Please be advised that the deadline for paper submissions to the special issue of Journal of International Management on 'Expanding models of the internationalization process: contributions from the study of emerging market multinationals' has been revised from 31 January to 30 April.
Expanding models of the internationalization process: contributions from the study of emerging market multinationals
Call for papers for a special issue of Journal of International Management
Deadline: April 30, 2019
The objective of the special issue
Process explanations of internalization such as the incremental internationalization and innovation-related models remain widely used approaches for analyzing and assessing the dynamics of firms’ international expansion (Andersen, 1993; Bilkey and Tesar, 1977; Johanson and Vahlne, 1977, 2009). At the same time, a growing literature on emerging market multinational companies (EMNCs) suggests that process models may apply differently to these firms (Gammeltoft, Barnard, and Madhok, 2010; Guillen and Garcia-Canal, 2009; Hennart, 2012; Luo and Tung, 2007; Ramamurti, 2012).
Hence, in this special issue, we seek to augment our understanding of the internationalization process by analyzing EMNCs. The study of these firms offers a range of exciting opportunities for questioning and enriching process models by challenging, extending, conditioning and possibly refuting some of their underlying assumptions and core assertions. There is already growing literature analyzing EMNCs, with many studies analyzing what these firms do in their internationalization decisions (e.g., which countries to enter, which methods to use…) and a lively debate on the contribution of their study to theory (Cuervo-Cazurra, 2012; Gammeltoft, Filatotchev, and Hobdari, 2012; Guillen and Garcia-Canal, 2009; Lou and Tung, 2007; Ramamurti, 2012; Verbeke and Kano, 2015). There is much less focus on how they internationalize (e.g., long-term dynamics of foreign entry, expansion, and contraction), whose study can also contribute to theoretical expansion and refinement. In this special issue, we are interested in the how of internationalization and in gaining a better understanding of how studies of EMNCs can enrich models of the internationalization process (Meyer and Thaijongrak, 2013; Peng, Lee and Wang, 2005; Santangelo and Meyer, 2011). These include a number of dimensions including but not confined to the interplay between market knowledge and market commitment (Johanson and Vahlne, 1977), the establishment chain, the management and coordination of subsidiaries across countries (Bartlett and Ghoshal, 1989), the development of innovations (Doz, Santos and Williamson, 2001), reverse innovation (Govindarajan and Ramamurti, 2011), regionalization (Rugman and Verbeke, 2004), the management of expatriates (Tung, 1982), changes in attitudes of managers toward international markets (Cavusgil, 1980), the role of networks in internationalization (Sharma and Blomstermo, 2003), the rapid internationalization of innovative firms (Oviatt and McDougal, 1994), or the role of ownership on internationalization (George, Wiklund and Zhara, 2005).
There are several avenues in which the study of EMNCs can help further the understanding of the internationalization process, and we are looking for papers that can help advance these ideas or challenge them with new insights. First, extant models tend to assume that internationalization represents the exploitation of sources of competitive advantage in overseas markets (Caves, 1971; Hymer, 1976; Dunning, 1977; Vernon, 1966). However, studies of EMNCs appear to indicate that some of these firms expand to obtain rather than exploit advantages, later using foreign technology to upgrade home country operations. We may need more complex models that captures better the co-evolution between firm capabilities and internationalization processes and captures better competitive advantage as dynamically developed through internationalization and possibly traded across firm borders.
Second, the traditional understanding of the internationalization process focused on sequences of increasing commitments to foreign markets and a selection of similar markets. However, some studies have shown how EMNCs often apply higher commitment modes earlier in the internationalization process than predicted; how EMNCs in their internationalization process may be motivated by large distances to exploit learning potentials; and how EMNCs are sometimes more driven by adverse home-country conditions than host-country learning processes (Guillen and Garcia-Canal, 2009; Luo and Tung, 2007; Ramamurti, 2012). Many of these ideas are based on theoretical suggestions that can benefit from refinement using comprehensive analyses of internationalization processes of a large number of firms.
Third, process models tend to perceive the internationalization process as comprising a sequence of exploration-exploitation steps, where a learning period (exploration) is succeeded by a commitment decision (exploitation). Ambidexterity, i.e., the ability of a firm to simultaneously explore and exploit, and how it lends firms with superior performance relative to firms specializing in one at the expense of the other are well studied for advanced-economy MNCs (He and Wong, 2004). Studies on EMNCs’ ambidexterity can provide new insights into how they develop their requisite combinative capabilities, structures, and processes throughout their internationalization process (Awate, Larsen and Mudambi, 2014).
