International Establishment Mode Choice: Past, Present and Future

The establishment mode of Chinese MNEs abroad and the Belt and Road Initiative: insights from a strategy tripod perspective

Purpose

Emerging-market multinational enterprises (MNEs) have pushed institutional factors to the cutting-edge of international business research. As for Chinese MNEs, the importance of institutions has been strengthened since the Chinese government launched the Belt and Road Initiative (BRI), which seeks to promote a comprehensive platform for cooperation among countries. This study aims to investigate the role played by the BRI as an institutional factor moderating the influence of other institution-, industry- and firm-specific factors on establishment mode choice by Chinese MNEs.

Design/methodology/approach

Drawing on the strategy tripod, a perspective claiming that a firm's strategies are the result of internal, industrial and institutional conditions, this study develops a number of hypotheses that are tested with data on 1,076 outward foreign direct investments (OFDIs) of Chinese MNEs between 2013 and 2021.

Findings

The results show that the BRI moderates the influence of both the firm's prior international acquisition experience and Chinese government's OFDI restrictions on the establishment by means of an acquisition. They also report that this moderating effect does not apply for acquisition experience in the host country nor institutional distance.

Originality/value

This study contributes to reinforce the importance of institutions as the third leg of a strategy tripod when explaining international behavior of Chinese MNEs. It also suggests that the BRI is a diplomatic tool that may act as a substitute for the firm's resources and may mitigate the negative influence of other external factors.

Entry Mode Choice: A Meta-Analysis of Antecedents and Outcomes

The entry mode decision is a critical topic in international business. Several studies have tested the antecedents of entry mode choices and compared the outcomes after entry. However, the results reported in these studies are contradictory and difficult to explain. Furthermore, the reviews using qualitative approaches cannot statistically combine empirical results and fail to fully discuss these relationships. Additionally, the mediating effects remain unexamined in the existing studies. Drawing upon transaction cost economics and the resource-based view, this paper presents a meta-analysis that combines entry mode choices, antecedents and post-entry outcomes to address these issues. This meta-analysis is based on 1499 effect sizes from 230 published empirical studies. This study focuses on 15 antecedents as well as post-entry performance and survival of entry mode choices. In addition to bivariate relationships (i.e. how a single antecedent affects entry mode choices), the paper uses meta-analytic structural equation modelling to analyse the mediating effects of entry mode choices on the antecedent - outcome relationship.

Five decades of research on foreign direct investment by MNEs: An overview and research agenda

Despite the significance attached to foreign direct investment (FDI) by Multinational enterprises (MNEs), there are is no comprehensive review of the FDI literature. Moreover, those that have been published, focus on subsets of FDI. This review systematically examines the empirical as well as theoretical research on FDI through an analysis of 500 articles published during the last five decades. Theoretical models, methods, context, and contributions to scholarship were reviewed. We strive to highlight the key theories, paradigms, and articles and provide directions for future research. We conclude that FDI has evolved as the most significant area of international business.

A Simple Criterion to Locate a Multinational Corporation Resulting from Optimization of Technological Knowledge Transfer

The aim of this study is to formulate both a conceptual and a mathematical model giving a criterion of choice for the location of an MNC in search of new technological knowledge and the means to optimize it. On the basis of a bibliographical study, we develop a conceptual argument in order to formulate hypotheses regarding the impact of distances and motivation on knowledge transfer and the acquisition's resulting performance. The assumptions thus formulated make it possible to justify the mathematical expression of performance in a function of the architectural distance, the knowledge transfer, and the motivation. The resolution of this optimization problem makes it possible to obtain the optimal architectural distance and the optimal motivation corresponding to the best choice of localization of an MNC. The authors deduce a simple criterion aiming at helping a manager confronted with the problem of localization choice. The presented model helps to define the typology of MNC units: isolating and exploiting a MNC's knowledge or using the local knowledge and transferring it to other units.

Innovation strategy management survey of the Chilean biomedical industry. Assessment of windows of opportunities to reduce technological gaps

The convergence of different theories (ie, catch-up effect and windows of opportunities) allows for the interpretation of different "technological innovation gaps" in Chile's biomedical industry. It is common knowledge that Chile has always had an economy almost exclusively based on services, commodities, and mainly in the exploitation of natural resources with low value added. The literature confirms that countries that concentrate their economies on the knowledge, research, development, and commercialization of technology and innovation have a better and more stable growth rate in the medium and long run. The "Asian Tigers" are a good example of this. Analyzing the technological gaps that affect the Chilean biomedical industry, it is possible to find windows of opportunities to catch up. This could allow the country to take its knowledge, skills, and capabilities further, thus enabling Chile to not just depend on its unpredictable natural resources. For the first time, a quantitative diagnosis of the Chilean biomedical industry was made. This study considered the Chilean biomedical industry and its innovation and entrepreneurship environment, taking into account its productive capacities and its potential to make progress in technological innovation and, as a result, dramatically reducing technological gaps through windows of opportunities.