PurposeThis paper has as its aim to research the factors affecting the risk perceived by family firm executives in relation to international activity.Design/methodology/approachThe paper examines the factors which can modify risk perception, placing special emphasis on those arising from the coincidence of ownership and management in family businesses.FindingsFocus on the international commitment assumed by family firms and using a sample of 92 Spanish family companies, this paper shows that risk perception decreases with the presence of the first generation and the size of these organisations. Additionally, it has been found that the risk perceived is higher when the firm advances in its international commitment level.Practical implicationsIf family firms know the factors which can affect the risk perceived about international activity, they will stand a better chance to handle them properly with a view to move forward in their internationalisation process.Originality/valueAn effort is made in this paper to deal with the risk perception associated with international activity in family firms, an issue treated in a small number of research works so far.
China's growing economic importance has led to a significant increase in the volume of empirical research about business and management in this country during the last few years. This study reviews the 180 empirical papers focusing on the Chinese context that were published in 12 leading international academic journals between 2000 and 2005. A summary of the methodologies used and the topics analysed is offered, along with various rankings of journals, authors, institutions, and papers.
One of the most important issues in the study of the internationalisation process is the choice of market entry strategy, which can be linked to the degree of international commitment. We have chosen to address this aspect in this paper by undertaking case studies of family firms, located in the province of Alicante (Spain), that belong to the most internationalised sectors in the region. The results obtained show that this group of firms follow the propositions laid down by the Uppsala model and that the age, size and generation of the family firm significantly influence the establishment of international, strategic alliances.
In recent years, there is an increasing number of papers focusing on the internationalisation process of Indian multinationals (MNCs). However, there is still a gap in understanding the determinants of their outward foreign direct investment (FDI) decisions.Thus, this paper analyses the factors influencing the choice between FDI modes by Indian firms. Our findings show that industry technological intensity, host country risk, host market attractiveness, previous international experience and the volume of exports from India to the host country, are determining factors of the choice between acquisitions and greenfields.
Purpose -Different theoretical approaches can be used to justify a positive or negative influence of country risk and cultural distance on the resources commitment level assumed in each decision to entering a new country. Before the disparity of results obtained in prior research, this study seeks to provide new empirical evidence about the influence that those two dimensions linked with the target country may exert on entry mode choice. Design/methodology/approach -Based on contingency approach, transaction cost economics, resource dependency perspective, bargaining power theory and organisational capabilities perspective, various alternative hypotheses are developed and tested using a sample of 471 entries performed by Spanish enterprises between 1999 and 2004. Findings -The findings indicate that both dimensions go in the same direction, as both greater target country risk and greater cultural distance reduce the likelihood of using higher-commitment entry strategies. Originality/value -The conflicting arguments are discussed which allow are to forecast that, in conditions of country risk or great cultural distance, both low-and high-commitment entry modes can be appropriate.
Purpose
Drawing on the institutional perspective, the purpose of this paper is to investigate how state ownership moderates the relationships between political risk, inertia and mimetic behavior, and the location choice of Chinese multinational enterprises (MNEs).
Design/methodology/approach
The authors argue that state ownership leads Chinese firms to behave toward political risk in an unconventional way, and that government support makes them less dependent on their own and other Chinese firms’ prior host country experience. The authors tested the hypotheses using data on outward foreign direct investment (OFDI) decisions made by 186 Chinese firms in 93 countries.
Findings
The authors found that Chinese state-owned enterprises (SOEs), compared to non-SOEs, are more likely to move into countries with high political risk, and that they are less likely to be inertial and mimetic.
Originality/value
Building on the distinction between macro- and micro-political risk, The authors contribute to the political risk literature by developing several arguments that explains why political risk varies across investing firms in a given host country. Moreover, this is one of the first studies of its kind to investigate the moderating effect of state ownership on the relationship between inertial and mimetic behavior, and the location choice of Chinese MNEs.
Purpose
The conventional wisdom suggests that the lack of prior host country-specific experience and a higher institutional distance deter multinational enterprises (MNEs) from entering a foreign country. However, past studies report that Chinese MNEs show an unconventional risk-taking behavior choosing foreign locations, where they have no prior experience or there is an increased institutional distance. Drawing on the institutional theory, the purpose of this paper is to argue that Chinese Government official visits to the host country may act as a risk-reduction device, thus providing an explanation for such an unconventional behavior.
Design/methodology/approach
The authors develop two hypotheses regarding how Chinese Government official visits moderate the impact of host country-specific experience and institutional distance on the location choice of Chinese MNEs. The authors test the hypotheses using a sample of investment location decisions by Chinese MNEs in Latin America.
Findings
The authors find that government official visits mitigate the lack of firm’s prior host country experience. However, only high-level government visits reduce institutional distance.
Originality/value
The authors contribute to the international business literature by analyzing how home country government diplomatic activities may pave the way of host country institutional environment for foreign MNEs from that home country. In addition, the authors provide an additional explanation for the unconventional risk-taking behavior of Chinese MNEs. Finally, the authors also contribute to a better understanding of the decision-making process of emerging-market MNEs entering other emerging economies.
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