Alvaro Cuervo-Cazurra

Northeastern University | NEU · D'Amore-McKim School of Business

We clarify what business groups are and analyze their various types. We first distinguish business groups from other types of firm networks based on the strategic relationships among companies; business groups are defined as those networks that exhibit unrelated diversification under common ownership. We then separate business groups into three typ...

This paper examines the impact of corruption on foreign direct investment (FDI). It argues that corruption results not only in a reduction in FDI, but also in a change in the composition of country of origin of FDI. It presents two key findings. First, corruption results in relatively lower FDI from countries that have signed the Organization for E...

We analyze the advantages and disadvantages of developing-country multinational enterprises (MNEs) in comparison with developed-country MNEs. Developing-country MNEs tend to be less competitive than their developed-country counterparts, partly because they suffer the disadvantage of operating in home countries with underdeveloped institutions. We a...

We study the causes of the difficulties faced by firms when they internationalize in search of new markets. We build on the resource-based theory to argue that the difficulties in internationalization can be separated into three main sets based on their relationship to advantage: loss of advantage provided by resources transferred abroad; creation...

This article studies the relative impact on product innovation of R&D collaborations with universities, suppliers, customers, and competitors. It argues that each type of R&D collaboration differs in terms of the breadth of new knowledge provided to the firm and in the ease of access of this new knowledge, resulting in a different impact on product...

Call for Papers for a Special Issue on State Capitalism and Firms: Ownership, Institutions and Beyond, edited by Alvaro Cuervo-Cazurra (Northeastern University), Anna Grosman (Loughborough University), Ilya Okhmatovskiy (Nova School of Business and Economics), Gerhard Schnyder (Loughborough University London), Geoffrey Wood (Western University), an...

We review the multidisciplinary literature on state capitalism and the firm to advance the theoretical foundations of the role of the government as an owner of firms. We explain state capitalism, how it has been theorized, how types of states affect choices within and between organizations, and the implications of government involvement on firm cor...

Building on the resource-based view, we propose conceptualizing a foreign multinational’s country of origin as a resource, an asset tied semi-permanently to the firm, and analyze how this resource affects its host country investments. We argue that the country of origin provides an advantage or disadvantage in the host country depending on its posi...

Studies on business groups, a collection of legally separate firms operating in unrelated industries under common control, tend to compare the behavior of firms affiliated with business groups and firms that are independent companies. Unfortunately, this ignores the diversity among business groups based on their controlling owner. Hence, in this co...

Abstract: We explore what drives variations in sovereign wealth funds’ transparency across countries. Sovereign wealth funds (SWFs) have emerged as an important instrument for governments to invest and manage excess funds. However, despite serving similar needs, there is much diversity in how they are governed from country to country. We integrate...

Extending the resource-based view that location characteristics influence firms’ resources and internationalization, we argue that the global value chains (GVCs) of lead firms from emerging and advanced economies differ in three dimensions: objectives, trajectory, and governance. First, because GVC objectives are driven to resolve home-country endo...

Corporate social responsibility (CSR) and its impact on performance have generated a debate that has evolved across several perspectives (shareholder, stakeholder, resource-based, and contingency). Building on the resource-based and contingency perspectives, we shed new light on this debate by analyzing the impact of CSR on performance in emerging...

Research Summary Global strategy, that is, the analysis of strategy in an international context, has co-evolved with the dramatic changes in the global economy in the 21st century. Research advances have enabled a more sophisticated understanding of how firms develop strategies in an increasingly turbulent global environment in which societal expec...

This handbook presents the latest theoretical and applied thinking on state capitalism, i.e., the institutional, policy, and ownership arrangements that reflect the direct influence of the state on the economy and firm behavior. It is a timely volume given the worldwide changes regarding the role of the state in the economy. Starting in the 1980s,...

Abstract We study how host country politics influence foreign multinational enterprises’ (MNEs) internationalization. Our meta‐analysis clarifies which ideas receive support across the empirical literature and reveals new theoretical insights in three areas: the conceptualization of host country politics, the impact of host country politics on inte...

We review and bridge the literature on the internationalization of state-owned firms and sovereign wealth funds to provide a novel understanding of how government ownership affects foreign investments in three ways. First, we explain how state-owned firms and funds behave differently from private ones because they need to balance governments' nonbu...

The United Nations’ Sustainable Development Goals (SDGs) are becoming a crucial mechanism for coordinating governments’ efforts to address global challenges. However, their implementation by managers of multinationals is challenging. We offer an overview of the pros and cons of the SDGs as mechanisms for managers of multinationals to help contribut...

