The OLI Paradigm as a comprehensive model of FDI determinants: a sub-national approach

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Cláudia Beatriz Batschauer da Cruz ◽  
Dinorá Eliete Floriani ◽  
Mohamed Amal
Keyword(s):  
International Business ◽  
National Level ◽  
Content Type ◽  
Institutional Effects ◽  
Location Determinants ◽  
Eclectic Paradigm ◽  
National Perspective ◽  
Location Strategies ◽  
National Approach ◽  
Oli Paradigm

PurposeThis study aims to advance a sub-national perspective within the OLI Paradigm by analyzing how and to what extent the Eclectic Paradigm can serve as a general model to capture region-specific aspects of the location determinants of FDI, encompassing institutional effects that extend beyond the quality of institutions.Design/methodology/approachThe authors conducted a systematic literature review of 41 selected papers published between 1990 and 2019. Using inductive content analysis, they investigated the theoretical choices used to support analyses of the effects of institutional factors on MNEs' location decisions at the sub-national level.FindingsIt was found that, when changing from the national to the sub-national level of analysis, there is no need to change the main assumptions used in the literature, although a different perspective must be adopted. The Eclectic Paradigm permeates most of the studies revised and can serve as a general model to capture the sub-national perspective. It offers a foundation for new perspectives on the dynamics of institutional and political factors and their effects on location strategies and determinants at the sub-national level. Adopting the OLI Paradigm with a sub-national approach could widen the IB literature's prevailing focus on traditional economic factors and institutional quality.Research limitations/implicationsThe authors contribute to extant International Business literature Their paper enhances the literature on FDI location determinants by providing a more specific approach to development of a sub-national perspective within the OLI Paradigm, extending the institutional effects to capture more region-specific factors influencing the location of FDI. Study limitations are related to our analytical focus on the location dimension, excluding motives for FDI or firm-level location strategies. Rather than limiting analysis to quantitative studies, future research that includes qualitative studies and also covers the other dimensions of the OLI Paradigm could open additional new research avenues for advancing the sub-national perspective within the field of IB.Practical implicationsThe authors’ main findings suggest that MNEs' location strategies should include a sub-national perspective, which means that firms need to assess different levels of the location and understand their interaction with nationwide constraints and limitations, as it may affect firms' ability to effectively conduct their value-adding activities. They also contribute elements that can support sub-national governments' actions and policies aiming to enhance locational advantages to attract and retain FDI.Originality/valueThis review specifically analyzes the location determinants of FDI at the sub-national level, in studies published in a broad set of journals, from a variety of fields, prioritizing articles that investigate sub-national institutional determinants. The authors derive implications for the International Business literature and propose that the sub-national dimension should be incorporated into the Eclectic paradigm in order to better understand the influence of institutional sub-national determinants.

New institutional economics: contributions to international business studies

2019 ◽  
Vol 14 (5) ◽  
pp. 1102-1123
Author(s):  
Bernardo Frossard Silva-Rêgo ◽  
Ariane Roder Figueira
Keyword(s):  
International Business ◽  
Institutional Economics ◽  
New Institutional Economics ◽  
Institutional Variables ◽  
Content Type ◽  
Asymmetrical Information ◽  
Eclectic Paradigm ◽  
Institutional Impact ◽  
The Impact ◽  
Oli Paradigm

Purpose The purpose of this paper is to analyze the main contributions of the new institutional economics to the international business (IB) arena. It also intends to show how the NIE is being incorporated to both eclectic paradigm and Uppsala school’s view, and how it is modifying them. Design/methodology/approach A range of IB articles, which contained an institutional view and also discussed the eclectic paradigm or the Uppsala school, provides the background to build a framework. Findings This paper proposes a framework showing the impact of the institutional variables on the internationalization of firms, by addressing both the OLI paradigm and Uppsala school. It also concludes that the institutional theory has been a point of intersection between the OLI paradigm and Uppsala school, since both have been renewed to understand the transaction costs borne by the firms in their international learning process and in the search for less asymmetrical information. Research limitations/implications This paper provided a brief discussion about the institutional components. Practical implications This study is a useful source of information for those who want to discuss the institutional impact in the IB arena and emerging markets. Originality/value This paper summarizes how the OLI paradigm and Uppsala school encompassed the institutional variables. It also presents a framework that allows new study possibilities since the understanding of the influence of institutional variables on the international movements of firms is still cloudy.

