Abstract: How does the stock market react to competitive actions by firms and their rivals? We empirically explore capability-seeking investments by firms from different strategic groups within an industry and examine their impact on rival firms in the competitive context of global software services. We argue that when firms make foreign investments to access high-value added capabilities (software architectural skills – requiring high levels of tacit, socially complex knowledge), they face greater challenges compared to firms making investments to access low-value added capabilities (software implementation skills – requiring only operational and cost efficiency). Analysis of cumulative abnormal returns in response to capability-seeking investment announcements made by a sample of leading U.S. and Indian firms in the global software services industry provides support for these arguments.

Abstract: As MNCs in increasingly diversified industries are able to disaggregate their value chains into smaller parts the distribution of power amongst units in the MNC has increased with control becoming problematic to attribute to one single unit. The papers focuses on how power is gained and utilized and were control ultimately rests within large organizations, such as the intra-organizational network of MNCs. The paper draws on captive offshoring as a canvas, upon which HQ orchestrates mandates and resources, and through which subsidiaries gain and develop power in their networks but also through which HQ can utilize the mechanism to retake control. To underscore the context of the power/control dilemma we draw on the resource dependence literature and economic property rights literature to illustrate the nexus between captive offshoring and mandates in distributed power and control.

Abstract: We test empirically for the existence of ‘reverse knowledge transfer’ effects using a firm-level panel of more than 1,600 manufacturing MNCs and over 2,400 overseas affiliates, covering 30 home and host countries. We find that highly-skilled labour in overseas affiliates has a significant impact upon the productivity of parent companies, suggesting the existence of a strong reverse knowledge transfer effect. We also establish that this knowledge transfer effect is greater (1) when the overseas affiliates are in related, rather than unrelated, industries; (2) when the overseas affiliates are downstream, rather than upstream, in the MNCs global value chains; (3) when the overseas affiliates involve horizontal, rather than vertical, FDI; and (4) when the overseas affiliates are wholly-owned subsidiaries, rather than joint ventures.

Abstract: In examining the physical and functional aspects of global value chains (GVCs), scholars have focused almost exclusively on two key decisions – control and location – as the primary determinants of these organizational structures. We examine how the dynamic, temporal nature of GVCs can be further explained via a third organizing decision that has received surprisingly little attention in this literature: the length of time that control and location settings remain in effect for each activity. We advance the theory that while control and location are critical choices faced by GVC orchestrators, assignment duration also drives learning- and cost-based value creation and thus plays a critical but overlooked role in global value chain organization.