CIBUL holds a series of seminars and workshops for faculty and PhD students. These workshops include both formal seminars and informal research talks. For more information please contact Elena Karali (E.Karali@leeds.ac.uk).
CIBUL@25 Anniversary Seminar Series
Emergent Technologies in the 2020s: Implications for International Business
Wednesday 27th of April 2022
In this presentation, Prof Knight discussed the emergence of ground-breaking technologies and how they are having a big impact in the 2020s. After highlighting the nature and challenges of “Industry 4.0” technologies, the likely consequences for international business (IB) were discussed. Prof Knight examined implications for multinational enterprises (MNEs), small- and medium-size enterprises (SMEs), and for public policy. Then, he zeroed in on the specific example of ‘additive manufacturing’ (AM; also known as ‘3D Printing) and examined the specific nature and likely effects of AM on IB.
Building and Transforming to Achieve Social and Environmental Compliance in Global Value Chains
Tuesday 15th of March 2022
Multinational corporations (MNC) are under increasing pressure to improve social and environmental standards in their global value chains (GVC). “Cascading compliance,” the process by which MNCs distribute codes of conduct and request their suppliers to “cascade” those standards to their suppliers, has become the primary method of achieving improving compliance. Yet, even firms strongly motivated to improve compliance may be exposed to supplier compliance shortcomings and we find that these MNCs have little guidance on how to improve their compliance systems. We build a capability framework to conceptualize higher-order routines MNCs need to orchestrate their GVC social and environmental compliance. We establish three key MNC roles—the internal prioritizer, external developer, and network transformer—and we highlight four crucial capabilities associated with each role by drawing upon prior research in operations, sustainability, and supply chain management. Our framework has significant practical value for both scholars and managers as it delineates between levels of analysis as well as temporal considerations.
Multinational enterprises and the circular economy
Tuesday 16th of November 2021
12:30 – 14:00
In this paper, the authors explore the role of multinational enterprises (MNEs) in the circular economy (CE). MNEs play a key role in reshaping business systems as they orchestrate a significant part of value activities in various locations across the globe. The authors argue that MNEs' adoption of CE opportunities varies due to corporate and contextual influences. In particular, the authors suggest that MNEs' corporate strategies regarding value activity integration, product diversification, and location choices influence how they approach CE. Industry and location factors also play roles in facilitating or impeding CE advancement. Regarding the international business ramifications of CE, the authors discuss the impact of MNEs' geographical scope in terms of a local, multi-local/regional, or global focus and show how formal and informal institutional contexts influence the design and implementation of CE. Their analysis demonstrates that established conceptualizations in the international business field of MNEs, and the business systems in which they operate, are useful for understanding CE, but further international business research is needed about how MNEs can help implement the transition towards CE.
Does Intranational Distance Matter? Evidence from US Multinational Firms
Wednesday 29th September 2021
Distance has important implications for crucial strategic decisions of the firm. The findings of most empirical research in international business have largely confirmed the negative effects of distance between countries, for example, reducing the levels of trade and foreign direct investment. We adopt this perspective to consider at the firm level if the negative effects of specific dimensions of distance within a country affect firm behaviour, specifically the geographic distribution of subsidiaries. Using a panel of 463 US MNEs with 38,163 US-based subsidiaries during 2010–2017, providing 2,497 MNE-year observations, we explore the CAGE (cultural, administrative, geographic, economic) distance effects on the dispersion of subsidiaries. Our predictions that a combined measure of the CAGE dimensions the individual CAGE distance measures will have a negative effect of the distribution of subsidiaries by the US MNEs is confirmed by the data. Our results reveal that the strongest negative effect on dispersion appears to emanate from cultural distance and administrative distance, followed by geographic distance. We find that economic distance has a small significantly weak negative effect. Additional analyses complement our main findings.
Three Types of Reverse Innovation
Tuesday 15th June 2021
Reverse innovation is the diffusion of innovations from developing countries to the rest of the world, including developed countries (Govindarajan & Ramamurti, 2011). Initial research on the topic focused largely on one type of situation, i.e. reinventing existing Western products for developing countries to make them ultra-affordable and simple to use, e.g. the famous case of GE’s medical devices (ultrasounds, MRIs, EKG machines, etc.). In his talk, Prof Ravi Ramamurti explored two other types of situation where reverse innovation is promising. One is the case of local process innovations, often driven by resource scarcity and relative poverty. He illustrated this with work on healthcare and public health. The other is the case of local product innovation, i.e. situations in which developing countries produce new-to-the-world products through catch-up and leapfrogging strategies. Prof Ravi Ramamurti also illustrated this with examples from telecom equipment (Huawei) and digital products (Zhong An). Prof Ravi Ramamurti concluded with implications for Western MNCs.
Developing Conflict: Elite Bias in the Stakeholder Networks of Global Projects
Thursday 20th May 2021
14:00 – 15:30 (BST)
Development projects have long been used to increase the economic prosperity of communities and nations, as well as reduce conflict and promote peace. Yet, the economic benefits of these development projects may not be distributed equitably across the stakeholder groups surrounding the projects, and this relative deprivation of certain groups may instigate, instead of reduce, conflict. Building on past research that examines how the elite bias in stakeholder networks can exacerbate conflict amongst political, social and economic groups, as well as past research that argues development aid worsens conflict, we examine under what conditions elite bias in the network of the project organization exacerbates conflict amongst stakeholder groups. Using a panel dataset of 763 World Bank funded projects across 124 countries, we develop a unique measure of conflict through the geocoding of project locations and the analysis of the media-corpus surrounding each project. We theorize and find that elite bias in the stakeholder network exacerbates conflict depending on project composition and selection, and that these effects are worsened in conflict-affected environments. Our findings provide support for the argument that the World Bank and other multilaterals should take socio-political relationships into account in their lending, and that lenders and managers who ignore these factors may drive the opposite-effect as intended.
Corporate Governance in Emerging Markets: The Case of Board Diversity
Thursday 29th April 2021
14:00 – 15:30 (BST)
Governments around the world have prioritized efforts to promote gender equity in the workplace, including at the very apex of the organization - the board. One tool that has been increasingly used by policymakers are gender quotas in boards. We examine how a governance practice, originally enacted in Norway, was adopted in 2013 in the emerging market country of India. The emerging market context allows us to turn our institutional lens to gender (and human capital) rebalancing efforts on the board thereby shedding light on systemic gender bias. We investigate the most critical issue associated with gender quotas - do they produce substantive change or is change merely symbolic? To do so, we explore which women are appointed after the implementation of such quotas and how they contribute to governance in these predominantly all-male boards. In doing so, we divert the conversation to how boards from emerging markets recalibrate dual institutional pressures, exercise their governance discretion and adopt hybrid governance models. We close by proposing solutions to alleviate underlying gender bias deeply ingrained in most emerging markets. In the process, we divert the attention of the gender quotas literature from its focus on performance and symbolic adoption to more fundamental questions critical to change makers.
