Summary International Strategy
Master Business Administration, International Management 2020-2021
Detailed summary of the cases and presentations
1
,Table of contents
Week 1: Theoretical foundations of international strategy..............................................................................4
Article 1. Cantwell J., Dunning, J.H., and Lundan, S.M. (2010): an evolutionary approach to understanding
international business activity: the co-evolution of MNEs and the institutional environment.............................6
Article 2. Foss, N.J. & Pedersen, T. (2004): Organizing knowledge processes in the MNC: an introduction....9
Article 3. Rugman, A.M. & Verbeke, A. (1992) - A note on the transnational solution and the transaction
cost theory of multinational strategic management............................................................................................................ 12
Article 4. Porter, M. E. 1986. Changing patterns of international competition.........................................................15
Article 5. Ghemawat, P. 2008. Reconceptualizing international strategy and organization..............................18
Week 2 – Where do MNEs invest?.............................................................................................................................21
Article 1. Benito, & Gripsrud, (1992). The expansion of foreign direct investments: discrete rational
location choices or a cultural learning process?.................................................................................................................... 24
Article 2. Mariotti, S., Piscitello, L. & Elia, S. (2010). Spatial agglomeration of multinational enterprises:
the role of information externalities and knowledge spillovers.......................................................................................26
Article 3. Demirbag, M. & Glaiser, K.W. (2010). Factors determining offshore location choice for R&D
projects: A comparative study for developed and emerging regions.............................................................................28
Article 4. Laamanen, T., Simula, T., & Torstila, S. (2012). Cross-border relocations of headquarters in
Europe....................................................................................................................................................................................................... 30
Week 3 How to invest abroad, entry mode dynamics.......................................................................................33
Article 1. Brouthers, K. D. & Hennart, J. F. 2007. Boundaries of the firm: Insights from international entry
mode research. Journal of Management, 33(3): 395-425...................................................................................................35
Article 2. Kogut, B. (1991). Joint ventures and the option to expand and acquire...................................................38
Article 3. Meyer, K., Estrin, S., Bhaumik, S.K., & Peng, M.W. (2009). Institutions, resources, and entry
strategies in emerging economies................................................................................................................................................. 40
Article 4. Gubbi, S.R., Aulakh, P.S., Ray, S., Sarkar, MB, & Chittoor, R. (2010) Do international acquisitions
by emerging-economy firms create shareholder value? The case of Indian firms...................................................42
Week 4, When to invest abroad.................................................................................................................................45
Article 1. Lieberman, M.B. & Montgomery, D.B. (1988). First mover advantages....................................................46
Article 2. Kerin, R. A.; Varadarajan, P. R.; Peterson, R. A. 1992. First-mover Advantage: A Synthesis,
Conceptual Framework, and Research Propositions............................................................................................................ 49
Article 3. Frynas, J.G., Mellahi, K., & Pigman, G.A. (2006). First mover advantages in international business
and firm-specific political resources............................................................................................................................................ 51
Article 4. Gaba, V., Pan, Y., & Ungson, G.R. (2002). Timing of entry in international market: An empirical
study of US Fortune 500 firms in China...................................................................................................................................... 54
Week 5, How do MNEs manage foreign subsidiaries.........................................................................................57
Article 1. Birkinshaw, J., N. Hood & S. Jonsson (1998). Building Firm-Specific Advantages in Multinational
Corporations: The Role of Subsidiary Initiative...................................................................................................................... 60
2
, Article 2. Monteiro, L.F., Arvidsson, N. & Birkinshaw, J. (2008). Knowledge flows within multinational
corporations: Explaining subsidiary isolation and its performance implications...................................................62
Article 3. Mudambi, R. & Navarra, P. (2004). Is knowledge power? Knowledge flows, subsidiary power and
rent seeking within MNCs................................................................................................................................................................. 65
Article 4. Feinberg, S.E. & Gupta, A.K. (2009). MNC subsidiaries and country risk: Internalization as a
safeguard against weak external institutions......................................................................................................................... 68
Week 6: Multinationality and performance..........................................................................................................72
Article 1. Lu, J., & Beamish, P. (2004) International Diversification and Firm Performance: The S-Curve
Hypothesis............................................................................................................................................................................................... 73
Article 2. Vermeulen, F. & Barkema, H. (2002). Pace, rhythm, and scope: Process dependence in building a
profitable multinational corporation.......................................................................................................................................... 76
Article 3. Chang, S-J. & Rhee, J.R. (2011). Rapid FDI expansion and firm performance.........................................78
Article 4. Hennart, J-F. (2007) The Theoretical Rationale for a Multinationality-Performance Relationship.
