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The Foreign Investment Decision Process
... Three notable approaches to studying resource allocation in global environments are provided by Aharoni (1966), Johanson and Vahlne (1977), and Kogut and Kulatilaka (1994). The model of international resource allocation and control put forth in Aharoni (1966) describes the "messiness" of the foreign investment decision process and predicts that systematic differences in decision-making styles affect the framing and sequencing of choices and outcome risk. ...
... Three notable approaches to studying resource allocation in global environments are provided by Aharoni (1966), Johanson and Vahlne (1977), and Kogut and Kulatilaka (1994). The model of international resource allocation and control put forth in Aharoni (1966) describes the "messiness" of the foreign investment decision process and predicts that systematic differences in decision-making styles affect the framing and sequencing of choices and outcome risk. The Uppsala internationalization model predicts that managers allocate resources to markets that are increasingly distal from the firm's domestic operations as they gain experience over time. ...
... Our essay provides one way to start this reconciliation by suggesting the value of systematically comparing whether and how the decision-making attributes in Table 1 affect the base predictions offered by these frameworks. For instance, one might test whether inter-decisional interdependence amplifies or mutes the associations between local experience, behavioral preferences, and resource allocation highlighted by Aharoni (1966). Relatedly, one might test if any observed moderation is weaker or stronger across choices that leverage national differences in productive factors, institutions, or distance. ...
This open access article argues that a robust academic field must set and revisit boundary conditions that define where, when, and to whom its insights apply. This is particularly true for a field such as global strategy where the ubiquity of the key terms invites indiscriminate use of the phrase. This essay argues that it is useful to define the field of global strategy as the subset of questions that meet the criteria for both “global” and “strategic” decisions. We offer an a priori approach to identifying and formulating problems that are unique to the global strategy field, suggest how our approach may help scholars better understand the “strategicness” of global decisions, and ultimately, offer a way for individuals with varied disciplinary or topical interests to connect with the field's core. It has been observed that few executives can clearly articulate their firm's global strategy. This observation is disappointing given the development of theoretical insights from the fields of international business and strategic management that suggest alternative ways in which organizations can reliably and repeatedly create, capture, and deliver value. The existence of this shortcoming suggests that it will be beneficial to develop unambiguous statements that define what constitutes a global, a strategic, and a globally strategic decision. This essay offers a priori definitions of these terms in the hope of helping individuals both consider the unique and distinctive elements of global strategy and better understand the core decisions that guide an organization's pursuit of its global objectives, scope, and sources of advantage.
... There are very few studies that investigate Diaspora Direct Investment (DDI) as a special type of FDI, although this may represent a more desirable form for the state than remittances. Much of the extant literature on DDI refers to, what we could call, "old diasporas", such as the Jewish (Aharoni, 1966), the Chinese (Gao, 2005;Yeung, 2000), the Indian (Wei & Balasubramanyam, 2006) and the Armenian (Hergnyan & Makaryan, 2006) diasporas. There are much fewer studies about "newer diasporas" such as the ones that resulted following the fall of Communism in Eastern Europe and the former Soviet Union and, to our knowledge, so far, no study has investigated the motivations of Romanians living in the diaspora to invest in their home country, even though the Romanian diaspora is one of the largest when compared to the population of the home country. ...
... Besides financial motivations, a few studies have argued that emotions should also be included among the factors that motivate FDI ( Van de Laar & de Neubourg, 2006). Indeed, already in the 1960s, Aharoni (1966) showed that members of the Jewish diaspora who invest in Israel are motivated not only by profit but also by the psychological ties they have with Israel, their homeland. Similarly, Beal et al. (2005) and Riddle & Brinkerhoff (2011) found that altruism and moral convictions are also important determinants for DDI, whereas Gillespie et al. (1999) mention altruism and perceived ethnic advantage. ...
... In fact, some researchers argue that diaspora investors could have a more or less hidden agenda. For example, some may invest to acquire social status or for political gains (Aharoni, 1966;Nielsen & Riddle, 2010). Elo and Jokela (2015) argued that the factors that may influence a member of the diaspora to invest in his home country are: nationality, gender, education, necessity, available alternative in life, level of prosperity, and family setting, whereas Nkongolo-Bakenda and Chrysostome (2013) found that DDI depends on the level of altruistic motivation, the need for social recognition, entrepreneurial opportunities, as well friendliness and receptivity of the home country and friendliness of the host country. ...
... The research on internationalization processes of firms can be traced back to Aharoni (1966), who provided one of the richest descriptions of US foreign inmir vol. 44, 2004/1 Intemationalization Process of Small and Medium-sized Enterprises vestment decision processes as the result of his field study. ...
... It is, in fact, one of the earliest studies that abandoned the classic economic rationality, and instead applied the behavioral theory of the firm to foreign direct investment (FDI) research. Perhaps the most influential study on internationalization processes was conducted by Johanson and Vahlne (t977), who drew upon the works of Cyert and March (1963) and Aharoni (1966), and developed a process model best known as "Uppsala model." Since then, research on intemationalization processes has attracted enormous scholarly attention. ...
... This process is often costly and time-consuming but could be worthwhile considering the typically large size of their foreign investments. In contrast, SMEs need to be focused and flexible given their relative paucity of resources (e.g., management time, Planning staff, money, etc.) and international experience (LieschlKnight 1999, Aharoni 1966. At times, a SME would benefit from undertaking a systematic planning process if it has a clear edge in technology and product quality, and has discretion to pick an appropriate foreign market to start its international campaign. ...
... This finding complements internationalization theory (Johanson & Vahlne, 2009), pointing out the role of social cues offered by relevant others in internationalization (Aharoni, Tihanyi, & Connelly, 2011;Greve, 1998). The moral imperatives, we argue, include a "push" to internationalize and an imperative to commit to other cluster firms, escalating the firm's commitment to the internationalization process (Aharoni, 1966). Second, our study reveals a timing effect, as the moral imperatives from the cluster are replaced when the firm generates idiosyncratic international experiences. ...
... This imperative materializes through elevated aspirations, encouragement, and suggestions from actors inside or outside the firm, pointing to desirable internationalization options. Decision makers operate in a socialized environment in which past and current relations with other actors influence decisions and processes (Aharoni, 1966;Cyert & March, 1963). When firms are faced with uncertainty, they economize on search costs and act on cues from external firms (Cyert & March, 1963;Haverman, 1993). ...
... The second mechanism of the moral imperative concerns cluster firms' commitments to follow through with the internationalization initiative. This mechanism can be understood from a behavioral perspective (Aharoni, 1966), as internationalization initiatives are embedded in collaborations with other cluster firms that are socially demanding to exit once the firm has offered initial commitment. The decision to internationalize is not a single event but a process (Aharoni & Brock, 2010), and, as the initial idea or proposal is investigated and discussed with other firms, the commitment increases (Aharoni, 1966). ...