Energy transition risks and opportunities
Wednesday 24th March 2021
14:30 – 12:00 (GMT)
Prof Lundan discussed the findings from a recent study (Patala et al., JIBS, 2021) that focuses on the role of FDI in the energy transition of electric utilities, and she also touched on the continuing work with the same team focusing on the management of energy transition risks in other sectors, namely shipping and aviation. They use qualitative comparative analysis to identify the paths leading to cross-border investment in renewable and non-renewable electricity generating capacity. They base their model on six conditions that include three FSA conditions, namely technological capabilities, international experience and state ownership, and three CSA conditions, namely growth in host country demand, host country declining emissions trend and host country public incentives for investment in renewables. Their outcome variable is FDI in renewables, with investment in renewables coded as positive and investment in non-renewables coded as negative. They find that while highly internationalised private MNEs with technological capabilities follow renewable-dominated strategies regardless of the presence of CSAs, SOMNEs appear to follow more cautious strategies relying mainly on CSAs. Moreover, they find that high international experience seems to be associated with FDI in renewables and low international experience with FDI in non-renewables for private MNEs, while for SOMNEs it is the opposite. Furthermore, their analysis also suggests that the same MNE may contribute simultaneously to both a ‘race to the top’ and a ‘race to the bottom’, extending and even challenging prior research highlighting the role of firm heterogeneity.
Employee Performance and Communication in a Hybrid Remote Workplace: Evidence from a Field Experiment
Tuesday 9th March 2021
14:00 – 15:30 (GMT)
Given the widespread adoption of remote work during the COVID-19 pandemic, it is likely that workers and organizations continue to adopt hybrid-remote work practices in the longer term. In a hybrid-remote work arrangement, work is partly done in a physical office and partly done remotely. Yet we lack causal evidence on how hybrid-remote work affects worker performance and intra-firm communication patterns. We report evidence from a field experiment, conducted within an organization in the summer of 2020. Following a government mandated four-month lockdown due to COVID-19, the experiment entailed randomizing the list of workers who were allowed back in office on any given day. More specifically, for a period of five weeks following the lockdown, we exploit an exogenous cap of the maximum number of workers allowed back in office and conduct daily lotteries to determine which workers were allowed to work in the office versus work at home. We exploit this allocation protocol and use data on emails exchanged among employees in the pre-lockdown, lockdown and post-lockdown (i.e. treatment) periods to study intra-firm communication patterns. Our preliminary results indicate that employees who spent an additional day in the office sent 0.3% more emails per day. Moreover, among those with intermediate time in the office, their email traffic increased by 5.5%, relative to those who came in 0-11 days. We furthermore find that employees who followed a hybrid work protocol that involved intermediate levels of number of days in the physical office received 0.34 to 0.53 higher standard deviations in performance ratings from their managers, compared to employees who mostly worked from home. Moreover, those who mostly came into the office did not have statistically different performance evaluations. In sum, our results contrast with some of the existing empirical results that the move to remote work arrangements amplifies intra-firm inequality by showing that hybrid work arrangements can actually expand employees' networks.
Authors: Raj Choudhury, Tarun Khanna, Christos Makridis, Kyle Schirmann, Subhrodip Sarkar
The anatomy of an award-winning meta-analysis: Recommendations for authors, reviewers, and readers of meta-analytic reviews
Thursday 25th February 2021
10:30 – 12:00 (GMT)
Meta-analyses summarize a field’s research base and are therefore highly influential. Despite their value, the standards for an excellent meta-analysis, one that is potentially award-winning, have changed in the last decade. Each step of a meta-analysis is now more formalized, from the identification of relevant articles to coding, moderator analysis, and reporting of results. What was exemplary a decade ago can be somewhat dated today. Using the award winning meta-analysis by Stahl et al. (Unraveling the effects of cultural diversity in teams: A meta-analysis of research on multicultural work groups. Journal of International Business Studies, 41(4):690–709, 2010) as an exemplar, we adopted a multi-disciplinary approach (e.g., management, psychology, health sciences) to summarize the anatomy (i.e., fundamental components) of a modern meta-analysis, focusing on: (1) data collection (i.e., literature search and screening, coding), (2) data preparation (i.e., treatment of multiple effect sizes, outlier identification and management, publication bias), (3) data analysis (i.e., average effect sizes, heterogeneity of effect sizes, moderator search), and (4) reporting (i.e., transparency and reproducibility, future research directions). In addition, we provide guidelines and a decision-making tree for when even foundational and highly cited meta-analyses should be updated. Based on the latest evidence, we summarize what journal editors and reviewers should expect, authors should provide, and readers (i.e., other researchers, practitioners, and policymakers) should consider about meta-analytic reviews.
Do the actual motivations for FDI match those of IB theory - and does it matter?
Friday 17th January 2020
The purpose of this paper is to explore the assumptions that underpin the dominant paradigm of international business, that divides FDI into market seeking, efficiency seeking, technology seeking and resource seeking. As we explore, this typology developed as almost a throw away line, but is now accepted without question.We explore the validity of these assumptions, but also explore whether their validity matters.
We subsequently explore the extent to which one can apply this typology to models that seek to explain variations to returns to FDI, using a new data set that captures motivation ex ante rather than ex post. We show that while motivation does matter, the broad brush 4 typology approach is too crude to explain variations in firm performance, either in terms of productivity or profitability, testing this across both countries and sectors.
The Coevolution of Industry Architecture, Geography, and Innovation in Mobile Phone Manufacturing, 1992-2012
Tuesday 18th February 2020
G.03, 20 Cromer Terrace
We examine the shifting geography and architecture of the mobile handset industry over the entire ‘outsourcing era,’ leveraging data on virtually every significant supply relationships for the design and manufacture of complete handsets for branded producers and mobile telecom operators in the period 1992-2012. As handset production shifted from primarily European and North American locations to a diverse set of countries centered in Asia, the industry architecture also evolved, from a stable structure dominated by a small handful of vertically-integrated producers, to a much more fragmented and differentiated structure, featuring integrated and ‘fabless’ producers, and a highly heterogeneous collection of electronic manufacturing service firms. Our analysis explores how these changing structures have played out in terms of firm boundary decisions, buyer-supplier relationships, innovation, and new product introductions.
