John H Dunning Centre - Discussion paper series

Discussion paper series

In 2011 the John H Dunning Centre for International Business relaunched its Discussion Paper Series.

The objective of the series is to improve the public availability of research undertaken by researchers affiliated to the Centre. It represents research results that in whole or part are suitable for submission to a refereed journal, to a major conference or to the editor of a book.

For further information, or to submit a paper, please contact dunning@henley.ac.uk.

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    The Past and the Future of Employee Voice: Shenzhen’s High Technology Industry

    Dr Denise Tsang, Zhang Yan

    Series Reference: JHD-2018-05

    Can a nation’s technology future be linked to its past? This article discusses employee voice, as defined in terms of discretionary and constructive behaviour that challenge the status quo, within the innovative, fast growing high technology industry in China. It provides insight into factors shaping employee voice in this under-researched knowledge-intensive sector of China that has emerged rapidly since the economic reform. It suggests the notion of employee voice among the highly skilled knowledge workforce can only be understood in terms of technological convergence and cultural divergence.

    Keywords

    employee voice; high technology; cultural divergency; Shenzhen

    JEL Classifications

    J59, L69, M12, N35, N95, O43

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    Post-Entry Performance of International New Ventures: The Mediating Role of Learning Orientation

    Dr Stephan Gerschewski, Yong Kyu Lew, Zaheer Khan, Byung Il Park

    Series Reference: JHD-2018-06

    This paper investigates the role of learning orientation in the post-entry performance of international new ventures (INVs) by examining the relationships of niche strategy, network resources, and learning orientation with the multi-dimensional post-entry performance of INVs. Based on the INV internationalisation literature, we develop and validate a conceptual model using a sample of 147 INVs from two relatively small and open economies from New Zealand and Australia. The results show that learning orientation of INVs positively mediates the relationship between niche orientation and network resources and INVs’ post-entry performance. Our study indicates that learning orientation may be an important capability through which INVs’ focused international business strategies and resources (e.g., niche orientation and network resources) may influence their multi-dimensional post-entry performance in terms of operational, financial and overall effectiveness measures. We draw key implications for research on INVs’ post-entry behaviour by explicating the role played by the firms’ learning capabilities, and how these capabilities may interact with their strategies and resources in enhancing the post-entry performance of INVs.

    Keywords

    international new venture, learning orientation, niche orientation, network resources, post-entry performance

    JEL Classifications

    M16 – International Business Administration

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    Because You’re Worth It? Determinants of Vice Chancellor Pay in the UK

    Professor James Walker, Dr Peder Greve, Geoff Wood, Professor Peter Miskell

    Series Reference: JHD-2018-04

    There is increasing pressure on universities to deliver social and economic impact from their work in an increasingly market and metric driven environment. Within the UK, increasing financial pressure has led to both an escalation of student fees, and constrained wage growth for rank and file faculty and administrators. In contrast, most Vice-Chancellors have secured substantive pay packages raising concerns as to the extent to which regulatory failures may be contributing to the rise. Against this backdrop, there is little empirical evidence of what has driven recent changes in V-C remuneration. Here we bring data from a panel of British universities. We find some measures of institutional performance, internal governance and individual characteristics are related to V-C pay and that these differ significantly between ‘old’ and ‘new’ universities. We find evidence that V-Cs will use their internal power within organisations to extract a disproportionate amount of the value created by the institution. However, we do not find that the presence of VCs on remuneration committees had a robust influence on salary. We also find that greater transparency is associated to higher rates of remuneration.

    Keywords

    pay, governance, metrics, performance, public sector, universities, Vice-Chancellors

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    Theorizing Career Success for Low Status Migrants

    Lovanirina Ramboarison-Lalao, Professor Chris Brewster, Jean-Luc Cerdin

    Series Reference: JHD-2018-02

    We use qualitative research to build and enrich theory on the career success construct of Low status migrants (LSMs). This is an important category of the workforce in many MNEs in, for example, the transport, hotels and construction industries, but is often overlooked in international business research. We find that, despite some similarities, the theory of motivation to integrate that applies to highly qualified immigrants needs to be adjusted to enable understanding of the career success of LSMs. We introduce ‘imposed change’, ‘fate/ religion’, and ‘community networking’ into the theory, finding that LSMs cope with the constraints of imposed change through a combination of fate/ religion and self-determination/ self-efficacy, leading, with the support of community networking, to settlement and career success. We draw conclusions about the value of understanding the possibilities as a means of improving management in the relevant sectors.