This paper explores the implications of the collective identity of a regional cluster on firms’ internationalization. Prior research has established the value of cluster “insidership” through access to knowledge and resources. Through a longitudinal study, we find that cluster identity, through distinct identity claims, provides imperatives and shapes the motivation of firms to internationalize. These imperatives, we argue, stem from cluster identity seen as defined features of regional collectives, extending reference theory to encompass the role of social cues from similar firms located geographically close. The imperatives are particularly salient in the early stages of firms’ internationalization, adding the role of cluster identity to explain the differences between inexperienced and experienced firms in internationalization.
... It worth to indicate that the concept of inflation is counted via many cases and phenomena as not dependent on other factors, this independence has raised some confusion in elaborating this principle. Inflation is defined as the excessive increase in most prices, i.e., the increase in the cash available without the increase of goods and services volumes [3], while it can be seen as the constant rise in common goods price levels [4]. Also, it is defined as the high-income cash level or the monetary income sectors numbingly wages and profits [5]. ...
... -Second dimension: Indirect resolution: (25)(26)(27)(28)(29)(30) paragraphs. The measure system of the responses is based on: Likert Scale, which is among the most widely used and easy to understand, and is as follows: (1)(2)(3)(4)(5) where (1) not full agreement (5) full agreement. The importance level for the locality of the answers counted was determined as per the presented ratios: (5-1) / 3 = 1.33 and then distributed as follows: 1-2.33 is Poor, 2.34 -3.66 is Average, 3.67 -5 is High. ...
This paper aimed to evaluate the impact of inflation prospects on investments of Industrial Companies in Jordan. The main objective is to elaborate the most relevant and feasible techniques to improve the prospects for developing the invests in the industrial sector. In the introduction part, inflation prospects and selected methods of analysis via available information resources were defined. It is well known that inflation is a prominent economic phenomenon in the modern world. The financial inflation is the prime objective of present study because it is primarily concerned with the investment process, especially to consider that inflation almost affects both the foreign and domestic direct investments by almost equal rates. The topic of industrial development is highly concerned with process of investment in Jordan. This research deals with the inflation effect on investment outcomes of most industrial companies in Jordan. This study will contribute to enrich the existing literature with financial structure and investment decisions via monetary inflation represented by capital, commodity and imports within the set of industrial companies. The study tool is a questionnaire that collected the needed data aiming to elaborate the preset conclusions of this research. Pearson correlation testing program was implemented to measure the relation between inflation and investment procedures. Overall outcomes revealed that the lowest coefficient observed between imports inflation. and all other variables were reversed, most increases in imports inflation were almost stabilized by the decrease of the other variables. While all other correlation values were positive.
... IPT is among the most original contributions to IB literature, theorizing that firms enter countries where they have more knowledge and experience in a sequential or staged fashion. Both the formal ''stage'' model (Johanson & Wiedersheim-Paul, 1975) and the nuanced ''process'' model (Johanson & Vahlne, 1977) draw from the behavioral theory of the firm (Cyert & March, 1963;Aharoni, 1966) and the theory of firm growth (Penrose, 1959). Both rely on the assumption that, with increased market knowledge and experience, firms overcome physical distance and increase their commitments within and across markets. ...
... NOTES 1 Consistent with Aharoni (1966), we argue that the decision process is inconsistent with a single, identifiable act, but rather involves a dynamic social process and a succession of acts. ...
While internationalization process theory has deepened our understanding of international expansion, it and many other international business (IB) theories have largely neglected the underlying managerial processes and decision-making contexts of internationalization. In response, we articulate a model that accounts for both the external context and the internal processes leading to internationalization decisions. We argue that internationalization decisions are grounded in contestation and struggle for control, eventually leading to a dominant discourse, consensus, and performativity. We illustrate our model through two contrasting cases of internationalization, and we show how contemporary IB theories can be enhanced by adding a discourse approach.
... The word "terrorism" frequently appears in Fortune 500 annual reports (Czinkota et al., 2010). Executives in both industrialized and developing nations have rated political risks such as terrorism as an important determinant of investment strategy (Aharoni, 1966;Baek & Qian, 2011;Bass, McGregor, & Walters, 2017;Li, 2006;Porcano, 1993), above even corruption and access to funding or qualified staff (MIGA, 2010). Additionally, many executives fear the financial risks of terrorism will continue to grow in the coming decades (Cigna, 2016;Karolyi & Martel, 2010). ...
... In Israel, the cases were written within a project financed by the US government to support the assistance from the New York University to develop business administration education at the Hebrew University and the Israel Institute of Technology. 11 Some of the cases were written by professors who had studied in the US, like Yair Aharoni who had a doctorate in IB from HBS (Aharoni, 1966). In India, nine of the cases were produced at the Administrative Staff College of India (ASCI) where the Ford Foundation had been strongly involved from 1958 in moving from traditional lecture teaching to the case method, including appointing in 1960 Andrew R. Towl, the first director of Case Development at HBS, as a technical expert at ASCI (Kumar, 2019). ...
The dominant narrative about the rise of international business (IB) focuses on early research and the institutionalization of a new academic field. In this study, we explore the role of case writing in the field’s formative period from the mid-1950s to the mid-1960s. Based on an analysis of teaching cases on IB topics, we demonstrate that case-based teaching, including the writing of cases, was an innovative pedagogical method that made a strong impact on the formation of the new academic field. Analyzing the cases and the background and affiliation of their authors offers new insights into the linkages to other disciplines from which the new academic field emerged. The analysis of the cases also provides new insight into how the case authors connected to the new practical experiences from an increasing number of multinational enterprises, particularly from the US, and conceptualized the experiences into a pedagogical language. The investigation covers 489 cases written by scholars located in 18 countries from the early 1950s to 1963, as well as archival studies of the business schools and institutions that initiated the production of cases.
... Put another way, the commercial activity gets under motion when an investment is made. The following are the two basic types of investment, as defined by the concept just presented: as the needs of a person, group, institution, or country develop, investments are made to meet those needs on an ongoing basis (Aharoni, 2015). These investments are known as -necessary investments‖. ...
The COVID-19 pandemic had a tangible impact on Indonesia’s economy to a 4.5% economic growth contraction (Husnulwati & Yanuarsi, 2021). To analyze the dynamics of investment in the emerging market and the effects of COVID-19 associated with the work creation law in Indonesia. This study is research in the field of law with an empirical legal research approach. The Job Creation Law provides simplifications, especially concerning business licensing and investments that can be made starting from the micro, small and medium enterprises (MSME) level. The COVID-19 pandemic can be interpreted as momentum for Indonesia to attract more investors. The world economy has had significant changes, especially in exports and imports, coupled with the trade war between China and the United States (Sumarni, 2020). Still, several things must be paid attention to, namely: the long-term effect of investment after the amendment of investment provisions in the water, electricity, weapons, and defense business sectors; and the formulation of implementing regulations in the Job Creation Law because so far, Indonesia has been known to be slow in formulating laws and regulations.