Whose interests are directors pursuing? A multi-country study
Monday 19th October 2020
10:00 – 11:30 (BST)
Academic and practitioner debates have focussed on whether the directors of companies should do the interests of the shareholders or those of the stakeholders. The debate is far from being settled and has generated mixed and inclusive findings. Using qualitative interviews with directors of listed companies from Australia, Hong Kong, Italy, and the United States, this study explores how directors make decisions and whose interests they pursue. From the qualitative interviews, it emerges that directors do not maximize the interests nor of the shareholders and neither of the stakeholders. Rather, the maximization of these interests is secondary to the maximization of the interests of the firm itself. The findings of this study help to reconcile the mixed findings literature. Opportunities for future research are discussed.
Navigating Cross-Border Institutional Complexity: A Review and Assessment of Multinational Nonmarket Strategy Research
Monday 9th November 2020
16:00 – 17:30 (GMT)
Multinational enterprises are deeply engaged in nonmarket strategy (NMS), including both corporate political activity (CPA) and strategic corporate social responsibility (SCSR). In this review, we document the multinational NMS research according to contributions’ theme, method, context, theory, and level of analysis. We then develop a multi-level, institutional multiplicity framework to organize our analysis of this large and fragmented body of literature. In so doing, we identify the most impactful contributions within three major themes – multinational CPA, multinational SCSR, and the integration of CPA and SCSR – and their respective subthemes, and call attention to limitations in the extant research. We also highlight promising avenues for future research, including expanding the scope of NMS to incorporate micro-foundations research, integrating macro-level scholarship on global institutions, placing greater attention on the interaction between CPA and SCSR, and focusing on important emergent global issues. Our review underscores the growing importance and missed opportunities of NMS research in the international business (IB) field.
Are Women More Likely Venture Funders? Theory and Evidence from Migrants Remitting to Developing Countries
Tuesday 17th November 2020
16:00 – 17:30 (GMT)
There is substantial research on how women differ from men as new business (venture) founders, but little on how women may differ from men as venture funders. We fill this gap with theory and evidence from an unconventional venture funding context: migrants’ remittances to developing countries. We propose that remitting migrant women are more likely venture funders consistent with a greater interest in assisting family members back home. Complementary empirical analyses of remittances to developing countries largely support our proposition. Cross-sectional data analyses of remitting tendencies among 718 migrants from 49 developing countries in 2011 suggest that migrant women are more likely to remit for investment purposes, particularly when family assistance motivates a specific remittance transaction. Panel data analyses of venture funding availability in 48 developing countries from 2001-2010 suggest that remittances from migrant communities with higher percentages of women increase venture funding more, particularly for migrant communities from developing countries with less wealth and less workplace gender inequality. In this unconventional context, women are more likely than men to step into (international) venture funding roles, particularly when socio-economic need and opportunity are greater.
Achieving Global Scale
Wednesday 25th November 2020
16:00 – 17:30 (GMT)
Achieving global scale is an ambition of many leaders of technology-based firms, but one that is challenging to execute. Through a qualitative study of software-as-a-service firms, we show that global scaling involved tensions between the contradictory demands of replication and entrepreneurial behavior. We explain how leaders navigate these tensions through three inter-related capacities, and summarize our findings in a theoretical framework. Our research contributes to global strategy scholarship by revealing the global strategy demands and managerial approaches for achieving global scale, thereby detailing boundary conditions of current international business strategy frameworks and building understanding of the variation in global strategies of firms offering digital products.
The MNE vs. host environment: which drives subsidiary performance? A comparison between advanced and emerging market MNE subsidiaries
Wednesday 27th November 2019
The performance of subsidiaries is influenced by MNEs’ competence and host country environment. We distinguish the host environment as a technological-rich environment measured by host patent stock and a diffusion-constraining environment measured by intellectual property regime (IPR). However, do subsidiaries of advanced market multinationals (AMNEs) and emerging market multinationals (EMNEs) benefit from their MNEs and host environments in the same way? By examining these differences, this study contributes to the literature that seeks a general explanation of multinational enterprises originating from contrasting home environments. We develop a general model on subsidiary performance examining the relative importance and joint effects of MNEs and host environments on subsidiary performance and different patterns of effects are expected emerging from the sub-samples (AMNE subsidiaries and EMNE subsidiaries). We find support in our analysis of data on 4978 foreign subsidiaries of MNEs including 4676 foreign subsidiaries belong to AMNEs (from France, Germany, Italy and US) and 302 foreign subsidiaries belong to EMNEs (from China and India) in a time period, 2006-2014. Our results suggest that AMNE subsidiaries rely more on internal competence (MNE R&D), while EMNE subsidiaries rely more on external competence. (technological-rich environment). Moreover, compared with EMNEs subsidiaries, AMNE subsidiaries with greater MNE R&D intensity are more negatively influenced by a diffusion-constraining environment.
Navigating Cross-Border Institutional Complexity: An Assessment of Nonmarket Strategy Research in the IB Field over 2000-2019
Thursday 15th October 2019
1.14, Liberty Building
Nonmarket strategy is a firm’s concerted action to improve its competitive position and performance by managing the institutional and/or societal contexts of business competition in which it operates. Multinational enterprises (MNEs) are deeply engaged in nonmarket strategy (NMS), including corporate political activities (CPA), strategic corporate social responsibility (SCSR) and adapting to the global nonmarket environment. In this review, we bring together insights from the fragmented multinational NMS research to analyze extant scholarship from multiple vantages. Further, we identify both shortcomings of current research and point to promising avenues for future research. We suggest that multinational nonmarket strategy research serves as one of the most promising areas for IB to address big questions and grand challenges in the contemporary world.