    Keywords

    Low status migrants; theories of career success; imposed change; religion/ fate; community networking; loci of control

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    Is Trust in Companies Rooted in Social Trust, or Regulatory Quality, or Both?

    Markus Leibrecht, Hans Pitlik

    Series Reference: JHD-2018-03

    While trust in the business sector is crucial for well-functioning markets, there is surprisingly little empirical work on its sources. Available research recognizes social trust as a major force explaining confidence in political institutions. Regulation is frequently advocated to foster trust in companies as it is supposed to reduce scope for opportunistic behavior. Based on individual level data from World Values Survey/European Values Studies and economic regulation data from the Economic Freedom of the World-project the paper empirically investigates joint effects of social trust, intensity and quality of regulation on public trust in major companies. Our findings suggest that it is not the intensity of economic regulation per se which matters for trust in companies but that the impartiality with which rules are enforced is decisive, even when we control for social trust. Trust in business can be facilitated by an implicit guarantee of governments to fair and impartial treatment.

    Key Words: Social Trust, Trust in Companies, Economic Regulation, World Values Survey

    JEL codes: D90, L50, P12

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    Asset Recombination as a Driver of Sustainable Competitive Advantage: An Extension and Taxonomy

    Professor Rajneesh Narula, Jong Min Lee, Jenny Hilleman

    Series Reference: JHD-2018-01

    To maintain competitiveness in a rapidly changing global economy, firms must continuously reconfigure their asset portfolio in tune with multiple environments. We systematically link the dynamic capability thinking to the MNE context, seeking to provide a more refined understanding of asset recombination. By distinguishing between firm-specific assets and advantages, this study also offers clarity to the concepts of sensing and seizing from the dynamic capabilities framework. We introduce recombinant firm-specific assets (FSAR) as an essential subset of dynamic capabilities that are closely related to the periodic asset orchestration and renewal in the dynamic capabilities framework. Asset recombination is the key to sustainable competitive advantage, and we distinguish between three different types of asset recombination, intra-firm, extra-firm and network recombination, depending on the source of complementary assets. This taxonomy and the associated types of FSAR provide a better understanding of the mechanisms that MNEs can utilize to effectively bundle and recombine their assets and thus create and capture value over time in cross-border settings.

    Asset recombination as a driver of sustainable competitive advantage: An extension and taxonomy

    Keywords
    Dynamic capabilities, Recombinant firm-specific assets, Asset recombination, Intra-firm recombination, Extra-firm recombination, Network recombination

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    Why Wait? The Speed of Foreign Market Re-Entry after Initial Entry and Exit

    Dr Irina Surdu, Kamel Mellahi, Keith Glaister, Dr Giulio Nardella

    Series Reference: JHD-2017-05

    Using a unique dataset comprising of over 1,000 foreign market re-entries by multinational enterprises, we examine the antecedents of speed of foreign market re-entry into previously exited markets. Contrary to previous studies, we find that the length of host market experience accumulated between initial entry and exit does not lead to earlier re-entries for the firms in our sample. The depth of experience accumulated through operating via joint ventures and the nature of the experience determined by the exit process have a positive and significant impact for early re-entrants. We highlight that the effect of knowledge accumulated through experience decreases as firms spend a long time out of the host market, with host institutional quality mediating the relationship between prior experiences and re-entry speed.

    Keywords
    foreign market re-entry speed, exit, timeout, learning, experience, institutions


    JEL Classifications
    M1

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    Once Bitten, Not Necessarily Shy? Organisational Learning Prior Experience Effects on Foreign Market Re-entry Commitment Decisions

    Dr Irina Surdu, Kamel Mellahi, Keith Glaister

    Series Reference: JHD-2017-04

    This study examines foreign market re-entry mode commitment, namely the changes in the modes of operation undertaken by multinational enterprises (MNEs) as they return to foreign markets from which they had previously exited. From an analysis of 1,020 re-entry events between 1980 and 2016, we find that operation mode prior to exit is a strong predictor of subsequent re-entry mode. Contrary to the predictions of learning theory, no support is found for the effect of host experience accumulated during the initial market endeavour on re-entry commitment. The results reveal that when favourable host institutional changes occur during the time-out period re-entrants escalate commitment but do not necessarily de-escalate commitment following unfavourable institutional change. Market exit motives significantly impact the decision to re-enter via a different commitment mode. Re-entrants do not replicate unsuccessful commitment strategies and tend not to return to previously existed markets via the same commitment if they had previously underperformed in the market.


