SPRING 2012

VOLUME13, NUMBER1

CHARACTERISTICS OF LOW-AUTONOMY FOREIGN SUBSIDIARIES: VALUE CHAINS, STAFFING, AND INTRA-ORGANIZATIONAL RELATIONSHIPS

Jens Gammelgaard, Frank McDonald, Andreas Stephan, Heinz Tüselmann, and Christoph Dörrenbächer

This paper examines several characteristics of foreign subsidiaries with low autonomy. Data derived from a survey of 381 MNC subsidiaries located in Denmark, Germany and the UK demonstrate that lowautonomy subsidiaries are highly embedded in their respective MNC networks and that they establish a high number of intra-organizational relationships. Furthermore, such subsidiaries are typically managed by nationals of the MNC’s headquarters home country. Despite the fact that such subsidiaries have low autonomy, they employ a high proportion of professional staff members. We find a negative

relationship between lower autonomy and the production activities carried out by the subsidiary. In fact, low-autonomy subsidiaries appear to be specialized in that they focus on a few value-chain activities and they typically serve as marketing outlets.


https://doi.org/10.51240/jibe.2012.1.1          PDF

FEATURES AND EFFECTS OF INTELLECTUAL PROPERTY RIGHTS IN INTERNATIONALIZATION

Pia Hurmelinna-Laukkanen

Intangible assets facilitate successful international growth and, likewise, new value can be created through internationalization as it supports creating and utilizing such assets. Independent of whether the innovative creations are input or output, in order to preserve the benefits, awareness of the threat of imitation is needed. Departing from prior studies concentrating on patenting and copy-prevention, or taking the relationship between intellectual property right (IPR) protection and internationalization as given premises, this study addresses the features and effects of IPRs in internationalization from a more strategic perspective. Analysis of data from 299 companies provides empirical evidence.


https://doi.org/10.51240/jibe.2012.1.2          PDF

FISCAL DEFICIT AND INFLATION: WHAT CAUSES WHAT? THE CASE OF INDIA

Aviral Kumar Tiwari, A. P. Tiwari, and Bharti Pandey

This study has made an attempt to examine the direction of causality among the fiscal deficit, government expenditure, money supply, and inflation. In the present study we have employed Dolado and Lütkepohl (DL) (1996) and standard Granger-causality approach to examine the direction of the causality among the test variables. However, we have found conflicting results for India. Causality analysis based on DL approach suggests that both government expenditure and money supply Granger-cause fiscal deficit while standard Granger-causality test indicates that only government expenditure Granger-cause fiscal deficit. And money supply Grangercause government expenditure and fiscal deficit Granger-cause money supply.


https://doi.org/10.51240/jibe.2012.1.3          PDF

UNCERTAINTY AND LEARNING IN INTERNATIONAL JOINT VENTURES

Sangcheol Song

This study deals with the potential interplays between two uncertainty types (endogenous vs. exogenous uncertainty) and the role of learning in joint ventures (JVs) from the real options perspective. Regarding the role of learning under different types of uncertainty in JVs, one stream of real options research argues that learning has nothing to do with investment decision, while the other stream of research argues that investment decision is endogenous to learning. Considering that investment decisions embedded in JVs are affected by endogenous uncertainty (e.g., partner uncertainty) and exogenous uncertainty (e.g., demand uncertainty), this study suggests a conceptual model which takes into account the impact of endogenous uncertainty and firm’s learning of JV partners and market demand on real options value and exercise. Since almost all real options research focuses on exogenous uncertainty and less study learning under the real options framework, we add to this literature by touching upon possible roles of endogenous uncertainty and learning in driving firm’s strategic choices.


https://doi.org/10.51240/jibe.2012.1.4          PDF

CHALLENGES FOR THE INTERNATIONALIZATION OF SMES AND THE ROLE OF GOVERNMENT: THE CASE OF MALAYSIA

Fariza Hashim

SMEs presence is significant nowadays to most economies, particularly those from emerging countries. The internationalization of these firms is no longer an option; it is indeed necessary for them to follow the wave of globalization. Despite of their constraints,

Malaysian SMEs are struggling to expand into the international market and compete internationally to sustain their foothold in the country. Various factors have forced SMEs in Malaysia to engage internationally, however the ventures are arduous to be accomplished independently. As a result, the Malaysian government has initiated various efforts in supporting them to stand in the international arena. Many agencies have been established and numerous programs have been developed to encourage SMEs internationalization. This study aims to unfold the challenges faced by SMEs from emerging countries

in expanding internationally by examining the business environment in the country. The study finds that, despite various supports offered by the government, Malaysian SMEs continue to struggle in the global market due various factors including market knowledge, technological and skills capabilities, and products quality.


https://doi.org/10.51240/jibe.2012.1.5          PDF