Does Global Integration Stimulate Corporate Citizenship? The Effect of Economic Integration and Regulatory Quality on State and Private Firm CSR Signaling
Friday 3rd May 2019
G.03, 20 Cromer Terrace
There is increasing interest by scholars and practitioners in the influence and responsibilities of business in society and the role of governmental and nongovernmental stakeholders in shaping that influence. In this study, we examine the effects of global integration on firm-level corporate social responsibility (CSR) signaling. Building on policy transfer and institutional theory, we propose that country-level participation in global trade agreements encourages firm-level CSR signaling. Further, we argue that participation in these trade arrangements stimulates greater signaling from state-owned firms than privately-owned firms because those agreements increase the accountability of state firms to supranational institutions, whereas private firms are already accountable to their respective state and domestic institutions. However, we suggest this effect is lower in countries with stronger regulatory quality, as state firms in such countries already experience greater internal pressures for social responsibility. Analyses from 152,267 firm-year observations from 11,992 firms from 133 countries spanning 2000-2014 provide robust support for the arguments.
Export Status and SME Productivity: Learning-to-export versus learning-by-exporting
Thursday 11th April 2019
We exploit a unique data source to examine the strategic choices of smaller firms in terms of exporting or non-exporting. We are able to differentiate export-capable firms (which have products or services suitable for exporting but have no intention to export) from both exporters and other non-exporters who do not have products/services suitable for exporting which we term ‘domestically-focused firms’. Our ability to separately identify export-capable and domestically-focussed firms provides new insight into the nature of learning-to-export and learning-by-exporting effects. There are four key results. First, the key influence of product innovation is in helping firms to become export-capable rather than in moving from export capability to actually exporting. Second, there is a clear relationship between growth ambition, export-capability and exporting. Third, export-capable firms exhibit a short-term decline in productivity relative to DFFs, an effect which does not persist into the exporting phase. Fourth, in our analysis there is clear evidence of learning-by-prior-exporting effects on productivity, regardless of firms’ current export status.
How does offshore outsourcing of specialized resources affect the exports and financial performance of emerging market firms?
Friday 22nd March 2019
Most extant literature on offshore outsourcing investigates large western multinational enterprises and their decisions to relocate some activities outside the borders of their home country in an effort to reduce costs. By contrast, this paper examines how firms from an emerging country resort to outsourcing as an alternative way to get access to specialized resources from advanced economies and whether such strategy leads to improvements in firms’ export and financial performance. Unlike prior research, we analyze the joint effect of offshore outsourcing and exports on business outcomes. Using panel data of 1,665 Indian firms over a 13-year period, we find that outsourcing specialized resources from abroad makes firms more competitive in the international market, enhancing their exports and financial performance. Moreover, the positive impact of offshore outsourcing on firm profitability is greater as international sales increase. The approach adopted in the paper offers new theoretical contributions and we propose several managerial implications based on our findings.
Emerging market business groups – agile competitors or dinosaurs? Evidence from technological progress of Indian firms
Tuesday 19th February 2019
Switching Options and Foreign Entry Decisions: The Role of Portfolio Configuration
Wednesday 23rd January 2019
Research on foreign market entry has rarely considered that multinational firms’ new entry decisions may be affected by the configuration of their existing portfolio of affiliates. We argue that in making entry decisions, firms take into account how an entry into a new location contributes to increasing the operational flexibility of their manufacturing affiliate portfolios. Such increase in operational flexibility derives from the enhanced options to switch operations across internationally dispersed affiliates in case of diverging labor cost developments. Controlling risk reduction motivations of entry, our simulation and empirical analysis of multinational firms’ foreign entry decisions supports this argument and also establishes several boundary conditions to the effect of operational flexibility on entry. We discuss our study’s implications for research on entry and real options.
Incoherent Strategic Orientation, Adaptive Capabilities and Firm Performance
Friday 18th January 2019
Strategic Orientation phenomenon has been well established to explain the strategic choices exercised by firms. There is an implicit assumption in the management literature that strategic orientation based on coherent choices leads to better firm performance. However, in an emerging market, where the market is relatively more volatile, it is not always possible to attain desired theoretical consistency. In this backdrop, our study investigates how firms in emerging economies attain higher performance even with (apparently) incoherent combination of strategic orientation. Using a proprietary, survey-based, dataset of 218 Indian firms, operating across sectors, our study finds that firms develop adaptive capabilities, a mediator, to improve firm performance and mitigate inconsistent strategic orientation. Besides offering managerial implications on strategic choices, our study highlights the need to revisit the basic consistency assumptions in strategic orientation, especially within the context of emerging economies.
The effects of Business Ecosystem Composition and Demand Heterogeneity on the Liability of Foreignness: Evidence From the Conso9le Video Game Industry
Tuesday 13th November
Ever shorter production cycles and the disaggregation of global value chains have triggered a situation where many multinational enterprises are working with a set of geographically dispersed business partners for the development of their products. Taking a product-level perspective on the liability of foreignness, this study develops theory on how a firm’s business ecosystem composition as well as heterogeneity in subnational consumer markets affects foreign firms’ competitiveness vis-a-vis domestic ones. We test our theory in the market for console video games by analyzing a unique dataset of 2,144 video games released across 11 subnational regions in the UK (2005-2008). We find that foreign video game publishers attain higher unit sales when they source inputs from video game developers located in the same subnational region as where the product is sold. We further find that foreign publishers attain higher sales in subnational regions with a larger share of cosmopolitan consumers. These effects are stronger for foreign publishers than for domestic publishers. These findings point to the composition of a firm’s business ecosystem as well as subnational demand heterogeneity as important factors affecting foreign firms’ relative competitiveness in the product markets in which they compete.
From China with Love: The Role of FDI from Third Countries on EU Competition and R&D Activities
Friday 2nd November
This report presents empirical analysis on the linkage between mergers and acquisition FDI and acquirer innovation efforts. The data indicates that acquisitions tend to result in a spike in research in the two following years. This impact, however, is contingent on industrial linkages between target and acquirer. In particular, non-manufacturing targets appear to have the largest impact. Further investigation using input-output linkages finds that acquirer R&D increases more when the target is a primary source of inputs for the acquirer. These effects, however, are smaller for Chinese acquirers, suggesting that concerns over whether acquisition of foreign technology is spurring faster Chinese technological growth may be misguided. Finally, these effects are smaller in more concentrated industries, suggesting the need to consider industry concentration when projecting the R&D implications of cross-border mergers.
Overcoming Psychic Distance in Relationship Learning: The Role of Exploration
Wednesday 10th October
We address several unresolved issues in relationship learning literature. First, scholars report inconsistent findings on how psychic distance affects cross-border business operations. Responding to a call in the literature, we explore the psychic distance paradox as we incorporate the organization’s learning capacity in our research framework. In addition, we explore the “so how” question: How does psychic distance affect the performance of cross-border partnerships? We identify the underlying mechanism of relationship learning that links psychic distance to performance in the international buyer-seller context. Finally, this paper answers the “so what” question: What could companies do to cope with challenges resulting from the psychic distance? We indicate a critical way to manage the psychic distance issue --- through cultivating the company’s explorative learning capacity. Based on findings from 198 international buyer-seller relationships, this research identifies that buyers’ explorative learning would mitigate the impediments of psychic distance in developing relationship learning.