Fourth, the study of internationalization processes has tended to rely on the analysis of large advanced-country multinationals with a well-established network of subsidiaries, which implicitly benefit from a supporting infrastructure at home and positive country-of-origin effects. However, EMNCs face challenges because of the difficult conditions of the home country and poorer reputation of the home country (Cuervo-Cazurra, Newburry, and Park, 2016; Khanna and Palepu, 2010; Peng, Wang and Jiang, 2008). These disadvantages warrant more detailed analyses, especially of unsuccessful foreign expansions that tend to be overlooked in the literature studying internationalization processes.
Fifth, even though dynamic capabilities are essential for the success and survival of any firm (Eisenhardt and Martin, 2000; Teece, Pisano and Shuen, 1997), the ability to continuously reconfigure their portfolio of assets is especially relevant to MNCs that are geographically and organizationally dispersed and diversified, requiring global orchestrations skills (Katkalo, Pitelis, and Teece, 2010; Teece, 2014). Even when EMNCs have progressed regarding the development of their operational resources and capabilities, they often remain disadvantaged in their higher-order dynamic capabilities that underpin the internationalization process. EMNCs need to accumulate a gradually stronger portfolio of value-generating bundles of sources of advantage along with a capability to establish and manage such bundles across borders (Gammeltoft and Hobdari, 2017). Further studies are needed of how EMNCs manage to leverage initial competitive strengths to develop the ability to dynamically merge firm capabilities with host country locational assets as well as organizational and managerial capabilities to orchestrate the international value chain.
Sixth, the traditional analysis of the internationalization process has been extended to include the influence of networks in the home country and how they support internationalization (Johanson and Vahlne, 2003). EMNCs often initiate their internationalization-related learning process domestically, e.g., through domestic joint-venture or subcontracting relations with foreign investors or, for those in large emerging economies, by investing or making acquisitions in distant states/provinces. Recognizing better the influence of these domestic learning processes may also explain some of the reported EMNC departures from existing process models.
Seventh, internationalization processes have highlighted the ability of firms to disaggregate value chains across locations using a multitude of governance mechanisms, from licenses to contracts to alliances to acquisitions. Some multinationals of advanced countries take this to the fullest, concentrating on design and marketing and offshore outsourcing production and distribution. EMNCs often remain tightly vertically integrated. Few of them are engaging in more complex arrangements with extended divisions of labor, involving both separate firms and their subsidiaries in third countries. There is a significant potential for deepening and institutionally broadening our understanding of EMNC internationalization processes by applying a global value chain approach to understand the evolution of their institutional, spatial and operational governance structure.
Eight, models of the internationalization process may also be enriched with studies of how EMNCs develop their human resources and organizations. Some of the internal challenges of EMNCs that can benefit from insightful analyses are the development of managers with the required international experience and cultural outlook, the change in the role of headquarters from source to coordinator, the development of regional headquarters, the change in competitive base from the home country to multiple countries, or the change in perception of the country-of-origin of the firm.
Ninth, the current wave of EMNCs’ expansion was facilitated by the opening of markets, liberalization of economies, and a general progression in globalization. However, there is an increasing skepticism on globalization, and some countries have re-imposed controls on trade and investment. New EMNCs are confronted with a vastly different international environment than previous generations of MNCs as both opportunities and constraints are intensified, thus setting the stage for a better understanding of the influence of the broader context of operation on the process of internationalization. The policy environment, political embeddedness, and the broader political economy of internationalization are becoming comparatively more important for many EMNCs.
Tenth, the extant literature (Luo and Tung, 2007) has argued that the foreign direct investments of EMNCs are motivated by the need to upgrade their technology, but has not explained well how EMNCs have the resources and the strategic space to search and digest these intangibles while simultaneously competing in their domestic markets with developed market MNCs. With few exceptions (e.g. Hennart, 2012), the extant literature has overlooked the fact that a crucial dimension of the internationalization of EMNCs is their competitive position, in their own domestic markets, with developed market MNCs. Analyses of how this competition evolves and how it strengthens or hinders EMNCs may throw light on the patterns and directions of their internationalization.
Hence, in this special issue, we are looking for manuscripts that analyze EMNCs as the basis for advancing theory on the internationalization process and the evolution of MNCs. We welcome contributions that apply a dynamic or longitudinal perspective on the internationalization process and which either compare with extant internationalization process models or allow such comparisons to be made. We encourage studies of EMNCs in various stages of internationalization, both early and late. Longitudinal studies that compare the evolution of firms as they grow and move from being purely domestic to being large established MNCs, or that analyze the internal changes within companies at different stages of their international expansion are particularly welcome. We also invite comparative studies of the internationalization process of different types of EMNCs, EMNCs at various stages of development, and EMNCs and MNCs from advanced economies.
