Diseño del juego FOREST

Presented On: July 5, 2013 - 14:50-16:05 Chair: Antonella Zucchella, University of Pavia

From Resources to International Performance of New Ventures: Are Innovation and Flexibility Strategies the Puzzle’s Missing Pieces?

Vitor Corado Simoes, Advance, ISEG, Technical University of Lisbon Nuno Crespo, Advance, ISEG, Technical University of Lisbon

Margarida Fontes, UMOSE - Laboratório Nacional de Engenharia e Geologia and Dinamia

A major weakness in the international entrepreneurship (IE) field is the empirical focus on direct relationships between the antecedents of IE and the outcomes of the internationalization process. This provided the motivation for the present research, which is aimed at contributing to a better understanding of the strategic processes which mediate the conversion of firms’ characteristics and resources into performance, more specifically international performance. Drawing on IE literature, a model is developed, introducing strategic approaches as mediators between entrepreneurial orientation and firm resources, on the one hand, and firm international performance, on the other. Two basic strategies were considered: innovation and flexibility. The empirical testing of the model, carried out on a sample of 416 international new ventures (INV), confirms that the firm strategies play an important role as determinants of international performance. A negative relationship was found between the availability of generic resources and the adoption of both innovation and flexibility strategies. This suggests that INVs may adopt those strategies to escape resource constraints. The research makes a three-fold contribution to the IE field. First, the results show that firm strategies (in this case, innovation and flexibility strategies) are relevant as mediators of the resources-performance relationship.

Second, firm generic resources are negatively related to these strategies, suggesting that INV’s strategic choices are influenced not just by existing but also by missing resources. Third, innovation strategy is based on a wider mix of resource requirements than flexibility strategy. These findings may pave the way towards further research dealing with the understanding of the role played by strategic approaches in explaining INV’s international performance. (For more information, please contact: Vitor Corado Simoes, Advance, ISEG, Technical University of Lisbon, Portugal: [email protected])

An Empirical Analysis of the Dual Effects of EO and Foreignness on Entrepreneurial Performance Arpita Joardar, Clark University

Sibin Wu, University of Texas-Pan American

This paper draws from research on entrepreneurial orientations (EO) and liabilities of foreignness to examine their combined effects on entrepreneurial performance. We attempted to find out when foreignness can be liability and benefit. Data obtained from 697 domestic and foreign entrepreneurs operating in the U.S. was used in this study. A three-step regression analysis was conducted to test the proposed hypotheses. Results indicate that there is evidence of foreignness having moderating effect on the relationship between EO and

performance. Implications of the findings are discussed. (For more information, please contact: Arpita Joardar, Clark University, USA: [email protected])

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Learning as an Antecedent to Entrepreneurial Orientation in the Internationalization Process: Cases from Indian Born Global Firms

Nishant Kumar, Stockholm University

This study examines what really accounts for the early adoption of internationalization by the Indian knowledge-intensive service firms and their continued success in international markets. On the basis of extant literature, a tentative frame of international entrepreneurial orientation, learning orientation is suggested and then used to analyse empirical material gleaned from multiple case studies of three Indian born global firms. Findings reveal that, despite the scarce resources, Indian born global firms leverage a distinctive mix of entrepreneurial orientations and strategies that allow them to succeed in diverse international markets. And their

entrepreneurial orientation is nurtured through the learning processes. (For more information, please contact:

Nishant Kumar, Stockholm University, Sweden: [email protected])

How Does Risk Preference Personality affect Decision-Making in Chinese Outward Direct Investment? A Conceptual Framework based on the Upper Echelons Theory

Yue Xu, Hull University Business School Hui Wang, Peking University

We argue past empirical studies regarding outward direct investment (ODI) of emerging market enterprises can be flawed from the risk neutral assumption. In reality top managers are not risk neutral in decision-making. To develop this argument, we propose a conceptual model by drawing insights from the upper echelons theory.

