The authors adopt and develop an institutional perspective to advance understanding of how host country environments influence subsidiary staffing strategies. They propose and find that (a) firms rely more on expatriates in institutionally distant environments for reasons related to the efficient transfer of management practices and firm-specific capabilities and (b) the positive influence of expatriate staffing levels on subsidiary performance is dependent on the institutional distance between the host and home country, and subsidiary experience. The authors' findings are based on their analysis of expatriate employment levels and performance in 12,997 foreign subsidiaries of 2,952 Japanese firms in 48 countries.

We examine the impact of diversification on performance for firms operating in different institutional environments during a relatively stable period and during a major economy‐wide shock. We locate our study in six Asian countries at different levels of institutional development. Results indicate that diversification negatively impacts performance in more developed institutional environments while improving performance only in the least developed environments. Even in the least developed institutional environments, diversification offers limited benefits when an economy‐wide shock strikes. Though successful diversifiers are sometimes affiliated with business groups, diversification is associated with poorer performance for both affiliated firms and independent firms. In sum, we find that the outcomes of diversification are influenced by institutional environments, economic stability and affiliation with business groups. Copyright © 2007 John Wiley & Sons, Ltd.

Several studies suggest that political ties help firms survive or perform but do not examine the boundary conditions concerning which types of firms and which type of ties help firms. We draw from resource dependence and resource-based theories to argue that political ties can improve both firm survival (labeled "buffering") and performance (labeled "enabling"), with weaker firms gaining more from buffering and stronger firms gaining more from enabling. We further examine the relative impact of local and central ties. We test our hypotheses on the television manufacturing industry in China between 1993 and2003. Results demonstrate the buffering roles of political ties, and under narrower conditions, their enabling roles. Local ties account for these outcomes, while central ties do not provide buffering or enabling benefits.

Authors with many theoretical and managerial perspectives argue that businesses commercializing technologically complex goods benefit when they collaborate closely with other businesses. Collaboration is viewed as a means for businesses to overcome competency limitations and to achieve the close configuration of components required for complex goods. We predict that collaborative relationships ofen assist businesses to produce complex goods, but that the relationships might also cause problems for the collaborating businesses. We find that firms using development-oriented and marketing-oriented collaborative relationships in the hospital sofhvare systems industry are less likely to shut down than businesses that follow independent approaches when the environment changes gradually, but businesses using collaborative relationships are sometimes susceptible to being acquired by other firms. Following a sudden environmental shock, businesses with collaborative relationships for activities central to the shock became more likely to shut down, while businesses with collaborative relationships for activities outside the focus of the shock became more likely to survive. The study critically evaluates and tests the widely stated but little-tested argument that interfirm collaboration is usually beneficial. The results address the issue of whether organizational choices affect comparative business performance.

Industry incumbents frequently delay entry into emerging technical subfields, fearing product cannibalization and uncertain investment, and enter only after technical and market uncertainties have subsided. We predict that many incumbents, particularly stronger firms, will participate in alliances with other firms before their standalone entry. The alliances will be used to realize part of the value of specialized assets and to gain information about the emerging products and markets. We support the predictions with evidence from the US. market of the medical diagnostic imaging industry.