The Sequence Effect on the Selection of R&D Projects
Wednesday 12th September 2018
G.03, 20 Cromer Terrace
This paper explores the micro-dynamics of organizational decision-making, examining the sequence effect in decision-making on R&D project selection. We propose that the sequence of selection matters in R&D – even when it should be completely irrelevant – as projects that appear in a sequence following a funded project are themselves less likely to receive funding. We also theorize that the context of decision-making moderates sequence effects, focusing on the timing of decisions, panel expertise and panel composition. We test these conjectures using a randomization in sequence order from several rounds of R&D project selection at a leading professional service firm, and find robust support for the existence of sequencing effects in R&D as well as their attenuation by decision timing and panel expertise. These findings have broader implications for the selection of innovation ideas and R&D management as it suggests that a previously overlooked dimension affect selection Body Text
Cities and International Entrepreneurship
Wednesday 5th September 2018
His seminar on Cities and International Entrepreneurship will review empirical evidence, from his own research, that there is pronounced London effect, which greatly increases the propensity to both import and export and the extent of that import and export behaviour. Some basic reasons will be explored, combining standard frameworks in IB such as Dunning’s OLI and Oviatt & McDougall’s International New Venture theory. The seminar will then proceed to critically explore the utility of using insights from Economic Geography and Urban Economics to understand the links between city location and international entrepreneurship activity. It will also consider the practical feasibility and the epistemological coherence of attempting to do so.
Lost in Translation? Independent Boards and Blockholder Appropriation
Wednesday 21st March
11:00-12:30 (followed by a buffet lunch at 12:30)
Emerging economies are oftentimes characterised by state capitalism, concentrated ownership and constrained resources, where firms face underinvestment due to resource misappropriation. Even the adoption of Anglo-American corporate governance practices may result in sub-optimal outcomes. We draw on the multiple agency perspective and research on cross-national governance to examine how independent directors, as agents with multiple roles, might mitigate blockholder appropriation. Using unique panel data from Russian publicly traded firms where the government and the business elite are predominant blockholders, we find that independent directors in private firms are less effective in mitigating blockholder appropriation than in state-owned enterprises. We further investigate board independence effects driven by the exposure to three international governance boundary conditions, namely Russian Multinational Enterprises, foreign listings of Russian firms, and foreign independent directors on Russian boards. Our study focuses on the agents that might mitigate principal-principal conflicts, explores when ineffective governance can be mitigated, and contributes to research on how governance practices developed in advanced economies get translated in emerging market economies.
What is the Impact of Overseas Technology Seeking Acquisitions on Domestic Innovation Performance in Chinese MNEs?
Wednesday 25th April
Liberty Building SR G.28
The question of whether emerging market multinational enterprises (EMNEs) undertake ‘strategic asset seeking’ has attracted great interest in International Business (IB) studies. Many have argued, for example, that EMNEs acquire intangible strategic assets via foreign M&As with a view to rapidly incorporating foreign know-how to improve domestic innovation performance and thus subsequently improve their ‘catch-up’ capabilities. To date, however, only a few studies, mostly restricted to single cases, have examined the impacts of EMNE acquisitions on subsequent innovation performance. This research uses propensity score matching methodologies to investigate how technology seeking acquisitions affect innovation in Chinese (C)MNE parent firms. Our results suggest such acquisitions do lead to outperformance in innovation in CMNEs vis a vis similar domestic firms not making acquisitions. In addition, we consider how the characteristics of the acquiring parent firm influence its subsequent innovation performance. We look at the impacts of ownership (involvement of state versus private owner), business group affiliation and international experience. We find the latter two characteristics have a positive impact on the extent to which CMNEs can benefit from their acquisitions in terms of innovation performance (measured in both number of patents and citations). We discuss implications for better understanding current conceptual debates in the EMNE literature, such as the updated Linkage-Leverage-Learning model (Mathews, 2006; 2017) and the ‘springboard perspective’ (Luo and Tung, 2017).
R&D INVESTMENTS AND INTERNATIONAL EXPANSION – A COMPLEX RELATIONSHIP
Wednesday 6th June
Joint work with: Ohad Ref, Ono Academic College
The conventional view in international business is that, other things being equal, firms that invest more in research and development (R&D) are likely to be more internationalized. In the current study, we show that this relationship is more complex than previously thought. First, we show that firms need to investment significantly more in R&D, relative to their industry peers, to have a higher likelihood to expand to new foreign markets. Second, we show that, at some point, firms with extensively high R&D investments relative to their industry peers, reduce their likelihood to expand to new foreign markets. Third, we show that, underperforming firms with lower R&D investments than their industry peers also have a higher likelihood to expand to new foreign markets, and that the lower are these firms' R&D investments.
Niron Hashai is an Associate Professor at the Arison School of Business, the Interdisciplinary Center, Herzliya, Israel and the Albertson-Waltuch Chair in Business Administration at the School of Business Administration at the Hebrew University of Jerusalem.
Professor Hashai obtained his BSc in Computer Sciences from the Technion and his MBA and PhD from Tel Aviv University. His research interests include: theory of the multinational corporation, technological innovation, diversification, and growth patterns of high technology firms. His research was published in top strategy, management, international business and innovation journals, including: Journal of International Business Studies, Journal of Management, Research Policy, Strategic Management Journal and Strategy Science. Professor Hashai serves on the boards of the Journal of International Business Studies, and the Global Strategy Journal, among others.
Professor Hashai is also a visiting Associate Professor at New York University, the Startup Nation visiting fellow at the Blavatnik School of Government, the University of Oxford, The Peter J. Buckley International Visiting Fellow at Leeds University Business School and an associate member at the John H. Dunning Research Centre, University of Reading.
Professor Hashai is co-founder of HUstart – the Hebrew University entrepreneurship center and the Israel Strategy Conference (ISC).
Research Seminar – details of paper to follow
Wednesday 12th September
Room G.03, Cromer Terrace
Professor Ammon Salter has published a number of highly cited papers on openess and he will present a paper about innovation within the MNE – further details to follow.