We analyze the impact of host country investment incentives on inward foreign direct investment. Building on institutional economics, we argue that financial and fiscal incentives are effective in attracting greenfield projects because they reduce the short-term establishment and long-term operational costs, respectively. We also propose that the e...

We review and bridge the literature on the internationalization of state-owned firms and sovereign wealth funds to provide a novel understanding of how governments' nonbusiness objectives affect foreign investments. We explain how governments as foreign investors behave differently from private ones because they need to balance politicians' nonbusi...

Research Summary This special issue advances the global strategy and entrepreneurship fields by providing a better understanding of the linkage between institutions and entrepreneurship. We provide an overview of existing literature in three key research areas: (a) the impact of institutions (types and complexity) on entrepreneurship, (b) the effec...

We argue and explain how the study of emerging market multinational companies can help enrich our understanding of the internationalization process. Firms' internationalization process is a central and enduring theme in international business. However, most of the theoretical models are built on the analysis of advanced economy multinationals. Emer...

Multinational companies have been a force for good but, unfortunately, some misbehave. Our comprehensive literature review on multinationals’ misbehavior reveals three ideas. First, most research focuses on the interaction between the multinational and its institutional context, but insights vary depending on whether the drivers of misbehavior lie...

In this introduction to the Handbook of State Capitalism and the Firm, we provide an overview of state capitalism, its evolution, diversity, and theoretical implications. We clarify the tension between the market and the government that drives state intervention in the economy. A brief historical evolution of state capitalism provides a much-needed...

Building on the concept of externalities, we propose an explanation of how multinationals can contribute to the enactment of the United Nations’ Sustainable Development Goals as part of their ordinary investments. First, we suggest grouping the 17 Sustainable Development Goals into six categories based on whether they increase positive externalitie...

Firms in emerging markets are becoming leading global players despite operating in challenging home country environments, but little is known about how they build their capabilities. By analyzing multiple companies operating across over a dozen emerging markets in Asia, Latin America, Africa and Europe, the authors identify the specific challenges...

Firms in emerging markets are becoming leading global players despite operating in challenging home country environments, but little is known about how they build their capabilities. By analyzing multiple companies operating across over a dozen emerging markets in Asia, Latin America, Africa and Europe, the authors identify the specific challenges...

Firms in emerging markets are becoming leading global players despite operating in challenging home country environments, but little is known about how they build their capabilities. By analyzing multiple companies operating across over a dozen emerging markets in Asia, Latin America, Africa and Europe, the authors identify the specific challenges...

Firms in emerging markets are becoming leading global players despite operating in challenging home country environments, but little is known about how they build their capabilities. By analyzing multiple companies operating across over a dozen emerging markets in Asia, Latin America, Africa and Europe, the authors identify the specific challenges...

Research summary We analyze the impact of informal entrepreneurship on innovation in emerging markets. Building on agency and imprinting theories, we introduce the concept of informality costs, that is, the higher agency costs from adverse selection and moral hazard problems caused by a firm’s informal creation. These informality costs become impri...

We critically review the literature on state-owned multinationals to clarify previous arguments and guide future studies. The content analysis of prior research reveals that state-owned firms differ from private firms in their internationalization: they are motivated by national strategic objectives, select more challenging countries, and use acqui...

Academic abstract We analyze how skepticism of globalization, the socially constructed vulnerability that emanates from global interdependencies, affects global strategy. We argue that inequality, identity, and influence drive this skepticism and propose that the increase in rhetoric against globalization and for new regulations do not seem to resu...

Many manuscripts submitted to the Journal of International Business Studies propose an interaction effect in their models in an effort to explain the complexity and contingency of relationships across borders. In this article, we provide guidance on how best to explain the interaction effects theoretically within and across levels of analysis. Firs...

The use of mixed methods holds promise for international business scholarship, yet mixed-methods research is not easy to execute or review. In this reflection, we make two observations and offer three suggestions to enhance reviewers’ methodological ambidexterity.

The complex nature of international business research, with its cross-country and multilevel nature, complicates the empirical identification of relationships among theoretical constructs. The objective of this editorial is to provide guidance to help international business scholars navigate this complexity and ensure that readers can trust their f...

Research Summary We analyze power relationships in subsidiaries of multinational corporations. We explain how despite many advances in the literature, there is still an unresolved debate with respect to the critical question of whether subsidiary power is loaned or owned. We develop an overarching framework that encompasses both agency theory and r...