scholarly journals How outward investment from emerging markets affects economic development at home: using the eclectic paradigm to synthesize two IB literatures

2020 ◽  
Vol 28 (4) ◽  
pp. 463-482
Author(s):  
Guus Hendriks
Keyword(s):  
Economic Development ◽  
International Business ◽  
Foreign Investment ◽  
Research Agenda ◽  
Emerging Market ◽  
The Other ◽  
Content Type ◽  
Important Policy ◽  
Eclectic Paradigm ◽  
Development Outcomes

Purpose This paper aims to use the eclectic paradigm as a broad organizing framework to bring together two somewhat parallel international business (IB) literatures, one on the development effects of multinational enterprise activity and the other on the internationalization of emerging market multinationals (EMNEs). The author does so to better understand how outward foreign investment shapes economic development in firms’ home countries. Design/methodology/approach Considering that the characteristics of foreign investment by EMNEs likely differ from that of their developed economy counterparts and that such characteristics may have unique development consequences, the author revisits one of IB’s overarching theories to rethink how ownership, location and internalization advantages take shape and stimulate diverse development outcomes. Findings My narrative review and conceptual analysis indicate that the eclectic paradigm is a valuable framework that can be used to shed light on underexplored phenomena and thereby inform important policy debates. The analysis suggests that unique characteristics of EMNE investment simultaneously have positive and negative development consequences in their home countries. Practical implications The author sets out a research agenda that revolves around six propositions that separately relate one of these three distinct characteristics of EMNE investment to two development outcomes, namely, spillovers and direct effects on home-country employment. My propositions suggest that important policy dilemmas potentially apply, in that each of the three characteristics positively affects one of the aspects of development, but negatively the other. Originality/value My research agenda presents international business scholars with new opportunities to build on a history of policymaking impact, now geared toward resolving society’s grand challenge of underdevelopment.

Re-examining regional borders and the multinational enterprise

2015 ◽  
Vol 23 (4) ◽  
pp. 374-394 ◽  
Author(s):  
Ruth V. Aguilera ◽  
Ricardo Flores ◽  
Jin Uk Kim
Keyword(s):  
International Business ◽  
Design Methodology ◽  
Multinational Enterprise ◽  
Future Research ◽  
Concerted Effort ◽  
Border Effects ◽  
Content Type ◽  
Distance Effects ◽  
Internationalization Strategy ◽  
Oli Paradigm

Purpose – The purpose of this paper is to critically assess the theoretical underpinnings and extant progress of the research on regional multi-national enterprises (MNEs) and offer a blueprint for future research by re-conceptualizing how (regional) boundaries relate to the international diversification of MNEs. Design/methodology/approach – The paper integrates key insights from the theory of the regional MNE and economic geography to re-orient the treatment of regional borders within international business (IB) literature. Findings – The paper suggests that the (L) component within the ownership location and internalization (OLI) paradigm should be disaggregated into continuous “distance effects” and discrete “border effects”. Within this rubric, regional borders represent discrete border effects that generate discontinuities that are permeable, fluid and firm specific. Such reconceptualization opens up avenues for future research and more tightly integrates the research on regional MNEs with other research streams. Research limitations/implications – IB scholars need to make concerted effort to think of regions as one among several parameters in studying the strategy and structure of MNEs. A stronger focus on internal processes and mechanisms elucidating the main drivers of MNEs strategies is needed. Originality/value – The paper offers innovative ways in which future research can advance the study of how regions matter in the internationalization strategy of MNEs.

