Dear friends and colleagues,
The second issue of Global Strategy Journal for 2023 focuses on internationalization. You can access it at https://onlinelibrary.wiley.com/toc/20425805/2023/13/2. In it, you will find a set of papers accepted through the regular review process that study a variety of dimensions of the internationalization strategy. We start the issue with a discussion of modes in offshoring by Elia, Larsen and Piscitello. We go deeper into this topic by presenting two papers that analyze international alliances, one by Bouncken, Fredrich, Sinkovics, & Sinkovics, and another by Zahoor, Al-Tabbaa, & Zaheer Khan, and complement this with two papers that study cross-border acquisitions, one by Bilgili, Bilgili, Allen, Loncarich, Kedia, & Johnson, and another by Shi & Li. We then move on to discussing global value chains with two papers, one by Buckley & Liesch, and another by Rodriguez, Ciravegna, & Petersen, and conclude the issue with two manuscripts studying the relationship between internationalization and performance, one by Huang, Ding, Lin, & Zhu, and another by Pedersen & Tallman. We hope that you find the articles insightful individually and impactful as a set.
You can access the papers accepted but not yet published in an issue at https://onlinelibrary.wiley.com/toc/20425805/0/0.
We look forward to receiving your best work for consideration for publication.
Gabriel R. G. Benito, Alvaro Cuervo-Cazurra, and Grazia Santangelo
Co-editors of Global Strategy Journal
Stefano Elia, Marcus M. Larsen, Lucia Piscitello
Transaction cost economics (TCE) holds that multinational corporations (MNCs) should select governance modes based on associated transactional hazards. However, MNCs often adopt theoretically misaligned governance modes. Applying a prospect theory (PT) perspective, we use the context of business-process offshoring to explore why firms choose misaligned governance modes. We argue that theoretically misaligned governance modes are regarded as riskier than aligned governance modes, and we suggest that prior experiences of failure in an international context—especially in business functions that are relevant for the internationalization of a firm—prompt decision-makers to choose theoretically misaligned governance modes. We enhance discussions on governance-mode decisions with important behavioral perspectives on how such decisions materialize.
Ricarda B. Bouncken, Viktor Fredrich, Noemi Sinkovics, Rudolf R. Sinkovics
Firms implement digital technology for improving coordination and communication in cross-border R&D alliances. However, there is great ambivalence regarding how digitalization influences cross-border knowledge transfers. Our analysis clarifies some of this ambivalence by providing different configurations of absorptive capacity in cross-border R&D alliances. The fuzzy-set qualitative comparative analysis (fsQCA) reveals only low absorptive capacity achievement in most configurations of digital technology implementation. The findings indicate effects of cognitive digitalization biases, under which firms take the benefits of digital technology for granted while ignoring deep-level challenges rooted in the contextuality of international ties. However, high absorptive capacity is achievable when (1) allying with bigger and younger partners, (2) under technological similarity, and (3) coping with the associated digitalization biases.
Nadia Zahoor, Omar Al-Tabbaa, Zaheer Khan
This study delves into the relationship between alliance management capability (AMC) and the post-entry internationalization speed of small-sized and medium-sized enterprises (SMEs). We develop a novel theoretical framework that illuminates the effect of co-innovation ambidexterity as a mechanism that unlocks AMC value in speeding up SME internationalization following entry into foreign markets. To validate our framework, we conduct an empirical investigation using a sample of 278 UK-based manufacturing SMEs. Our findings support the proposition that co-innovation ambidexterity is a crucial mediating mechanism through which AMC boosts the post-entry internationalization speed of SMEs. Therefore, this research sheds new light on the critical roles of AMC and co-innovation ambidexterity during the post-entry stage, which has far-reaching implications for the fields of international entrepreneurship and international strategic alliances.