Research summary We review the relationships between institutions and global strategy and explain several clarifications for future research. First, studies need to clarify the standard used to assess quality in institutional dimensions they research rather than let readers assess them from the measures. Second, analyses need to specify the theoret...

I study Multilatinas, Latin American multinationals, and explain how their analysis helps provide new insights on internationalization. I propose that the historical commonalities among Latin American countries help control for influences that facilitate the analysis of the impact of the home country on internationalization in a way that is not pos...

We analyze frugality-based advantage and explain its types and implications. Frugality-based advantage is an advantage that a firm achieves over competitors in its ability to develop and use frugal innovations, that is, innovations that overcome external resource constraints. We differentiate among three types of frugality-based advantages based on...

Research Summary We study how state ownership affects the international expansion of emerging‐market firms. Building on agency theory and the resource‐based view, we propose an S‐curve relationship: Firms with a low level of state ownership have a limited level of international expansion, those with a medium level of state ownership have an increas...

We review the literature analyzing the impact of pro-market institutions on firms’ global strategy. We propose that the ideological tension between whether the government or the market should drive economic development results in a pendulum of pro-market reforms and reversals that drive changes in firm strategy and performance. Much progress has be...

In this theoretical paper, I analyze business groups’ corporate social responsibility (CSR). Building on economic thinking, I propose that the level and diversity of CSR investments of business groups evolve with the development of the country, as a result of the interaction of two drivers: the level of infrastructure deficiencies and the cost of n...

This chapter summarizes the contents of the book State-Owned Multinationals: Governments in Global Business, which provides an overview of our current understanding of the behavior of state-owned multinational companies (SOMNCs), or companies that are owned by the government and that have value-added activities outside their home country. The study...

I study the impact of the internationalization of state-owned companies from emerging markets on host-country government policy. Whereas the literature commonly recommends that host-country governments design policies to attract foreign direct investment, governments instead question or block investments by state-owned firms from emerging markets....

Purpose This paper aims to analyze how emerging market firms upgrade their capabilities by focusing on “uncommoditizing strategies” that enable them to achieve levels of international competitiveness beyond the comparative advantages of their home countries and serve markets with premium pricing, quality and reputation of products. Design/methodol...

We analyze how pro-market institutions affect firm performance in emerging markets. Integrating transaction costs and signaling theory, we advance three arguments. First, we separate four dynamic components of pro-market institutions: intensifying and fading pro-market reforms and intensifying and fading pro-market reversals. Second, we propose an...

We analyze how a firm's home country influences its internationalization. We propose two complementary types of influence. First, we conceptualize a firm's international trade as shaped by four drivers: comparative advantage, comparative disadvantage, country-of-origin advantage, and country-of-origin liability. Second, we conceptualize the firm's...

This chapter studies the drivers of the transformation of business groups in Spain and complements the traditional drivers (weak institutions and a closed economy) with new ones (industry regulation and owner ideology). These drivers vary with the ownership of business groups. First, state-owned business groups emerge following an ideology of natio...

Research summary We briefly review the evolution in the analysis of the boundaries of the firm in global strategy. We explain how initial studies that argued that firm boundaries were driven by the minimization of transaction costs were later complemented by analyses that proposed that firm boundaries were driven by the development and use of resou...

We study the impact of foreign direct investment on domestic investment by emerging-market firms. This relationship underlies a key policy debate on whether and how home-country governments should support outward foreign direct investment. While some governments are strongly in favour of supporting their firms’ overseas expansion, many are hesitant...

This book provides a deep understanding of state-owned multinationals (SOMNCs) and their role in global business. SOMNCs have emerged as a force to contend with in global competition, and their study connects several fields such as economics, political economy, international business and global strategy. This prestigious collection of articles pres...

We analyze the impact of home country uncertainty on the internationalization-performance relationship of emerging market firms. Building on organizational learning theory and the institutional approach, we argue that internationalization has a positive impact on the performance of emerging market firms, and that this relationship is strengthened f...

The analysis of the competitive advantage of the firm is at the core of strategic management. There is a large body of literature that analyzes the relationship between a firm's characteristics and its advantage over other companies, trying to identify the firm factors that are most likely to be associated with superior performance as the embodimen...

Africa is an increasingly important business context, yet we still know little about it. We review the challenges and opportunities that firms in Africa face and propose that these can serve as the basis for extending current theories and models of the firm. We do so by challenging some of the implicit assumptions and stereotypes on firms in Africa...

