Dear friends and colleagues,  


The second issue of Global Strategy Journal for 2022 is available at In it, you can find a set of articles accepted in the regular submission process that provide the latest thinking on the impact of the context on multinationals. The issue opens with a global strategy collection on emerging market multinational enterprises (Pedersen & Tallman). We then have articles studying various dimensions of the impact of the international context on firms¡¯ strategies, such as informal institutions (Bu, Luo, & Zhang), culture, economic and environmental conditions (Prieto-S¨¢nchez & Merino), cultural, social, and legal barriers (Leiblein, Larsen, & Pedersen), exchange rates (Fisch & Puhr), geography (Song), development (Williamson, Symeou, & Zyglidopoulos), and institutions (Lopez-Vega & Lakemond)  


For those interested in ownership, we have an open call for papers for a special issue on Ownership and Global Strategy with a deadline of June 15, 2022. More details are available here: 


If you want to read what is forthcoming at GSJ, please check it here 


We look forward to receiving your best work for consideration for publication.  


Best wishes,  

Gabriel R. G. Benito, Alvaro Cuervo-Cazurra, and Ram Mudambi 

Co-editors of Global Strategy Journal 


Global strategy collections: Emerging market multinational enterprises 

Torben Pedersen, Stephen Tallman 

This first collection of articles for global strategy focuses on the relatively new phenomenon of Emerging Market Multinational Enterprises (EMNEs). The first topic to draw real attention to articles in Global Strategy Journal, the study of EMNEs challenges many assumptions about what characteristics make a firm a successful MNE and forces a reconsideration of fundamental questions in strategic management. The articles in the collection provide a good introduction to the topic, but there is much more research on the topic in a variety of journals for those scholars considering the EMNE as a topic for their own research. 


The dark side of informal institutions: How crime, corruption, and informality influence foreign firms' commitment 

Juan Bu, Yadong Luo, Huan Zhang 

This study focuses on three prevalent societal issues¡ªcrime, corruption, and informal sector¡ªthat constitute the dark side of informal institutions in developing countries. We argue that the dark side of informal institutions has the potential to impede foreign firms' desire and ability to commit to the host countries. The effects of these three forms on foreign firms differ depending on the type of local commitment. Analyzing the World Bank data of foreign firms in 36 developing countries, we find that (a) host country corruption is stronger in deterring foreign firms' long-term investment, (b) host country informality is stronger in obstructing foreign firms' innovation output, and (c) host country crime is stronger in undermining foreign firms' production capacity utilization. Our analysis also shows that host country's efficient regulatory institutions and foreign firms' non-market-seeking motive are two important countervailing forces that attenuate the negative effects of the dark side of informal institutions. 


Incidence of cultural, economic, and environmental factors in the emergence of born©\global companies in Latin America 

Carlos-Javier Prieto-S¨¢nchez, Fernando Merino 

This paper examines the effect of key cultural and economic factors on the emergence of born-global (BG) companies. Such factors include the intentions and the growth aspirations of the entrepreneur, as well as the country's characteristics in terms of its income per capita and the complexity of its economic system. The analysis also highlights how the environment affects the importance of the aspirations to be BG. Our work expands the literature on BGs in Latin America by analyzing macroeconomic aspects and specific features of the entrepreneur and the environment as possible determinants of BG character. The results reveal that the entrepreneur's intentions and aspirations, along with environmental factors and the economic growth in Latin America, contribute to a firm's probability of becoming a BG company. 


Are governance mode and foreign location choices independent? 

Michael J. Leiblein, Marcus M. Larsen, Torben Pedersen 

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. 


Financial hedging and operational flexibility as instruments to manage exchange©\rate uncertainty in multinational corporations 

Jan Hendrik Fisch, Harald Puhr 

Literature that compares the advantages of financial hedging and operational flexibility as instruments to manage exchange-rate uncertainty presents inconsistent results. This study addresses such inconsistencies in two ways. First, it clarifies that the effects of financial hedging and operational flexibility are asymmetric. Financial hedging helps an MNC to reduce a negative effect of exchange-rate uncertainty on firm value, whereas operational flexibility allows an MNC to enhance a positive effect of exchange-rate uncertainty on firm value. Second, the study demonstrates that these effects are contextual to the MNC's subsidiary network. Depending on whether exchange-rate correlation in the subsidiary network is positive or negative, either financial hedging or operational flexibility is more effective than the other. Regressions on a sample of U.S. manufacturing firms support the predictions. 


Locational boundness of resource, compatibility of production, and downside risks of multinationality 

Sangcheol Song 

We extend the multinational operational flexibility literature by examining how the characteristics of resources and capabilities within a portfolio of international investments affect its downside risks. We postulate that non-location bound resources and capabilities within an international investment portfolio are crucial to reducing switching costs and enhancing cross-country switchability, thus curbing downside risks. Our large sample of Korean multinational corporations reveals that globally sourced production inputs or more technological capabilities help curb downside risks, while locally sourced inputs or more marketing capabilities do not. We additionally find that the positive effect of less locational boundness is more salient when the portfolio has a high product relatedness or standardization. 


International diversification, legitimacy, and corporate social performance of extractive industry multinationals 

Peter J. Williamson, Pavlos C. Symeou, Stelios Zyglidopoulos 

This article examines how different international diversification strategies impact the legitimacy challenges multinationals face and the way they manage their corporate and social responsibilities. Analyzing these questions in a sample of companies in extractive industries, we find that those who pursue resource-seeking investments that involve locating extraction operations overseas respond with the largest improvement in their corporate-level social performance (CSP). Those pursuing efficiency-seeking by establishing processing subsidiaries abroad increase their CSP less, with the smallest increase for those pursuing market-seeking through marketing and sales operations overseas. For each type of activity established overseas, the increase in CSP becomes greater the more developed the company's home country and the larger its international footprint, but is not dependent on the host country's level of development. These findings suggest that, in today's globalized world, the legitimacy challenges that result from subsidiaries' activities increasingly need to be managed at a global, corporate level. 


Tapping into emerging markets: EMNEs' strategies for innovation capability building 

Henry Lopez-Vega, Nicolette Lakemond 

This article explores EMNEs' innovation capability building in emerging markets. The paper provides a longitudinal account of how the Brazilian cosmetics firm Natura transitioned from scant to ample innovation resources and processes. Building on the institution-based view and the resource-based view, we explain how EMNEs' innovation capability building is anchored in open innovation and collaborative nonmarket strategies. The paper reveals a unique pattern of innovation capability building based on a combination of local and global open innovation processes and harnessing the country characteristics over time. It is shown how combining open innovation and collaborative nonmarket strategies can help mitigate weak formal and informal institutions in emerging markets. The study offers an integrated framework explaining innovation capability building and the effects on the institutional setting. 


  Professor, International Business and Strategy, Northeastern University    

   Co-editor, Global Strategy Journal      


Recent publications:    

   Enriching internationalization process theory: insights from the study of emerging market multinationals. JIM 

   Multinationals misbehavior. JWB  

   Implementing the United Nations¡¯ Sustainable Development Goals in international business. JIBS   

   State ownership and internationalization: The advantage and disadvantage of stateness. JWB   

   Innovating for the Middle of the Pyramid in Emerging Countries. Cambridge University Press   

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