    Keywords
    foreign market exit and re-entry, organisational learning, institutional change, commitment
    escalation, commitment de-escalation, operation modes


    JEL Classifications
    M1

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    Location of R&D abroad. An analysis on Global Cities

    Professor Davide Castellani, Katiuscia Lavoratori

    Series Reference: JHD-2017-03

    This paper investigates the determinants of the location of MNEs’ overseas R&D activities, by focusing on two major drivers. On the one hand, external location factors lead the firm to separate its activities along the value chain and geographically disperse these activities in different locations. On the other hand, the R&D location choice may be driven by the existence of internal (within-firm) linkages that motivate firms to locate their value chain activities in the same location (co-location within-firm). Using data from the fDi Markets database, the study examines 2,580 location decisions of new R&D greenfield investments made by MNEs in 110 global cities worldwide, over the period 2003-2014. Results from Conditional and Mixed Logit econometric models reveal that both external and internal factors matter. Findings confirm the strong role of external agglomeration economies, but also suggest that previous R&D and production activities of the same MNE increase the probability to locate R&D in a given global city.


    Keywords
    location of international R&D, empirical methodology


    JEL Classifications
    F23, O30, R30

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    The Changing Geography of Innovation and the Role of Multinational Enterprises

    Professor Davide Castellani

    Series Reference: JHD-2017-02

    This paper provides descriptive evidence of the changing geography of inventive activity and the role of MNEs international R&D activities, with quite an extensive geographical coverage. Results highlight that ‘local buzz’ is crucial for the development of knowledge in local economies, and it leads to persistence in innovative activities. However, ‘global pipelines’ are also becoming a crucial element for the successful development of local knowledge. In particular, we first find that the number of regions involved in patenting has increased threefold since the 1980s. Second, despite this increase in the number of regions patenting, 70% of inventions come from the top 100 regions. Third, although the hierarchy of the top patenting regions is not immobile, the propensity to patent is quite dependent on previous innovation. Fourth, international collaboration in patenting has been steadily on the rise over the last three decades. Fifth, international R&D investments of MNEs are indeed also very concentrated in a few locations, which can also be quite distant from the MNEs headquarters’ location.

    Keywords
    geography of innovation, MNEs, regions, local buzz, global pipelines

    JEL Classifications
    F23; R11, O33

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    When Developing Countries Meet Transnational Universities: Searching for Complementarity Not Substitution

    José Guimón, Professor Rajneesh Narula

    Series Reference: JHD-2017-01

    During the last two decades a growing number of universities, mainly from developed countries, have established campuses in developing countries. From the developing countries’ perspective, attracting foreign universities helps mitigate financial constraints and capacity shortages that impair the state’s ability to provide greater access to tertiary education, while also improving teaching and research in general. However, foreign universities may also be detrimental if they crowd-out their domestic counterparts. We explore different scenarios and policy options for
    developing countries aiming to attract foreign universities, building upon a review of four case studies (from Chile, China, Kazakhstan and Malaysia). Our analysis suggests that policy-makers should provide incentives that properly align incoming foreign universities so that they
    complement and strengthen the areas of weakness in the national tertiary education system.

