Internationaler Joint Venture Erfolg: Eine Meta-Analyse

To analyze the success factors of international joint ventures (IJVs), this study meta-analytically integrates 106 studies of 32.318 firms. The results show that the success factors from the partner level (e.g., operational and strategic fit, partner experience) and IJV level (e.g., commitment, trust, control, interdependence, conflicts, conflict management, and organizational learning) determine IJV performance. Further, results reveal that IJV type, industry, and geographical distance moderate the relationships between success factors and IJV performance. Thus, this study contributes to extant knowledge by synthesizing and contextualizing quantitative empirical IJV research.     

Capital structure,managerial ownership and firm performance: evidence from Egypt

This paper focuses on an important issue, which has generally received less attention in corporate governance literature, being the effect of managerial ownership on the relationship between debt and firm performance. By employing a sample of Egyptian listed firms, the generalized least squares method, as a panel data technique, is used to examine the joint effect of debt and managerial ownership on various measures of firm performance (i.e., Tobin’s q and ROA). The results reveal that managerial ownership moderates the relationship between debt and firm performance, with the relationship being negative (positive) in presence (absence) of managerial ownership concentration. The implication of this finding is that the optimal capital structure is more likely to be contingent on contextual variables as well as the roles, power, and stakes of key internal and external actors. Put simply, the effectiveness of one corporate governance mechanism (i.e., debt) is more likely to be contingent on the effect of other existed corporate governance mechanisms, and hence, there is not one best arrangement of either capital structure or ownership structure, but different arrangements are not equally good.     

Additive Manufacturing and Production Internationalization: An Internalization Perspective

Additive manufacturing (AM) has been touted as a transformative technology that alters the way production is organized across geographical and organizational boundaries, yet little is known what this means for firms' internationalization of production. In this paper, we take an internalization theory perspective to hypothesize how the adoption of AM technology influences a firm's propensity to have an international production subsidiary, the number of foreign production subsidiaries that it operates, and the number of countries in which it has foreign production subsidiaries. To test our hypotheses, we rely on European Patent Office data to identify firms with AM-related patents and match this information to firm-level data of international production subsidiary networks from Bureau Van Dijk. Using both propensity score matching and zero-inflated negative binomial regressions, we find that AM firms are more likely to have a foreign production subsidiary than non-AM firms and operate them in more countries. We find partial evidence that AM firms have more foreign production subsidiaries than non-AM firms, in particular as compared to comparable innovative firms.     

‘Becoming Angry When Another is Treated Fairly’: On Understanding When Own and Other's Fair Treatment Influences Negative Reactions

The present research examined across two experimental studies the impact of how fairly one's partner was treated on the experience of one's own negative emotions and intentions to display antisocial behaviours. Experiment 1 revealed that one's own feelings of anger and frustration were significantly higher when one's partner was treated fairly (i.e. receiving voice in the decision‐making procedure) relative to when one's partner was treated unfairly (i.e. receiving no voice), but only so when the interaction between oneself and the other was characterized by competitive interdependence (i.e. a zero‐sum gain in which a good performance by the other is negative for oneself and vice versa). The opposite pattern of results emerged in the cooperative interdependence condition (i.e. a good performance by the other is positive for oneself and vice versa). Experiment 2 (in which also the fairness of one's own treatment was manipulated) further showed that in the competitive interdependence condition own anger and frustration were higher when one's partner received voice and oneself did not relative to when the partner did not receive voice and oneself did. A similar effect was also obtained for intentions to display antisocial behaviour, which was mediated by negative emotions. These findings thus reveal that the other's procedurally fair treatment affects own responses differently as a function of the given goal interdependence and own treatment.     

Decision-making Autonomy in UK International Equity Joint Ventures

This paper investigates approaches to decision making in international joint ventures (IJVs) from the perspectives of the transactions cost and resource‐based theories of the firm. In particular, the concept of autonomy in decision‐making in a sample of UK‐European equity joint ventures is examined. The study adopts a multi‐method personal interview and self‐administered questionnaire approach to examine managerial perceptions of decision‐making and autonomy in the parent firms and the joint venture. The findings show that there are differences in the perception of autonomy between each of the parent firms, and between the parent firms and the IJV management. When we unpack the nature of autonomy in detail, it is found that IJV managers have greater degrees of operational autonomy than strategic autonomy and that decision making by IJV managers takes place within the context of constraints set within the IJV's business plan. This confirms the transaction cost theory which posits that key internal markets (for management, technology and capital) will be under parent control and also supports the resource based view that key capabilities are protected under the business plan established by the parent firms. The influence on IJV autonomy of the moderating variables IJV performance and IJV duration are also examined.     