Crisis or opportunity: Marks and Spencer’s tryst with Indian retail

2020 ◽  
Vol 16 (6) ◽  
pp. 671-690
Author(s):  
Arunima Rana ◽  
Ravi Shankar
Keyword(s):  
Decision Making ◽  
International Business ◽  
Brand Management ◽  
Secondary Data ◽  
Business Environment ◽  
Special Focus ◽  
Retail Sector ◽  
Content Type ◽  
Competitor Analysis ◽  
Fashion Retail

Research methodology The case is written using secondary data sources (namely, research documents, press information, journal articles and published interviews). Publicly declared company information has further been leveraged to augment case facts. All information sources have been duly acknowledged in the reference section. Case overview/synopsis The case is written in the backdrop of COVID-19 pandemic and its effect on the Indian retail industry, revolving around scenarios in which a multinational retailer has to decide on its long- and short-term strategy in such an economic crisis. The case story has been developed around Marks and Spencer’s retail venture in the Indian market. With the COVID-19 pandemic impacting business at various levels, with countries moving to lock down and economies shrinking to recessionary levels, one of the worst affected sectors is retail. The teaching case builds upon Mark and Spencer’s initial decision of not entering and extending its food/grocery business in India. While it remained a dominant player in Indian fashion retail for almost two decades, it needs to re-think its decision of entering food retail owing to a pandemic situation affecting its offline sales/store footfall and increasing competition from global fashion brands such as Zara and H&M that had flooded the Indian fashion retail sector. The case provides a context for students to perform environmental factor and competitor analysis for a sector, with special focus on decision making in a changing crisis scenario. Complexity academic level This case could be used in undergraduate and MBA classroom programme, across subjects such as retail management, marketing management, international business, international business environment and strategic business management. This case fits while discussing topics such as business environmental factors, competitor analysis, decision-making under crisis, market entry decision, omnichannel retail strategy, consumer behaviour and brand management.

scholarly journals The prevalence of ill-treatment and bullying at work in Ireland

2020 ◽  
Vol 13 (3) ◽  
pp. 245-264
Author(s):  
Victoria Hogan ◽  
Margaret Hodgins ◽  
Duncan Lewis ◽  
Sarah Maccurtain ◽  
Patricia Mannix-McNamara ◽  
...  
Keyword(s):  
Workplace Bullying ◽  
National Level ◽  
Economic Recession ◽  
Survey Study ◽  
National Study ◽  
Content Type ◽  
Level Data ◽  
Irish Data ◽  
Behaviour Study ◽  
National Probability Sample

PurposeThe purpose of this paper is to examine the prevalence of ill-treatment and bullying experienced by Irish workers and to explore individual and organisational predictors. The most recent national figures available are specific to bullying and predate the economic recession; therefore, this study is timely and investigates a broader range of negative behaviours.Design/methodology/approachA questionnaire survey study on a national probability sample of Irish employees was conducted (N = 1,764). The study design replicated the methodology employed in the British workplace behaviour study.FindingsThe results showed that 43% of Irish workers had experienced ill-treatment at work over the past two years, with 9% meeting the criteria for experiencing workplace bullying. A number of individual and organisational factors were found to be significantly associated with the experience of ill-treatment at work.Research limitations/implicationsThis study provides national-level data on workplace ill-treatment and bullying that are directly comparable to British study findings.Practical implicationsThe findings indicate that a significant number of Irish workers experience ill-treatment at work, and that workplace bullying does not appear to have decreased since the last national study was conducted in Ireland.Social implicationsThis study is of use to the Irish regulator and persons responsible for managing workplace bullying cases, as it identifies high-risk work situations and contributing individual factors.Originality/valueThis study provides national Irish data on workplace behaviour and ill-treatment following a severe economic recession.

Middle East luxury retail sector – opportunities or uncertainties in the future?

2016 ◽  
Vol 6 (3) ◽  
pp. 1-39
Author(s):  
Roger Moser ◽  
Gopalakrishnan Narayanamurthy
Keyword(s):  
Middle East ◽  
Multinational Corporations ◽  
International Business ◽  
Market Entry ◽  
Middle Eastern ◽  
Subject Area ◽  
Retail Sector ◽  
Senior Executive ◽  
Content Type ◽  
The Future