... Earlier research suggests that SEs are created to support people from the same social backgrounds as the entrepreneurs (Bromiley, 2005); however, this may not explain the ISEs, unless they too had an international background from that country. In the behavioural tradition, Aharoni (1966) emphasizes decision-makers' personal motives in the internationalization process, which has been identified as "highly relevant to SEs" (Alon et al., 2020: 2). Additionally, this behavioural approach found in much of international entrepreneurship literature "appears to be well-suited to explain why SEs internationalize their activities" (Alon et al., 2020: 2). ...
Despite increased importance of SEs in the global marketplace, limited research in social entrepreneurship addresses internationalization, and fewer from a behavioural perspective. We fill this gap by investigating the SE manager’s behavioural attributes and their influence on the decision of social entrepreneurs to become international social entrepreneurs (ISEs) through an exploratory design using content analysis and interviews. All social entrepreneurs were driven to address social change by a strong social conscience; however, this research finds that ISEs shared an urgent and personal call to action. This sense of urgency developed from transformative experiences that altered their views of the world and their place within it. Domestic social entrepreneurs were motivated primarily by their social conscience, shared background, and the timing of the social enterprise opportunity, factors previously identified in research.
... The phases or stages of the investment decision-making process have been variably identified in the literature with the most relevance to the accounting discipline (Drury, 2012;Dwyer et al., 2010;Sykianakis & Bellas, 2005;Wei & Christodoulou, 1997). However, the implication remains somewhat generic in that capital investment is primarily focused on the review of decision-making processes and their subsequent acceptance (Aharoni, 1966). While Drury (2012) emphasizes a two-stage model entailing six-phases that involve the planning stage and the management stage, Wei and Christodoulou (1997) explore four phases for investment decision-making, including initiation and preliminary thought, inquiry, assessment, and final decisionmaking. ...
The tourism industry of Bangladesh is growing very rapidly in recent
years though international tourist arrival is very limited compared to the neighboring
countries. However, domestic tourist flow has been increasing excessively. This
book chapter reveals the status of sustainable tourism indicators of Bangladesh
guided by the World Tourism Organization (UNWTO) and Department of
International Development (DFID). It has been found that the local people of the
topmost revenue-generating destination of Bangladesh are slightly dissatisfied with
mass tourism development, yet, it varies for different factors. In terms of social and
environmental concerns, local people are dissatisfied with conventional tourism
practices. However, they are very satisfied with the increase of diversified livelihood
and economic multiplication. On the other hand, livelihood capital is used limited
to sustainability in the four major sectors of the tourism industry for the country.
The main reason for it could be depicted lack of theoretical understanding of
research. However, the tourism industry of the country is still in the booming stage.
Therefore, the application of effective knowledge with proper investments and
development practices could improve the industries involved in the tourism business
in a sustainable manner. Thus, this industry could rise and bring about decent
employment offerings in a sustainable manner to everyone (i.e. from the community
to investors or the government). Moreover, these practices will improve the capacity
of the destination’s inhabitants to protect the environment and ensure community
empowerment.
... Moreover, Vernon's studies of firms based on manager interviews was a radical departure from what at the time was considered a legitimate research design. Aharoni's (1966) and Wilkins and Hill's (1964) analyses of how managers make internationalization decisions were unique precisely because they focused on the inner workings of the MNC. Fayerweather, who was in 1960Fayerweather, who was in -1961 the first president of the Academy of International Business, was also the first to author an IB textbook, and in it he explicitly built on the notion of internal resources that can be transferred to host countries by internationalizing firms (Fayerweather, 1960), an idea that has shaped IB research ever since (Rugman & Verbeke, 1992, 2003Teece, 2014). ...
The field of international business (IB) has been successful in developing a unique body of knowledge on the multinational corporation and on country-level contexts. A recurring debate concerns its claim to uniqueness, and to associated scholarly characteristics that distinguish IB from other fields of research. I discuss what makes IB research unique by looking at what IB theory can explain and predict. To that end, I leverage key theoretical arguments and empirical insights to advance an understanding of IB centered around a firm’s ability to create added value in more than one location. I introduce a stylized model of the multi-locational firm embedded in multiple business systems characterized by equifinality. As a result of the qualitative disjunctures that separate one place from another, multi-locational firms are confronted with additional managerial and organizational challenges. These challenges are rooted in the process of “othering”. Theorizing on the critical constructs of place, space, and organization, I argue that IB offers the most generalizable approach to understanding firms doing business in more than one location. IB’s ultimate uniqueness lies in the potential of advancing a general theory of the firm in space.
... For several decades, strategic management was absent from the FSAs and only in 2015 that a wider perspective of FSAs advocates for management quality as one of the fundamental components, as argued by Aharoni (2015, as cited in Verbeke & Yuan, 2021. Furthermore, Verbeke and Yuan (2021) suggest that mitigation of the COVID-19 pandemic requires a broader FSAs definition regarding management quality. ...
Generally and in the UAE, businesses worldwide are particularly affected by the COVID-19 pandemic. The SME companies in Dubai UAE faced a very tough challenge to deal with the new circumstances of lockdown and curfews in running the international business. The purpose of the current study was to analyze the effect of the COVID-19 pandemic on Business Performance. The theoretical frameworks for this study are Process Theory of Internationalization (PTI), Uppsala-model (the U-model), and internalization theories and the link with IB theories applications nowadays. The quantitative study applied a nonexperimental, deductive approach and explanatory correlation design, and Snowball sampling was used to select stakeholders of integrated remote site management (IRSM) services in Dubai, UAE. Data was collected at a single phase using a cross-sectional survey instrument and analyzed using inferential statistics with the aid of SPSS. The survey results revealed that the COVID-19 pandemic did not significantly change the efficiency performance of the IRSM stakeholders. Stakeholders' confidence in their strategic leaders did not decrease while working under the constraints of the COVID-19 pandemic. The study did not account for any changes in employee or leaders’ behavior over time. This Empirical study findings add value to the limited literature on the correlation between the COVID-19 pandemic and the strategic leadership of international businesses. The paper’s practical implications would be further study on strategic leadership in IB and efficiency performances during global pandemics.
... For this to be integrated into an insightful decision process environment (Aharoni, 2015); (Souitaris & Maestro, 2010); (Eisenhardt, 1989), several things to consider include; (1) quality and quantity of known natural resources and required (Meyers-Levy & Peracchio, 1995).; (2) the consequences of taking natural resources, on land and in the sea, including marine and biological wealth and the depletion of deposits and stock; (3) alternative ways of extracting marine biological wealth and its consequences on the source of that wealth; (4) whether or not there is a replacement technology (Gustke et al., 2014); (Nair & Hopp, 1992); (5) possible development of replacement technologies including their respective costs; (6) there are other locations that are as good or better (Song et al., 2000); (7) water and air pollution levels, if any (Hedegaard et al., 2008); (8) there is a place for waste and waste disposal and its management return (Recycling) as raw material; the impact of the project on the environment speed of the hunting process environmental and other alternative costs. ...