Explaining the complexity of foreign operations: The role of managerial and governance characteristics (with G. Békés, G. Benito and B. Muraközy).
Location: LUBS 1.44
Date: Thursday 30th November
Venturing abroad provide business opportunities for firms, but internationalization also increases the risks and difficulties of doing and profiting from business. The more opportunities that are pursued simultaneously, the higher the complexity, especially as firms simultaneously expand their geographical footprint and add new ways of operating internationally. Firms differ in their willingness and capacity to take on and manage such complexity. In this study, we examine the association between managerial and governance characteristics and the complexity of foreign operations. Specifically, we study how differences across firms regarding characteristics of their top management teams and CEOs as well as their governance attributes, explain firms’ proclivity to take on different levels of internationalization complexity. Using unique data from the EFIGE survey, our results suggest that management and governance indeed matter for explaining the degree of complexity of firms’ foreign operations.
The Co-evolution of International Scope and Technological Knowledge
Location: Charles Thackrah SR4 1.04
Date: Wednesday 25th October
Two sets of relationships permeate research on technological knowledge and international scope for multinational firms: technological knowledge stimulates international expansion; and internationalization leads to technological enhancements. In this study we develop a model of the dynamic process in which both technological knowledge and international scope co-evolve. The model distinguishes between local, regional and global spans of firms' international scope and technology development efforts to predict the existence of several archetypical effects: (1) Saturation - where the current level of either international scope or technological knowledge limits their future expansion. (2) Internalization – where the current level of technological knowledge pushes for greater internationalization within given geographic boundaries. (3) Fungibility – where the current level of technological knowledge influences internationalization across geographic boundaries. (4) Learning – where the firm's current geographic scope affects technological learning within geographic boundaries, and (5) Remote learning – where the firm's current geographic scope affects technological learning across geographic boundaries. The combination of these archetypes allows us identify multiple sets of complex co-evolution trajectories of international scope and technological knowledge and to offer a holistic view of different strands of internationalization theories. These relationships are tested on a unique, large longitudinal sample of Japanese multinational firms which includes comprehensive data on the geographic locations of these firms' operations as well as on the geographic location of their technological patenting.
Rigor, Relevance and Impact in International Business Research: Suggestions for Carrying out Impactful Research Projects
Location: LUBS 1.06
Date: Tuesday 24th October
Business practitioners complain about the esoteric nature of academic publications. Some academics argue that too many studies lack ‘scholarly robustness.’ What are their concerns? Are theoretical rigor and practical relevance competing objectives? How do we craft more balanced and impactful articles? How do build theoretical robustness into our research projects?
In addition to addressing these questions, Professor Cavusgil will suggest ways in which these concerns can be addressed.
The Use of Tax Havens by British Multinationals After The Financial Crisis: ‘Business as Usual’
Location: LUBS 1.44
Date: Thursday 12th October
We investigate the use of tax havens by British multinational enterprises (MNEs) before and after the global financial crisis of 2008. We find that in the post crisis period, British MNEs increased their subsidiaries in tax haven locations as compared with the pre-crisis period. This suggests that recent media attention on the tax affairs of British based MNEs has had little impact on their activities. It seems to be “business as usual” in terms of tax avoidance. Our analysis takes advantage of a large firm-level dataset which allows the estimation of a variety of panel data models. We also find evidence of a causal link between austerity imposed upon Her Majesty’s Revenue and Customs (HMRC) and the use of tax havens by MNEs.
The Theory of International Business: The Role of Economic Models
Location: LUBS 1.44
Date: Thursday 5th October
This paper reviews the scope for economic modelling in international business. It argues for a multi-level theory based on classical internalisation theory. The theory extends the ‘systems approach’ to the multinational enterprise in which modular activities, such as production, marketing and R&D, are linked by flows of semi-processed products and proprietary knowledge. It is shown how this theory can be extended from the firm level to the industry level in order to analyse inter-firm co-operation and rivalry. The theory can be extended to higher levels (e.g. the global economy) and lower levels (e.g. personal relationships within plants and offices).
Appropriability, Legacy-informed Entrepreneurial Imagination, and Cross-Border Organization
Professor Christos Pitelis, University of Bath
Location: Seminar Room 1.44
Date: 12 March 2015
This paper explores how entrepreneurs and entrepreneurial managers and organizations imagine future states of the world and embark upon a process of creation, co-creation, and development of cross-border markets and supporting business ecosystems that help them realize their visions. This process is examined conceptually and by drawing on historical case studies. These show how the emergence of the multinational enterprise (MNE) can be attributed to imaginative entrepreneurs, motivated by appropriability of returns on their perceived advantages, actions, and action potential, and who act upon their images and visions in order to shape, create and co-create their desired realities, often informed by their historical experiences. We claim that our approach challenges the extant theory of the MNE and helps appreciate better phenomena such as MNEs without apparent differential ‘ownership advantages’ and born-global firms.
Organizational Learning through Alliance Secondments: Managing the Spin-Out, Spin-In Paradox in Cross-Sector Partnersh
Aline Gatignon, INSEAD
Location: Seminar Room 1.32
Date: 23 April 2015
Aline is currently a PhD candidate in Strategy at INSEAD. She will be joining the Multinational Management Department of the Wharton School at the University of Pennsylvania in July 2015. Aline studies how organizations can develop their knowledge, skills and capabilities through cross-sector partnerships in emerging markets (i.e., alliances between private sector firms and public or non-profit sector organizations). Her dissertation builds on three hand-collected databases combining archival, interview and survey data. The empirical contexts she studies are cosmetics and banking in Brazil as well as logistics and healthcare partnerships in Africa, Latin America and Asia.Organizations are increasingly using external secondments to alliance partners to develop knowledge and skills: they temporarily detach employees to learn under unfamiliar conditions (‘spin-out’) and subsequently reintegrate them into the firm (‘spin-in’). The link between employee learning processes and alliance outcomes is critical to this process, yet it is so far insufficiently understood. Drawing on organizational learning and identity theory, I study how the intensity of coordination with the partner during secondment projects impacts two employee-level outcomes: 1) learning and 2) reintegration. I then explore how these employee-level outcomes feed into project success for the firm. I use mixed methods to develop and then test hypotheses, drawing on interview, archival and survey data on alliance secondments within a10-year partnership between global logistics provider TNT and the United Nations World Food Program. The results reveal a paradox: while intense coordination promotes employee learning during the spin-out, it hinders employee reintegration during the spin-in, for two reasons. First, knowledge developed through intense coordination is more difficult to leverage into employees’ usual professional environment. Second, intense coordination increases employees’ attachment to their partnership identity, creating a misalignment with the firm’s identity and values upon their return. Firms can become more cognizant of this paradox over time, and can mitigate its effects by fostering a sense that employees’ secondment experience is valued.