Subject area The subject area is international business and global operations. Study level/applicability The study includes BSc, MSc and MBA students and management trainees who are interested in learning how an industry can be assessed to make a decision on market entry/expansion. Even senior management teams could be targeted in executive education programs, as this case provides a detailed procedure and methodology that is also used by companies (multinational corporations and small- and medium-sized enterprises) to develop strategies on corporate and functional levels. Case overview A group of five senior executive teams of different Swiss luxury and lifestyle companies wanted to enter the Middle East market. To figure out the optimal market entry and operating strategies, the senior executive team approached the Head of the Swiss Business Hub Middle East of Switzerland Global Enterprise, Thomas Meier, in December 2012. Although being marked with great potential and an over-proportional growth, the Middle Eastern luxury market contained impediments that international firms had to take into consideration. Therefore, Thomas had to analyze the future outlook for this segment of the Middle East retail sector to develop potential strategies for the five different Swiss luxury and lifestyle companies to potentially operate successfully in the Middle East luxury and lifestyle market. Expected learning outcomes The study identifies barriers and operations challenges especially for Swiss and other foreign luxury and lifestyle retailers in the Middle East, understands the future (2017) institutional environment of the luxury and lifestyle retail sector in the Middle East and applies the institutions-resources matrix in the context of a Swiss company to evaluate the uncertainties prevailing in the Middle East luxury and lifestyle retail sector. It helps in turning insights about future developments in an industry (segment) into consequences for the corporate and functional strategies of a company. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or e-mail [email protected] to request teaching notes. Subject code CSS 5: International Business.

Social capital and national innovation system: a cross-country analysis

2014 ◽  
Vol 21 (4) ◽  
pp. 453-475 ◽  
Author(s):  
Sepehr Ghazinoory ◽  
Ali Bitaab ◽  
Ardeshir Lohrasbi
Keyword(s):  
Social Capital ◽  
National Level ◽  
Innovation System ◽  
Negative Effects ◽  
Content Type ◽  
Research Findings ◽  
Different Dimensions ◽  
The Impact ◽  
Positive Effect

Purpose – In the last two decades, researchers have paid much attention to the role of cultural values on economic and social development. In particular, the crucial role of different aspects of culture on the development of innovation has been stressed in the literature. Consequently, it is vital to understand how social capital, as a core cultural value, affects the innovation process and the innovative performance at the national level. However, to date, the impact of different dimensions of social capital and innovation has not been properly portrayed or explained. Thus, the purpose of this paper is to investigate the influence of four different dimensions of social capital (institutional and interpersonal, associational life and norms) on two of the main functions of national innovation system (NIS) (entrepreneurship and knowledge creation) based on over 50,000 observations in 34 countries. Design/methodology/approach – In this regard, national-level data from the World Values Survey database was employed to quantify social capital. Entrepreneurship is, in turn, assumed to consist of three sub-indexes and 14 indicators based on the Global Entrepreneurship Index. Knowledge creation is also measured through US Patent Office applications. Also, exploratory factor analysis and structural equation modeling approach were used to build the measurement model and investigate the impact that each factor of social capital had on entrepreneurship and knowledge application, respectively. Measurement and structural models were built and their reliability and validity were tested using various fit indices. Research findings suggest the strong positive effect of institutional trust and networking on entrepreneurship. Also, interpersonal trust and networks were shown to have high influence on knowledge development at the national level. Norms appear to have naïve to medium negative effects on both functions. Findings – Research findings suggest the strong positive effect of institutional trust and networking on entrepreneurship. Also, interpersonal trust and networks were shown to have high influence on knowledge development at the national level. Norms appear to have naïve to medium negative effects on both functions. Originality/value – However, to date, the impact of different dimensions of social capital and innovation has not been properly portrayed or explained.

Support for female international business travellers in dual-career families

2017 ◽  
Vol 5 (1) ◽  
pp. 22-42 ◽  
Author(s):  
Katharina Puchmüller ◽  
Iris Fischlmayr
Keyword(s):  
Social Support ◽  
International Business ◽  
Organizational Support ◽  
Dual Career ◽  
Structured Interviews ◽  
Content Type ◽  
Cultural Variations ◽  
Support Theory ◽  
Template Analysis ◽  
Business Travellers