... No behavioral explanations were included regarding how organizations and managers perceive and make sense of what should be learned. This is the case despite the acknowledgment of seminal works, such as that of Aharoni (1966), that decision-makers occupy a central position in explaining foreign investments. The firm-level of analysis has remained predominant, to the neglect of the decision-maker level of analysis (Maitland and Sammartino, 2015;Guercini & Milanesi, 2020). ...
This study explores the influence that entrepreneurial cognition, in terms of the dichotomy
in human information processing, has on the earliness of internationalization and post-entry speed. Entrepreneurial cognition is investigated through the lens of the dual-process theory, which posits that human information processing is formed of two systems, the experiential cognitive system (System 1) and the rational and analytical cognitive system (System 2). The speed of the entire internationalization process is analyzed in terms of earliness (how soon after inception a company enters its first international market) and post-entry speed (how fast it enters new markets after the first internationalization). Drawing on ten cases, we find that companies that internationalized earlier and faster were managed by entrepreneurs with higher levels of the experiential cognitive system. In contrast, companies that internationalized later and more gradually were managed by entrepreneurs with higher levels of the rational cognitive system. Thus, our study reveals that the speed of the entire process of internationalization is governed, at least partially, by the entrepreneur’s cognition. On the basis of our findings, we introduce three propositions on the moderation that the entrepreneur’s cognition exerts on the well-established relations between environmental signals and both earliness of internationalization and post-internationalization speed.
... The phases or stages of the investment decision-making process have been variably identified in the literature with the most relevance to the accounting discipline (Drury, 2012;Dwyer et al., 2010;Sykianakis & Bellas, 2005;Wei & Christodoulou, 1997). However, the implication remains somewhat generic in that capital investment is primarily focused on the review of decision-making processes and their subsequent acceptance (Aharoni, 1966). While Drury (2012) emphasizes a two-stage model entailing six-phases that involve the planning stage and the management stage, Wei and Christodoulou (1997) explore four phases for investment decision-making, including initiation and preliminary thought, inquiry, assessment, and final decisionmaking. ...
A country’s touristy appeal majorly relies on its culture, archaeology, ancient heritage, historic palaces, natural beauty, etc. From this angle, Bangladesh can be considered as a touristic country. The present-day landmass that constitutes Bangladesh has a rich history with many tourist attractions. The Bangladesh economy is more integrated with the tourism industry. In this context, this research aims to outline the scenario and prospect of development and investment of tourism in the country. Findings of this review chapter show that adequate development and investments in the tourism industry of Bangladesh can facilitate the economy’s integration with greater financial and technical strengths.
... The phases or stages of the investment decision-making process have been variably identified in the literature with the most relevance to the accounting discipline (Drury, 2012;Dwyer et al., 2010;Sykianakis & Bellas, 2005;Wei & Christodoulou, 1997). However, the implication remains somewhat generic in that capital investment is primarily focused on the review of decision-making processes and their subsequent acceptance (Aharoni, 1966). While Drury (2012) emphasizes a two-stage model entailing six-phases that involve the planning stage and the management stage, Wei and Christodoulou (1997) explore four phases for investment decision-making, including initiation and preliminary thought, inquiry, assessment, and final decisionmaking. ...
In many countries across the world, tourism is considered as the medium to promote business enterprises. Investment in the tourism and hospitality industry pertains to purchasing existing, opening, or relocating enterprises or investing in constructions or redevelopment projects. Positive decision-making for foreign public and private sector investments is important for both general economic growth and sectoral growth, for instance, the tourism and hospitality industry. Still, the knowledge in these areas is very limited in a developing country’ context, such as Bangladesh. This chapter explains the theoretical aspects of investment decision-making and Foreign Direct Investment (FDI) and relates to the particular context of Bangladesh. This chapter discusses the theoretical perspective of FDI and tourism development and their link-up. It also discourses different approaches and theories regarding investment decision making and the host country’s policy with empirical examples from the literature. The chapter explores both the general and the tourism and hospitality industry perspectives of investment decision-making followed by FDI and its role in the growth of the tourism and hospitality industry. The chapter then highlights the tourism and hospitality industry in Bangladesh, which reveal eventually that the country has been offering FDI benefits in this industry. Nevertheless, there are challenges, and this study puts forward some suggestions.
... We refer to the Uppsala model (Johanson and Wiedersheim-Paul, 1975;Vahlne, 1977, 1990) that was based on the behavioral theory of the firm and was designed to understand the internationalization process (Cyert and March, 1963;Aharoni, 1966). These efforts were characterized by the study of the mature and largelargely Western firm (Rugman et al., 2011;Ramamurti, 2012). ...
Purpose
This paper aims to investigate the effect of governance – a proxy for network effects on small and medium enterprises (SME) growth through access to new markets. Specifically, investigate how export intensity (EI) and performance are affected. This study also tests related theories, given the growth in the post-liberalization setting of a developing economy. Specifically, this study tests Uppsala and born global (BG) perspectives for internationalization and resource-based view for performance.
Design/methodology/approach
The authors collect secondary data for each SME over a 20 year period from a growth-oriented developing economy – India. This period is after the liberalization of the Indian economy. Thus, the authors test the hypotheses in this context. The authors expect that exports would surge for SMEs given the governance structures considered. The authors consider several governance modes and two types of product classifications, namely, products and services.
Findings
The authors find conditional support for the two models – indicating that governance structures do not consistently support finding new markets. Further, given the governance structure, EI is not consistently a means to improved performance. This is contrary to the expectations. However, at the same time, the authors do find evidence that governance matters and affects products and services differently.
Research limitations/implications
While the authors conduct research in India which has a variety of cultures and state policies, the authors still believe comparative study with multi-country data from developing countries might bring further insights. Further, primary data would also help to understand governance and motivational effects (the authors did not consider the later). Implications: The authors believe the research will have implications for policy since the authors find effects of governance. Hence, specific policies that improve the performance of a governance type could be adopted.
Practical implications
Although SMEs are affected by many factors, the authors find significant effects for important variables. Hence, the authors believe the government could use the study to design proper policies so that new markets could be discovered through different governance forms, through strategic investment and capacity building.
Social implications
SMEs are a key part of the social fabric of a society/country. The work deals with how SMEs could be helped. Hence, the authors believe the work has important implications for society. Further, as the work deals with large firm-SME interfaces, the authors also inform how these different governance structures are performing and where attention is needed.
