Journal of International Business Studies — 52, pg. 1031–1046

Global scaling as a logic of multinationalization

Reuber, A.R., Tippmann, E. & Monaghan, S. 

Global scaling – defined as a logic of multinationalization that seeks rapid growth through the replication of a global business model across foreign markets – is an increasingly visible real-world phenomenon; however, it is one which has not yet been theorized in international business research. The purpose of this editorial is to initiate a dialogue that will lead to greater discussion and research in this area. We present the theoretical facets of the global scaling logic and compare global scaling with other conceptualizations of rapid international growth. We then draw on previous research in international business and entrepreneurship to suggest facilitators of global scaling. Finally, we highlight the challenges of global scaling and areas for future empirical research to help us better understand which kinds of firms are likely to follow a global scaling logic, and which factors contribute to its successful implementation. Throughout the discussion, we use published case studies as examples, in order to provide suggestions for teaching material on global scaling.

Global Strategy Journal – DOI: https://doi.org/10.1002/gsj.1412

Disentangling the relationship between internationalization, incremental and radical innovation, and firm performance

Joan Freixanet, Josep Rialp

This study examines the impact of firm internationalization on incremental and radical product innovation, and the effects of these innovation facets on sales growth. We use a sample of 1,064 Spanish manufacturers over the period 2008–2014. We find a positive relationship between higher international scope and greater ex-post radical innovation output, and an inverted U-shape relationship between export intensity and both innovation forms. We also find a positive relationship between incremental innovation and sales growth for performance leaders, and negative for performance laggards. Conversely, radical innovation boosts performance laggards’ sales growth, but reduces that of performance leaders. The study supports and qualifies the learning-by-exporting effect, by identifying some firm-specific factors that shape the relationship between internationalization, innovation, and firm performance.

International Business Review – DOI: https://doi.org/10.1016/j.ibusrev.2020.101774

Foreign direct investment and entrepreneurship: Does the role of institutions matter?

Ly Slesman, Yazid Abdullahi Abubakar, Jay Mitra

Development economics, international business, and entrepreneurship literature suggest that foreign direct investment (FDI) has significant positive spillover effects for entrepreneurial activities of host economies. However, the findings of past research are mixed, and they do not always confirm this suggestion. We argue that the reason for conflicting findings may be because of an incomplete understanding of the factors that influence the FDI-entrepreneurship nexus in different contexts. Previous studies have carried out only limited exploration of the contingencies in the FDI and domestic entrepreneurship relationship that may depend on the host country’s institutional capacity. We argue that not all countries can reap the rewards from FDI equally. Rather, we hypothesize that countries need to have a sufficient degree of institutional capacity relevant to specific conditions and appropriate threshold levels to successfully capture the positive spillover effects of FDI on domestic entrepreneurship. Utilizing panel data from 2006 to 2016 for 97 emerging markets, developing and developed countries (at different income levels), and a System Generalized Method of Moments (SGMM) estimator that controls for instrument proliferation in dealing with endogeneity problems, we test this hypothesis. We find that FDI has a negative (crowding-out) effect on domestic entrepreneurship at below-threshold levels of institutional capacity, and a positive (crowding-in) effect at above-threshold levels of institutional capacity. The crowding-out effect diminishes as the institutional capacity changes or improves to meet mutating economic environment conditions. Our findings are robust across a wide range of aggregate and disaggregate measures of different types of institutions and alternative empirical strategies.