    Keywords
    tertiary education; transnational university; international branch campus; embeddedness; crowding-out

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    Theorizing the Meaning(s) of Expatriate: Establishing Boundary Conditions

    Yvonne McNulty, Professor Chris Brewster

    Series Reference: JHD-2016-05

    This paper examines the concept of expatriates, arguing that sloppy use of the term in the past has led to problems of inconsistent research, incompatible findings and a lack of clarity in the field. The increasing interest over the last dozen years or so in other forms of international
    experience, often equally poorly conceptualised, has compounded the problem. We argue for the need for greater construct clarity in studies of expatriates and, by extension, of other forms of international experience. Specifically we attempt to clarify to whom does the term ‘expatriate’, and specifically ‘business expatriate’, apply and the boundary conditions under which expatriate employment is enacted.
    Keywords
    expatriates, expatriate definition, boundary conditions for expatriation, business expatriates, migrants, sojourners

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    Conceptualising the Future of HRM and Technology Research

    Tanya Bondarouk, Professor Chris Brewster

    Series Reference: JHD-2016-06

    This paper examines the role of information technology (IT) directly on one central aspect of work in the twenty-first century, its impact on human resource management (HRM) itself. We use the long-established ‘Harvard’ model of HRM, offering a more contextualised view of HRM, a more expansive view of stakeholders, and a wider and more long-term approach to outcomes. Applying those principles to the literature on IT and HRM helps us clarify both the advantages and disadvantages to different stakeholders of the intersection between HRM and technology. We show that rapid technological developments offer a new, smart, digital context for HRM practices with the better quality HRM data and enabling a strong HRM ownership by all stakeholders. At the same time, we see a tension in HRM responsibilities between HRM professionals and organizational members who are not directly assigned HRM tasks but are the subject of them. On the basis of that analysis we offer suggestions for future research.
    Keywords
    information technology, human resource management, contextual HRM, multi-stakeholder perspective, e-HRM, HRM outcomes, Harvard approach

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    Human Resource Management: The Promise, the Performance, the Consequences

    Professor Chris Brewster, Paul N Gooderham, Wolfgang Mayrhofer

    Series Reference: JHD-2016-07

    Reviewing the trajectory of human resource management research over the last thirty years, this polemical paper argues that the dominant focus has been on 'Strategic HRM' or HRM that is supposed to improve firm performance in some way. It argues that this narrow focus has not
    only proved disappointing in its own terms but has led to the subject being addressed in a simplistic neo-liberal way that fails to take into account the wider constituency of HRM stakeholders and does not address many of the 'big issues' that these stakeholders face in practice. It calls for a wider and more realistic research agenda.
    Keywords
    HRM strategy, job satisfaction, sustainable HRM, contextual HRM

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    The Impact of Stop-Go Demand Management Policy on Britain's Consumer Durables Industries, 1952-1965

    Professor Peter Scott, Professor James Walker

    Series Reference: IBH-2016-02

    We examine the impacts of British government ‘stop-go’ policy on domestic sales of consumer durables over 1952 – 1965, via hire purchase restrictions and punitive Purchase Tax rates. Our analysis includes a general review of contemporary evidence regarding the impacts of these measures, a more detailed study of the television sector, and time-series econometric analysis for both televisions and a representative high-ticket labour-saving consumer durable –washing machines. We find that the restrictions had devastating impacts on Britain’s consumer durables industries, preventing firms from fully exploiting economies of scale, reducing output growth and international competitiveness, and eroding industrial relations. Government officials were aware of these problems, but considered them a price worth paying to facilitate moves towards sterling convertibility and the re-establishment of the City as a leading financial and trading centre.

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    The introduction of the joint-stock company in English banking and monetary policy

    Victoria Barnes, Dr Lucy Newton

    Series Reference: IBH-2016-01

    Following the passage of the 1826 Act, the joint-stock bank entered the English banking system and its dominance over the private bank is often thought to be a result of laissez-faire political ideology. This article shows that banking and monetary policy in the nineteenth century was far from liberal or permissive as regulators legislated with a clear idea of the intended outcomes of their actions. Yet, as policy-makers were often unsuccessful in their attempts to introduce change in the banking system, they became interventionist in an effort to rectify their mistakes. By placing regulation in its political context, we show that the emergence of a set of banks with shareholders, sleeping partners and investors as owners was both unexpected and unintentional. It reveals their subsequent attempt to repeal the 1826 Act and dissolve the offending companies through more legislation.