Purpose The purpose of this paper is to evaluate experiences of female international business travellers living in dual-career families (DCFs) who also have childcare obligations. In particular, the paper explores in which way different sources of support – specifically organizational support – are perceived as important and are available to the women under research. Because of the women’s regular absences due to business trips and the fulfilment of their family role, challenges regarding childcare or household responsibilities may occur. Consequently and also according to social support theory, different types of support may be necessary to organize family and international career, and effectively perform in both environments. Design/methodology/approach This paper examines the experiences and thoughts of these women with special regards on support issues. Data are collected from 51 semi-structured interviews with internationally travelling women in DCF situations originating from seven Western and non-Western countries. The interviews are analysed applying template analysis. Findings Results show that, across countries, support is mainly derived from within family. Regarding institutional or organizational support, however, the reported expectations and actually offered activities differ because of local institutional and cultural variations. The examined women value different forms of organizational support, but do not necessarily expect it. Originality/value This paper represents the first exploratory examinations of various forms of support for female international business travellers in DCFs suggested by social support theory. It includes a culturally diverse sample and contributes to cross-cultural career research.

From Asia to Africa: the international expansion of Hon Chuan enterprise

2018 ◽  
Vol 8 (1) ◽  
pp. 1-33
Author(s):  
Caleb Huanyong Chen ◽  
Allan KK Chan
Keyword(s):  
Emerging Markets ◽  
International Business ◽  
Success Factors ◽  
Corporate Strategy ◽  
Mainland China ◽  
Subject Area ◽  
International Expansion ◽  
Content Type ◽  
Key Customer ◽  
Beverage Packaging

Subject area International Expansion; Emerging Markets; Corporate Strategy; Strategic Management. Study level/applicability Senior undergraduate; MBA; EMBA. Case overview This case focuses on the international expansion of Hon Chuan Enterprise, a beverage packaging and filling company headquartered in Taiwan. The company has set foot in Africa after its development in mainland China and Southeast Asia. Its 41st factory has just started production in Mozambique, Africa. The African base may help the company reach the turnover milestone of NT$20bn (approximately US$640m) in the next year. This NT$20bn turnover has been a target every year since 2013, but they have so far failed to reach it. As an original equipment manufacturer (OEM) in beverage packaging and filling, Hon Chuan to some extent relies on customers that own brands. After losing a key customer in mainland China, the company has experienced a three-year slump that forced the company’s president, Hish-Chung Tsao, to modify his strategy. Africa was the new battlefield bearing his ambition. His intention was not just to add another manufacturing base, but to develop its own beverage brands as an OBM. Yet, how could this be achieved in Africa? It would be a new journey full of challenges. Africa was more complex than other markets. The company’s first factory there had just been established, and its future was still unknown. Expected learning outcomes This case is appropriate for courses in international business, emerging markets, corporate strategy and marketing management. After studying the case, students should be able to understand international expansion of a manufacturing company in emerging markets; understand several key emerging markets of the world and learn what CAGE distances are; identify Hon Chuan’s success factors, challenges and necessary capabilities for future development and then comprehend why it is important to upgrade from OEM to OBM; and learn how to develop beverage brands in emerging markets. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes. Subject code CSS 5: International Business.

Exploring the importance of cultural collectivism on the efficacy of lean practices

2015 ◽  
Vol 35 (3) ◽  
pp. 370-391 ◽  
Author(s):  
Frank Wiengarten ◽  
Cristina Gimenez ◽  
Brian Fynes ◽  
Kasra Ferdows
Keyword(s):  
Lean Manufacturing ◽  
Negative Impact ◽  
National Level ◽  
Organisational Culture ◽  
Cultural Dimension ◽  
Content Type ◽  
Lean Practices ◽  
Individualistic Culture ◽  
Cultural Components ◽  
Organisational Level

Purpose – The purpose of this paper is to assess the influence of cultural collectivism on the efficacy of lean practices. Furthermore, this study assesses whether or not potential cultural disadvantages related to the level of individualism at the national level can be compensated for at the organisational culture level. Design/methodology/approach – Hofstede’s cultural dimension of individualism is used to test whether practicing a collectivistic culture at the organisational level can fully compensate for the potential disadvantages of being geographically situated in an individualistic culture when practicing lean manufacturing. Findings – Results suggest that cultural collectivism at the national and organisational level have a significant impact on the efficacy of lean practices. Furthermore, the negative impact of being situated in an individualistic country cannot be fully compensated for through practicing a collectivistic organisational culture when practicing lean. Originality/value – This study represents a comprehensive attempt to simultaneously assess the collectivism cultural components of lean practices at the national as well as at the organisational level.

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