Originality/value
The authors find that certain governance-type and SME-type work well together. Further, networks through the governance structures help find new markets – depending on SME-type. The authors find partial support for the Uppsala model and also for the BG model, again depending on the SME-type.
... Due to cognitive limitations, boundedly rational actors seek satisfactory rather than optimal solutions (Aharoni et al., 2011;Simon, 1945). Even though early IB research noted the roles of uncertainty and cognitive limitations (e.g., Aharoni, 1966;Johanson & Vahlne, 1977), several researchers (Jiang & Holburn, 2018;Jung & Bansal, 2009;Lim, 2019;Lin, 2014;Wennberg & Holmquist, 2008;Xie et al., 2019) have recently argued that the IB literature could benefit from integrating more key theoretical components of the Carnegie School (Wennberg & Holmquist, 2008). ...
To resolve the mixed and sometimes contradictory results regarding the effect of performance feedback on the tendency and timing to expand abroad, we develop a theoretical framework that takes opportunity costs into account. Our findings show a non-linear relationship, mostly an inverted U-shape, between performance both below and above aspiration and entering new foreign markets. Our results also show that industry growth rate moderates this non-linear relationship differently for firms near aspiration (below or above) compared with firms well below or well above aspiration, furthering our understanding of contextual factors and the boundaries of performance feedback theory regarding international expansion.
... Internationalization focuses venture creating process but in literature its connection with venture creation did not gain much attention (Zahra & George, 2002;Zahra et al., 2005). The same appears to be a problem for entrepreneurs intending to invest in foreign markets having relatively higher degree of uncertainty than local markets (Aharoni, 1966). International new venture (INV) theory terms internalization to be insufficient to allow entrepreneur to develop comparative advantage from it efficient use of resources. ...
Business development and utilization of indigenous resources is directly linked with the level of economic growth of any society. Globalization and innovation have made it challenging for developing countries to keep pace of business development to attain sustainable levels of economic growth. Developing counties are faced with the problems of non-conducive external business environment, complex business registration and taxation systems, scarcity of finance, technological support and logistics, and lack of managerial skills and financial advice. Enhancing entrepreneurial effectuation can enable the entrepreneurs of developing countries to successfully create such businesses that are not only efficient in resources utilization but also have a competitive outlook. Effectuation theory is best suited to the environment of developing countries as it enables the entrepreneurs to undertake affordable losses and in the face of uncertainty, create strategic partnerships and use the contingencies to their benefit. In order to achieve this end, the governments in developing countries can play a role of insurer and confidence booster for those entrepreneurs that can create value to the indigenous resources and create employment and competitiveness.
... Internationalization focuses venture creating process but in literature its connection with venture creation did not gain much attention (Zahra & George, 2002;Zahra et al., 2005). The same appears to be a problem for entrepreneurs intending to invest in foreign markets having relatively higher degree of uncertainty than local markets (Aharoni, 1966). International new venture (INV) theory terms internalization to be insufficient to allow entrepreneur to develop comparative advantage from it efficient use of resources. ...
Business development and utilization of indigenous resources is directly linked with the level of economic growth of any society. Globalization and innovation have made it challenging for developing countries to keep pace of business development to attain sustainable levels of economic growth. Developing counties are faced with the problems of non-conducive external business environment, complex business registration and taxation systems, scarcity of finance, technological support and logistics, and lack of managerial skills and financial advice. Enhancing entrepreneurial effectuation can enable the entrepreneurs of developing countries to successfully create such businesses that are not only efficient in resources utilization but also have a competitive outlook. Effectuation theory is best suited to the environment of developing countries as it enables the entrepreneurs to undertake affordable losses and in the face of uncertainty, create strategic partnerships and use the contingencies to their benefit. In order to achieve this end, the governments in developing countries can play a role of insurer and confidence booster for those entrepreneurs that can create value to the indigenous resources and create employment and competitiveness.
... Dunning, 2010;Dunning & Lundan, 2008;Hellman, 1996). Early, Aharoni (1966) and Hymer (1976Hymer ( :1960 developed frameworks for studying foreign direct investments (FDI) and international business. The Eclectic Paradigm (the OLI paradigm; "ownership-, location-and internationalization-advantages") has been further suggested by Dunning with a framework similar to that of FDI theory, but with the addition of locational factors (Dunning, 1980); his taxonomy focuses on how new institutional arrangements can favor or disrupt a particular location. ...
Women’s entrepreneurship has received global recognition and support due to its contribution to the economy, with many initiatives focusing on entrepreneurship programs as a tool for influencing women’s perceptions and attitudes towards entrepreneurship. The socio-cultural context also plays a role, with a society’s gender role ideology determining the level of normative support and legitimacy accorded to women entrepreneurs. Based on semi-structured interviews, this study focuses on analyzing women’s entrepreneurial motives and perceptions regarding entrepreneurship programs in two different socio-cultural contexts namely Sweden and Tanzania. The study contributes to existing literature on entrepreneurial motives by identifying different non-mutually exclusive categories of ‘pull’ (personal identity, prior experiences, social mission and self achievement), ‘push’ (providing solutions) and ‘combined ‘(part-time entrepreneurs) factors that influence women’s decisions to become entrepreneurs. Second, I find that the socio-cultural context influences the prevalence of entrepreneurial motives in each context. This highlights the fact that women’s entrepreneurial motives are more nuanced and complex than the ongoing academic discourse on ‘necessity’ versus ‘opportunity’ entrepreneurs. Third, entrepreneurship programs can be viewed as having an overall positive impact on women entrepreneurs. However, what was perceived as being of value by the women entrepreneurs differed based on their entrepreneurial motives. Implications for policy and practice are also highlighted.
... As pointed out by Aharoni, Tihanyi, and Connelly (2011), decisions about internationalization are often idiosyncratic and intuitive. While early research dealing with decision-makers in internationalization goes back a long time (see, e.g., Aharoni, 1966;Cavusgil, 1981;Cavusgil & Nevin, 1981;Larimo, 1995), decision processes as such remain generally underexplored and poorly understood (Surdu, Greve, & Benito, 2021). The nature of the process was underlined by Mintzberg and McHugh (1985), who showed how strategies can be formed in different ways as results of an interplay between deliberate intentional strategies and emergent nonintentional strategies. ...
This article addresses the question of why some business schools internationalize by establishing units abroad. We study their internationalization by examining the process that led to Harvard Business School’s first international strategy and its first foreign direct investment. The study elaborates how internationalization theories are applicable to research on the internationalization of business schools by exploring the role of environment and agency. The analysis shows that in an academic organization characterized as a loosely coupled system, individuals may influence the collective cognition in a strategy process by using new theoretical insights to conceptualize experiences and legitimize decisions. This demonstrates that agency is a multifaceted concept, and its function depends on who has agency and how it is used. By exploring how a new academic discipline, international business, contributed both to the conceptualization and the legitimization of a new strategy, the study provides new insight into the process that leads to the formation of an international strategy.