Mindscapes across Landscapes: Diverse Culture Archetypes in Japan, USA, China and India
David Midgley, Insead
Date: 25 April 2014
Most culture-related research in international business aggregates people within a country into a single, homogeneous, national culture. But, in reality, there are often large differences among individuals within a country. Similarly, people with similar values are often found across national boundaries. Using Schwartz culture values and demographic data from the World Values Survey 2005, we find significant within-country heterogeneity and between-country commonality in Schwartz values. Our novel archetypal analysis method identifies four culture archetypes in Japan, USA and China, and six in India. The existence of both transnational and within-country archetypes suggests the need to recognize culture as a global or a sub-national phenomenon rather than as a national construct. Our results show that international business researchers and practitioners may need cultural schema that better reflect the real world of similarities and differences within and between countries.
Professor Midgley is a graduate in science, management and marketing from the Universities of Salford and Bradford in England. He was previously a Professor at the Australian Graduate School of Management and a long term visiting Professor at UCLA. He has been an invited scholar at the Stanford Graduate School of Business and the Wharton School, University of Pennsylvania. David Midgley’s latest book is The Innovation Manual: Integrated Strategies and Practical Tools for Bringing Value Innovation to the Market, (Wiley, 2008). www.theinnovationmanual.com This book provides the essentials of innovation for the practising manager based on an extensive synthesis of research and best practice. He has over 100 publications, including papers in leading journals such as the Journal of Consumer Research, Journal of Information Technology, Journal of International Business Studies, Journal of Marketing Research, Journal of Marketing, Marketing Science, Management Science, Organization Science, and Research Policy. He has also served on the editorial boards of the Journal of Consumer Research and the International Journal of Research in Marketing, . His principal areas of research are innovation and strategy.
Professor Ulf Andersson, editor of the Journal of International Business Studies
Professor Ulf Andersson, Copenhagen Business School & Maldaren University.
Date: 30 April 2014
Followed by a reception in LUBS Foyer
Professor Ulf Andersson, Editor of the Journal of International Business Studies conducted the first seminar on publishing. The Journal of International Business Studies is an FT45 journal that publishes research from various fields including international management, finance, marketing and economics.
Brand–Country Image (BCI) Fit: A New Metric to Evaluate Brand Positioning Strategies
Professor Henrik Sattler, University of Hamburg
Date: 14 May 2014
Location: Leeds University Business School 1.44
Brand positioning strategies must determine the image attributes that produce favorable brand images. Although markets continue to globalize, local consumer culture or the culture of one’s home country remains a powerful influence, and consumers continue to prefer local consumption imagery. Managers thus face the question of how to identify image attributes that associate a brand’s positioning with local consumer culture. This article introduces a new diagnostic metric to evaluate brand positioning strategies: brand–country image fit (BCI-Fit). It measures the extent to which consumers in a specific country perceive a brand’s image as congruent with their home country’s image. The authors conceptualize and empirically analyze BCI-Fit for more than 1,000 brands and three countries, using Young & Rubicam’s Brand Asset Valuator data base and additional consumer survey data. They examine the impact of the proposed metric on consumers’ brand evaluations and analyze several moderators (e.g., variety seeking weakens the impact). Because the BCI-Fit metric employs a multi-attribute measurement approach, it provides guidance on which image dimensions and in which conditions managers may (re)position their brands.
The Impact of Foreign Pharmaceutical Patents on Innovation in Chile Bronwyn H. Hall (with Maria Jose Abud and Christian Helmers)
Professor Bronwyn Hall
Date: 20 May 2014
Bronwyn H. Hall is Professor in the Graduate School at the University of California at Berkeley and Professor of Economics of Technology and Innovation at the University of Maastricht, Netherlands. She is a Research Associate of the National Bureau of Economic Research and the Institute for Fiscal Studies, London and a Visiting Fellow at the National Institute of Economics and Social Research, London. For 30 years, she was the founding partner of TSP International, an econometric software firm. She received a B.A. in physics from Wellesley College in 1966 and a Ph.D. in economics from Stanford University in 1988.
Professor Hall has published articles on the economics and econometrics of technical change and innovation in journals such as Econometrica, the American Economic Review, the Rand Journal of Economics, and Research Policy. She is also the editor with Nathan Rosenberg of the Handbook of the Economics of Innovation, in the Elsevier series. Her current research includes comparative analysis of the U.S. and European patent systems, the use of patent citation data for the valuation of intangible (knowledge) assets, comparative firm‐level investment and innovation studies, measuring the returns to R&D and innovation at the firm level, analysis of technology policies such as R&D subsidies and tax incentives, and of recent changes in patenting behavior in the semiconductor and computer industries. She has made substantial contributions to applied economic research via the creation of software for econometric estimation and of firm‐level datasets for the study of innovation, including the widely used NBER dataset for U.S. patents.
Foreign multinational companies account for around 95% of pharmaceutical patents filed in Chile between 1991 and 2010. These patents account for over half of all patents filed in Chile during the past two decades. This study analyzes the impact of foreign pharmaceutical patenting behavior on the domestic pharmaceutical industry in Chile.
We analyze the patent filing strategies of foreign pharmaceutical companies and compare the characteristics of drugs sold on the Chilean market that are patented by foreign multinationals to those that are patented by domestic companies or not patented. In addition, the study investigates whether and in which way foreign pharmaceutical companies 'work' these patents and analyze the effect of this choice on domestic companies behavior, in terms of drugs developed and marketed.
The analysis relies on a mapping of patents filed in Chile to pharmaceutical products, as well as information on the way foreign companies 'work' their patents. To empirically measure whether and in which way firms 'work' their patents, the study combines information on patents and trademarks at the product level with information from the public health register.
The results indicate a negative association between the share of foreign patents and the number of domestic drugs even within broad therapeutic classes. Foreign firms rely in particular increasingly on the filing of "secondary" pharmaceutical patents (patents on modified compounds, formulations, dosages, particular medical uses etc.) to extend basic patent protection in breadth and length to keep domestic generic producers off the market.
