Review of International Business and Strategy

Gerschewski, Stephan; Lindsay, Valerie J.; Rose, Elizabeth

2016 Review of International Business and Strategy

doi: 10.1108/RIBS-08-2016-0042

PurposeThe purpose of this paper is to examine how entrepreneurial orientation (EO) is manifested in the context of born global firms. Specifically, the authors investigate the extent to which the EO dimensions of the influential Miller/Covin & Slevin scale are demonstrated in born globals. In addition, following calls in the literature, some as-yet unrecognised dimensions of EO in born globals are examined.Design/methodology/approachThe authors use a qualitative research approach by conducting semi-structured, in-depth interviews with eight born global firms from New Zealand and Australia.FindingsThe authors find that the EO dimensions of proactiveness and innovativeness are strongly prevalent in these firms. In contrast to the extant literature, the results also indicate that these born global firms generally display a relatively low level of risk-taking. The authors find strong empirical support for two additional emerging dimensions of EO: passion and perseverance.Originality/valueThe study provides two key contributions to the area of international entrepreneurship by investigating how EO is prevalent in the context of born globals and by proposing the new dimensions of passion and perseverance.

Tang, Ryan W.; Cheung, Mike W.-L.

2016 Review of International Business and Strategy

doi: 10.1108/RIBS-04-2016-0022

PurposeThe purpose of this paper is to illustrate how international business (IB) researchers can benefit from meta-analytic structural equation modeling (MASEM) by introducing a statistically rigorous approach (i.e. two-stage meta-analytic structural equation modeling or TSSEM) and comparing it with a conventional approach (i.e. the univariate-r approach). The illustration and comparison present a methodological overview of MASEM that will assist IB researchers in selecting an optimal method.Design/methodology/approachIn this paper, the MASEM method is elaborated upon, and methodological issues are addressed, by comparing the TSSEM and the univariate-r approaches using an empirical illustration. In this illustrative example, which is based on transaction cost economics, the effects of a firm’s internal factors on its levels of commitment in an international entry strategy are examined.FindingsThe MASEM method can help IB researchers to test and build on IB theories by synthesizing findings in the extant literature because this method reflects the theoretical complexity of IB (e.g. intercorrelationships among factors). Comparing the two approaches of MASEM, it is found in this study that due to its statistical rigorousness TSSEM has methodological advantages in helping IB researchers test theoretical models.Originality/valueThis is the first study to introduce MASEM into the discipline of IB strategies. In this paper, the authors introduce an advanced research method and illustrate two ways of using it.

Alharbi, Jaithen; Gelaidan, Hamid; Al-Swidi, Abdullah; Saeed, Abubakr

2016 Review of International Business and Strategy

doi: 10.1108/RIBS-03-2016-0018

PurposeThis study aims to investigated the control mechanisms of headquarters exercised over their subsidiaries and is conducted with the help of primary data.Design/methodology/approachThe headquarters–subsidiary model used in this study has four components of control in it: personal centralised control (PCC), bureaucratic formalised control (BFC), output control (OUT) and informal control (INFO). These controls (as an agency mechanism) provide a solid platform on which other mechanisms can be built. Using a data collected from 147 multinational enterprises (MNEs) operating in the Kingdom of Saudi Arabia, the influence of each of these factors on this selection is empirically tested with the help of primary data.FindingsThe study found that Anglo-Saxon countries heavily use impersonal types of control mechanisms, specifically bureaucratic formalised control and output control. Compared to the USA, the level of control in Oriental subsidiaries is less; or, put differently, the latter enjoy a greater degree of autonomy than US subsidiaries. The complementarities of these control mechanisms may be linked to earlier studies that show that successful organisations combine tight control with more open, informal and flexible information and communication exchanges. A focus that bends too much towards formal control or too much towards informal control may threaten a company’s existence. This research provides an empirical explanation on this premise.Research limitations/implicationsThe methodology adopted for this study can be extended for similar studies in the Middle East or in Gulf Council Cooperation countries.Practical implicationsThe study show that MNEs from different countries often have different dominant control mechanisms and organisational models. This is partly due to different industry distributions, but it is also related to cultural/societal differences between countries. These differences should be considered when searching for a partner in cross-national mergers and acquisitions. Failure to do so could hinder the successful operation of a merger that seems to be perfect from a financial and competitive point of view.Originality/valueThe study explored variations in the extent of control mechanisms, according to country of origin and organisational characteristics, in a challenging country of domicile. This empirical work not only replicates earlier studies, retesting propositions encountered in the existing literature, but also sheds new light on the challenges of doing business in the Gulf region, and the consequences of the large scale usage of expatriates.

Sufian, Fadzlan; Kamarudin, Fakarudin

2016 Review of International Business and Strategy

doi: 10.1108/RIBS-02-2016-0003

PurposeThis paper aims to provide empirical evidence for the impact globalization has had on the performance of the banking sector in South Africa. In addition, this study also investigates bank-specific characteristics and macroeconomic conditions that may influence the performance of the banking sector.Design/methodology/approachThe authors use data collected for all commercial banks in South Africa between 1998 and 2012. The ratio of return on assets was used to measure bank performance. They then used the dynamic panel regression with the generalized method of moments as an estimation method to investigate the potential determinants and the impact of globalization on bank performance.FindingsPositive impact of greater economic integration and trade movements of the host country, while greater social globalization in the host country tends to exert negative influence on bank profitability. The results show that banks originating from the relatively more economically globalized countries tend to perform better, while banks headquartered in countries with greater social and political globalizations tend to exhibit lower profitability levels.Originality/valueAn empirical model was developed that allows for the performance of multinational banks to depend on internal and external factors. Moreover, unlike the previous studies on bank performance, in this empirical analysis, we control for the different dimensions of globalizations while taking into account the origins of the multinational banks. The procedure allows us to test for the home field, the liability of foreignness and global advantage hypotheses to deduce further insights into the prospects of banking across borders.

Yasser, Qaiser Rafique; Mamun, Abdullah Al; Ahmed, Irfan

2016 Review of International Business and Strategy

doi: 10.1108/RIBS-02-2016-0011

PurposeThe main purpose of this paper is to examine the causes and interrelations between ownership composition and financial reporting quality of firms in the Asia-Pacific region.Design/methodology/approachThe study uses panel data for 420 firms for the period 2011-2013 (three years) from Australia, Singapore, Malaysia, the Philippines and Pakistan.FindingsOverall, the authors find that ownership concentration is positively associated with the financial reporting quality. However, institutional ownership and foreign ownership are positively associated with financial disclosure in developing countries. Further, the result indicates that institutional and public ownership is positively associated with financial reporting in developed countries. Among the control variables, the authors find that larger firms are negatively correlated with financial reporting quality in Asia-Pacific.Originality/valueThese results highlight the highly individualized effects of blockholders and the need for research to further understand the mechanisms through which shareholders impact financial reporting quality.