Our model aims to examine the effect of executive orientation, namely, top managers’ risk preference personality and experiences, on international venturing decision-making. We highlights indigenous

characteristics specific to the context of Chinese ODI. Accordingly, three moderating effect is considered in the model, they are: corporate governance conditions, organisational conditions (mainly intangible resources) and industry conditions. Theoretical contribution and limitation of the research are also discussed. (For more information, please contact: Yue Xu, Hull University Business School, United Kingdom: [email protected])

Beyond Path Dependence: Explorative Orientation, Slack Resources and SMEs’ Internationalization Angels Dasi, Universitat de Valencia

Vicente Safon, Universitat de Valencia Maria Iborra, Universitat de Valencia

Exploration and exploitation orientation of the firm represent two different learning processes. Applying this organizational learning perspective this study analyzes the influence that these two orientations have on the SMEs’ managerial intentionality to internationalize. We hypothesize that exploitative orientation is going to reinforce the internationalization trajectories the firm already has, whereas explorative orientation has a direct and positive effect over manager’s willingness to increase international activities. In addition, we study the effect that slack resources have on the managerial intentionality to internationalize. We test our hypothesis on a data set of 136 small and medium enterprises. Our findings support the role of an explorative orientation on management intentionality towards internationalization. We also confirm the moderator role of management discretionary resources on this relationship. (For more information, please contact: Angels Dasi, Universitat de Valencia, Spain: [email protected])

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Conceptualizing the Dynamics of International Entrepreneurship: A model of International Entrepreneurial Orientation, Opportunity Recognition, Internationalization, and Performance

Rico Baldegger, University of Applied Sciences Western Switzerland Patrick Schueffel, University of Applied Sciences Western Switzerland

This paper contributes to the existing research by integrating the notions of opportunity recognition and

international entrepreneurial orientation into the body of the new venture theory of internationalization. It helps to explain and understand which factors compel SMEs into a rapid mode of internationalization or into a stage-wise approach. A conceptual framework is developed that presents potential relationships between key concepts from the field of entrepreneurship on the one hand and the degree of internationalization and the performance of an internationalizing SME on the other. Our results suggest that internationalization may not just be the result of one or multiple push or pull factors, but that internationalization itself may significantly influence the international entrepreneurial orientation and the opportunity recognition capabilities of a firm. Consequently, internationalization may be seen as an independent variable, a fact that was largely neglected in past research on SME internationalization. (For more information, please contact: Rico Baldegger, University of Applied Sciences Western Switzerland, Switzerland: [email protected])

Entrepreneurial Orientation and Performance of SMEs: Moderating Role of Institutional Environment Ahreum Lee, Temple University

Deeksha Singh, Temple University

This paper examines the relationship between entrepreneurial orientation (EO) and firm performance in the case of SMEs. Recognizing the resource scarcity that SMEs face, we argue for a “U” shaped relationship between EO and performance. Further, we propose that this relationship is contingent on the level of

institutional support that SMEs receive in a given context. More specifically, in the presence of a higher level of political support and a higher level of social support, SMEs are able to derive greater benefits from their

entrepreneurial orientation. Our empirical analysis, based on a sample of 284 SMEs in Germany largely supports our arguments. (For more information, please contact: Ahreum Lee, Temple University, USA:

[email protected])

Entrepreneurial Orientation and SME International Scope: The Differential Roles of Innovativeness, Proactiveness, and Risk-Taking

Li Dai, Loyola Marymount University Vladislav Maksimov, University of Miami Brett Gilbert, Rutgers University

Stephanie A. Fernhaber, Butler University

This study advances research on small and medium-sized enterprises (SMEs) and entrepreneurial orientation by examining how the latter’s sub-dimensions of innovativeness, proactiveness, and risk-taking individually shape the ability of SMEs to simultaneously pursue multiple opportunities in foreign markets. Using a unique data set of 500 SMEs spanning 10 industries, we found negative implications of adopting a “stuck-in-the-middle” strategy with respect to being innovative and proactive. Our theory on the costs and benefits of entrepreneurial

orientation dimensions in capturing international opportunities also reveal the nuanced impact of risk-taking on SME international scope. Overall, the findings of non-uniform and non-linear relationships contribute to a better understanding of when the individual dimensions of entrepreneurial orientation represent an asset or a liability for entrepreneurial firms in the internationalization process. (For more information, please contact: Li Dai, Loyola Marymount University, USA: [email protected])