...................................................................................................................................................................................................................... 81
3
, Week 1: Theoretical foundations of international strategy
Three main issues
1. How MNE theories help us understand what an international strategy is?
Core concepts from TIM course, Cantwell (2010), Foss & Pedersen (2004), Rugman
& Verbeke (1992)
2. How could we define international strategy?
3. What are the main issues to consider for a cross-border strategy?
Porter (1986) and Ghemawat (2008)
Core concepts from Theories of International Management course
- Transaction cost economics (Coase, Williamson)
o Each type of transaction produces coordination costs of monitoring,
controlling, and managing transactions.
- Internalization theory (Buckley, Casson, Hennart)
o Focuses on firm specific advantages a firm should internalize production or
service provision when there is a chance of losing knowledge when the
activity would have been done by a third party.
- OLI / Eclectic paradigm (Dunning)
o Ownership, Location, Internlization advantages for FDI.
- Internationalization Theory (Johanson and Vahlne)
o Focuses on the incremental expansion of MNEs.
- Bridge from internalization theory to strategic management (Rugman):
o FSAs as asset and transactional advantages.
o Important of Location / Non-location bound FSAs.
- The role of subsidiary (Birkinshaw)
- From the 1980s: Industry-based view (Porter)
o Industry-level, notion of competitiveness
- From the 1990s: Resource-Based View (Barney)
o VRIN, tangible/Intangible resources.
o Capabilities are firm-specific abilities to recombine resources.
- From 2000s: Institution-based view (North, Scott, Peng)
4
Master Business Administration, International Management 2020-2021
Detailed summary of the cases and presentations
1
,Table of contents
Week 1: Theoretical foundations of international strategy..............................................................................4
Article 1. Cantwell J., Dunning, J.H., and Lundan, S.M. (2010): an evolutionary approach to understanding
international business activity: the co-evolution of MNEs and the institutional environment.............................6
Article 2. Foss, N.J. & Pedersen, T. (2004): Organizing knowledge processes in the MNC: an introduction....9
Article 3. Rugman, A.M. & Verbeke, A. (1992) - A note on the transnational solution and the transaction
cost theory of multinational strategic management............................................................................................................ 12
Article 4. Porter, M. E. 1986. Changing patterns of international competition.........................................................15
Article 5. Ghemawat, P. 2008. Reconceptualizing international strategy and organization..............................18
Week 2 – Where do MNEs invest?.............................................................................................................................21
Article 1. Benito, & Gripsrud, (1992). The expansion of foreign direct investments: discrete rational
location choices or a cultural learning process?.................................................................................................................... 24
Article 2. Mariotti, S., Piscitello, L. & Elia, S. (2010). Spatial agglomeration of multinational enterprises:
the role of information externalities and knowledge spillovers.......................................................................................26
Article 3. Demirbag, M. & Glaiser, K.W. (2010). Factors determining offshore location choice for R&D
projects: A comparative study for developed and emerging regions.............................................................................28
Article 4. Laamanen, T., Simula, T., & Torstila, S. (2012). Cross-border relocations of headquarters in
Europe....................................................................................................................................................................................................... 30
Week 3 How to invest abroad, entry mode dynamics.......................................................................................33
Article 1. Brouthers, K. D. & Hennart, J. F. 2007. Boundaries of the firm: Insights from international entry
mode research. Journal of Management, 33(3): 395-425...................................................................................................35
Article 2. Kogut, B. (1991). Joint ventures and the option to expand and acquire...................................................38
Article 3. Meyer, K., Estrin, S., Bhaumik, S.K., & Peng, M.W. (2009). Institutions, resources, and entry
strategies in emerging economies................................................................................................................................................. 40
Article 4. Gubbi, S.R., Aulakh, P.S., Ray, S., Sarkar, MB, & Chittoor, R. (2010) Do international acquisitions
by emerging-economy firms create shareholder value? The case of Indian firms...................................................42