    Keywords
    Banks, nineteenth century, policy-making, legislation

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    Import, Export and Multinationality. Evidence from Swedish Firms

    Professor Davide Castellani, Claudio Fassio

    Series Reference: JHD-2016-08

    This paper studies the role of imported inputs in explaining firms’ export behaviour. Unlike most of the existing literature we are also able to control for the participation of domestic firms to multinational networks. This allows us to test to what extent the recurrent evidence that
    importing foster exporting activity is instead a figment of the fact that importers are also part of multinational groups. Our evidence, based on Swedish manufacturing firms, suggests that imported inputs, rather than multinationality, are a key determinant of firms’ export propensity
    and product scope. This result is particularly strong for SMEs, and it is driven by imported intermediates and (to a lesser extent) capital goods.
    Keywords
    importing, exporting, multinational enterprises, Sweden

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    Multinationality, R&D and productivity: Evidence from the top R&D investors worldwide

    Professor Davide Castellani, Sandro Montresor, Torben Schubert, Antonio Vezzani

    Series Reference: JHD-2016-04

    This paper investigates the effects of multinationality on firm productivity, and contributes to the literature in two respects. First, we argue that multinationality affects productivity both directly and indirectly, through higher incentives to invest in R&D. Second, we maintain that the multinational depth and breadth have different direct effects on productivity and R&D. Using data from the top R&D investors in the world, we propose an econometric model with an R&D and a productivity equation that both depend on multinationality. We find: i) multinational
    depth has a positive effect on productivity, while the effect of multinational breadth is negative; ii) multinationality (along both dimensions) has a positive effect on R&D intensity, translating into an indirect positive effect on productivity; iii) the positive indirect effect is however not large enough to compensate the negative direct effect of multinational breadth.

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    R&D and Productivity in the US and the EU: Sectoral Specificities and Differences in the Crisis

    Professor Davide Castellani, Mariacristina Piva, Torben Schubert, Marco Vivarelli

    Series Reference: JHD-2016-03

    Using data on the US and EU top R&D spenders from 2004 until 2012, this paper investigates the
    sources of the US/EU productivity gap. We find robust evidence that US firms have a higher capacity to translate R&D into productivity gains (especially in the high-tech industries), and this contributes to explaining the higher productivity of US firms. Conversely, EU firms are more likely to achieve productivity gains through capital-embodied technological change at least in medium and low-tech sectors. Our results also show that the US/EU productivity gap has worsened during the crisis period, as the EU companies have been more affected by the economic crisis in their capacity to translate R&D investments into productivity. Based on these findings, we make a case for a learning-based and selective R&D funding, which – instead of purely aiming at stimulating higher R&D expenditures – works on improving the firms’ capabilities to transform R&D into productivity gains.

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    Multinational Enterprises and Economic Development in Host Countries: What We Know and What We Dont Know

    Professor Rajneesh Narula, André Pineli

    Series Reference: JHD-2016-01

    The attraction of multinational enterprises (MNEs) has become a key component of development policies. Generous incentive packages are offered by governments to attract foreign direct investment (FDI), although few countries perform proper cost/benefit analyses. MNEs can have a decisive influence on the development path of countries, although the effectiveness of an FDI-assisted development strategy depends on a variety of factors. Net benefits depend not only on quantity, but also on the quality of FDI. Quality has to do with the MNE’s investment motivations, the affiliates’ mandate and autonomy, which in turn determine the potential for linkages and spillovers. These effects also depend on the capacity of domestic
    firms to absorb, internalise and upgrade their knowledge assets. A sound FDI policy must not be exclusively concerned with attracting capital investment, but must prioritise enhancing the local embeddedness of the MNEs.

    Globalization and subsequent changes in economic organization require both policy makers and scholars to reconsider their understanding of FDI and development. “FDI” and “MNEs” are no longer synonyms, as MNEs are increasingly able to control value chains without ownership through equity. Poor data and weak methodologies mean making realistic estimations of development effects is also increasingly fraught with difficulty. The tools to measure linkages and spillovers are increasingly outdated, as we cannot estimate non-equity engagements or knowledge flows, and this means we are unable to objectively judge if foreign investments have a net positive or negative effect, and whether such effects persist or attenuate over time.

