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A Multilevel Perspective on Corporate Governance: Firm, Industry, and Macro Environments  

Alessandro Zattoni and Hans van Ees

At the beginning of the 20th century, the publication of The Modern Corporation and Private Property opened the debate about the potential negative consequences associated with ownership dispersion. Since then, governance scholars aimed at understanding which corporate governance mechanisms could help companies both to prevent the agency problems connected with managerial opportunism, and to improve the strategic decision-making at the top of the firm. These early studies were mostly (or almost only) focused on the corporate governance of widely held companies listed in Anglo-American countries, thus neglecting for a long time the investigation of governance issues and mechanisms in other geographical settings. In addition, the main objective of these studies was to identify universal best practices (like an independent board, the separation of the CEO and Chair positions, or the use of high-powered incentives) that could address the agency problems of large listed companies. An implicit assumption in this stream of research was that firm-level agency problems do not vary across industry and macro environments, i.e., industry- and macro-environmental variables cannot either aggravate or attenuate agency problems. This long-standing tradition has been increasingly criticized by scholars arguing that industry- or macro-environmental variables could directly (or indirectly through their influence on governance mechanisms) affect corporate governance problems. Based on this idea, they started to develop sound theoretical models and to adopt rigorous empirical research methods in order to investigate if and how the characteristics of industry and macro environments could address firm-level agency problems. A first stream of studies argued and empirically analyzed whether some industry conditions (e.g., high competitiveness) could attenuate managerial discretion and, thus, partly solve firm-level agency problems. A second stream of research argued and empirically tested whether, instead, the high quality of the macro environment (e.g., the national or supranational level of investor protection, transparency, or rules enforcement) could directly address corporate governance problems, with beneficial effects on firm performance. More recently, scholars started to develop a multilevel investigation of corporate governance problems and mechanisms by including firm-, industry- and macro-environmental variables in their theoretical frameworks. In particular, through building new theoretical frameworks (e.g., based on the resource dependence or the institutional theory) and profiting from the development of new statistical techniques (like the multilevel statistical analysis or the fuzzy-set qualitative comparative analysis), scholars increasingly explored if and how the interaction among firm-level governance mechanisms and industry- and/or macro-environmental variables could address agency problems and produce positive consequences on firm long-term results. This new research stream suggests that the industry and macro environments affect the effectiveness of governance mechanisms and processes, and so represents boundary conditions that limit the generalizability of our research findings outside a specific context. In this way, they invite governance scholars either to contextualize their theories and results about firm-level governance mechanisms within a specific industry and macro context, or to explore the potential influence of one or more contextual variables (e.g., at the industry, country, or supranational level). Thanks to the results of this new stream of research, scholars and practitioners have been able to develop a richer and more contextual understanding of both (a) the relationships among corporate governance mechanisms and industry- and/or macro-environmental conditions, and (b) their direct and indirect impact on various company results.


The Application of Real Option Approach in International Business Research  

Tailan Chi and Yan Huang

The real option theory (ROT), a theory on investment decision making under uncertainty, has been applied to analyzing a broad range of questions in international business (IB). In the face of uncertainty, any discretion that the managers of a multinational enterprise (MNE) have over the timing, scale, speed, and sequence of investing or using the firm’s resources, in the forms of physical or intellectual capital or managerial time and effort, can be a real option. Such options confer upon the managers the right, but not the obligation, to exploit the upside potential while limiting the downside risk. Uncertainty, irreversibility, and absence of immediate and complete preemption are three necessary conditions for a real option to create value. Uncertainty offers opportunities to gather more information in the future, and such information can help managers make better decisions or alter prior decisions for improvement. Irreversibility is defined as the proportion of the investment committed to a project that cannot be recouped if the project is abandoned. Preemption refers to the revocation of the decision-making discretion that nullifies the option. It is possible to distinguish seven types of real options that have been examined in IB studies: (a) option to defer, (b) option to abandon/exit, (c) option to exchange, (d) option to grow/scale up, (e) option to contract/scale down, (f) option to switch, and (g) compound options. These types of options are found to influence a firm’s international market-entry strategies (e.g., location, timing, scale, speed, and mode) and the configuration and organization of the firm’s geographically dispersed production network. ROT has also been integrated with other economic theories, such as transaction cost economics and resource-based view, to better understand these decisions. Although ROT assumes a strong form of rationality on the part of the decision maker, it is also possible to incorporate cognitive or cultural biases into the theory and give the theory’s analysis greater realism. ROT represents a theoretical approach that can be integrated with various economic and noneconomic theories. More work in such theoretical integration can potentially help researchers gain deeper or more complete understandings of IB questions. Extant studies in IB typically analyze only a single type of option in isolation. But the global production network of a MNE typically has a portfolio of different types of options embedded, and the different types of options inevitably interact. The study of interactions among two or more types of options under different sources of uncertainty is likely to yield new insights on the strategy and organization of the MNE.