We identify how barriers to absorptive capacity limit success in integrating external technology by firms in emerging markets. We refine previous barriers to absorptive capacity and classify them into internal (managerial biases and weak social integration mechanisms) and external (muted activation triggers, conflicting source relationships, and fe...

Latin America is an under-researched region that has the potential to yield new and important insights on the internationalization of firms from emerging markets, particularly as compared with the experience of firms from other regions. At the same time, some of the unique features of Latin America are generating new ideas that contribute to a bett...

We build on the knowledge-based view to study the relative impact of alternative R&D sources on innovation performance. We contrast two arguments that have created a debate in the literature: One is that diversity of knowledge is better for innovation, because the integration of a larger variety of knowledge helps create new products that can fulfi...

Research summary: We review advances in research methodology used in global strategy research and provide suggestions on how researchers can improve their analyses and arguments. Methodological advances in the extraction of information, such as computer-aided text analysis, and in the analysis of datasets, such as differences-in-differences and pro...

Purpose The purpose of this study is to use the rise of emerging-market multinationals as a vehicle to explore how a firm’s country of origin influences its internationalization. Design/methodology/approach This paper is a conceptual paper. Findings We argue that the home country’s institutional and economic underdevelopment can influence the int...

Research Summary In underdeveloped countries like those in Sub‐Saharan Africa, firms suffer from human capital voids (i.e., a prevalence of very low levels of skills among individuals). These human capital voids have a negative effect on performance improvement. However, managers can solve this negative effect by choosing organizational upgrading m...

We analyze the impact of the home country on the internationalization of firms from emerging markets. We introduce a framework that links the underdevelopment of emerging markets to firm internationalization via firms’ characteristics and strategies. Specifically, we argue that an underdeveloped economy undergoing pro-market transformations and the...

We analyze learning-by-doing and how emerging market multinationals use it to upgrade their capabilities. Building on an in-depth case study, we present two novel arguments. First, we clarify the concept of learning-by-doing by identifying four distinct processes in which learning-by-doing occurs: Integration, whereby the firm incorporates external...

The complex nature of international business research, with its cross-country and multilevel nature, complicates the empirical identification of relationships among theoretical constructs. The objective of this editorial is to provide guidance to help international business scholars navigate this complexity and ensure that readers can trust their f...

Emerging market multinationals are becoming leaders in their industries, able to compete on equal terms with firms from advanced economies, but their paths toward global leadership are not always smooth. This book examines the specific challenges faced by emerging market multinationals as they seek to develop their international operations and prop...

This study reviews the literature on multilatinas, Latin American multinationals, and provides suggestions for using these firms as a laboratory for extending exiting theories and models of the multinational. Analyses of their behavior tend to discuss their upgrading of capabilities and their patterns of internationalization. An additional opportun...

I analyze corruption in international business, presenting a critical assessment of the topic and providing suggestions for future research. I argue that corruption creates a laboratory for expanding international business studies because its illegal nature, the differences in perception about illegality, and the variation in the enforcement of law...

I study the relationship between pro-market reforms and the expansion of emerging market multinational companies (EMNCs). Extending institutional economics, I propose a co-evolutionary process, whereby pro-market reforms in emerging markets induce the transformation of domestic firms into EMNCs, and the global expansion of EMNCs in turn facilitates...

In this chapter, we provide some guidance to researchers on how to do research in, and publish on, Latin America. We first discuss the advantages and disadvantages of analyzing Latin American and its firms as a research setting, providing suggestions on how to turn the disadvantages into advantages, in particular by addressing how particularities o...

Emerging market firms have become an important topic of research in recent times. However, it is somewhat surprising that little has been published about Latin American firms in top management journals, neither by Latin American scholars nor by North American and European scholars for that matter (Pérez-Batres, Pisani, and Doh, 2010). In fact, Lati...

This article analyzes corruption in governnment. Corruption is the abuse of public power for private gain. There are not only negative but also positive views on corruption. However, most research tends to propose and find that corruption has a negative impact on economic transactions, even though its illegal nature makes it difficult to measure an...

We investigate how individuals’ identity work helps construct the identity of the group, how identity work by the group influences the identity of the individual, and how these two levels of identity work are influenced by the institutional environment. We identify four identity work strategies that were used by members of four Assertive Community...

Recent research has identified many ways in which states can affect the development of firms and their capabilities in the current context of intensified international competition by developing new governance mechanisms. However, there often remain substantial barriers to these developments and in this symposium we will examine how novel forms of f...