We welcome studies from diverse disciplinary backgrounds, i.e., management, economics, sociology, political economy, psychology, etc. and topical interests, i.e., global strategy, international entrepreneurship, organizational behavior, cultural studies, human resources, international management, etc. We encourage methodological diversity and welcome theoretical papers, large-sample analyses, and case studies, as long as they establish a contribution to our understanding of the theoretical mechanisms underpinning internationalization process models.
The following topics illustrate the range of submissions. Authors are free to contact the guest editors to discuss these and other topics they want to analyze:
Context. How does the home country influence the internationalization process of EMNCs? How does this influence change with the global expansion of the firms? How do perceptions of the home country change as the EMNC progresses in its internationalization? Are particular institutional and regulatory setups more or less conducive to the further internationalization of EMNCs? To which extent and how do host country institutional systems impact upon home country governance structures of EMNCs?
Resources. To which extent can internationalization process differences be explained by differentials in resource endowments, strategic orientation, institutional environment, etc.? How do EMNCs combine resource acquisition abroad with resource augmentation at home to advance internationalization? How do EMNCs develop their engagement in global value chains throughout their internationalization process?
Capabilities. Are different sets of dynamic capabilities required at various stages of the internationalization process? What are the dynamics of capability development during the internationalization of EMNCs? How do they build and develop their capabilities, organically and through acquisitions? Are there particularly challenging junctures in the internationalization process? In which respects can firms regress and why?
Learning. Which learning mechanisms do firms apply to advance through different stages? What is the importance of domestic internationalization-related learning processes preceding internationalization? What are the relationships between experience, market knowledge and market commitment through different stages of internationalization? How do home country conditions affect these relationships?
Organization. How does the role of headquarters transform in EMNCs? How does this role transform as the EMNC expands abroad? What are the dynamics of parent-subsidiary relations through different stages of EMNC internationalization? How are systems of corporate governance transformed with the evolution of the MNC? How do firms develop the needed managers with international experience to coordinate the increasing diversity and complexity of EMNCs?
Competition. How do EMNCs adapt their internationalization process to enable them to compete against more sophisticated, diverse, and larger advanced economy MNCs? How do EMNCs balance advantages differently than other MNCs? Does the balance vary with stage of development?
Between January 1 and April 30, 2019, authors should submit their manuscripts online via https://www.evise.com/profile/#/INTMAN/login. To ensure that all manuscripts are correctly identified for consideration for this special issue, it is important that authors mark the button Internationalization Process.
Discussions of the topic were facilitated at the ten-year anniversary of the conference series on “Emerging Multinationals: Outward Investment from Emerging Economies” at Copenhagen Business School on October 11-12, 2018. Authors of manuscripts considering submission to the special issue benefitted from attending the conference.
Another workshop with manuscripts that have progressed through the review process may be held in August 2019 in Boston coinciding with the annual meeting of the Academy of Management. This second workshop will help improve the manuscripts and facilitate the exchange of ideas among those interested in the topic. As with the first workshop, presentation at the workshop is neither a requirement for nor a promise of final acceptance of the paper in the special issue. Publication is expected to be in early 2020.
Please, direct questions about the special issue to the two guest editors: Peter Gammeltoft, Copenhagen Business School ([log in to unmask]); Alvaro Cuervo-Cazurra, Northeastern University ([log in to unmask]).
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Biographies of the guest editors of the special issue
Alvaro Cuervo-Cazurra is Professor of International Business and Strategy at Northeastern University. He studies the internationalization of firms, with a special interest in emerging market multinationals, capability upgrading, particularly technological capabilities, and governance issues, focusing on corruption in international business. His research appears in leading academic journals, such as Academy of Management Journal, Journal of International Business Studies, Strategic Management Journal, and Research Policy, and in edited books. He is co-editor of Global Strategy Journal, was the reviewing editor of Journal of International Business Studies and serves on the editorial boards of other leading journals, such as Academy of Management Review and Strategic Management Journal. His geographical area of expertise is Latin America. He was elected a Fellow of the Academy of International Business and to the Executive Committee of the International Management Division of the Academy of Management. He was awarded a Ph.D. from the Massachusetts Institute of Technology. For more information, please visit www.cuervo-cazurra.com.
Peter Gammeltoft is Professor of International Business at the Department of International Economics and Management, Copenhagen Business School. His research focuses on economic and technological changes in emerging economies, particularly the globalization of innovation, with East Asia as the primary area specialization. His current research focuses on outward investments from emerging economies, especially strategic asset-seeking investments. Among his publication outlets are Asia-Pacific Journal of Management, Journal of International Management, International Journal of Technology Management, European Management Journal, and International Migration. He has carried out consultancies for the European Commission and the Danish Ministry of Foreign Affairs. He teaches subjects on emerging economies and international management and strategy. Before pursuing an academic career, he worked as a senior consultant with Accenture in organizational development and healthcare information systems.
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