Tsvetomira V. Bilgili, Hansin Bilgili, David G. Allen, Holly Loncarich, Ben L. Kedia, Jonathan L. Johnson
We draw on the political institutions approach and relational embeddedness perspective to advance a relational theory of policy risk. We argue that policy risk negatively affects acquisition completion, but the strength of the effect is dependent on home-host country relations. Home-host country relations underpin host governments' motivation to commit to policies and influence foreign acquirers' perceptions of the credibility of such commitments. Using longitudinal event data on intercountry interactions, we measure the valence and strength of home-host country relations and examine the relationship between policy risk and cross-border acquisition (CBA) completion under cooperative, conflictive, and ambivalent relations. In a sample of 26,124 CBAs, we find that the relationship is negative and strong under conflictive relations, weaker under cooperative relations, and weakest under ambivalent relations.
Wei Shi, Boshuo Li
This study investigates the influence of foreign takeover protection triggered by investment-related national security screening laws and regulations on firm innovation efficiency. Drawing on agency theory, we argue that an increase in foreign takeover protection can lead to a reduction in innovation efficiency—the amount of innovation output relative to innovation input—by encouraging managerial entrenchment that can result in ineffective allocation and use of R&D resources. Such effects are weaker in the presence of monitoring from external governance actors—dedicated institutional investors and financial analysts. Using the enactment of the Foreign Investment and National Security Act in the United States as our empirical context, we find support for our arguments.
Peter J. Buckley, Peter W. Liesch
Negative externalities in global value chains (GVCs) create challenges for regulation. We establish conditions under which firms are more likely to adapt their GVCs to rectify negative externalities that occur at global scale. Firms in GVCs vary in relation to their active involvement in attending to negative externalities in a predictable way, according to their awareness (A) of these externalities, motivation (M) to address them, and the capability (C) to do so. Firms in GVCs can self-correct imperfections by strategy changes, or new firms can be recruited into the GVC with the awareness, motivation, and the capability to attend to negative externalities. National governments may find these externalities to be a significant policy challenge, particularly when they extend across national jurisdictions.
Carlos Rodriguez, Luciano Ciravegna, Bent Petersen
Negative performance feedback in offshoring service activities entices firms to undertake geographical reconfiguration of their global value chains (GVCs) as a substitute for, or complement to, change of governance modes, decomposition of offshored activities, or shift of local service providers. In this study, we build on performance feedback theory and the concept of problemistic search to examine the extent to which firms move offshored service activities to new countries when facing negative performance gaps. We also examine if these relocations take place within a search space limited by the managers' cognitive span. We formulate a set of hypotheses revolving around this idea of search within a limited space. Our hypotheses are supported when tested on a sample of global sourcing projects undertaken by 223 firms between 1995 and 2012.
Sheng Huang, Zhenkuo Ding, Xiaoman Lin, Yunxia Zhu
The impact of post-entry internationalization speed (PIS) on firm performance has become a central issue in global strategy research. This paper conducts a meta-analysis concerning the relationships between two dimensions (i.e., international commitment speed and international scope speed) of PIS and performance, and the moderating effects of learning speed on these relationships among international firms. Empirical evidence from 60 independent samples reveals that international commitment speed positively influences performance, while international scope speed has an inverted U-shaped impact on performance. Our results also indicate that learning speed negatively moderates the link between international commitment speed and performance, whereas it positively moderates the association between international scope speed and performance. Based on the findings, we discuss the contributions to the global strategy literature, organizational learning theory and time-based competition view, and point at future research directions systematically.
Torben Pedersen, Stephen Tallman
In this second collection of articles relating to global strategy, we address the well-established but unresolved issue of the relationship between multinationality and performance among multinational firms. The M-P relationship has been the topic of many articles in many journals for many years, but its true nature is still not established. Both theory and empirical findings provide different and often opposed views, as can be seen in the articles collected here. We see two main perspectives on this issue. Some scholars suggest that differences in data and analytical tools have prevented consistent empirical results, and that more consistent and carefully chosen empirical modeling can yet establish the true M-P connection. Others believe that basic problems in theory and in building testable frameworks that are truly consistent with theory have made this an inherently intractable problem. The collection provides important articles that test the M-P relationship as well as critiques from both perspectives. We see considerable power in the view that individual firms are likely to have their own idiosyncratic optimal level of multinationalization. We finish by calling for and suggesting new approaches to the issue, such as a micro-foundations approach, as opposed to simply using more sophisticated tools to test problematic models based on well-established but ultimately inadequate theory.