforming resources to improve performance of technology-based firms: A Taiwanese Empirical Study

This study analyzes how firms transform resources into performance, and proposes that dynamic capabilities serve as a link for transforming internal and external resources first into firm competitiveness, and then into financial performance. One hundred and ninety-six Taiwanese technology-based firms are adopted as a research sample. The resource-based view of the firm, social capital theory, and dynamic capabilities are integrated to formulate a comprehensive framework for explaining the performance variation of technological-based firms. Analytical results demonstrate that technological-based firms can transform their resources into profit via dynamic capabilities and competitiveness.     

Analysing the Role of International Drivers for Eco-innovators

The aim of this paper is to analyse the impact of several “international” drivers on firms developing or adopting eco-innovation (i.e., eco-innovators), with the help of a bivariate probit model with sample selection and using a database of Spanish innovators. We test how the eco-innovative behaviour of innovative firms is affected by international sources of funding, one international regulation (the European Union Emissions Trading Scheme, EU ETS), customers in foreign markets, cooperation with international institutions and the presence of foreign equity in firms. Our results show that the influence of international factors on the eco-innovativeness of firms is modest. Public subsidies from international sources do not increase the likelihood of being an eco-innovator, although national sources of funding do. The EU ETS and cooperation with international actors positively and significantly affect eco-innovators. Firms with foreign equity are not more likely to eco-innovate and selling abroad does not increase the likelihood of being an eco-innovator.     

Self-regulation of corporate governance in Russian firms: translating the national standard into internal policies

We consider how firms develop internal corporate governance policies based on external nation-wide standards. Flexibility in interpreting external standards allows firms to develop internal regulations focused on governance procedures that are only loosely coupled with expected governance outcomes. Our results demonstrate that firms tend to adopt less restrictive policies than what is recommended by the national standard and are more willing to adopt policies regulating governance procedures than policies regulating governance decisions. We also argue that the process of translating external standards into internal guidelines is affected by firm-specific characteristics and explore factors that determine to what extent firms switch the focus of internal policies from regulating governance decisions to regulating governance procedures.     

Host-country Headquarters of U.S. Firms in China: An Empirical Study

Recent studies show that large multinational enterprises (MNEs) adopt an organizational unit, called host-country headquarters (HCHQ), in key foreign countries (Ma and Delios, 2010; Ma, Delios and Lau, 2013). In this study, we examine the factors that are associated with the establishment of an HCHQ by US firms in China. We hypothesize that an HCHQ is associated with both firm-specific factors and host country-specific factors. We find that an HCHQ is associated with the firm's scope diversification and degree of internationalization, and the strategic importance of foreign host country and subsidiary diversification in that host country. The findings are based on archival data of U.S. Fortune 500 firms. The findings add to the understanding of an important organizational structure of large U.S. firms in China, and possibly to MNE structures more widely in key foreign countries.     

Creating value through offshore outsourcing: An integrative framework

This article proposes an analytical framework to explain value creation through offshore outsourcing by addressing a key question: How do firms create value by outsourcing their business functions to foreign external providers? The growing prevalence of offshore outsourcing as a dominant business practice in global business makes this question worthy of further research attention. Situated within the organizational design literature, our proposed value creation framework also draws from strategic resource management, disintegration, location-specific resourcing, and externalization (D–L–E) and contingency perspectives. Our analysis shows that firms embarking on offshore outsourcing create value by effectively managing their internal and external resources in accordance with a changing global environment. The framework has significant implications for theory and practice and suggests avenues for further research.     

European Integration and the Integration of European Labour Markets1

Abstract. Will European economic and monetary union bring about a unification of European labour markets, and is there likely to be a convergence of patterns of labour market organisation among Community countries? The evidence discussed suggests that a major increase in unskilled mobility across the EC is unlikely, at least concerning EC citizens. Among skilled labour, a major increase in international mobility is also unlikely on account of differences in skill organisation among countries. In contrast, the integration of European capital is causing some integration of enterprise internal labour markets across national borders as firms seek to integrate their managerial and technical workforces. In the “high-tech” area, skills are in a state of flux, and the possibility that European labour markets will emerge is much stronger than for other categories.     

Improving supply chain responsiveness through Advanced Manufacturing Technology: the mediating role of internal and external integration

Abstract

Responsiveness is one of the key performance factors that firms need to face up to the challenges posed by today’s markets. Many manufacturing firms are investing in advanced manufacturing technology (AMT) with a view to improving competitiveness. However, empirical evidence shows that investments in AMT alone do not lead to improvements in performance. In this study, a model that links AMT implementation and responsiveness through internal integration and external integration is proposed. A sample of 441 Spanish industrial companies was used to test the model through structural equation modelling. The findings highlight that internal integration needs to be supplemented with external integration in order to ensure that the implementation of AMT will result in improved responsiveness. Supply chain managers should focus on integration within the supply chain – firstly internal and later external – to obtain returns on investments in AMT in the form of improved flexibility and more reliable and faster deliveries.     