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    The Modern MNE as an Efficient Meta-integrator: Emerging Market MNEs Need to Foster Internal Embeddedness to Succeed

    Professor Rajneesh Narula

    Series Reference: JHD-2016-02

    The modern MNE has to be a ‘meta-integrator’, able to leverage knowledge within and between its different constituent affiliates, which requires efficient internal markets and well-structured cross-border hierarchies. EMNEs will need to strengthen the ownership advantages necessary to achieve such internal embeddedness, which are hard to acquire, and must be learnt. I couch this discussion in the ongoing debate about the nature of ownership advantages. The ability to be competitive in an era of globalization depends as much on the EMNE’s technological assets as it does on its ability to achieve economies of common governance. The EMNE (like all MNEs) has to be able to promote internal knowledge flows, both to and from the parent, as well as between affiliates located in different countries, and the ability to achieve organizational, scale and scope economies.

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    Economic Institutions and the Location Strategies of European Multinationals in their Geographical Neighbourhood

    Andrea Ascani, Riccardo Crescenzi, Simona Iammarino

    Series Reference: JHD-2015-07

    This paper investigates how the location behaviour of Multinational Enterprises (MNEs) is shaped by the economic institutions of the host countries. The analysis covers a wide set of geographically proximate economies with different degrees of integration with the ‘Old’ 15 European Union (EU) members: New Member States, Accession and Candidate Countries, as well as European Neighbourhood Policy (ENP) countries and the Russian Federation. The paper aims to shed new light on the heterogeneity of MNE preferences for the host countries’ regulatory settings (including labour market and business regulation), legal aspects (i.e.protection of property rights and contract enforcement) and the weight of the government in the economy. By employing data on 6,888 greenfield investment projects, the randomcoefficient Mixed Logit analysis here applied shows that, while the quality of the national institutional framework is generally beneficial for the attraction of foreign investment, MNEs preferences over economic institutions are highly heterogeneous across sectors and business functions.

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    The Importance of Domestic Capabilities for FDI-assisted Development: Lessons from Asia and Latin America

    Professor Rajneesh Narula

    Series Reference: JHD-2015-05

    This paper argues that the rapid growth of certain emerging economies over the last two decades is not only due to liberalised markets, MNEs and laissez-faire policies, but also to the effects of industrial development strategies that continue to share several similarities to the import-substitution industrialisation approach. The building up of capabilities in the domestic sector is crucial. At the same time, the heterogeneity in country experiences and their varying degrees of success at becoming internationally competitive indicates that understanding MNE assisted development requires us to go beyond just improving absorptive capacities. We also need to understand the role of political economy and issues of path-dependency in both policies and resources. I illustrate my arguments by contrasting the experiences of East Asian and Latin American economies.

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    Disentangling the Role of Modularity and Bandwidth in Entry Mode Choice: The Case of Business Services Offshoring

    Stefano Elia, Professor Rajneesh Narula, Silvia Massini

    Series Reference: JHD-2015-06

    This paper investigates the role of modularity on entry mode choice of companies’ offshoring of business services. We distinguish between functional modularity, which reflects the possibility to subdivide a function into smaller modules, and architectural modularity, which reflects the interdependence between these modules. Lower architectural modularity requires greater interaction (greater ‘bandwidth’) between the organizational units to reintegrate the individual modules. Using modularity appropriately can decrease transaction costs and reduce the risks of knowledge leakages associated with offshoring, and improve the effectiveness of the sourcing process, thus increasing the probability that firms opt for less hierarchical entry modes. Firms that are less experienced with offshoring tend to underestimate the associated resources and costs of architectural modularity and select entry modes that do not provide sufficient bandwidth to efficiently reintegrate offshored modules, increasing the risk of failure of the offshoring initiatives. Our empirical analysis, which involves 490 offshoring initiatives, supports our arguments, especially in high-tech and knowledge-intensive industries.

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    The HRM of Foreign MNCs Operating in Europe

    Dr Chul Chung, Masayuki Furusawa

    Series Reference: JHD-2015-04

    Europe has been a major destination for foreign direct investment as one of the triad economies with the USA and Japan. MNCs have brought not just financial resources but also human resources and, in many cases, particular ways of managing workforces from their home base. Transferring HRM practices could be highly complex and challenging, as human resources are the most country-bounded resources. Foreign MNCs operating in Europe face cross-national challenges stemming from the process of transfer and adaptation of HRM practices, due to the uniqueness of European traditions as well as the national diversity within Europe in relation to employment relations. This paper examines how MNCs from three different countries – the USA and Japan, the two other triad economies, and South Korea, a home base of emerging MNCs – have dealt with the challenges in managing human resources in their European operations within the given institutional contexts.