Business Groups as an Organizational Model  

Asli M. Colpan and Alvaro Cuervo-Cazurra

Business groups are an organizational model in which collections of legally independent firms bounded together with formal and informal ties use collaborative arrangements to enhance their collective welfare. Among the different varieties of business groups, diversified business groups that exhibit unrelated product diversification under central control, and often containing chains of publicly listed firms, are the most-studied type in the management literature. The reason is that they challenge two traditionally held assumptions. First, broad and especially unrelated diversification have a negative impact on performance, and thus business groups should focus on a narrow scope of related businesses. Second, such diversification is only sustainable in emerging economies in which market and institutional underdevelopment are more common and where business groups can provide a solution to such imperfections. However, a historical perspective indicates that diversified business groups are a long-lived organizational model and are present in emerging and advanced economies, illustrating how business groups adapt to different market and institutional settings. This evolutionary approach also highlights the importance of going beyond diversification when studying business groups and redirecting studies toward the evolution of the group structure, their internal administrative mechanisms, and other strategic actions beyond diversification such as internationalization.


Business History in International Business  

Teresa da Silva Lopes

Historical research on the multinational enterprise has long been important in international business studies. When the discipline of international business first developed in the late 1950s, historical evidence was frequently used to build generalizations and propose theories. However, over time, that tradition eroded, as the discipline moved toward using more quantitative and econometric reasoning. International business and business history share important commonalities, such as the topics they address. These include: multinational patterns of international trade and foreign investment; the boundaries and competitiveness of the multinational enterprise; changes in organizational strategy and structure of multinational enterprises and the connections between the two; coordination and management of the activities of the multinational enterprise; impact of multinationals on knowledge and capital flows in host countries; and investment, resilience, and survival in high-risk environments. Nonetheless, the approaches followed can be quite distinct. While both disciplines consider the firm and other institutional forms as the unit of analysis, the way context and the environment are integrated in the analysis, the methodologies followed, the types of comparative analysis carried out, the temporal dimensions adopted, and the way in which theory is used are quite distinct. There are possible ways forward for international business history to be more integrated and provide new dimensions in international business studies. These include using history as a generator of theory to understand phenomena such as the origins of competitiveness and as a way to uncover phenomena that can be fully understood only after the situation has occurred, such as the impact of entrepreneurship on economic development; as a way to check false claims that certain phenomena is new; and to inform discussions on complex phenomena and grand challenges such as globalization and deglobalization, investment in high risk environments, and climate change.


Corporate Ethics Codes and Practices  

Tanusree Jain and Jiangtao Xie

Having a Code of Ethics (COE) has become a common practice within large companies since the 1980s. A COE serves multiple functions for organizations: as an internal control mechanism to guide employees during ethical dilemmas, a benchmark for fostering ethical corporate culture, and as a communication tool to signal organizational commitment to stakeholders. Four major theoretical frameworks underpin the extant academic scholarship on COEs. In particular, organizational justice and stakeholder theories highlight the role of individuals in adopting and shaping a COE, and the institutional theory emphasizes the influence of the exogenous environment on the convergence and/or divergence of COEs across firms and contexts. Integrative social contracts theory captures the significance of both individuals and the institutional environment and views COEs as a contractual obligation that guides managers and employees to manage contradictions between local and global norms. Within these theoretical framings, significant variations in the nature and stakeholder orientations of COEs have been detected across the developed and developing world. In the developed contexts, a comparative institutional analysis using the national business system approach shows that while in the compartmentalized cluster (the United States, United Kingdom, Canada, Australia, and Japan), expectations of market participants and firm owners are key drivers of COEs; in the collaborative cluster (Germany, Ireland, and the Netherlands), firms develop COEs that have a wider focus oriented towards multiple stakeholders such as employees, suppliers, and the environment. Whereas in the state-organized cluster (South Korea, Spain, Greece, and Slovakia) the role and the nature of the state are important guiding factors. The coordinated industrial district cluster (Italy) characterized by alliances among smaller artisanal firms demonstrates a human-centric view of business embedded within their COEs. Excluded from the national business systems categorization, the Nordic cluster displays a unique distinctiveness in its approach to COEs through the presence of a structured moral apparatus within firms. In the developing world, country-specific institutional characteristics play a vital role behind adoption of localized a COE, yet nonstate actors—namely multinationals enterprises, and international and supranational institutions—promote the diffusion of hyper-norms. Given the pervasiveness of corporate misconduct despite the global diffusion of COEs, scholars must pay heed to understand the conditions under which gaps between a COE adoption and implementation arise. Equally, more scholarly attention needs to be accorded to a systematic investigation of COEs in transitional and emerging contexts. This becomes particularly necessary in the face of sociological changes, a fast-evolving landscape of local and transnational regulations including those arising from global events such climate change, and COVID-19, and the co-existence of multilevel COEs at the industry, firm, and professional levels.