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AIB 2013 Conference Proceedings Session: 2.4.12 - Interactive

Track: Track: 1 - Institutions, Governance, and CSR

Impact of Owners and Other Stakeholders

Presented On: July 5, 2013 - 14:50-16:05

Chair: Ruth Aguilera, University of Illinois at Urbana-Champaign

Corporate Ownership and Internationalization: The Effects of Family, Bank and Institutional Investor Ownership in the UK and in Continental Europe

Vincenza Odorici, Univesity of Bologna Antonio Majocchi, University of Pavia Manuela Presutti, Univesity of Bologna

While the role of corporate governance has been analysed, it is only recently that the effects of corporate governance features on firm international strategies have been considered. The objective of this quantitative paper is to analyze the potential role played by different kind of shareholders on firm internationalization level.

First, using a European sample of listed firms, we intend to assess if and how different shareholders typologies affect the firms’ degree of internationalization. Second, distinguishing between the firms quoted in the UK from those listed in Continental Europe’s countries (France, Germany, Italy, Poland, Spain) we investigate if the different characteristics of the corporate governance systems in the two regions have any impact on firms’

internationalization. Our results confirm that different kind of ownerships affect with different degree of intensity the overall level of firm’s internationalization. First, we find that ownership matters. Second, we show that the effects of ownership over firm’s international strategies depend also on the context of analysis. We suggest that the attitude towards internationalization of financial institutional investors differ in institutional contexts. While in the Continental Europe context, bank ownership negatively affects the level of

internationalization, our result show that in an Anglo-Saxon context institutional investors promote internationalization. (For more information, please contact: Vincenza Odorici, Univesity of Bologna, Italy:

[email protected])

Foreign Ownership and Corporate Governance Patterns: The Board-Auditor Relationship in Japan Kurt Desender, University Carlos III, Madrid

Rafel Crespi, Universidad de las Islas Baleares

Monica Lopez-Puertas Lamy, Unicredit Banca - University of Bologna

Auditing is an important piece of the corporate governance puzzle because it is an instrument enhancing the protection of investors’ rights. We draw on a contingency approach which conceptualizes corporate governance as a system of interrelated elements having strategic or institutional complementarities and claims that

particular governance practices will only be effective in certain combinations which may lead to different corporate governance patterns. We claim that the relationship between boards and auditors is contingent on the ownership of the firm, and in particular on the degree of foreign ownership. To test this logic, we focus on the relationship between board characteristics and audit fees in Japan—an institutional setting which differs substantially from the U.S., and has witnessed a high increase in Anglo-American institutional investors. Our results show that board independence, as well as board of corporate auditors’ independence and the external auditor become complementary when foreign ownership is high, while such relation is absent when foreign ownership is low. Our findings highlight the possibility of different patterns of corporate governance within one country, shaped by the weight of foreign owners. (For more information, please contact: Kurt Desender, University Carlos III, Madrid, Spain: [email protected])

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Family and Institutional Ownership and Firm Performance: A Cross-National Analysis Jean B. McGuire, Louisiana State University

Sandra Dow, Monterey Institute of International Studies

Using a sample of firms from over 40 countries, we examine the relationship between family ownership and firm performance. We find a negative relationship between family ownership and firm performance. and a positive relationship between institutional investment and firm performance. (For more information, please contact: Jean B. McGuire, Louisiana State University, USA: [email protected])

How Much I am Going to Tell You? A Study of Differences in Ownership Strategic Behavior Kurt Desender, University Carlos III, Madrid

Jun Ho Lee, University of Illinois at Urbana-Champaign

Although current corporate governance studies have emphasized that institutions matter for the diffusion of corporate practices, less attention has been paid to how different institutions matter for the implementation of corporate practices, especially when different shareholders who have been embedded in different institutional environments coexist. To answer the question, from the institutional perspective, we develop a theoretical framework to explain how a corporate earnings disclosure practice is implemented by different owners (i.e.

Relation-oriented vs. Transaction-oriented owners) who represent different institutional features (i.e.