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    A Set of Motives to Unite Them All? Revisiting the Principles and Typology of MNE Motives

    Alvaro Cuervo-Cazzura, Professor Rajneesh Narula

    Series Reference: JHD-2015-03

    We reflect on the background and evolution of the internationalization motives over the last few decades, and provide suggestions for how to use the motives for future analyses. We also reflect on the contributions to the debate of the accompanying articles of the forum.There continue to be new developments in the way in which firms organize themselves as MNEs and this implies that the ‘classic’ motives originally introduced by Dunning in 1993 need to be revisited. Dunning’s motives and arguments were deductive and atheoretical, and were intended to be used as a toolkit, used in conjunction with other theories and frameworks. They are not an alternative to a classification of possible MNE strategies.

    This paper provides a deeper and nuanced understanding on internationalization motives for future research to build on.

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    Asset Recombination in International Partnerships as a Source of Improved Innovation Capabilities in China

    Simon Colinson, Professor Rajneesh Narula

    Series Reference: JHD-2014-05

    This paper examines how multinational enterprises (MNEs) and local partners, including suppliers, customers and competitors in China, improve their innovation capabilities through collaboration. We analyse this collaboration as a three-way interaction between the ownership specific (O) advantages or firm-specific assets (FSAs) of the MNE subsidiary, the FSAs of the local partner, and the location-specific assets of the host location. Our propositions are examined through a survey of 320 firms, supplemented with 30 in-depth case studies. We find that the recombination of asset-type (Oa) FSAs and transaction-type (Ot) FSAs from both partners leads to new innovation-related ownership advantages, or ‘recombinant advantages’. The study reveals important patterns of reciprocal transfer, sharing and integration for different asset categories (tacit, codified) and different forms of FSA and explicitly links these to different innovation performance outcomes. Ot FSAs, in the form of access to local suppliers, customers or government networks are particularly important for reducing the liability of foreignness for MNEs.

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    End-User Collaboration for Process Innovation in Services: The Role of Internal Resources

    Mona Ashok, Professor Rajneesh Narula, Andrea Martinez-Noya

    Series Reference: JHD-2014-03

    This paper focuses on how to improve process innovation in service sectors. To do so, we analyse how the interplay of external knowledge sources (specifically, the intensity of end-user collaboration and the breadth of external collaboration) and the firm’s internal resources impact process innovation at the firm level. Survey data from 166 Information Technology Services firms provide the empirical data, which is tested using the partial least squares structural equation model. Our results demonstrate that benefits from collaboration are not automatic, as the firm's commitment of internal resources fully mediates the impact of the intensity of end-user collaboration and breadth of external collaboration on process innovation. Thus, internal resources become critical to make effective use of the knowledge residing both internally and externally, and key managerial practices that enable a firm to extract benefits from external collaboration are identified.

    Keywords
    end-user collaboration, external knowledge sources, internal resources, process innovation,
    service industry

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    The Viability of Sustained Growth by India’s MNEs: India’s Dual Economy and Constraints from Location Assets

    Professor Rajneesh Narula

    Series Reference: JHD-2014-04

    This paper considers the longer-term viability of the internationalization and success of Indian MNEs. We apply the ‘dual economy’ concept (Lewis 1954), to reconcile the contradictions of the typical emerging economy, where a ‘modern’ knowledge-intensive economy exists alongside a ‘traditional’ resource-intensive economy. Each type of economy generates firms with different types of ownership advantages, and hence different types of MNEs and internationalisation patterns. We also highlight the vulnerabilities of a growth-by-acquisitions approach. The potential for Indian MNEs to grow requires an understanding of India’s dual economy and the constraints from the home country’s location advantages, particularly those in its knowledge infrastructure.

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    Regional and Product Diversification and the Performance of Retail Multinationals

    Chang Hoon Oh, Timo Sohl, Timo Sohl

    Series Reference: JHD-2014-02

    Despite the importance of geographic expansion in the services sector, few studies have analyzed the relationships between international diversification, product diversification and performance for services firms. Here we investigate whether and how firms in the retail-trade sector may benefit by spreading their boundaries within and across regional boundaries. Using a panel data set of 68 large European retailers from 19 countries for the period between 1997 and 2010, we find that intra-regional diversification has a horizontal S-curve relationship and interregional diversification has an S-curve relationship with firm performance. Moreover, the results show that unrelated product diversification has a negative moderating effect on the relationship between inter-regional diversification and firm performance. Overall, these results add support in the services sector for the three-stage paradigm of international diversification and performance.