... The authors drew inspiration and insights from three famous theories: the Behavioural Theory of the Firm (Cyert & March, 1963) Firm, 1966) and The Foreign Investment Decision Process (Aharoni, 1966). 4 The article ranks in the top 99 th percentile on Springer for the citations in the field of internationalization and business: https://citations.springer.com/item?doi=10.1057/palgrave.jibs.8490676 ...
My Bachelor Thesis project revolves around the theme of Internationalisation of enterprises in the context of Globalisation.
In the introduction, you can find very interesting details about the current state of globalisation of markets, economic interrelatedness and a brief summary history of the evolution of Globalisation and its enabling technologies throughout the years.
In the first chapter, I review the Uppsala Internationalisation Process model in its entirety and Dunning's Eclectic (OLI) Paradigm.
In the second chapter, I present two case studies about two Italian fashion luxury houses, Brunello Cucinelli SpA and Moncler SpA.
I will conclude by comparing the two cases with the internationalisation paths that are prescribed by the aforementioned economic theories.
Indeed, I find that international strategy of the companies can be explained by the two theories in particular, the Uppsala Internationalisation Process model fit well the first stages of the process while Dunning's Eclectic Paradigm allows us to better explain the strategic evolution of the companies in a more mature stage of their lifecycles.
... Para Aharoni (1966), conhecimento e compromisso de mercado influenciam as decisões de compromisso e o desenvolvimento das atividades realizadas pela empresa. Na visão de Williamson (1966), com o processo de internacionalização é esperado que uma empresa aumente sua efetividade visando crescer seu lucro a longo prazo. ...
This study’s aim was to identify the competitive advantages that influenced the internationalization of electric motors produced by Brazilian companies, based on a research with three producing companies. The study adopted a qualitative approach, through the collection of survey data by questionnaire, answered by employees of several hierarchical levels. The data collected was analyzed through categorization, verifying which strategic points influenced the decision of the internationalization process. From the results obtained, it was concluded that, in fact, competitive advantage was a decisive factor to initiate the internationalization of national electric motors.
Key Words: Internationalization; Competitive Advantage; Electric Motors.
... Specific responses to uncertainty in approaching international markets have been advanced in the literature, and include avoidance (Mascarenhas, 1982;Pich et al., 2002), control (Allaire and Firsirotu, 1989;MacCrimmon and Wehrung, 1986;March and Simon, 1958), cooperation (Miller, 1992;Pfeffer and Salancik, 1978;Vernon, 1983), imitation (Aharoni, 1966;Barlow and Wender, 1955;DiMaggio and Powell, 1983;Vernon, 1983) and flexibility (Hill et al., 1990;Petersen et al., 2003;Porter, 1985). ...
Purpose of the paper: By proposing a model of SMEs’ entry in foreign markets characterised by uncertainty, we test the relationships among the implementation of a global niche strategy, the perception of lower competition, and international performance. Methodology: Hypotheses are tested on a sample of 110 Australian firms by applying structural equation modelling through the PLS-SEM technique. Results: Our results support the idea that entrepreneurial firms need to create their own environment and, at the same time, control it by exerting high levels of control on manufacturing and technological capabilities and by vertically integrating production processes. Research limitations: More samples from more countries would increase the generalisability of the results. The operationalisation of the components of the global niche strategy which resulted as non-significant need further refinement. Longitudinal studies are required to measure the sustainability of the global niche strategy over time. Practical implications: A customer focus instead of a country focus can help manage perceived uncertainty while growing internationally. Furthermore, decision makers should leverage on product uniqueness through a continuous refinement of technology thanks to insourced production processes. Originality of the paper. To date, no study has advanced a model to represent firms’ internationalisation by considering a process that starts with the formation of strategic antecedents - here represented by the components of the global niche strategy - of international performance.
... The model makes a reference to dynamism (see Johanson & Vahlne, 1977, p. 30), but mostly disregards the changing and varying nature of management incentives and expectations to move past the initial export step, and their effect on the decision-making process. The international investment decision is rarely the result of progressive reasoning (Aharoni, 1966) with factors in the internal and external environment of the firm eventually influencing investment choices. Because the Uppsala model has not provided sufficient emphasis and insight into aspects such as opportunity identification and development (Petersen, Pedersen, & Sharma, 2003), its empirical applications have become highly deterministic over time, limiting its predictive value. ...
International business (IB) scholars' over-reliance on a select few theories leaves our understanding of firm internationalization incomplete. The behavioral theory of the firm (BTF) can offer new insights and can be used to model a broad range of firm actions. We focus on the three basic BTF components: problemistic search, learning by doing, and vicarious learning. These components help us understand why firm behaviors are more dynamic and heterogeneous than other theories allow. BTF, with its emphasis on how firms assess performance according to aspiration levels, selectively learn and update routines, and selectively incorporate the learning of others, is better suited to examine the diversity and change increasingly observed in internationalization decisions. We explain why scholars should move beyond ''dynamizing'' static theories and show BTF's applicability to behaviors involving change such as multi-mode market entries and market re-entries. BTF also helps examine the decision to internationalize in the first place, nascent firm internationalization, location choices, international market adaptation, and headquarter-subsidiary relationships. We encourage IB scholars to use theories that can handle the complexity increasingly associated with modern firm growth, and propose BTF as a promising starting point. Journal of International Business Studies (2020).
... I could offer a behavioral theory that explained how and why decisions are made and how and why commitments accumulate. In 1966, I published a book based on my findings which are well known so I will not repeat them (Aharoni, 1966). ...
This opinion/editorial piece presents lessons from Yair Aharoni’s career as an IB researcher. Dr. Aharoni reflects on what he considers a few of the major challenges and implications for IB researchers.
... The internationalisation process model, which is often referred to as "the Uppsala model", is rooted in the behavioural theory of the firm (Aharoni, 1966;Cyert & March, 1963). The Uppsala model is based on the empirical study of a group of Scandinavian scholars carried out in the late 1970s, and is also one of the earliest studies that integrated dynamism into MNCs internationalisation activities. ...
Further studies are required to provide an insight and understanding into the internationalisation process of EMNCs, because the theories of firms’ internationalisation were developed from studies in advanced countries. However the behaviour of EMNCs may be different from that of firms from advanced countries. Despite a growing number of studies on the internationalisation process of emerging market multinationals (EMNCs), Latin American and Asian firms have dominated the geographical focus. Studies of the internationalisation process of Sub-Saharan African firms, in particular that of Nigerian firms, are lacking in the international business literature. This study examines the factors that have impacted on the domestic growth of Nigerian firms, the
factors that have motivated their internationalisation and the location patterns of their
internationalisation. It draws on four case studies of Nigerian companies from different sectors of the Nigerian economy; namely, manufacturing, banking, insurance and ICT. This study is important because it brings an in-depth understanding to an under explored new phenomenon.