Stakeholderism vs. Shareholderism). We also examine how a board of directors functions differently in earnings disclosure, depending on ownership structure in a corporation. We test our hypotheses with the analysis of 2,151 Japanese firms for the 2005-2011 period. (For more information, please contact: Jun Ho Lee, University of Illinois at Urbana-Champaign, USA: [email protected])

First Impressions: Stakeholder Networks, Proactive Engagement and Stakeholder Opinions of Corporations Sinziana Dorobantu, New York University

Lite Nartey, University of South Carolina Witold Henisz, University of Pennsylvania

Stakeholders receive information about a firm’s activities through the media, from other stakeholders, and from the company. We study the relative weight of four different mechanisms through which stakeholders form their opinion of corporations: (1) rational processing of media information; (2) sifting of information received through social networks; (3) following of opinion leaders; and (4) impression formation through interaction with the company. We design our analysis to assess the relative importance of the four mechanisms using data from 4,652 social, political and economic stakeholders (government representatives, communities, non-governmental organizations, unions, etc.) that have voiced a position in relation to one of 26 gold mining projects around the world. We show that stakeholders’ first impressions of companies are shaped by the media and by direct interactions initiated by the company. These results highlight that through proactive stakeholder engagement companies can go a long way in terms of managing their reputations and building positive social capital with stakeholders. (For more information, please contact: Sinziana Dorobantu, New York University, USA:

[email protected])

A Participatory Approach to Stakeholder Engagement: Defining a Hierarchy of Strategic Action Lite Nartey, University of South Carolina

Sinziana Dorobantu, New York University Witold Henisz, University of Pennsylvania

Scholars of stakeholder engagement and corporate social responsibility have long grappled with the question of how to strategically engage stakeholders to obtain the strategic benefits of cooperation and reduce conflict with stakeholders. We use insights from the literatures on civic participation and participatory development to

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identify five strategic actions, and the underlying mechanisms of these actions, that firms can use to

strategically engage stakeholders to increase cooperation and reduce conflict These strategic actions include—

Announcements, Meetings, Payments, Activity, and Monitoring and Evaluation (M&E). We find similar impact of payment and activity, similar but lower impact of both Announcements and Meetings, and lowest impact of M&E. We further find that stakeholder-led strategic actions have a consistently greater impact than firm-led strategic actions, and that joint actions are not perceived as joint but as rather firm-led or possibly staged. Our context is an original dataset of roughly 52,000 media reported stakeholder events that we use to capture dyadic relations and engagement among stakeholders and firms associated with 19 gold mining companies operating 26 mines in 20 countries. (For more information, please contact: Lite Nartey, University of South Carolina, USA: [email protected])

Business Groups’ Ownership Structure in Emerging Countries Wlamir Goncalves Xavier, FGV/EAESP e UNISUL Silvio Parodi Camilo, UNESC

Rosilene Marcon, UNIVALI

Rodrigo Bandeira-de-Mello, Fundação Getúlio Vargas

Business Groups prevail in emerging countries as diverse organizational structures that aggregate various companies under the control of a family or of a reduced number of people (Khanna and Yafeh, 2007; Schneider, 2008). This economically relevant structure is responsible for a significant share of countries’ Gross Domestic Product (GDP) and frequently congregates the largest private companies in their respective countries

(Casanova, 2009; Ghosh, 2010). Business Groups exist partly due to the need to overcome the limitations of the market in which they exist, such as a lack of adequate infrastructure or of an effective financial system (Khanna and Palepu, 1997). Furthermore, governments leverage and enable BGs. Institutional reforms have been implemented in emerging economies in order to support the integration of other nations from a commercial perspective. Consequences of such reforms include opening internal markets and introducing common intermediation financial mechanisms. These reforms produce profound changes in the companies of such countries (Peng, 2003), and it is within this context that this study seeks to analyze the relationship between the ownership structure of private Business Groups and the institutional environment. (For more information, please contact: Wlamir Goncalves Xavier, FGV/EAESP e UNISUL, Brazil: [email protected])

Session: 2.4.13 - Interactive

Track: Track: 8 - Developing Country MNCs