Corporate Governance and the Multinational Enterprise  

Roger Strange

Corporate governance refers to the array of structures, mechanisms, and institutional constraints that influence the ways in which firms control and manage their operations. Most analyses of corporate strategy implicitly assume that firms are risk-neutral and their strategic decisions are guided by short-term profit maximization. But foreign direct investment (FDI) projects undertaken by multinational enterprises (MNEs) typically require substantial commitments of resources, involve high levels of uncertainty and risk, and may not yield positive returns for many years. MNEs’ willingness to engage in outward foreign direct investment (OFDI) projects is likely to depend inter alia on the identity, expertise, and relative influence of the MNE’s major shareholders and other relevant stakeholders and their objectives, attitudes to risk, and decision-making time horizons. Furthermore, the impact of corporate governance mechanisms and structures will depend upon the formal and informal institutional attributes in both host and home countries. Any consideration of MNEs’ FDI strategies must therefore consider not only the MNEs’ own resources and capabilities but also their ownership structures and the governance environment within which they operate. Future research should focus on the impacts of both formal and institutions on MNE corporate governance and FDI strategy, how internal “conflicting voices” regarding FDI strategy are resolved, and how the impact of corporate governance on FDI may depend upon various firm (e.g., size) and project (e.g., FDI motive) characteristics.


De-Internationalization: The Other Side of Internationalization  

Gabriel R. G. Benito

Companies rightly regard internationalization decisions as strategic; they are long-term, require and bind up resources, and have important implications for companies’ performance. But internationalization is inherently demanding and risky, changes are likely to happen, and there is no guarantee of a positive outcome. The notion of de-internationalization captures the other side of internationalization: actions that reduce a company’s engagement in or exposure to international or border-crossing activities. One important dimension of de-internationalization is its extent, which ranges from a total withdrawal from international operations to partial retractions, such as exiting from a particular market, and minor adjustments, such as downscaling activities. Another key dimension is the volition aspect of de-internationalization, which distinguishes between de-internationalization decisions that are principally taken by the companies themselves, and those that have been imposed upon the companies by other actors, such as host-country authorities. There are three main types of de-internationalization: reductions in trade volume, market withdrawals, and divestments. Extant research, while limited, has tended to take either a behavioral perspective or an economics perspective. The latter takes a choice (or decision) perspective on de-internationalization, while the former emphasizes the process aspects of such actions. De-internationalization does not need to be the end of the road for companies’ foreign involvement. There is mounting evidence that de-internationalization can be temporary, with companies re-entering foreign markets after a time-out period, often by implementing better suited approaches when retrying.


External Corporate Governance Mechanisms: Linking Forces to Behaviors  

G. Tyge Payne and Curt Moore

Corporate governance research has a long and varied history, having evolved from a broad number of scholarly disciplines, including sociology, law, finance, and management. Across these various disciplines, it is maintained that governance is essential to corporate success, as it provides strategic and ethical guidance to the company. While research has largely focused on internal mechanisms through which governance is enacted (such as ownership arrangements, board structures, managerial rewards and incentives, etc.), external forces and mechanisms are increasingly important to modern businesses. External corporate governance mechanisms emanate from outside the organization and support forces that promote governance structures, processes, and practices by top executives and board directors. Institutions, industries, markets, networks, and strong individual external stakeholders all work to influence corporate governance decisions and behaviors both directly and indirectly. The external forces induce mechanisms that influence desirable behaviors or intervene when internal mechanisms are compromised or ineffective. Recent literature on external governance mechanisms can help scholars and practitioners develop a better understanding of this important area of inquiry, and future research should consider three broad suggestions to move the field forward: differentiating between forces and mechanisms; recognizing unique stakeholders, boundaries, and levels of analysis; and improving empirical designs to better recognize and understand what factors matter in instituting governance adjustments and behavior changes.