Data were drawn from multiple sources of evidence for triangulation and convergence. “Within case” and “cross-case” data analysis was undertaken. The primary data were analysed thematically and the Nvivo 11 qualitative software package was used for data coding.
It was found that there is no uniform set of factors that have motivated the internationalisation of Nigerian firms. Even though some similarities exist across cases, there are also stark differences. The study shows that Nigerian firms have evolved during a difficult period in Nigeria’s economic development. It also reveals that the economics of liberalisation after the democratic transition in 1999 opened new opportunities, which enabled Nigerian firms to accumulate their specific ownership advantages in the domestic market, which then enhanced their competitive advantage in both domestic and international markets. The home country’s specific advantages, such as resource endowment, favourable domestic business environment and home market profitability have had a positive impact on firms’ ability to develop their specific advantages. The study reveals that institutional and resource based factors drove the domestic growth of the four firms. These included the political environment, social conditions, economic
conditions, technological changes, sectorial characteristics, management orientation and the resources and capabilities of the firms.
The internationalisation of Nigerian firms also reflects a Pan-African investment strategy.
Regional/host markets factors were key motivations for the firms’ internationalisation and their location patterns. Regional markets provided the case firms with opportunities to expand and also served as an international entry point to develop their experiential learning of internationalisation.
Home market advantage, network relationships, management orientation, vision, resources and capabilities were found to have impacted positively on the internationalisation process of Nigerian firms. The study indicates that the geographical proximity of the host market, rather than its psychic distance, was a motivation for both Nigerian firms’ internationalisation and their location
pattern.
... Because of this, locally made products in developing countries are not able to meet international product quality requirements. According to the OECD (Fliess and Busquets, 2006), limited managerial skills and knowledge of internationalization remain critical constraints to SME international expansion (Aharoni, 1966;Boermans and Roelfsema, 2013;Aaby and Slater, 1989). Since SMEs have less hierarchical levels, their top managers play both strategic and operational roles, and consequently, they directly experience the challenge of competing for knowledge in the pursuit of internationalization (Al-Hyari et al., 2012). ...
Purpose
This paper reviews the literature on internationalization barriers of small and medium enterprises (SMEs) from developing countries. The purposes of the study are: (1) to explicitly point out specific factors influencing the growth and internationalization of SMEs from developing countries and (2) to identify the research gaps to provide lucid and succinct directions for future research in this area.
Design/methodology/approach
The authors selected relevant papers from journals listed on Web of Science and Scopus databases.
Findings
It was found that there are large number of questions remain unanswered regarding the internationalization of SMEs from developing countries regarding the factors determining their growth and internationalization.
Originality/value
This review distinctively accentuates previous studies on such barriers influencing the growth of SMEs from developing countries and systematically synthesize the issues faced by those SMEs. Thus, the authors seek to provide a comprehensible platform for researchers working in this area.
Internalization theory explains the existence of the firm because it is the most efficient way of coordinating a set of activities rather than market exchange. The firm grows when it can absorb markets and it will do so until the costs to the firm of further growth exceed the benefits. This principle is combined with theories of trade and innovation to explain the location and relative success of firms. It has proved particularly useful in explaining the growth and organizational development of multinational enterprises (MNEs) in combination with theories of entrepreneurship and culture. Recent theorizing distinguishes operational internalization from knowledge internalization, with the empirical argument that the former is declining, the latter increasing. Spatial and governance implications of the theory are at the frontier of knowledge.
Due to the limitations of traditional financial analysis and the non-specificity of laboratory based gambling tasks, it is difficult for researchers to isolate the independent contributions of risk perception and initial investment experience on novice investors' behaviors. Thus, it is still necessary for researchers to describe the process by which investment experience affects the investment behavior of novice investors by employing the methods of psychological experiments that can control and eliminate these confounding variables in the laboratory. The current study created a stock investment task based on the balloon analogy risk task to simulate the stock market in the laboratory. Two hundred and twenty Chinese college students were recruited as participants. Chain intermediary model analysis showed that initial investment experience influences a novice investor's behavior through risk perception. In addition, risk perception displayed the characteristics of continuity , in which the initial risk perception would affect later risk perception. These results indicate that investment experience does influence investment behavior. Different early investment experiences have correspondingly significant effects on the novice investors' investment behavior through their risk perception. The results also suggest that novice investors can partly correct the effects of their initial investment experience through continuous feedback from the stock market.
This article identifies the key factors in the internationalization
of SMEs in the textile sector in the metropolitan area of the
Aburrá Valley. Dimensions are defined and relationships are
established between the variables observed and those
unobserved according to the internationalization stages of the
Uppsala model. Information is analyzed by structural equations
with Lisrel software. The results show that information and
resources have an impact in the internationalization of SMEs,
but not in the dynamic capabilities.
The foreign market entry choice is one of the most important decisions in international business and it is a complex challenge for the internationalizing firm. The entry mode decisions are characterized by high uncertainty arising from the unfamiliarity of foreign environments. Firms can make this decision for the first time, change or add to the current scope of business when internationalizing.Making an entry mode choice requires a deliberate decision dealing with the questions of why, how, when, and where to internationalize. These four dimensions are major questions in international business. The “Why” is about the right motives and strategies guiding the intended internationalization. The “how” is related to the question of which entry mode is the most feasible. The question of “when” refers to the problem of finding the right moment to internationalize. In addition, the “where” is about finding a proper location for the chosen strategy to internalize.
Izravno inozemno ulaganje i inozemno deinvestiranje dvije su strane iste medalje, jedna detaljno izučena i istražena, druga iznenađujuće zanemarena. Danas na globalnom tržištu postoji snažna borba svake pojedine zemlje u privlačenju što većeg dijela kolača inozemnog kapitala unutar svojih granica. Jedna od mjera kojom se pokušava privući inozemni ulagač upravo su porezni poticaji. No uspješnost te mjere je upitna jer vrlo često po njezinu isteku i inozemni ulagač napušta zemlju. Iz navedenog problema istraživanja proizlazi i glavni cilj ovog rada: ukazati na problematiku vezanu uz porezne poticaje kao jedan od načina privlačenja izravnih inozemnih ulaganja, pružiti detaljan uvid u dosadašnje razumijevanja pojma deinvestiranja te analizirati povezanost poreznih poticaja i deinvestiranja na primjeru Republike Hrvatske. Provedena analiza ukazala je na činjenicu kako na primjeru Republike Hrvatske postoji jasna povezanost između ročnosti poreznih poticaja i deinvestiranja. Prosječna starost inozemnih poduzeća u Republici Hrvatskoj iznosi 9,2 godine što odgovara desetogodišnjem razdoblju trajanja porezne potpore.