The Assessment of Heterogeneity Revisited: Across Group Similarities and within Group Differences
Professor Christian Ringle, Hamburg University of Technology, Germany, and University of Newcastle, Australia
Date: 12 September 2014
Time: 12.00 – 13:30
International business research analyses, compares and explains heterogeneity between countries or cultures. This research looks at the evidence for observed and latent heterogeneity within empirical data. Examining data for two specific a priori defined groups reveals only modest differences. However, latent mixture PLS path modeling (FIMIX-PLS) uncovers two different segments within each group. This analysis demonstrates substantial differences across these segments—but a surprising similarity across groups. An importance performance matrix analysis illustrates these differences and is a foundation to develop managerial implications. Overall, this study highlights the potential for heterogeneity in international business research.
Offshore Outsourcing and Innovation In The Mobile Phone Industry (joint with Juan Alcacer and Ramon Lecuona)
Professor Joanne Oxley, University of Toronto
Date: 17 September 2014
Time: 13.45 – 15.15
Location: Leeds University Business School 1.31
We document the evolution of outsourcing strategy in an industry that has witnessed a dramatic rise in offshore outsourcing and the emergence of a multitude of specialized suppliers over the past decade. Through analysis of a comprehensive and detailed dataset of supply relationships for the design and manufacture of all mobile handsets introduced worldwide from the beginning of the outsourcing trend, we explore the evolving logic guiding outsourcing strategy in the industry, and trace the effect of offshore outsourcing on the innovative performance of leading producers and suppliers.
Joanne Oxley is Professor of Strategic Management at the Rotman School of Management at the University of Toronto, Canada. Her research lies at the intersection of strategy and international business, exploring topics related to inter-firm collaboration, outsourcing, and the impact of international differences in economic and institutional environments on firm strategy and performance. Joanne's publications have appeared in many leading academic journals, and she currently serves as an Associate Editor at Strategic Management Journal and Management Science, and as Consulting Editor at the Journal of International Business Studies.
Buddhism and Consumption
Professor Giana Eckhardt, Royal Holloway-University of London
Date: Friday 3 October 2014
Location: Leeds University Business School 1.44
Abstract:Buddhism as a belief system views important constructs in marketing in ways not seen in the literature to date. For example, Buddhism emphasizes the importance of eliminating desire for material goods (marketing tries to stimulate this desire), and the perils of becoming attached to material possessions (marketing encourages attachment in a variety of forms, most notably brand loyalty). Past research has noted that Buddhism affects consumer's behavior to a larger extent than other spiritual belief systems. What does Buddhist consumption look like? This is investigated in China, where Buddhism has been the primary spiritual belief system for thousands of years. We take an ethnographic approach, focusing on Buddhist monks as well as Buddhist consumers in urban, Eastern China. We supplement in-depth interviews with observation and immersion in a variety of new and old Buddhist sites. Our findings focus on the nature of materialism, consumer desire and product/brand relationships, which differ significantly to our understanding of these constructs to date. These findings allow us to question and redefine core theories in marketing. This is especially important as the influence of Buddhism is spreading around the world, and in the West is often thought to be a solution to overconsumption.
European Differences in the Extent of Family Firm Internationalization
Professor Jean Francois Hennart, Tilburg University
Date: Tuesday 21 October 2014
Location: Leeds University Business School 1.44
Most firms around the world are owned and run by families. Yet, surprisingly, there is only limited research on whether this form of governance encourages or discourages internationalization and empirical evidence to date is inconclusive. While most of the literature has argued that family control discourages internationalization, we suggest that this only applies to firms that sell mass-market products requiring local production and adaptation, and hence large scale as well as specially trained managers. On the contrary, we argue that family firms will have greater foreign sales than nonfamily firms when they follow global niche strategies. These strategies focus on high product and service quality and long term relationships with clients, two strategies well-suited for family firm governance. Modelling a firm’s foreign sales through a gravity model, we test our hypotheses on a large sample of firms from five European Union countries. Our results show that while family control per se reduces international sales for UK, Italian and French firms, it increases them when family-run firms based in these countries pursue global niche strategies.
Export diversity or focus? What strategy is best for first-time internationalizing SMEs from an emerging market?
Professor Desislava Dikova, Wirtschaftsuniversität Wien (WU)
Date: Thursday, 23rd October 2014
Location: Leeds University Business School G.31
The question how much internationalization is beneficial for emerging-market small and medium enterprises (EM SMEs) remains challenging for both international business (IB) scholars and managers. We explore export strategies of first time exporters and focus on the scope of EM SMEs internationalization activities. We tackle the question whether more focused or more diversified internationalization through exporting is beneficial for EM SMEs. We examine the impact of foreign market (geographic) diversification, product diversification and export intensity on firm performance of an entire population of EM SMEs from an emerging east European economy. In addition, we test whether a complex export strategy—an export strategy of simultaneous product- and geographic export diversification—is beneficial for EM SMEs. We use a panel population data of first time Slovenian exporters in the period 1994-2012. We find that diversified internationalization, both in terms of product- and foreign market diversity, and export intensity significantly improve productivity and sales performance for EM SMEs. Furthermore, EM SMEs with complex export strategies enjoy significantly improved productivity and sales performance.
An empirical examination of a transaction cost explanation of FDI capital structure
Professor Gabriel Benito, BI-Norwegian School of Business
Date: Tuesday 4 November 2014
Location: Leeds University Business School 1.44
Transaction cost theory (TCT) explains multinational enterprise (MNE) boundaries, and is increasingly applied to intra-MNE governance. We apply TCT to capital structure decisions for MNE subsidiaries. Following TCT, equity and debt are not just financial instruments, but also alternative governance structures. Debt is based on market mechanisms, while equity has features of hierarchy and is important for projects involving specific assets that cannot serve as collateral, especially under conditions of strong external uncertainty. We apply the theory to the intra-MNE context, where headquarters (HQs) nominally own all assets and there may be greater redeployability of assets within firms. We argue that internal governance costs may lead HQs to re-introduce the price mechanism through debt, while imperfect HQs' ownership of and limits to the redeployability of subsidiary assets promote equity financing. Thus, even within firms, imperfections suggest a rationale for differentiated use of equity, internal debt and external debt. We test our predictions using subsidiary-level panel data on Norwegian outward foreign direct investment (FDI) from 2003 to 2006, measuring asset specificity by R&D-related variables and external uncertainty by political risk indices. We find partial support for our arguments, but robustness checks suggest the results are sensitive to measurement and estimation.