From Absorptive Capacity in International Business to Strategic Flexibility of Multinational Corporations  

Carine Peeters

Both the absorptive capacity (AC) and international business (IB) literatures are interested in knowledge processes and learning in organizations. Although originating from different streams of research, AC and IB were thus meant to meet and reinforce each other. Fundamentally, the role of AC in IB is to condition the performance outcome of firms’ internationalization efforts. Firms benefit from their IB activities conditional on being able to absorb new knowledge and learn. In other words, multinational corporations (MNCs) need to have the necessary AC to overcome their liabilities of foreignness and outsidership. Short of AC, the costs and challenges of entering foreign markets and operating across countries are likely to outweigh potential performance gains. Moreover, AC plays a role in the technological upgrade and economic development of nations, as it helps firms in emerging economies to benefit from spillovers of foreign direct investments by MNCs from more economically advanced economies. And national governments can play an important role to facilitate this effect by developing appropriate economic and innovation policies that support knowledge creation and learning. Firms can also proactively develop AC. For instance, MNCs can nurture a broad knowledge base that can be leveraged in different contexts and opt for a decentralized structure with mechanisms that help subsidiaries access the knowledge base of the parent organization. They can also practice specific routines to identify and access relevant knowledge from their external environment, transfer that knowledge in their organization, and assimilate it in their own knowledge creation processes. Moreover, MNCs can adopt human resources management practices that help raise the capacity and motivation of their employees to acquire and exploit new knowledge. Ultimately, the most important contribution of AC in IB might be to help MNCs develop the strategic flexibility that enables them to thrive in dynamic environments. High-AC MNCs may indeed be in a better position than other firms to (a) build diverse options to prepare for uncertain evolutions in the market, (b) access flexible resources to allocate to new courses of actions, and (c) redeploy resources across options over time. Unpacking the exact mechanisms as well as boundary conditions for the role of AC in building strategic flexibility offers ample opportunities for future research on a highly relevant topic for MNCs.


Global Strategy and Multinational Corporation Capabilities  

Donald R. Lessard and D. Eleanor Westney

Strategy in a global setting involves competition in industries that extend across national boundaries and among firms with different national home bases that may tap into strategic resources in more than one location. The resources that the firm accesses from its home country provide it with international competitive advantage only if they are relevant in other markets, if the value they create is appropriable, and if they are transferable to those markets (RAT), These resources include tangible assets and factors of production, but, importantly, also the capabilities the firm develops. Similarly, the resources that it taps from other contexts provide it with further competitive advantage only if these resources are complementary to the firm’s existing resources, appropriable, and transferable to the locations where it can exploit them (CAT). These two sets of factors—RAT and CAT—provide a framework for international strategic decisions that emphasizes developing, acquiring, and transferring capabilities.


An Identity Lens to Understand Teams in International Business  

Sonia Raghav and Cristina Gibson

In international business, teams can take on a variety of forms, including domestic collocated teams, multinational collocated teams, global virtual teams, and multicultural teams. All of these types of teams offer the potential for developing innovative products and services, but they also may face substantial challenges with respect to collaboration and coordination. Team members are likely to identify with a variety of affiliations, based on dimensions such as gender, family roles, ethnicity, culture, nation, profession, organization, and team. Identification with each of these social groups brings with it the opportunity for diverse insights and perspectives, skill breadth, and broad social connections. However, this can lead to both benefits and challenges for teams. As a result, the ability to negotiate identities has become critical in international business. Drawing upon concepts of social identity, an identity lens can be used to document the promise and problems of teams in international business. An understanding of how multiple identity interactions within an individual can affect processes and outcomes for the team has the potential to create a more nuanced comprehension of international teams.


