Clougherty, Joe, Kim, Jin Uk, Skousen, Bradley , Szücs, Florian. 2016. The Foundations of International Business: Cross-Border Investment Activity and the Balance between Market-Power and Efficiency Effects. Journal of Management Studies (JMS) 54 (3), 340-365.


BibTeX

@ARTICLE{Clougherty2016,
title = {The Foundations of International Business: Cross-Border Investment Activity and the Balance between Market-Power and Efficiency Effects},
author = {Joe Clougherty and Jin Uk Kim and Bradley Skousen and Florian Szücs},
year = {2016},
doi = {http://dx.doi.org/10.1111/joms.12205},
url = {http://onlinelibrary.wiley.com/doi/10.1111/joms.12205/full},
volume = {54},
number = {3},
language = {EN},
pages = {340-365},
journal = {Journal of Management Studies (JMS)},
abstract = {The foundational international business (IB) scholarship grappled with whether multinational enterprises (MNEs) are largely efficiency-enhancing or market-power inducing institutions. Contemporary scholarship, however, often associates foreign direct investment (FDI) with efficiency-enhancing properties and thus neglects the market-power interpretation of the MNE. Such an imbalance is problematic given that the theoretical and empirical justifications behind the field's embrace of the efficiency interpretation are not fully evident. Instead, both efficiency and market-power effects are seemingly present in cross-border investment activity. Based on a comprehensive sample of up to 4,361 cross-border investments materializing between 1986 and 2010, we present theoretically-grounded hypotheses with regard to when market-power effects will tend to dominate efficiency effects. We find that cross-border investments undertaken by emerging-market MNEs in both developed and emerging markets tend to involve substantial efficiency effects and minimal market-power effects when compared with the cross-border investments undertaken by developed-country MNEs in both developed and emerging markets.},
}

Abstract

The foundational international business (IB) scholarship grappled with whether multinational enterprises (MNEs) are largely efficiency-enhancing or market-power inducing institutions. Contemporary scholarship, however, often associates foreign direct investment (FDI) with efficiency-enhancing properties and thus neglects the market-power interpretation of the MNE. Such an imbalance is problematic given that the theoretical and empirical justifications behind the field's embrace of the efficiency interpretation are not fully evident. Instead, both efficiency and market-power effects are seemingly present in cross-border investment activity. Based on a comprehensive sample of up to 4,361 cross-border investments materializing between 1986 and 2010, we present theoretically-grounded hypotheses with regard to when market-power effects will tend to dominate efficiency effects. We find that cross-border investments undertaken by emerging-market MNEs in both developed and emerging markets tend to involve substantial efficiency effects and minimal market-power effects when compared with the cross-border investments undertaken by developed-country MNEs in both developed and emerging markets.

Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Journal of Management Studies (JMS)
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, INF-A, MAN-A+, STRAT-A, WH-A
Language English
Title The Foundations of International Business: Cross-Border Investment Activity and the Balance between Market-Power and Efficiency Effects
Volume 54
Number 3
Year 2016
Page from 340
Page to 365
Reviewed? Y
URL http://onlinelibrary.wiley.com/doi/10.1111/joms.12205/full
DOI http://dx.doi.org/10.1111/joms.12205

Associations

People
Szücs, Florian (Details)
External
Clougherty, Joe (University of Illinois at Urbana-Champaign and CEPR-London, United States/USA)
Kim, Jin Uk (University of Illinois at Urbana-Champaign , United States/USA)
Skousen, Bradley (The Ohio State University, United States/USA)
Organization
Economics DP (Details)
Quantitative Economics IN (Details)
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