Week 4, When to invest abroad.................................................................................................................................45
Article 1. Lieberman, M.B. & Montgomery, D.B. (1988). First mover advantages....................................................46
Article 2. Kerin, R. A.; Varadarajan, P. R.; Peterson, R. A. 1992. First-mover Advantage: A Synthesis,
Conceptual Framework, and Research Propositions............................................................................................................ 49
Article 3. Frynas, J.G., Mellahi, K., & Pigman, G.A. (2006). First mover advantages in international business
and firm-specific political resources............................................................................................................................................ 51
Article 4. Gaba, V., Pan, Y., & Ungson, G.R. (2002). Timing of entry in international market: An empirical
study of US Fortune 500 firms in China...................................................................................................................................... 54
Week 5, How do MNEs manage foreign subsidiaries.........................................................................................57
Article 1. Birkinshaw, J., N. Hood & S. Jonsson (1998). Building Firm-Specific Advantages in Multinational
Corporations: The Role of Subsidiary Initiative...................................................................................................................... 60
2
, Article 2. Monteiro, L.F., Arvidsson, N. & Birkinshaw, J. (2008). Knowledge flows within multinational
corporations: Explaining subsidiary isolation and its performance implications...................................................62
Article 3. Mudambi, R. & Navarra, P. (2004). Is knowledge power? Knowledge flows, subsidiary power and
rent seeking within MNCs................................................................................................................................................................. 65
Article 4. Feinberg, S.E. & Gupta, A.K. (2009). MNC subsidiaries and country risk: Internalization as a
safeguard against weak external institutions......................................................................................................................... 68
Week 6: Multinationality and performance..........................................................................................................72
Article 1. Lu, J., & Beamish, P. (2004) International Diversification and Firm Performance: The S-Curve
Hypothesis............................................................................................................................................................................................... 73
Article 2. Vermeulen, F. & Barkema, H. (2002). Pace, rhythm, and scope: Process dependence in building a
profitable multinational corporation.......................................................................................................................................... 76
Article 3. Chang, S-J. & Rhee, J.R. (2011). Rapid FDI expansion and firm performance.........................................78
Article 4. Hennart, J-F. (2007) The Theoretical Rationale for a Multinationality-Performance Relationship.
...................................................................................................................................................................................................................... 81
3
, Week 1: Theoretical foundations of international strategy
Three main issues
1. How MNE theories help us understand what an international strategy is?
Core concepts from TIM course, Cantwell (2010), Foss & Pedersen (2004), Rugman
& Verbeke (1992)
2. How could we define international strategy?
3. What are the main issues to consider for a cross-border strategy?
Porter (1986) and Ghemawat (2008)
Core concepts from Theories of International Management course
- Transaction cost economics (Coase, Williamson)
o Each type of transaction produces coordination costs of monitoring,
controlling, and managing transactions.
- Internalization theory (Buckley, Casson, Hennart)
o Focuses on firm specific advantages a firm should internalize production or
service provision when there is a chance of losing knowledge when the
activity would have been done by a third party.
- OLI / Eclectic paradigm (Dunning)
o Ownership, Location, Internlization advantages for FDI.
- Internationalization Theory (Johanson and Vahlne)
o Focuses on the incremental expansion of MNEs.
- Bridge from internalization theory to strategic management (Rugman):
o FSAs as asset and transactional advantages.
o Important of Location / Non-location bound FSAs.
- The role of subsidiary (Birkinshaw)
- From the 1980s: Industry-based view (Porter)
o Industry-level, notion of competitiveness
- From the 1990s: Resource-Based View (Barney)
o VRIN, tangible/Intangible resources.
o Capabilities are firm-specific abilities to recombine resources.
- From 2000s: Institution-based view (North, Scott, Peng)
4