    Keywords: Retail firms, geographic diversification, product diversification, regional diversification, performance, S curve.

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    How Home Country Weaknesses Can Constrain Further EMNE Growth: Extrapolating from the Example of India

    Professor Rajneesh Narula, Tiju Prasad Kodiyat

    Series Reference: JHD-2014-01

    This paper discusses the opportunities and limitations that the location-specific (L) assets of the home country represent for MNEs, particularly at the early stages of internationalization. The systemic weaknesses of the home country can constrain the long-term competitiveness of its firms, and ultimately, the competitiveness of its MNEs. It is the contention of this paper that many of the emerging countries have a constrained set of L assets from which their firms are able to develop ownership-specific assets. Are their economies developing improved L assets that will promote a new generation of EMNEs? We examine data for the case of India, an economy regarded as having considerable potential to expand to knowledge-intensive sectors. At the macro level, India’s performance is not different from countries of similar economic structure, and its current pockets of excellence are a reflection of its L assets. Our analysis suggests that the failure to foster and upgrade the L assets of emerging economies is likely to stunt the growth of their domestic firms, and ultimately any new MNE activity in the long-term.

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Ref. NoYearPaperDownload 
012011Narula, R. and Nguyen, Q. "Emerging Country MNEs and the Role of Home Countries: Separating Fact from Irrational Expectations"Download (PDF-303 KB)
022011

Rugman, A., Verbeke, A. and Nguyen, Q. "Fifty Years of International Business Theory and Beyond"

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032011 

Rugman, A., Oh, C. H. and Lim, D.S. K. "The Regional and Global Competitiveness of Multinational Firms"

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042011Narula, R. and Santangelo, G. D. "New Insights on the Role of Location Advantages in International
Innovation"
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052011Narula, R "Do we need different frameworks to explain infant MNEs from developing countries?"Download (PDF-450 KB)
062011

Godley, A "The emergence of competence creating subsidiaries in UK pharmaceuticals in the 20th century"

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072012

Godley, A "Entrepreneurial opportunities, implicit contracts and market making for complex consumer goods"

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08 2012

Almodóvar, P "The International Performance of Standardizing and Customizing Spanish Firms: The M Curve Relationships"

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 09 2012Nguyen, Q "The Regional Strategies of British Multinational Subsidiaries in South East Asia" Download (PDF-414KB)
 10 2013Boselie, P and Brewster, C "At the Crossroads at Midnight: Strategic Human Resource Management now" Download (PDF-570KB)
 11 2013Nguyen, Q and Rugman, A "Modern International Business Theory and Emerging Economy Multinational Companies"Download (PDF-6.27MB)
 12 2013Rugman, A and Almodóvar, P "The M Curve and the Performance of Spanish International New Ventures"Download (PDF-6.49MB)
132013

Narula, R, "Using a ‘Systems’ Perspective to Explain the Limits of ‘New’ Multinational Enterprises: the role of ‘members-only’ location advantages"

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142013Akrivou, K "Self-ideal Congruence and Self Complexity: The constructs, their positive role for adult ego development and their relationship"Download (PDF-369KB)
012014Narula, R and Prasad-Kodiyat, T "How Home Country Weaknesses Can Constrain Further EMNE Growth: Extrapolating from the Example of India"Download PDF
022014Oh, C.H., Sohl, T and Rugman, A "Regional and Product Diversification and the Performance of Retail Multinationals"Download PDF
032014Ashok, M., Narula, R., and Martinez-Noya, A., "End-User Collaboration for Process Innovation in Services: The Role of Internal Resources"Download PDF
042014

Narula, R., "The Viability of Sustained Growth by India’s MNEs: India’s Dual Economy and Constraints from Location Assets"

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052014

Collinson, S and Narula, R., "Asset Recombination in International Partnerships as a Source of Improved Innovation Capabilities in China"

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 06 2014

Narula, R and Martínez-Noya, A., "International R&D Alliances by Firms: Origins and Development"

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