Theories of International Business - Complete Summary

Theories of International Business: Complete
Summary
Lecture, Literature & Notes
By AceAcademy ©

, Table of Contents
 Theme I: Core IB Theories........................................................................................5
 Conceptualizing IB......................................................................................................................................5
 Summary of Rugman, Verbeke, & Nguyen (2011) - "Fifty Years of International Business Theory and
Beyond"...........................................................................................................................................................6
 Summary of Buckley & Casson (2009) - "The Internalization Theory of The Multinational Enterprise: A
Review of The Progress of A Research Agenda After 30 Years"......................................................................8
 Summary of Dunning (2000) - "The Eclectic Paradigm as an Envelope for Economic and Business
Theories of MNE Activity"...............................................................................................................................8
 Uppsala Model...........................................................................................................................................9
 1980 MNEs Network and Subsidiaries-Level Analysis:............................................................................10
 Summary of Peng (2001) - "The Resource-based View and International Business"..............................11
 Summary of Peng (2002) - "Towards an Institution-based View of Business Strategy":.........................12

 Theme II: Global Integration Processes..................................................................13
 Globalization......................................................................................................................13
 The first age of globalization....................................................................................................................13
 Summary of Garret (2000) – “The Cause of Globalization”.....................................................................13
 Semi Globalization..............................................................................................................15
 Summary of Ghemawat (2003) - Semiglobalization and International Business Strategy......................15
 Regionalization...................................................................................................................16
 Regional and Global Strategies of MNEs:.................................................................................................16
 Rugman & Verbeke (2004) - A Perspective on Regional and Global Strategies of
Multinational Enterprises:..........................................................................................................16
 Negotiation Strategies:.......................................................................................................17
 Summary of Discussion Case: Meyer (2015) - Getting to Si, Ja, Oui, Hai, and Da.................18
 Hofstede’s cultural dimensions................................................................................................................18

 Theme III: MNE Entry Modes.................................................................................20
 Summary of Dunning (1998) – “Location and the Multinational Enterprise: A Neglected
Factor?”......................................................................................................................................20
 Evolution of FDI motivations....................................................................................................................20
 Summary of Gao, Murray, Kotabe, and Lu (2010) – “A 'Strategy Tripod' Perspective on
Export Behaviors: Evidence from Domestic and Foreign Firms Based in an Emerging Economy” 20
 The Strategy Tripod consists of:...............................................................................................................21
 Entry Modes Choice.................................................................................................................................21
 Market Entry Trade-offs...........................................................................................................................22
 Choice of Entry Modes:............................................................................................................................22

 Export: The sale of goods from Company A in Country X to Company B in Country Y,
often an initial step in the manufacturing industry...........................................................22
 R&D Contracts: Non-equity agreements between two or more foreign partners to
collaborate on a specific R&D project...............................................................................22
 What factors impact the selection of the entry mode?...........................................................................23
 Summary of Brouthers & Hennart (2007) – “Boundaries of the Firm: Insights from
International Entry Mode Research”...........................................................................................23
 Uncertainty and Gradual Expansion:.......................................................................................................24
 Overcoming These Challenges Gradually:................................................................................................24
 **Internalization Theory - Uppsala Model Stages:..................................................................................24

,  Summary of Discussion Paper: Brennan (2018) – “Netflix's Expansion to 190 Countries in 7
Years”.........................................................................................................................................24
 Netflix's success was attributed to two strategic moves.........................................................................24
 Key Factors:..............................................................................................................................................25

 Theme IV: Home and Host Countries and Concepts of Distance..............................26
 Impact of Geographic Proximity on Multinational Enterprise (MNE) Performance.............26
 Liability of Foreignness (LOF)...................................................................................................................26
 Reducing LOF............................................................................................................................................27
 The Concept of Distance..........................................................................................................................27
 Summary of Hutzschenreuter, Kleindienst & Lange (2016) – “The concept of distance in
international business research: A review and research agenda”...............................................27
 What constitutes distance?......................................................................................................................27
 Measurements of distance......................................................................................................................28
 Schwartz's 1994 "Survey of Values".........................................................................................................29
 Summary of Hofstede's 1994 Work - "Culture: The Heart of International Business"........29
 Five Dimensions of National Culture:......................................................................................................29
 Six Dimensions of Organizational Culture:...............................................................................................30
 Measuring Cultural Distance....................................................................................................................30
 Limitations of Cultural Distance...............................................................................................................30
 Why is Distance Significant?....................................................................................................................30
 Summary of Ghemawat's 2001 Work - "Distance Still Matters".........................................31
 Cage Framework......................................................................................................................................31
 Critiques of the CAGE Framework:..........................................................................................................31
 Bilateral vs. Unilateral Measurement:.....................................................................................................32
 Determining Investment Destinations.....................................................................................................32
 Impacted Outcomes Due to Distance:.....................................................................................................32
 Distance as a Moderating Factor:............................................................................................................33
 Summing up the concept of distance......................................................................................................33
 Summary of Moon, Rugman, and Verbeke (1998) - A Generalized Double Diamond
Approach to the Global Competitiveness of Korea and Singapore..............................................33
 Nature of the Diamond:...........................................................................................................................33
 The Single Diamond Model (Porter):.......................................................................................................33
 The Double Diamond Model:...................................................................................................................34
 Government's Role:..................................................................................................................................34
 Double Diamond Analysis (DDA) - The Function of Multinational Enterprises (MNEs) via Foreign Direct
Investment (FDI):..........................................................................................................................................34
 Takeaways................................................................................................................................................35
 To What Extent Does the Country Play a Role?.......................................................................................35
 So, Does the Country Matter?..................................................................................................................35

 Theme V: New MNE’s............................................................................................36
 Conventional versus New MNEs.........................................................................................36
 Conventional Multinational Enterprises (MNEs):....................................................................................36
 Emerging Multinational Enterprises (MNEs):..........................................................................................36
 International New Ventures & Born Globals.......................................................................36
 Summary of Oviatt and McDougall (2005) - Toward a Theory of International New Ventures
36
 International new Ventures.....................................................................................................................36
 Transformations in the Global Business Landscape.................................................................................36
 MNE Theory and International New Ventures (INVs):.............................................................................36
 Scale and International Expansion...........................................................................................................37
 Characteristics of INVs..............................................................................................................................37

,  4 Elements for sustainable INVs...............................................................................................................37
 Conditions for International New Ventures (INVs): Four Key Aspects.....................................................39
 Key Insights..............................................................................................................................................39
 Summary of Isenberg (2009) – “The Global Entrepreneur: A New Breed of Entrepreneur
Thinking Across Borders from Day One”.....................................................................................39
 Emerging Market Multinationals (EMNEs)..........................................................................40
 Emerging Economies:...............................................................................................................................40
 Examples of Emerging Country Categories:.............................................................................................40
 Diverse Nature of Emerging Economies:.................................................................................................40
 Types of emerging economies.................................................................................................................40
 EMNEs and Inward Foreign Direct Investment (FDI) Emerging Multinational Enterprises (EMMNEs)...41
 Summary of Luo and Tung (2007) - International Expansion of Emerging Market
Enterprises: A springboard perspective......................................................................................41
 Internationalization of EMNEs.................................................................................................................41
 International Springboard: Motivations...................................................................................................42
 Distinct Challenges Faced by EMMNEs....................................................................................................42
 Is a New EMMNE Theory Necessary?......................................................................................................42
 Internationalization Patterns of EMMNEs...............................................................................................42
 Conclusion Regarding EMMNEs...............................................................................................................42