How does liability of origin influence cross-border acquisition completion? Evidence from Chinese firms

Purpose The environment of international business (IB) and the capabilities of emerging market multinational enterprises (EMNEs) as well as their home countries have changed significantly, leading to some new features of liability of origin (LOR). This paper aims to extend the LOR literature by particularly focusing on the LOR of Chinese multinational enterprises (MNEs) and by taking into account the heterogeneity among industries and across individual MNEs. Design/methodology/approach Based on the stereotype content model and organizational legitimacy perspective, this study explores how LOR influences Chinese MNEs’ cross-border acquisition completions. Several hypotheses were tested by using a binary logistic regression model with panel data techniques based on data of 780 Chinese MNEs’ acquisition deals between 2008 and 2018. Findings The results of this study show that when the competence dimension of China’s LOR is perceived as high in the host country, Chinese MNEs are less likely to complete cross-border acquisitions. Moreover, deals are less likely to be completed when the warmth dimension of China’s LOR is perceived to be low. Global experience and the foreign-listed status of individual Chinese MNEs can alter the relationship between the LOR and deal completions. Originality/value This study advances and enriches the LOR research. It shows that a high level of competence in the home country has led to LOR for Chinese MNEs rather than the low level of competence proposed by existing LOR studies; and the LOR for Chinese MNEs is also determined by the perceived low level of warmth in the home country resulting from the geopolitical conflicts between two countries. In addition, the LOR suffered by EMNEs could vary based on certain industry- and firm-level characteristics. The findings of this study provide important practical implications for emerging economy governments and for firms intending to go abroad.

Achieving Access to Justice in a Business and Human Rights Context

Multinational enterprises (MNEs) can contribute to economic prosperity and social development in the countries where they operate. At the same time, their activities may directly or indirectly cause harm to humans and to the environment. However, MNEs are rarely held accountable for their involvement in human rights abuses and environmental damage. In recent years, activists have challenged corporate impunity by introducing innovative claims seeking to hold parent companies directly liable for the harm caused by their group’s activities. They have also strategically used this type of litigation to trigger corporate accountability reforms at international, regional, and national levels. Using national litigation experiences as a starting point and focusing on European civil-law countries, the book evaluates the extent to which litigation against MNEs has been effective in achieving access to justice and corporate accountability. It also considers whether ongoing regulatory developments, such as the adoption of mandatory human rights due diligence norms and the negotiations for a business and human rights treaty, can contribute to the realisation of access to justice and corporate accountability in the future.

Different roots, intertwined branches: linking International Business and Economic Geography through the Uppsala Model and Global Production Network

PurposeThe aim of this study is to propose a link between international business (IB) and economic geography, which are two streams of thought that have developed without one acknowledging the other. We use the Uppsala model and the Global Production Network as pillars to sustain this link. We expect that this research triggers a collaboration with allied social sciences in important debates surrounding the business-societal interface.Design/methodology/approachWe selected papers produced by Johanson and Vahlne to understand the development of the Uppsala model over 40 years. The same was done with the Global Production Network, where we scrutinized the work of Henderson, Coe, Dicken, Hess and Yeung – scholars from the Manchester School of Geography – in the last twenty years. Based on Humphrey et al. (2019), we applied an inductive and inferential approach to uncover similarities and differences between the Uppsala model and Global Production Network.FindingsThe Uppsala model reinforces the strategic role of network position in the internationalization process, while the Global Production Network aims to explain how the governance of global firms scattered world-wide affects the development and upgrading opportunities of the various regions and firms involved. Despite these clear differences, the geographical nature of IB and shared similarities accounting the network as a channel to foster and provide access to important resources and practices regarding management, coordination and governance of dispersed parts of multinational enterprises give room to using these two theories as pillars to link IB and economic geography.Originality/valueWhile attempts to link IB and economic geography are not new, none of these studies have focused on the Uppsala model and Global Production Network as pillars to create a link. We foresee an intense cross collaboration and an even possible renaissance of IB and economic geography to target the ever-changing business environment and its impact on social and economic development.

Proactive Corporate Sustainability via Social Innovation—A Case Study of the Hennes & Mauritz Grand Challenge in Bangladesh

The purpose of the study is to explore how a multinational enterprise can use social innovations to drive change and solve grand challenges in an emerging market context. This paper brings market-shaping literature into a sustainability context, particularly by studying the implementation of social innovations in an emerging market context. Specifically, the study involves an in-depth qualitative study of H&M’s fair living wages program in Bangladesh. We find that H&M is tackling utterances of grand challenges revealed by orchestrating social innovation in collaborations with local stakeholders. Social innovation is carried out in ongoing projects involving multiple stakeholders. The study contributes to current literature by revealing that multinational enterprises indeed can use social innovation to drive change in emerging markets, although this requires long-term commitment, an ability and willingness to shape the surrounding business environment, and a prominent standing among key stakeholders.

Extending Uppsala Model with Springboard Perspective in Emerging Multinational’s Sequential Internationalisation—Evidence from a Construction Company’s Expansion in Africa

The Uppsala model explains the traditional internationalisation process of multinational enterprises (MNEs), which gradually begin to internationalise from countries with smaller psychic distances. However, in the turbulent global economy, an increasing number of MNEs from emerging markets (EMNEs) adopts a more radical and aggressive approach, strategically using international expansion as a springboard to enter an overseas market and radiate surrounding countries and regions. By combining the springboard perspective and the Uppsala model, we analyse a series of processes from EMNE’s first entry into an overseas market to the successful localisation and expansion of international business. This radical model of international expansion has not been thoroughly studied. This empirical study aims to address this research gap by using a qualitative method and an in-depth case study. This paper conducted a semi-structured interview with 16 expatriates, executives, and middle-level managers from the case company in 2016. As one of the few single case studies that systematically studies the internationalisation process of EMNEs and provides first-hand empirical evidence, it contributes to practice and provides a contextual reference for EMNEs.