Opportunism in Capital Budget Recommendations: The Effects of Past Performance and Its Attributions*

This study uses an experiment to examine the separate and combined effects of managers' loss aversion and their causal attributions about their divisions' performance on tendencies to make goal‐incongruent capital budget recommendations. We find that managers' recommendations are biased by their loss aversion. In particular, managers of high‐performing divisions are more likely than managers of low‐performing divisions to propose investments that maximize their division's short‐term profits at the expense of the firm's long‐term value. We also find that managers' recommendations are biased by their causal attributions. In particular, managers are more likely to propose investments that maximize their division's short‐term profits at the expense of the firm's long‐term value when they attribute their division's performance to external causes (e.g., task difficulty or luck) rather than to internal causes (e.g., managerial ability or effort). Further, the effects of causal attributions are greater for managers of high‐performing divisions than for managers of low‐performing divisions. The study's findings are important because loss aversion and causal attributions are often manifested in firms. Thus, they may bias managers' decisions, which in turn may be detrimental to the firms' long‐term value.     

Regulatory Institutional Distance and MNCs' Subsidiary Performance: Climbing up Vs. Climbing Down the Institutional Ladder

We investigate the possibility of regulatory institutional distance exerting an asymmetric effect on multinational corporations' (MNCs') subsidiary performance depending on the direction of institutional distance. We use the term ‘institutional ladder’ to differentiate between upward distance, referred to as when the subsidiary is operating in a relatively stronger institutional environment than its parent-firm's home country, and downward distance for vice versa. Combining institutional theory with organisational imprinting and learning perspectives, we argue that the implications of regulatory institutional distance on subsidiary performance are relatively more positive (or less negative) when MNCs are climbing down the institutional ladder as compared to when MNCs are climbing up the institutional ladder. We also argue that subsidiary ownership strategy – i.e. the choice of a wholly owned subsidiary (WOS) versus joint venture (JV) – moderates the above-mentioned implications of institutional distance on subsidiary performance. We test these hypotheses based on a panel data-set of 1936 foreign subsidiaries representing 70 host countries and 66 home countries and spanning the 12-year period: 2002–2013.     

Coopetition Strategy – When is it Successful? Empirical Evidence on Innovation and Market Performance

Coopetition (collaboration between competing firms) has been viewed as a potentially beneficial but also a risky relationship for a firm. Earlier literature provides inconclusive evidence in terms of the effects of a firm's coopetition strategy on innovation and market performance, suggesting both positive and negative implications. Some of this variation could be attributed to the fact that coopetition is successful only in certain types of business environment. In order to take the research further, this study examines the effect of a coopetition strategy on the firm's innovation and market performance, focusing on the moderating effects of market uncertainty, network externalities and competitive intensity. The results from a cross‐industry survey of 209 Finnish firms provide novel evidence on the conditions under which coopetition is successful and when it is not.     

Towards a re-conceptualization of firm internationalization: Heterogeneous process,subsidiary roles and knowledge flow

This paper proposes a re-conceptualization of firm internationalization to understand and predict the rapid global expansion of firms since the 1990s, especially those from emerging markets. First, based on a review of existing literature, we re-conceptualize firm internationalization as a heterogeneous process of strategic development of subsidiaries in overseas countries or regions. This re-conceptualization captures the pluralistic character of the process of firm internationalization.Second, we delineate peculiar roles played by subsidiaries in pursuit of multinational enterprise (MNE) headquarters' internationalization strategies. We argue that the HQ's heterogeneous strategies toward overseas subsidiary development define the corresponding roles of subsidiaries, which in turn shape the knowledge-flow patterns within the MNEs. Finally, we link firms' internationalization strategies with different subsidiary roles to generate hypotheses concerning the effect of such links on subsidiary performance. We argue that the proper alignment of HQ's internationalization strategies with subsidiary roles will lead to success of the overseas subsidiaries; by contrast, a mismatch will lead to subsidiary failure. The paper thus contributes to the field of firm internationalization by linking its new conceptualization with the literature on subsidiary roles and knowledge flows in MNEs.     