Immigrant Entrepreneurship: A Typology Based on Historical and Contemporary Evidence  

Hartmut Berghoff

Immigrant entrepreneurs are different, and they are everywhere. They can be unambiguously distinguished from entrepreneurs without a migration background. They operate under distinct conditions and respond to unique opportunities and challenges. They have specific motivational, economic, and social resources at their disposal, for example, ethnic solidarity and international networks. Their knowledge of languages and cultures, as well as the high pressure to integrate themselves into a new society, can be factors that stimulate entrepreneurship and innovation. It is hard to find countries with no immigrant entrepreneurs. In many places like the United States, Canada, or South East Asia, they play a substantial economic role. The ubiquity, dynamism, and significance of immigrant entrepreneurs has led to a spate of research projects since the 1990s, especially by economic sociologists and ethnologists, but also by management scholars and historians. On the basis of their work, the article distinguishes six different ideal types of immigrant entrepreneurs, even though these categories are neither clear-cut nor mutually exclusive. Necessity entrepreneurs react to blocked careers in other areas and often set up small, precarious businesses, out of which in exceptional cases more viable companies emerge. Diaspora merchants are part of commercial networks of people with the same ethnic background who live in foreign countries and trade with each other. Transnational entrepreneurs are not necessarily part of networks and do not always engage in mercantile activities. This category also encompasses individual actors and industrial activities. They are characterized by the ability to mobilize resources in several countries and facilitate activities between different countries. Middleman minorities stand between the majority society and third parties, often minorities. They fill niches that are left by indigenous businesses, which consider these areas as unattractive. Entrepreneurs in ethnic enclave economies live and work with their co-ethnics in neighborhoods defined by their group. Their main function is to cater to their own communities, often with ethnic products such as food or publications from their countries of origin. Refugee entrepreneurs leave their home country involuntarily, often driven out by violence and expropriation. In most cases their emigration is unprepared. Starting conditions in the country of destination are unfavorable. Conversely, the pressure for social integration is pronounced and can act as an impulse for self-employment. There are, however, cases in which refugees are consciously patronized or even summoned by the governments of the receiving countries, turning them into a highly privileged group.


The Impact of Corporate Governance on Firms’ International Strategies  

Gabriele Galli and Antonio Majocchi

The structure and characteristics of firms’ corporate governance influence the internationalization choices of companies, impacting different and heterogeneous features. The international business literature focuses on two fundamental characteristics of corporate governance: ownership and board of directors. The features of different shareholders and the level of ownership shares result in different global strategies and objectives for multinational companies. Considering the executive level, the characteristics of the different directors involved in the governance may influence investment choices and relations with different stakeholders in different countries. Corporate governance is therefore a fundamental dimension to be taken into account in international business research, with special reference to two particular types of companies: family- and state-owned firms. Ownership and the board of directors of these companies present specific corporate governance features and dynamics that expand the classical theory of internationalization. The focus on these two types of firms helps to understand and describe the current global context and the set of decisions and different policies that influence the different choices related to firms’ internationalization strategies.


Individualism-Collectivism: A Review of Conceptualization and Measurement  

Chao C. Chen and Ali F. Unal

The concept of individualism-collectivism (I-C) has been a prominent construct in philosophy, political science, sociology, psychology, and organization and management. Its meaning may vary greatly in scope, content, and levels of analysis, depending on the fields of inquiry and the phenomenon of interest. We focus on I-C as it relates to values, identities, motives, and behaviors in the context of organization and management. At its core, I-C is about self-collective relationships and the impact they have on the relational dynamics and outcomes at various levels of analysis. Theory and research have identified patterns of contrasts between individualism and collectivism. While the individualist orientation emphasizes individual self-identity, personal agency, and values that tend to prioritize individuals over collectives, the collectivist orientation emphasizes individuals’ collective identity, collective agency, and values that tend to prioritize collectives over individuals. Various I-C conceptions have been critically evaluated with the focus on basic assumptions regarding the nature of individualism and collectivism as unidimensional, bidimensional, or multidimensional constructs, and whether or not individualism and collectivism are conceived as inherently oppositional or complementary to form a high-order construct. Specifically, previous reviews of culture and value studies in general, and of I-C studies in particular, acknowledge the possibility that individualist and collectivist orientations may coexist within a diverse society, organization, or group, and that those orientations may change over time or evolve to tackle emergent survival challenges. However, most previous reviews continue to focus on the unitary construct of I-C composed of two entities as polar opposites of each other, the high of one meaning the low of the other. Over time, instead of or in addition to the initial unidimensional conception of I-C, research has adopted the bidimensional or multidimensional conceptions. Furthermore, more of bi- or multidimensional conceptions have adopted the unipolar approach. That is, maintaining I-C as a high-order construct, individualism and collectivism are conceived as independent dimensions of I-C, each varies on a separate continuum, making it possible that individuals, groups and societies may be categorized on the various combinations of individualism and collectivism. The advantages of the multidimensional approach have been emphasized, but issues of conceptual muddiness have also been raised, together with the challenges of theory-based research. It is recommended that I-C researchers be mindful of conceptual equivalence in developing I-C constructs and measurements and consider the optimal distinctiveness theory and the dialectic perspective as two potential overarching perspectives for comparative research on I-C. Finally, areas of future research have been identified as fertile fields for generating knowledge and understanding of I-C.


