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Dear Friends and Colleagues,

The May 2017 issue of Global Strategy Journal is out! Below is the extended table of contents.You can access the articles at http://onlinelibrary.wiley.com/doi/10.1002/gsj.2017.7.issue-2/issuetoc  We hope that you will enjoy them!

Best wishes, 

Alvaro, Ram and Torben

 

Changes in the Editorial Team of Global Strategy Journal (pages 153–154)

Torben Pedersen

 

Globalization: Rising skepticism (pages 155–158)

Alvaro Cuervo-Cazurrra, Ram Mudambi and Torben Pedersen

 

Bricks and Mortar in a Borderless World: Globalization, the Backlash, and the Multinational Enterprise (pages 159–171)

Stephen J. Kobrin

Research summary

Globalization, increased interconnectedness, and deep integration resulted in significant increases in trade and FDI from 1989 through 2008. The recession marked the end of that trend and the rise of a broad-based opposition that has economic, social, and political components. This article explores the backlash, arguing that is driven by sociotropic perceptions. While globalization can be explained as a cyclical or structural phenomenon, I argue that technological change results in a networked global economy, the transition from a space of places to a space of flows, and increases the potential cost of devolution to the point where economic independence is no longer feasible. Nonetheless, I conclude that MNCs face a period of prolonged uncertainty and develop implications for firm strategy.

Managerial summary

Globalization entailed explosive growth in trade and FDI from 1989 through 2008. The decline in both since the recession and the strident backlash may indicate the end of this wave. The economic, political, and social components of the backlash are explored, and I argue that while the economic and political factors that gave rise to globalization longer exist, structural factors—networked MNCs, dispersion of technology, and complex global supply chains—increase the cost of devolution to the point where a return to independent national markets is not feasible. We are likely to be stuck with an international economy from which we can neither withdraw nor manage effectively, a prolonged period of angst and uncertainty. I conclude with scenarios and implications for multinational firms. 

 

How do subsidiaries assume autonomy? A refined application of agency theory within the subsidiary-headquarters context (pages 172–192)

Andrew Cavanagh, Susan Freeman, Paul Kalfadellis and Salih Tamer Cavusgil

Research Summary

While the notion of subsidiary autonomy has received considerable attention within the international business literature, extant research is yet to comprehensively distinguish between the different types of subsidiary autonomy. This article outlines a key type that is independently claimed by the subsidiary, ‘assumed autonomy,’ and makes the following contributions: first, we outline the causes for this type of autonomy. Second, we elucidate how assumed autonomy is viewed by the head office. In doing so, the article also challenges previous applications of agency theory within the subsidiary-headquarters context, arguing the need for a refined, more nuanced interpretation in this setting to reflect a revised set of agency theory assumptions.

Managerial summary

Despite representing a key issue in subsidiary management today, the types of autonomy that may be acquired by, or available to, a subsidiary are not yet fully understood. This article aims to reduce the confusion in this respect by outlining a key type of autonomy that is ‘assumed’ by the subsidiary without explicit delegation from the head office. We explain the reasons why this type of autonomy may be developed by the subsidiary and also how it is likely to be viewed by the head office. We anticipate that this will in turn have significant implications for the ongoing viability and value of the subsidiary within the multinational, and it highlights the importance of head office managers adopting a more open-minded approach to proactive subsidiary behavior. 

 

Catch-up via agglomeration: A study of township clusters (pages 193–211)

Liangding Jia, Sali Li, Steve Tallman and Yaqin Zheng

Research Summary

This study examines both the horizontal and the vertical dimensions of Chinese township industrial clusters in order to disentangle the determinants of catch-up performance. By examining 87 township clusters in Jiangsu Province, we find that a cluster's competitive intensity partially mediates the relationship between cluster size and cluster performance and that the number of R&D centers and interfirm joint actions in a cluster positively affects a cluster's innovativeness which, in turn, contributes to cluster performance. Our study not only helps shed light on what strategic factors led Chinese manufacturing clusters to catch up in the global value chain, but our findings can be used as a basis for comparison with other types of clusters around the world.

Managerial summary

Despite the emergence of Chinese manufacturing industries over the past 30 years, little is known about how local clusters have helped Chinese firms catch up in global competition. By analyzing the performance of 87 township industrial clusters in Jiangsu Province, we find that the level of competition in a cluster mediates the relationship between cluster size and cluster performance and that a cluster's number of R&D centers and interfirm collaborations positively affect a cluster's innovativeness which, in turn, contributes to cluster performance. Our study contributes to a better understanding of cluster catch-up strategies, helping compare and contrast the differences between clusters from developing countries and ones from developed countries. 

 

Acquisition or greenfield entry into Africa? Responding to institutional dynamics in an emerging continent (pages 212–230)

Ruiyuan Chen, Lin Cui, Sali Li and Robert Rolfe

Research Summary

Foreign direct investment establishment mode literature has focused on the impact of unidimensional measures of institutional status, despite that institutional environments in emerging economies undergo substantial and continuous changes in multiple dimensions. This study integrates the dynamic institution-based view with the theoretical construct of institutional competitive advantages to examine the heterogeneous strategic responses of investing firms to host country institutional dynamics. Empirical results from 2,245 FDIs into Africa during the period 2008–2013 show that multinational enterprises MNEs are more likely to adopt: (1) a greenfield mode in countries with rapid development of formal institutions; and (2) an acquisition mode in countries with rapid development of factor markets. Moreover, the regional experience of MNEs strengthens the first effect, while the institutional ties strengthen both effects.

Managerial summary

The dynamic development of a host country's institutional and factor market conditions is a critical consideration for multinational enterprises when entering emerging countries. By studying 2,245 foreign direct investments into Africa during the period 2008–2013, we find that MNEs are more likely to enter African countries that have formal institutions that are rapidly improving via greenfield investments. This is especially true for those MNEs with prior investment experience in Africa or with local government connections. We also find that acquisition modes are more likely to be adopted in African countries with rapidly improving factor market conditions, especially by MNEs with local government connections. We promote a dynamic perspective for MNEs for assessing business opportunities and entry modes in Africa.