基于多元回归的中美高技术产品贸易研究

美国长期以来都是中国高技术产品贸易的重要合作伙伴,对中国贸易和相关产业的发展有着举足轻重的作用。本文首先对中美高技术产品贸易现状进行分析,明确中美高技术贸易所具有的贸易规模不断扩大、贸易构成不平衡和我国贸易竞争力薄弱的特点;再通过对中美高技术产品贸易影响因素的分析,从技术创新角度找到影响高技术产品贸易的主要因素;最后为促进两国贸易发展提出建议。     

International Evidence on the Determinants of Organizational Ethical Vulnerability

This paper proposes a model to explain what makes organizations ethically vulnerable. Drawing upon legitimacy, institutional, agency and individual moral reasoning theories we consider three sets of explanatory factors and examine their association with organizational ethical vulnerability. The three sets comprise external institutional context, internal corporate governance mechanisms and organizational ethical infrastructure. We combine these three sets of factors and develop an analytical framework for classifying ethical issues and propose a new model of organizational ethical vulnerability. We test our model on a sample of 253 firms that were involved in ethical misconduct and compare them with a matched sample of the same number of firms from 28 different countries. The results suggest that weak regulatory environment and internal corporate governance, combined with profitability warnings or losses in the preceding year, increase organizational ethical vulnerability. We find counterintuitive evidence suggesting that firms’ involvement in bribery and corruption prevention training programmes is positively associated with the likelihood of ethical vulnerability. By synthesizing insights about individual and corporate behaviour from multiple theories, this study extends existing analytical literature on business ethics. Our findings have implications for firms’ external regulatory settings, corporate governance mechanisms and organizational ethical infrastructure.     

Navigating institutional change: An historical perspective of firm responses to pro-market reversals

We explore the strategic responses of multinational enterprises (MNEs) in the context of protracted institutional change. Analyzing the long-run trajectory of three British MNEs during the setting of Indian independence, we find that these firms engaged in a series of tactical and strategic responses to address uncertain institutional changes in the form of pro-market reversals. Our findings reveal how MNE responses are characterized by path dependence and path creation in that they are historically conditioned by patterns of previous decisions and actions. We demonstrate how tactical responses to earlier institutional changes coalesce to shape dominant strategic responses in later periods. Our paper contributes to a more holistic conceptualization of how MNEs strategize in response to pro-market reversals by integrating a business history lens.     

Developing the eclectic paradigm as a model of global strategy: An application to the impact of the Sep. 11 terrorist attacks on MNE performance levels

We expand the eclectic paradigm into a model of global strategic management and apply the latter to the analysis of the impact of the Sep. 11th terrorist attacks on the MNEs' performance to investigate the effect of exogenous shocks on the global strategies of firms. First, we integrate MNE resources and capabilities, strategy, and structure with the eclectic paradigm. Then we focus specifically on location attractiveness to examine how MNEs adjust internal factors with the exogenous distortions caused by an extreme environmental shock. We suggest that this adjustment is carried out at four levels: resources and capabilities, strategy, structure, and choice of location which jointly determine MNEs' performance. Although we restrict the application of this model of global strategic management to the post-Sep. 11th, our model may be applied to other extreme events that change, at least partly, the worldwide, or regional, economic order.     

Strategy frames in coopetition: An examination of coopetition entry factors in high-tech firms

Collaboration with competitors offers unique advantages such as increasing market, innovation, and financial performance. However, the degree of coopetition adoption varies between firms, as does the ability to achieve intended outcomes. We address this variety through the lens of strategic frames, essential for understanding business environment interpretations that managers develop, interactions with other actors that they engage in, and the subsequent performance firms may achieve. We examine associations between external and internal coopetition factors as perceived by coopeting managers.To single out the coopetition factors seen by respondents as the most relevant and to evaluate their mutual associations, we apply traditional regression analyses on survey data collected from 352 high-technology firms in Poland. To fully embrace the causal complexity, we advance our regression-based insights by using a complementary necessary condition analysis (NCA) and bottleneck analysis.Our results suggest that coopeting managers place higher importance on customer-driven rather than on resource-driven coopetition factors when considered as sufficient leveraging factors. Still, the complementary NCA reveals internal resources as critical factors for the perception of external factors of coopetition. Finally, we identify external technological development as the most limiting bottleneck for the perception of most internal coopetition factors, highlighting coopetition as a technology-driven strategy.     

Business incubators as international knowledge intermediaries: Exploring their role in the internationalization of start-ups from an emerging market

This paper investigates how business incubators facilitate the international growth of start-up clients originating from emerging markets. Drawing key insights from a network perspective, we explore the processes by which business incubators create international linkages between the networks of knowledge creation and knowledge application. Our analysis of interviews and archival data on five Chinese high-tech business incubators reveals that clients-interface, market-interface, and knowledge recombination practices of the business incubators create international knowledge linkages, which in turn facilitate the international growth of their start-up clients. This role of incubators as knowledge intermediaries is achieved through several networking and learning mechanisms, including clustering and coaching of international clients, upstream and downstream networking in international markets, and client-market matchmaking internally. This study demonstrates business incubators as an efficient modality of internationalization for locally bound international knowledge and network scarce start-up clients.