An Institutional Perspective on Corporate Governance  

Ilir Haxhi

Concerned with the structure of rights and responsibilities among corporate actors, corporate governance focuses primarily on the monitoring of executive boards, the protection of minority shareholders, corporate reporting and disclosure, and the improvement of employee participation in the corporate decision-making process. An institutional theory–driven approach helps position corporate governance as a social construct that reflects formal institutional rules as well as the informal practices that prevail when formal rules are absent, weak, or ambiguously defined. The institutional context thus constitutes a framework for corporate governance that captures not only the internal structures of corporations but also the institutional arrangements and national business systems in which these corporations are embedded. The actor-centered institutional perspective provides a comprehensive, in-depth, and nuanced picture not only of current governance structures but also of the characteristics and practices that prevail within and across different corporate governance models. Overall, adopting an institutional perspective underscores the importance of recognizing that corporate governance at the national level remains a key unit of analysis for explaining its diversity because it highlights the role of national institutions and their powerful institutional actors.



Rajneesh Narula and Jong Min Lee

Internalization theory stands as a foundational framework within the realm of international business (IB). Its primary aim is to elucidate the reasons and methods behind a firm’s expansion across national boundaries. Pioneered and developed by eminent scholars, including John Dunning, Peter Buckley, Mark Casson, Jean-François Hennart, and Alan Rugman, internalization theory scrutinizes the underlying motives that drive firms to conduct transactions internally rather than resorting to external markets. Its central objective is to forecast why firms opt for internal transactions when venturing into the international arena, thereby influencing multiple facets of decision-making within organizations. Consequently, it offers invaluable insights into the structure and operation of multinational enterprises (MNEs). At its core, internalization theory delves into the dynamic interplay between the advantages and costs linked to the internalization of transactions. This analysis is pivotal in comprehending how firms tactically oversee their operations, especially within the context of the global economy. Crucially, the theory encompasses various substreams, as introduced by scholars such as Buckley and Casson, Hennart, and Rugman. Each of these substreams delves into specific aspects of internalization, collectively enriching the broader understanding of IB. Since the turn of the century, the discourse surrounding internalization theory has extended its scope to encompass concepts like the recombination of firm-specific advantages, the role of dynamic capabilities, and the impact of entrepreneurial actions in the operations of MNEs. A burgeoning concept within this theory is “quasi-internalization,” which signifies a hybrid governance approach. It amalgamates elements of both market and hierarchy, frequently relying on relational and reputation-based controls to facilitate international transactions. Thus, internalization theory remains highly pertinent in explaining the boundaries of MNEs across diverse eras and contexts, spanning from emerging economies to digital economies. It also serves as a valuable guide for other disciplines, such as strategy and management. When investigating new transaction types, firms, or governance methods, a prudent initial step involves assessing whether internalization theory can effectively elucidate them.


International Initial Public Offerings  

Christina Maria Muehr and Thomas Lindner

An initial public offering (IPO) is the process within which private firms offer their shares to the public by form of a new stock issuance for the first time. IPOs have strong economic significance and performance fluctuations, which affect both firms and public markets. What is more, acquiring capital on a stock exchange outside of the firm’s home country comes with substantial benefits, including access to a greater and more diversified pool of resources and investors, more liquid markets, the opportunity to raise capital at a lower cost of capital, and increased capital retention for future investments. On the contrary, it also introduces multiple challenges, including higher underwriting, professional, and initial listing fees or lower analyst coverage, trading volume, and trading liquidity. Integrating and building on literature emerging from multiple domains, including international business (IB), accounting, finance, entrepreneurship, management, and economics, international IPO research clusters around seven central themes: corporate governance, upper echelon, social partners, internationalization activities, institutions, technology, and market activities. Each of these themes employs unique theoretical perspectives and findings, which are at the forefront of advancements in international IPO research from its early beginnings and altogether provide a deep understanding with some potential avenues of future enquiries within the field.


