Bernardo Frossard Silva-Rêgo and Ariane Roder Figueira
The purpose of this paper is to analyze the main contributions of the new institutional economics to the international business (IB) arena. It also intends to show how the NIE is…
Abstract
Purpose
The purpose of this paper is to analyze the main contributions of the new institutional economics to the international business (IB) arena. It also intends to show how the NIE is being incorporated to both eclectic paradigm and Uppsala school’s view, and how it is modifying them.
Design/methodology/approach
A range of IB articles, which contained an institutional view and also discussed the eclectic paradigm or the Uppsala school, provides the background to build a framework.
Findings
This paper proposes a framework showing the impact of the institutional variables on the internationalization of firms, by addressing both the OLI paradigm and Uppsala school. It also concludes that the institutional theory has been a point of intersection between the OLI paradigm and Uppsala school, since both have been renewed to understand the transaction costs borne by the firms in their international learning process and in the search for less asymmetrical information.
Research limitations/implications
This paper provided a brief discussion about the institutional components.
Practical implications
This study is a useful source of information for those who want to discuss the institutional impact in the IB arena and emerging markets.
Originality/value
This paper summarizes how the OLI paradigm and Uppsala school encompassed the institutional variables. It also presents a framework that allows new study possibilities since the understanding of the influence of institutional variables on the international movements of firms is still cloudy.
Details
Keywords
Renan Oliveira, Ariane Roder Figueira and Bernardo Silva-Rêgo
The aim of this study is to propose a link between international business (IB) and economic geography, which are two streams of thought that have developed without one…
Abstract
Purpose
The aim of this study is to propose a link between international business (IB) and economic geography, which are two streams of thought that have developed without one acknowledging the other. We use the Uppsala model and the Global Production Network as pillars to sustain this link. We expect that this research triggers a collaboration with allied social sciences in important debates surrounding the business-societal interface.
Design/methodology/approach
We selected papers produced by Johanson and Vahlne to understand the development of the Uppsala model over 40 years. The same was done with the Global Production Network, where we scrutinized the work of Henderson, Coe, Dicken, Hess and Yeung – scholars from the Manchester School of Geography – in the last twenty years. Based on Humphrey et al. (2019), we applied an inductive and inferential approach to uncover similarities and differences between the Uppsala model and Global Production Network.
Findings
The Uppsala model reinforces the strategic role of network position in the internationalization process, while the Global Production Network aims to explain how the governance of global firms scattered world-wide affects the development and upgrading opportunities of the various regions and firms involved. Despite these clear differences, the geographical nature of IB and shared similarities accounting the network as a channel to foster and provide access to important resources and practices regarding management, coordination and governance of dispersed parts of multinational enterprises give room to using these two theories as pillars to link IB and economic geography.
Originality/value
While attempts to link IB and economic geography are not new, none of these studies have focused on the Uppsala model and Global Production Network as pillars to create a link. We foresee an intense cross collaboration and an even possible renaissance of IB and economic geography to target the ever-changing business environment and its impact on social and economic development.
Details
Keywords
Stephanie Tonn Goulart Moura, Christian Falaster and Bernardo Silva-Rêgo
Cultural distance can be a challenge for internationalization. However, in some instances, it is possible that different cultures could represent a benefit for multinational…
Abstract
Purpose
Cultural distance can be a challenge for internationalization. However, in some instances, it is possible that different cultures could represent a benefit for multinational enterprises (MNEs) from emerging contexts. Drawing on the knowledge-based view (KBV), the authors propose that greater cultural distances lead to benefits for multinationals seeking to absorb new knowledge overseas.
Design/methodology/approach
The authors performed ordinary least squares regressions with moderation tests over a database containing 101 cross-border acquisitions to test the study’s hypotheses. The acquisitions were performed by Brazilian firms between 1995 and 2015, targeting 24 host countries.
Findings
The study’s results indicate that cultural distance positively affects the firm's post-acquisition performance and that absorptive capacity moderates these results, improving the positive effect. The study suggests that cultural diversity is an asset for the multinationals in question.
Practical implications
When deciding to invest in a foreign country, managers should consider this cultural diversity as one more value creation driver, especially if the firm has well-developed innovation capabilities.
Originality/value
The study’s findings contribute to the international business literature providing further evidence that emerging markets multinationals can create value in acquisitions through the firm's abilities to exploit cultural asymmetries. Thus, the authors also emphasize that absorptive capacity plays a strategic role in multinational's international strategies.