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Article
Publication date: 28 July 2023

Jakob Müllner, Igor Filatotchev and Thomas Lindner

The purpose of this paper is to bridge the disciplinary divide between international finance and international business (IB) to realign academic research with business reality in…

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Abstract

Purpose

The purpose of this paper is to bridge the disciplinary divide between international finance and international business (IB) to realign academic research with business reality in which strategy and finance align to determine firms’ success or failures.

Design/methodology/approach

The authors discuss theoretical differences between the fields of international finance and IB strategy that caused the fields to develop in isolation with little fertilization across disciplines. The authors review scarce interdisciplinary contributions between the fields. Finally, the authors identify complementarities that suggest fruitful avenues for future research.

Findings

The authors find a persistent disconnect between finance and strategy/IB literature that can be explained by fundamentally different aims and assumptions about the markets. While finance theory seeks to explain typical effects under functioning markets, strategy and IB theories focus inherently on exceptional effects and market inefficiencies.

Research limitations/implications

The fundamental theoretical differences that isolate finance and strategy/IB create avenues for interdisciplinary research that harness the complementarities of the two disciplines. These include strategic aspects of capital structure, internal capital market inefficiencies, corporate governance, capital market liability of foreignness and institutional aspects of financial management.

Practical implications

With this paper, the authors not only bring academic researchers in finance and strategy closer to corporate practice. The theoretical discussion also challenges the functional blind spots of practitioners and encourages more holistic decision-making.

Social implications

Challenging market functioning and recognizing market inefficiencies using strategy and IB foundations connects financial economics with non-market topics such as environment, society and governance or impact investing.

Originality/value

The value and originality of the paper come from the qualitative, epistemological approach to study and analyse the divide between international finance and strategy/IB scholarship.

Details

Multinational Business Review, vol. 31 no. 3
Type: Research Article
ISSN: 1525-383X

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Book part
Publication date: 14 March 2022

Vera Kunczer, Thomas Lindner and Jonas Puck

Country risk is an important determinant for foreign direct investment (FDI) decisions. Over the lifetime of an FDI project, country risk can change due to political, social, or

Abstract

Country risk is an important determinant for foreign direct investment (FDI) decisions. Over the lifetime of an FDI project, country risk can change due to political, social, or economic events in a country. However, how changing country risk influences FDI decisions has not been fully investigated. Therefore, the goal of this study is to provide a theoretical conceptualization of how dynamic risk developments affect FDI. We follow a financial theoretical perspective and base our propositions on discounted cash-flow models. We propose that a positive trend in country risk, where country risk is expected to decrease over time, increases FDI probability. What is more, we propose that predictability of this trend positively moderates this effect, but that high amplitude and high frequency in risk changes reduce the positive effect of a positive trend on FDI. Finally, our theoretical model proposes that firms of different size can manage dynamic risk developments differently: large firms can better deal with high-amplitude changes, whereas small firms can better deal with high frequency changes in country risk. With this study, we want to contribute to a better understanding of how dynamic environments influence investment decisions and introduce a long-term perspective of country risk.

Details

International Business in Times of Crisis: Tribute Volume to Geoffrey Jones
Type: Book
ISBN: 978-1-80262-164-8

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Book part
Publication date: 2 December 2024

Vítor Corado Simões, John Cantwell and Philippe Gugler

Abstract

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The History of EIBA: A Tale of the Co-evolution between International Business Issues and a Scholarly Community
Type: Book
ISBN: 978-1-83608-665-9

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Book part
Publication date: 23 November 2017

Jonas F. Puck, Markus Hödl, Igor Filatotchev and Thomas Lindner

We build on the resource-based view and extend entry mode research by focusing on firms’ intention to transfer different resources from the parent firm to its overseas subsidiary…

Abstract

We build on the resource-based view and extend entry mode research by focusing on firms’ intention to transfer different resources from the parent firm to its overseas subsidiary. In line with our hypotheses, we find that parent firms that plan to transfer high levels of intangible resources to their foreign subsidiaries tend to choose wholly owned subsidiaries, while firms that intend to transfer high levels of tangible resources tend to choose international joint ventures. Moreover, we find that these relationships are moderated by institutional distance. We test our hypotheses using unique primary data from a sample of 128 foreign subsidiaries in the People’s Republic of China. Our results have important theoretical implications for international business strategy research as they develop further existing entry-mode theories.

Details

Distance in International Business: Concept, Cost and Value
Type: Book
ISBN: 978-1-78743-718-0

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Available. Content available
Book part
Publication date: 2 December 2024

Vítor Corado Simões, John Cantwell and Philippe Gugler

Abstract

Details

The History of EIBA: A Tale of the Co-evolution between International Business Issues and a Scholarly Community
Type: Book
ISBN: 978-1-83608-665-9

Available. Content available
Book part
Publication date: 23 November 2017

Abstract

Details

Distance in International Business: Concept, Cost and Value
Type: Book
ISBN: 978-1-78743-718-0

Available. Content available
Book part
Publication date: 14 March 2022

Free Access. Free Access

Abstract

Details

International Business in Times of Crisis: Tribute Volume to Geoffrey Jones
Type: Book
ISBN: 978-1-80262-164-8

Available. Content available
Article
Publication date: 1 July 2006

John Ling

169

Abstract

Details

Soldering & Surface Mount Technology, vol. 18 no. 3
Type: Research Article
ISSN: 0954-0911

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Book part
Publication date: 14 March 2022

Rob van Tulder, Alain Verbeke, Lucia Piscitello and Jonas Puck

Crises are often studied in international business (IB) research as the external “context” for business strategies, but firms can also be active participants in the unfolding of

Abstract

Crises are often studied in international business (IB) research as the external “context” for business strategies, but firms can also be active participants in the unfolding of crises. The study of crises in IB could benefit greatly from studying the role of multinational enterprises (MNEs) as active participants, rather than as mere passive actors, responding to exogenous events. History shows that IB crises typically unfold partially as exogenous processes, and partly as the result of MNE strategies. A multilevel and longitudinal approach to studying crises in IB is clearly necessary. This chapter considers the extent to which smaller events that preceded the present crisis – since 1989 – point to systemic problems in global governance. It also defines five overlapping lenses through which future IB studies can further create relevant insights on how to deal with crises: historic, macro, meso, micro and exogenous. The chapter finally serves as an introduction to the whole Progress in International Business Research volume by indicating the relevance of all parts and chapters that follow.

Details

International Business in Times of Crisis: Tribute Volume to Geoffrey Jones
Type: Book
ISBN: 978-1-80262-164-8

Keywords

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Abstract

Details

Designing the New European Union
Type: Book
ISBN: 978-1-84950-863-6

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