Organizing for Global Competition

Global information technology (i.e., computer hardware, software, and data communications shared across country boundaries) can support the multinational firm as it seeks to coordinate global operations, diffuse innovations worldwide, or provide integrated service to a global corporate customer. The current study uses information processing theory as the basis for examining alternative organizational designs for information technology in a globally competing firm. Mail survey data gathered from information technology managers in 109 multinationals provide evidence that multinational firms use different and distinct ways of organizing their global information technology activities. The survey data also reveal that in nearly half of the organizations, the way information technology activities are organized is inconsistent with the way the organization is reportedly structured. A follow-up interview-based study sought explanations for these misfits. Several contingency variables were identified that may shed some light to the misfits. These included factors from both the firm's internal and external environments.     

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.     

Unpacking the relationship between post-entry speed of internationalization and export performance of SMEs: A capability-building perspective

Prior research has acknowledged the merits of firms' post-entry speed of internationalization (PSI) for export performance. However, remarkably little attention has been devoted to the transformational mechanisms that enable firms to convert their PSI into performance outcomes. Drawing on the capability-building perspective, we examine the mediating role of two key firm-specific capabilities, i.e., knowledge capability upgrading (KCU) and adaptive capabilities (ADC), on the relationship between PSI and financial and non-financial export performance. Employing a sample of 208 New Zealand exporting SMEs, we found a positive relationship between PSI and both KCU and ADC and found support that PSI's effect on export performance is conveyed through ADC. We found that although KCU does not directly mediate the PSI-export performance relationship, it acts as a driving factor for ADC, which in turn contributes to export performance. This study contributes to the evolving literature on post-entry dynamics of internationalization and capability-building perspective.     

Success Traps,Dynamic Capabilities and Firm Performance

Dynamic capabilities (DCs) are fundamental to the understanding of differential firm performance. However, the question remains why some firms are better at developing and applying DCs than others. In particular, successful firms have been warned against the tendency to fall into a success or competence trap, where success reinforces exploitation of existing competences and crowds out exploration of new competences, hindering the development of DCs. Therefore, this study examines the effects of success traps on DCs and consequently firm performance, taking into account firm strategy and market dynamism. To facilitate this, our study also identifies the commonalities of DCs across firms. Drawing on survey data from 113 UK high‐tech small and medium‐sized firms, we find that success traps have a significant, strong negative effect on DCs, which in turn have a weak positive effect on firm performance; DCs are manifested through absorptive and transformative capabilities as two common features across firms. We also find that the development and application of DCs is related to internal factors (such as success traps) rather than external factors (such as market dynamism).     

The interaction between stock prices and corporate investment: is Europe different?

I find limited evidence of firm learning from stock prices in Europe and uncover multifaceted complementarities between firm informational and operating environments in determining investment sensitivity to stock prices. Specifically, European firms seemingly do not shift away from their own (peer) stock prices even in instances in which their peers’ (own) stock prices become relatively more informative about firms’ fundamentals. This is consistent with European managers adopting more conservative strategies relative to their U.S.-based peers, and stock prices being less revealing in Europe than in the U.S. Furthermore, while a firm may attach equal weight to both its own stock prices and peer price innovations when peer firms are relatively smaller, investment responds more positively to peers’ price shocks than to that firm’s own stock prices when peers are relatively larger. Interestingly, investment sensitivity to peers’ stock prices decreases in peers’ market share, operating performance, and capital intensity. The decrease is accentuated when peer firms have more informative stock prices and are industry leaders or more capital intensive, thereby signaling perceived reduced growth opportunities. Broadly, these results imply that the specifics of the interaction between stock prices and firm behavior in the U.S. do not necessarily generalize to Europe. More important, these different learning patterns are partly attributable to differences in the amount of internal information, which in turn depends on country-level institutional infrastructures.     

Connecting external knowledge usage and firm performance: An empirical analysis

Prior research suggests that firms create breakthrough innovations by using external knowledge, but it also underscores the difficulties firms face in acquiring and applying external knowledge. In this paper, we combine these insights to examine the conditions under which external knowledge usage will either enhance or erode firm performance. In particular, we argue that high external knowledge usage has a negative effect on performance when firms enter multiple new product markets, but a positive effect on performance when firms using external knowledge have higher absorptive capacity. We find general support for our hypotheses, which we test using patent citation data from the global integrated circuit manufacturing industry. Our findings have important implications for managers of firms making strategic decisions about their firms’ product portfolios and the degree to which they use external knowledge.     

