Session 382

Drivers of Multinational Performance:What, Where and When?

Track G

Date: Monday, September 22, 2014

 

Time: 16:30 – 17:45

Common Ground

Room: Luxemburgo


Facilitator:

  • Randi Lunnan, BI Norwegian Business School

Title: Can Home-Country Conditions Shape Firm’s International Activities? An Investigation of Emerging Versus Developed Multinational Firms

Authors

  • Jose Geleilate, Florida International University
  • Peter Magnusson, Florida International University
  • Ronaldo Parente, Florida International University
  • Marcelo Alvarado-Vargas, University of Toledo

Abstract: Multinational enterprises (MNEs) coming from different home-country environments possess distinct characteristics attributed to their origins that are capable of influencing their international activities. We focus on the Multinationality-Performance (M-P) relationship of MNEs from both emerging and developed economies and how these firms are affected by their home-country different policies. After analyzing how home-country institutions of MNEs from 26 different countries alter their M-P relationship, we found that the same institutional factor can have opposite effects between emerging and developed MNEs. Thus, we show that multinational firms from emerging economies have a set of international capabilities acquired at their home-country very different from the ones possessed by multinationals from developed economies.

Title: Firm, Industry and Country Effects on Performance in the Global Economic Crisis

Authors

  • Vassiliki Bamiatzi, University of Liverpool
  • Konstantinos Bozos, University of Leeds
  • Tamer Cavusgil, Georgia State University
  • G. Tomas M. Hult, Michigan State University

Abstract: The present investigation offers new insights on the influence of firm, industry and country (F-I-C) effects on firm profitability. We consider the role of the global economic crisis and its impact on the underlying F-I-C relationship between developed and emerging countries. Using a 3-Level HLM model, we examine 15,008 firms within 10 emerging and 10 developed countries, and contrast F-I-C effects on profitability during the period 2005-2011. We find that firm effects are more important in emerging than in developed countries, and they are accentuated under conditions of adversity at the expense of industry and country effects.

Title: Misfortune of One, Happiness of Others? Impact of Parent Firms’ Market Munificence on Subsidiaries’ Performance

Authors

  • Aude Le Cottier, IE Business School
  • Juan Santalo, IE Business School

Abstract: We use Dess and Beard’s (1984) model of organizational task environment to suggest that home-market munificence has an ambivalent effect on the profitability of multinational corporations’ (MNCs) subsidiaries. We show that resources abundance at the parent-firm level enhances subsidiaries’ performance in general. But home-market scarcity also has virtues for industry-related subsidiaries, which may benefit from the capabilities developed by their parent to cope with a hostile environment at home. We also demonstrate that subsidiaries perform better when the distance in munificence between their home and host markets is small. Analysis of a unique panel database, gathering ownership ties and financial performance for 2,848 listed multinational corporations (MNCs) and their European subsidiaries over three years, supports our hypotheses.

Title: Performance in Foreign Markets: Brand and Product Strategies

Authors

  • Alicia Barroso, Carlos III University of Madrid
  • Marco Giarratana, IE Business School
  • Martina Pasquini, IE Business School

Abstract: This paper tests the post-entry performance of branding strategies of firms that enter in a foreign market. The empirical setting is the penetration of non-European car brands in the Spanish market after the process of tariff reduction due to the integration of Spain into the European Union. This empirical context allows testing the penetration in Spain of foreign brands that were already present in other European countries. Identify the brand strategy thought the trademarks registered by the firm and using a Heckman model, we find the generalist brands, i.e. unique brands that were used in different countries, accrue higher performance when coupled with a portfolio of diversified products, but they suffer more the competition of local niche-specialized brands.

Title: Rapid Internationalization and Firm Performance: Evidence From the Largest Indian Software Service Firms

Authors

  • Naveen Jain, University of Akron
  • Sokol Celo, Suffolk University
  • Vikas Kumar, University of Sydney

Abstract: Firms have been rapidly expanding into international markets, especially from the emerging markets. Traditional international business (IB) theories, however, prescribe firms to expand only gradually due to liabilities of foreignness, time compression diseconomies, and resultant loss in profitability. Given the potential adverse performance effects of rapid internationalization, firms have to manage their internationalization speed with the resource constraints they face. We study the moderating influence of firm resources on the relationship between their internationalization speed and performance. We posit that process capabilities and international experience will have a positive moderating influence while business group affiliation will negatively moderate the speed-performance relationship. We test our hypotheses on a sample of Indian software service firms. Our empirical findings largely support our predictions.

Title: Unified or Split Control of MNE Subsidiary: A Test of Competing Hypotheses

Authors

  • Anurag Sharma, University of Massachusetts-Amherst
  • Mayank Sewak, University of Massachusetts-Amherst

Abstract: MNEs control as well as transfer managerial know how to foreign subsidiaries through the expatriates. When leadership of an MNE subsidiary is split between an expatriate and a local manager, the subsidiary benefits from the parent’s knowhow complementing local institutional knowledge and networks. Yet, where leadership of the subsidiary is made up solely of either local managers or of expatriates, the benefits of such unity of command include better coordination and decisive action when needed. We use Social Identity Theory to develop arguments and test the two competing hypotheses for a sample of MNE subsidiaries operating in India. We find that subsidiaries with unified command outperform those with split in leadership. We conclude by discussing the implications for future research.

All Sessions in Track G...

Sun: 08:00 – 09:15
Session 389: Managing the Multinational Organization in an Increasingly Complex World
Sun: 09:30 – 10:45
Session 221: Global Stakeholder Networks
Session 390: Local Determinants of Competitive Advantage and Disadvantage
Sun: 11:15 – 12:30
Session 2: Offshore Outsourcing, Dynamic Capabilities, and the Changing Nature of Firm Boundaries
Sun: 15:45 – 17:00
Session 270: Innovation in MNCs and Global Networks
Session 371: Inter and Intra Organizational Learning Across Borders: A Knowledge Management Perspective
Session 380: Small, Young and Entrepreneurial Firms: A Unique Perspective in Globalization
Sun: 17:15 – 18:30
Session 603: Global Strategy IG Business Meeting
Mon: 08:00 – 09:15
Session 335: Internationalization and Strategic Decisions
Session 379: Emerging Markets: Understanding the Importance of Context
Mon: 11:00 – 12:15
Session 372: The Challenges of Global Operations: Managing R&D and Complexity
Session 373: Global Diversification: Governance and Performance Implications
Mon: 14:45 – 16:00
Session 375: Changing External Environments: How do Multinationals Respond?
Session 381: Firm boundaries in Multinational Organizations: Antecedents and Consequences
Session 414: Global Networks and Business Groups
Mon: 16:30 – 17:45
Session 226: Culture, Norms and Institutions: The contextual influences on Entrepreneurship
Session 374: Antecedents and Consequences of Multinational Location Decisions
Session 382: Drivers of Multinational Performance:What, Where and When?
Tue: 08:00 – 09:15
Session 383: Globalization of R&D: Implications for Learning and Innovation
Tue: 11:00 – 12:15
Session 376: Headquarters Subsidiary Relationship: New Approaches to an Old Question
Session 384: Multinational Location Decisions: New Approaches Across Different Perspective
Tue: 15:30 – 16:45
Session 263: Innovation Models in Emerging Economies
Session 377: Organizing Assets Across Borders: Drivers and Consequences
Session 385: Multinational firms and the External Environment: The Role of Institutions
Tue: 17:15 – 18:30
Session 378: Global Outsourcing & Offshoring: Implications for Multinational Decisions


Strategic Management Society

Madrid