Abstract: In this study, we propose a novel approach to assess portfolio decisions in multinational enterprises. We categorize each operation in a host country in terms of a set of critical, high asset specificity contracts with various stakeholders. These high asset specificity contracts are then assessed in terms of the information problems (bounded rationality) they are associated with, as well as the possible challenges of proper execution related to a lack of contracting parties’ reliability (bounded reliability). Through a case study, we find that portfolio decisions incorporating bounded rationality and bounded reliability challenges differ from decisions based on conventional technical and economic analyses. This suggests that conventional portfolio analyses may be missing key analytical variables, thereby somewhat divorcing such analyses from mainstream scholarly IB work.

Abstract: Service firms have been rapidly expanding into international markets in order to tap new markets and enhance their competitiveness. Given the potential adverse performance effects of rapid internationalization, firms face a dilemma to simultaneously manage their internationalization speed and performance. We investigate service firms’ resources that can potentially moderate the internationalization speed and performance relationship. We posit that process capability, relational capital, human capital and international experience may mitigate some of the negative influences of internationalization speed on firm performance. We test our hypotheses on a sample of Indian software service firms. Our empirical findings largely support our predictions and depict a more nuanced influence of customer relationship and human capital on the speed – performance relationship.

Abstract: We conceptualize corporate social performance (CSP) as firm legitimacy and decompose it into two types of legitimacy: social and regulatory legitimacy, according to who grants legitimacy. We argue that internationalization has a negative effect on social legitimacy. To gain social legitimacy, a firm has to conform to the norms, values and expectations of stakeholders, but to satisfy diverse normative demands that are embedded in unique cultural, socioeconomic and ethical institutions is a big challenge for MNCs. By contrast, internationalization has a positive effect on regulatory legitimacy. Because typical stakeholder demands of this domain (government, accreditation, licensing and certifying organizations) are likely to be standardized and consistent across countries, MNCs are motivated to comply with more stringent rules in environment protection and corporate governance to have the scope economy advantage that they can leverage across countries.

Abstract: Fragmented industries differ from concentrated industries as they are characterized by low entry and exit barriers, small or no scale economies, low market power, high substitutability among products and strong price competition. However, there has been little quantitative research on the shifting international boundaries of firms in fragmented industries. One line of inquiry suggests that country-level market characteristics impact foreign direct investment (FDI) decisions. A second line suggests that firm characteristics drive FDI. A third suggests that competitive dynamics drive FDI as firms react to the expansion of competitors. Within this project, we examine these drivers of the pace of international expansion in retailing, a relatively fragmented industry with a recent internationalization history, using a sample including 947 firm-year observations from 1997 to 2006.

Abstract: We adopt an international diversification perspective to study ambidexterity and make two claims: First, the focus on international diversification distracts firms from balancing explorative and exploitative activities. Firms with a high degree of international diversification show lower levels of ambidexterity. Second, and despite firms’ lack of attention to ambidexterity, we submit that ambidextrous firms are particularly able to benefit from international diversification. Firms with a high degree of international diversification have the attention capacity and structure to particularly benefit from balancing exploration and exploitation. Studying a sample of 64 international insurance firms over a nine year period provides support for our arguments. We derive contributions to the ambidexterity literature as well as to the debate on the performance implications of international diversification.

Abstract: This paper examines how political connections influence a firm’s international strategy. I argue that connections with the home-country’s political authorities help firms to alleviate the impact of environmental risk, to obtain better information, and to reduce capital costs. Accordingly, I propose that political connections are positively associated with a firm’s international investments, the level of political risk and the level of political alignment of the chosen host-countries. I test hypotheses on a sample of international investments by the largest French firms during 2003-2012. Results suggest that politically-connected firms invest more internationally, following a distinct pattern of host countries’ level of political risk and level of political alignment with France relative to firms without political connections. This heterogeneity is contingent on the type of political connections and is influenced by environmental changes that alter the value of political connections.