Many studies have shown the positive impact of foreign direct investment on the economy. This study aims to analyze the impact of crime on foreign direct investment in Pakistan Data from 1983-2016 is used. After an ARDL analysis we find that crime has a negative and significant effect on foreign direct investment in the long run and short run. Toda Yamamato shows that the relationship between crime and foreign direct investment is unidirectional. Trade openness and infrastructure were found to be significant in the short run. However, trade openness did not have any effect in the long run.
O presente trabalho tem por objetivo analisar os motivos que levaram a Construtora Norberto Odebrecht se internacionalizar para Angola na década de 1980, momento em que o país vivenciava uma guerra civil que já se arrastava por décadas. Por meio da análise qualitativa de documentos oficiais e artigos científicos, buscou-se também averiguar como a atuação de demais atores estatais e privados próximos à empresa contribuíram para a diminuição do risco percebido inerente ao processo de internacionalização. Para embasarmos tal estudo, teremos como marco referencial as principais interpretações do viés comportamental das teorias administrativas da internacionalização como a Escola Nórdica de Negócios Internacionais, por meio de suas Teorias das Networks e Paradoxo da Distância Psíquica. Dessa maneira, pretende-se contribuir para a área de estudo da Administração, Ciências Políticas e Relações Internacionais, através do entendimento da importância do relacionamento público x privado em movimentos de internacionalização de empresas para locais que apresentem elevado risco político.
The purpose of this chapter is to explore how top management team (TMT) size, diversity and experience are associated with strategic orientations and internationalization in small and medium-sized enterprises (SMEs) and thus to provide additional insight concerning upper echelon issues in such firms. Specifically, we will look closer at the strategic consequences of size, diversity and experience of TMTs. An empirical study among Norwegian exporting SMEs indicates that international growth expectations as well as strategic orientations (growth, learning, international) are significantly higher in firms in which top management teams are larger, more diverse and more experienced. Such firms also reach out to more markets internationally and perform better. TMT size and composition seems to be important not only for international new ventures, but also for more established SME exporters.
Research Summary
This article explores the relationship between organizational governance and location choices. While the existing literature provides significant intuition regarding the factors that influence these choices, it often assumes that governance and location choice are independent from one another. This article tests the veracity of this assumption in the global semiconductor industry. We report evidence of significant correlations across choices regarding how to govern and where to locate production, evidence of a reciprocal relationship between governance and location choices, and evidence suggesting how interdependence between governance and location choices affects the stability of relationships highlighted by extant theories. We conclude with implications for future theoretical and empirical research based on the existence of these interdependent effects.
Managerial Summary
Managers face difficult choices when deciding how to organize the performance of an activity. They must choose whether to outsource an activity by balancing the potential benefits of a supplier's lower costs or knowledge against the costs of diminished coordination and control. They must also choose where to perform an activity by considering the benefits of locally bound expertise as well as potential costs associated with cultural, legal, and social barriers. While prior research has often addressed these issues by assuming that these choices are independent, this paper demonstrates that governance and location choices are interdependent and that each choice reciprocally affects the other. It concludes by suggesting managers utilize an expanded governance-location choice set when evaluating where and how to manage their core activities.
Sharing Economy platforms have expanded their operations all around the globe at an unexpected rate. Due to its “asset-lite” nature, traditional internationalisation theories may not be able to fully explain or predict their expansion patterns. This lack of theoretical background puts at risk the phenomenon’s future and stops traditional companies from coming up with a solid plan to compete against platforms. To ease the creation of a Sharing Economy internationalisation paradigm, this paper intends to review the existing research regarding the internationalisation of sharing platforms as well as the applicability of existing theories. Through a systematic literature review, the existing research was reviewed, and afterwards, internationalisation theories and their distinct factors extracted were noted to address the applicability of these within the singularities of the sharing phenomenon. This classification of factors was done according to the exiting literature in the field. After this research, we can confirm the lack of explanatory power of traditional theories regarding sharing platforms and confirm the insufficient research regarding these operations. We propose a list of factors that should be considered for future research as a guideline for the further development of the Sharing Economy internationalisation theory. Additionally, the factors classification is tested upon the case of the internationalisation of Blablacar, the most extensive carpooling network operating, to check if the theoretical and the practical approaches converge.
Although developing countries have developed various kinds of diaspora engagement policies (DEPs) to court foreign direct investment (FDI) from diaspora, we do not know whether these policies matter for investment promotion. Do DEPs contribute to attracting diaspora FDI? Under what conditions might DEPs be most effective at attracting this FDI? DEPs facilitate diaspora FDI by lowering legal, informational, and psychological barriers that diasporas confront when investing in the homeland. These barriers include FDI restrictions, information scarcity, and a lack of meaningful, harmonious ties to the homeland. DEPs are more effective in autocracies where high investment barriers exist and are especially so when they lower informational and psychological investment obstacles. An analysis of diaspora‐weighted FDI from the United States to 25 Asian countries from 2002–2011 lends some support to these claims. While DEPs do not affect diaspora‐weighted FDI flows per se, their positive impact is observed in autocracies, and DEPs' lowering of psychological obstacles drives this conditional impact.
In the 1980s Prof. Yair Aharoni wrote a report about the future of Israel. He stated that “Startup companies are unlikely to provide the major share of export growth in the next ten years, but they are crucial to Israel’s long-term economic development.” Little did the researchers know that twenty years later Israel would become known as “Start Up Nation”, attracting policy makers, researchers, and students from around the world who were interested in understanding how Israel underwent this major change from exporting oranges to exporting knowledge-based products and services.
The short paper presents the intellectual legacy of Prof. Yair Aharoni
Am Beginn jeder Internationalisierung steht die generelle Entscheidung, sich auf Auslandsmärkten engagieren zu wollen. Der Anstoß dafür kann sowohl aus dem Unternehmen selbst als auch von außen kommen. Zusätzlich zu den wichtigsten Motiven für die Internationalisierung werden in diesem Kapitel auch die damit verbundenen Risiken diskutiert, welche neben den Chancen (von potenziellen Umsatz- und Gewinnzuwächsen bis hin zu Effizienz- und Kostenvorteilen) nicht vernachlässigt werden sollten. Damit die Internationalisierungsentscheidung positiv ausfällt, müssen aber auch interne Voraussetzungen im Unternehmen erfüllt sein, welche eine erfolgreiche Auslandstätigkeit überhaupt erst möglich machen. Dazu zählen das entsprechende Commitment des Managements ebenso wie das Vorhandensein der notwendigen Fähigkeiten zur Internationalisierung sowie von Wettbewerbsvorteilen, die im Ausland genutzt werden können. Zum Abschluss des Kapitels wird ein typischer Ablauf des Entscheidungsprozesses zur Internationalisierung vorgestellt, der in der Praxis nicht immer systematisch durchgeführt wird.
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