Trading on Twitter: Using Social Media Sentiment to Predict Stock Returns

Decision making is often based on the rational assessment of information, but recent research shows that emotional sentiment also plays an important role, especially for investment decision making. Emotional sentiment about a firm's stock that spreads rapidly through social media is more likely to be incorporated quickly into stock prices (e.g., on the same trading day it was expressed), while sentiment that spreads slowly takes longer to be incorporated into stock prices and thus is more likely to predict stock prices on future days. We analyzed the cumulative sentiment (positive and negative) in 2.5 million Twitter postings about individual S&P 500 firms and compared this to the stock returns of those firms. Our results show that the sentiment in tweets about a specific firm from users with less than 171 followers (the median in our sample) had a significant impact on the stock's returns on the next trading day, the next 10 days, and the next 20 days. Interestingly, sentiment in tweets from users with fewer than 171 followers that were not retweeted had the greatest impact on future stock returns. A trading strategy based on these findings produced meaningful economic gains on the order of an 11–15% annual return.     

Evaluating the consequences of abandoning unprofitable customers: A comparison of direct and indirect abandonment strategies

Due to the increasing use of customer databases in many industries, companies nowadays have high visibility about the profitability of individual-level client relationships. This has led some researchers to recommend the implementation of value-based customer management strategies, including the abandonment of unprofitable customer relationships. In this context firms are faced with the choice between direct and indirect abandonment approaches. While direct abandonment strategies tend to be more efficient than indirect ones (i.e., immediate termination of the relationship vs. hoping that the unprofitable customer may leave on her own) they are also claimed to be associated with more severe negative reactions and higher abandonment cost. Based on two surveys among 965 US customers we provide evidence that, despite these beliefs, direct and indirect abandonment strategies do not differ in their negative impact on the abandoning firm. Given that (indirect) abandonment costs are therefore likely to be similar for both approaches, direct abandonment appears to be the recommendable approach for relationship dissolution.     

Expatriate Managers,Product Relatedness,and IJV Performance: A Resource and Knowledge-based Perspective

Drawing from the resource and knowledge-based perspectives, we examine the role expatriates play as a critical managerial resource within the multinational's international joint-venture (IJV). By using a large sample (3772 IJV annual performance years) of Japanese IJVs in the USA from 1991 to 2001, we find that expatriate deployment shows a curvilinear (inverted-U) relationship with IJV performance. Further, this relationship is positively moderated by product relatedness between the parent and the IJV.     

When Gray is Good: Gray Markets and Market‐Creating Investments

Gray markets arise when an intermediary buys a product in a lower‐priced, often emerging market and resells it to compete with the product's original manufacturer in a higher priced, more developed market. Evidence suggests that gray markets make the original manufacturer worse off globally by eroding profit margins in developed markets. Thus, it is interesting that many firms do not implement control systems to curb gray market activity. Our analysis suggests that one possible explanation lies at the intersection of two economic phenomena: firms investing to build emerging market demand, and investments conferring positive externalities (spillovers) on a rival's demand. We find that gray markets amplify the incentives to invest in emerging markets, because investments increase both emerging market consumption and the gray market's cost base. Moreover, when market‐creating investments confer positive spillovers, each firm builds its own market more efficiently. Thus, firms can be better off with gray markets when investments confer spillovers, provided the spillover effect is sufficiently large. These results provide a perspective on why firms might not implement control systems to prevent gray market distribution in sectors where investment spillovers are common (e.g., the technology sector) and, more broadly, why gray markets persist in the economy.     

The Impact of the Potential Entry of Copycats: Entry Conditions,Consumer Welfare,and Social Welfare

This article examines the implications of the potential entry of a copycat who produces and sells a copycat (i.e., imitation) product that competes with the incumbent product. By analyzing a two‐period dynamic noncooperative game between these two firms, we identify conditions under which the copycat can gain successful market entry. More importantly, we find that the potential entry of a copycat creates (implicit) pressure for the incumbent to lower its selling price; hence, it improves consumer welfare. Finally, we identify conditions under which the potential entry of a copycat can increase social welfare (i.e., consumer welfare and the profit of both firms).