Theories of International Business - Complete Summary
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Course
Theories of International Business (6012B0427Y)
Institution
Universiteit Van Amsterdam (UvA)
A comprehensive compilation of the key points from all course materials and lectures within the "Theories of International Business" course, offered as part of the Master of Science in Business Administration program with a focus on International Business at the University of Amsterdam. This summar...
, Table of Contents
Theme I: Core IB Theories........................................................................................5
Conceptualizing IB......................................................................................................................................5
Summary of Rugman, Verbeke, & Nguyen (2011) - "Fifty Years of International Business Theory and
Beyond"...........................................................................................................................................................6
Summary of Buckley & Casson (2009) - "The Internalization Theory of The Multinational Enterprise: A
Review of The Progress of A Research Agenda After 30 Years"......................................................................8
Summary of Dunning (2000) - "The Eclectic Paradigm as an Envelope for Economic and Business
Theories of MNE Activity"...............................................................................................................................8
Uppsala Model...........................................................................................................................................9
1980 MNEs Network and Subsidiaries-Level Analysis:............................................................................10
Summary of Peng (2001) - "The Resource-based View and International Business"..............................11
Summary of Peng (2002) - "Towards an Institution-based View of Business Strategy":.........................12
Theme II: Global Integration Processes..................................................................13
Globalization......................................................................................................................13
The first age of globalization....................................................................................................................13
Summary of Garret (2000) – “The Cause of Globalization”.....................................................................13
Semi Globalization..............................................................................................................15
Summary of Ghemawat (2003) - Semiglobalization and International Business Strategy......................15
Regionalization...................................................................................................................16
Regional and Global Strategies of MNEs:.................................................................................................16
Rugman & Verbeke (2004) - A Perspective on Regional and Global Strategies of
Multinational Enterprises:..........................................................................................................16
Negotiation Strategies:.......................................................................................................17
Summary of Discussion Case: Meyer (2015) - Getting to Si, Ja, Oui, Hai, and Da.................18
Hofstede’s cultural dimensions................................................................................................................18
Theme III: MNE Entry Modes.................................................................................20
Summary of Dunning (1998) – “Location and the Multinational Enterprise: A Neglected
Factor?”......................................................................................................................................20
Evolution of FDI motivations....................................................................................................................20
Summary of Gao, Murray, Kotabe, and Lu (2010) – “A 'Strategy Tripod' Perspective on
Export Behaviors: Evidence from Domestic and Foreign Firms Based in an Emerging Economy” 20
The Strategy Tripod consists of:...............................................................................................................21
Entry Modes Choice.................................................................................................................................21
Market Entry Trade-offs...........................................................................................................................22
Choice of Entry Modes:............................................................................................................................22
Export: The sale of goods from Company A in Country X to Company B in Country Y,
often an initial step in the manufacturing industry...........................................................22
R&D Contracts: Non-equity agreements between two or more foreign partners to
collaborate on a specific R&D project...............................................................................22
What factors impact the selection of the entry mode?...........................................................................23
Summary of Brouthers & Hennart (2007) – “Boundaries of the Firm: Insights from
International Entry Mode Research”...........................................................................................23
Uncertainty and Gradual Expansion:.......................................................................................................24
Overcoming These Challenges Gradually:................................................................................................24
**Internalization Theory - Uppsala Model Stages:..................................................................................24
, Summary of Discussion Paper: Brennan (2018) – “Netflix's Expansion to 190 Countries in 7
Years”.........................................................................................................................................24
Netflix's success was attributed to two strategic moves.........................................................................24
Key Factors:..............................................................................................................................................25
Theme IV: Home and Host Countries and Concepts of Distance..............................26
Impact of Geographic Proximity on Multinational Enterprise (MNE) Performance.............26
Liability of Foreignness (LOF)...................................................................................................................26
Reducing LOF............................................................................................................................................27
The Concept of Distance..........................................................................................................................27
Summary of Hutzschenreuter, Kleindienst & Lange (2016) – “The concept of distance in
international business research: A review and research agenda”...............................................27
What constitutes distance?......................................................................................................................27
Measurements of distance......................................................................................................................28
Schwartz's 1994 "Survey of Values".........................................................................................................29
Summary of Hofstede's 1994 Work - "Culture: The Heart of International Business"........29
Five Dimensions of National Culture:......................................................................................................29
Six Dimensions of Organizational Culture:...............................................................................................30
Measuring Cultural Distance....................................................................................................................30
Limitations of Cultural Distance...............................................................................................................30
Why is Distance Significant?....................................................................................................................30
Summary of Ghemawat's 2001 Work - "Distance Still Matters".........................................31
Cage Framework......................................................................................................................................31
Critiques of the CAGE Framework:..........................................................................................................31
Bilateral vs. Unilateral Measurement:.....................................................................................................32
Determining Investment Destinations.....................................................................................................32
Impacted Outcomes Due to Distance:.....................................................................................................32
Distance as a Moderating Factor:............................................................................................................33
Summing up the concept of distance......................................................................................................33
Summary of Moon, Rugman, and Verbeke (1998) - A Generalized Double Diamond
Approach to the Global Competitiveness of Korea and Singapore..............................................33
Nature of the Diamond:...........................................................................................................................33
The Single Diamond Model (Porter):.......................................................................................................33
The Double Diamond Model:...................................................................................................................34
Government's Role:..................................................................................................................................34
Double Diamond Analysis (DDA) - The Function of Multinational Enterprises (MNEs) via Foreign Direct
Investment (FDI):..........................................................................................................................................34
Takeaways................................................................................................................................................35
To What Extent Does the Country Play a Role?.......................................................................................35
So, Does the Country Matter?..................................................................................................................35
Theme V: New MNE’s............................................................................................36
Conventional versus New MNEs.........................................................................................36
Conventional Multinational Enterprises (MNEs):....................................................................................36
Emerging Multinational Enterprises (MNEs):..........................................................................................36
International New Ventures & Born Globals.......................................................................36
Summary of Oviatt and McDougall (2005) - Toward a Theory of International New Ventures
36
International new Ventures.....................................................................................................................36
Transformations in the Global Business Landscape.................................................................................36
MNE Theory and International New Ventures (INVs):.............................................................................36
Scale and International Expansion...........................................................................................................37
Characteristics of INVs..............................................................................................................................37
, 4 Elements for sustainable INVs...............................................................................................................37
Conditions for International New Ventures (INVs): Four Key Aspects.....................................................39
Key Insights..............................................................................................................................................39
Summary of Isenberg (2009) – “The Global Entrepreneur: A New Breed of Entrepreneur
Thinking Across Borders from Day One”.....................................................................................39
Emerging Market Multinationals (EMNEs)..........................................................................40
Emerging Economies:...............................................................................................................................40
Examples of Emerging Country Categories:.............................................................................................40
Diverse Nature of Emerging Economies:.................................................................................................40
Types of emerging economies.................................................................................................................40
EMNEs and Inward Foreign Direct Investment (FDI) Emerging Multinational Enterprises (EMMNEs)...41
Summary of Luo and Tung (2007) - International Expansion of Emerging Market
Enterprises: A springboard perspective......................................................................................41
Internationalization of EMNEs.................................................................................................................41
International Springboard: Motivations...................................................................................................42
Distinct Challenges Faced by EMMNEs....................................................................................................42
Is a New EMMNE Theory Necessary?......................................................................................................42
Internationalization Patterns of EMMNEs...............................................................................................42
Conclusion Regarding EMMNEs...............................................................................................................42
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