Internationalization Processes  

Catherine Welch and Peter W. Liesch

The Uppsala internationalization process (IP) model is one of the few long-standing developments in the international business (IB) field to have maintained pre-eminence into the early 21st century. Scholars at Uppsala University were early proponents of research on firm internationalization processes, advancing a model that defined the “Uppsala School” in IB. The attention that the model has received is justified, attesting to its continued relevance since it was first proposed in the 1970s. While welcomed, this attention has, however, not succeeded in capturing the theoretical essence of this model and its potential in further developing IP theory. The consequence of this failure in the IB field is profound, as the full promise of research on the internationalizing firm, as well as the firm’s expansion into markets overseas, is yet to be realized. It can be asked, What then is the Uppsala IP model? Answering this question requires addressing common misconceptions about the model that have circulated for decades. These misconceptions continue to circulate, constraining theorizing on this topic. Dispelling these misconceptions and specifying what the IP model is provides the IB field fresh insights into what it could be when developed further in the future.


International Research and Development and Knowledge Sourcing by Multinational Corporations  

Kazuhiro Asakawa and Jaeyong Song

Internationalization of R&D facilitates knowledge sourcing of multinational corporations (MNCs) on a global scale. As MNCs internationalize R&D, they not only engage in domestic-driven R&D but are actively involved in overseas-driven R&D. And accordingly, the role of overseas R&D laboratories often evolves, from applying the HQ-generated innovation to local market, to innovating locally and contributing to the parent company. Within an MNC boundary, knowledge flows have become multidirectional: on top of the most typical knowledge flows from headquarters (HQ) to a subsidiary, reverse knowledge flows from a subsidiary to HQ as well as horizontal knowledge flows among overseas subsidiaries have become more salient. In addition to knowledge flows within a firm, increasing attention has been paid to external knowledge sourcing, i.e., knowledge sourcing from foreign locations outside the firm. MNCs commonly engage in local knowledge sourcing, i.e., sourcing knowledge from an overseas local environment, to tap into local hotbeds of innovation. But MNCs are also increasingly conducting global knowledge sourcing, i.e., sourcing knowledge from around the world, to practise global open innovation. Theoretically, knowledge sourcing in international R&D has often been examined from the capability and embeddedness perspectives. The effect of capability has been discussed in connection with motivation, autonomy, and mandates of subsidiaries. The effect of embeddedness has been discussed in connection with complementarity between external and internal embeddedness. As future research agenda, the following are suggested. First, cross-fertilization among the research fields of international R&D, global innovation, and open innovation deserves further attention. Second, greater research focus can be placed on managerial processes of global knowledge sourcing. Third, further research can be advanced on global knowledge sourcing at the team level. Fourth, the association between corporate governance and global knowledge sourcing can be investigated further. Fifth, much more attention needs to be paid to microfoundations of global knowledge sourcing. And lastly, further evolving patterns of global knowledge sourcing by advanced country multinationals (AMNCs) and emerging economies multinationals (EMNCs) continue to be relevant.


The Concept, Treatment, and Future of Language in Contemporary Business and Management  

Terry Mughan

In the literature of business and management, language, unlike the contiguous concepts of culture and communication, did not have a recognized place until the early part of the 21st century. Isolated publications about language might have appeared occasionally in journals in subdisciplines such as marketing, communication, and international business (IB), but there was no real visible research community or concentration of output in the field. Special issues appearing in International Studies of Management and Organization, 2005 and the Journal of World Business, 2011 were significant steps in demonstrating the emergence of active researchers at this time. In 2014, the Journal of International Business Studies (JIBS), the top-ranked IB journal and the only such journal used by the Financial Times for its global journal rankings, published its first special issue on the subject. This landmark issue attracted 78 submissions, of which 14 were published in JIBS over two issues, and this represented a breakthrough in terms of both quality and quantity that captured the attention of all in the IB field. Many explanations have been proffered for the delay in breaching this barrier, from tacit resistance on the part of monolingual executives and institutions to methodological bias in favor of numerical data to the daunting definitional complexity of the term “language” itself and its relation to nation-level phenomena.