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19
Home-country networks and foreign expansion
- Academy of Management Journal
, 2010
"... We propose that home country network advantages shape firms ’ foreign expansion. We argue that a social status advantage is transferable from one market to another as a signal of quality but that a brokerage advantage is more context-specific and difficult to transfer. Furthermore, the value of netw ..."
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We propose that home country network advantages shape firms ’ foreign expansion. We argue that a social status advantage is transferable from one market to another as a signal of quality but that a brokerage advantage is more context-specific and difficult to transfer. Furthermore, the value of network advantages changes as networks evolve. Data on the foreign market entries of 1,010 U.S. venture capital firms provide robust support for the effects of social status. We also find that brokerage reduces foreign entry in the absence of home country partners in a new market and increases it when partners are already operating in that market. Foreign market entry is a process fraught with difficulty for firms, given the unknowns of operat-ing in settings that can be very different from their home countries. The literature on international management suggests that home country advan-tages allow firms to compensate for the difficulties associated with operating abroad. This stream of research has tended to emphasize the advantages associated with the possession of brands, technol-ogy, know-how, and general management skills (see Caves [1996] and Helfat and Lieberman [2002] for reviews of this literature). Little attention, how-ever, has been paid to the effect on foreign expan-sion of network-based advantages in a firm’s home country, in spite of the large body of evidence doc-umenting the influence of social networks on firm strategy and performance (e.g., Burt, 1992; Na-hapiet & Ghoshal, 1998; Podolny, 2005). There is some international evidence indicating that both vertical relationships with suppliers or buyers and ties within business groups in a home country are associated with entry into specific foreign markets. This line of research shows that firms follow their peers, customers, or partners into foreign markets; it does not, however, examine the impact of firm-specific advantages arising from firms ’ network po-sitions in the home countries (e.g. Guillén, 2002;
The Two Facets of Collaboration: Cooperation and Coordination in Strategic Alliances. The Academy of Management Annals
- European Journal of Information Systems
, 2012
"... This paper unpacks two underspecified facets of collaboration: cooperation and coordination. Prior research has emphasized cooperation, specifically partners ’ commitment and alignment of interests, as the key determinant of collaborative success. Scholars have paid less attention to the critical ro ..."
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Cited by 6 (1 self)
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This paper unpacks two underspecified facets of collaboration: cooperation and coordination. Prior research has emphasized cooperation, specifically partners ’ commitment and alignment of interests, as the key determinant of collaborative success. Scholars have paid less attention to the critical role of coordination—the effective alignment and adjustment of partners ’ actions. To redress this imbalance, we conceptually disentangle cooperation and coordination in the context of inter-organizational collaboration, and examine how the two phenomena play out in the partner selection, design, and post-formation stages of an alliance’s life cycle. As we demonstrate, a
Firm Experience and Market Entry by Venture Capital Firms (1962–2004)joms_869 130..161
"... abstract In this paper, we examine a firm’s decision to enter new markets as related to the depth and breadth of its experience and the relative distance of those markets. We situate our discussion and analysis in the context of the venture capital (VC) industry, and examine whether and when US VC f ..."
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Cited by 5 (0 self)
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abstract In this paper, we examine a firm’s decision to enter new markets as related to the depth and breadth of its experience and the relative distance of those markets. We situate our discussion and analysis in the context of the venture capital (VC) industry, and examine whether and when US VC firms enter five high-technology investment markets through first-or later-round investments. This setting allows us to observe both the firms that chose to enter a new market and those that did not, and analyse the antecedents of these decisions. We find that VC firms overall are less likely to enter distant markets; those with broader experience are more likely to make first-round entries. In addition, VC firms with deeper investment experience are more likely to make first-round entries in proximate markets and less likely to enter distant markets and make later-round entries. These results offer interesting implications for the literature on organizational learning and entrepreneurship.
Decomposing Uncertainty and Its Effects on Imitation in Firm Exit Decisions
"... This study examines the effects of different uncertainty types on interorganizational imitation in firm exit decisions.We draw on herding models to conceptualize exit decisions as being based on a firm’s private information, which the firm updates with information inferred from observing the actions ..."
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This study examines the effects of different uncertainty types on interorganizational imitation in firm exit decisions.We draw on herding models to conceptualize exit decisions as being based on a firm’s private information, which the firm updates with information inferred from observing the actions of others. We posit that different types of uncertainty differentially affect this observational learning process; in particular, we propose that certain uncertainty types attenuate (rather than foster) observational learning and subsequent imitation. We test this theory using a 29-year panel data set on the exit of private venture capital firms. Our results indicate that observational learning does influence imitation in firm exit decisions, and they also suggest that a common belief—that uncertainty enhances imitation—does not apply to all types of uncertainty. Specifically, we find that uncertainty fosters imitation only when it is idiosyncratic to the firm; uncertainties that are common to all firms, in contrast, actually reduce reliance on observational learning. By decomposing uncertainty into different types and explicating their effects on imitation, we demonstrate that this relationship is more nuanced than previously assumed and, in addition, highlight the role of deliberate information processing in imitation. Key words: imitation; uncertainty; organizational learning; herding; firm exit History: Published online in Articles in Advance.
Institutional influences on the choice of organizational form: The case of franchising
- Journal of Management
, 2009
"... Current explanations for franchising assume that managers only pay attention to firm-specific economic factors. In contrast, the authors submit that social factors described by institutional theory will enhance understanding. Using a sample of 1,300 franchisors active during 1980 through 2000, the a ..."
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Current explanations for franchising assume that managers only pay attention to firm-specific economic factors. In contrast, the authors submit that social factors described by institutional theory will enhance understanding. Using a sample of 1,300 franchisors active during 1980 through 2000, the authors find evidence that both environmental and internal institutional pressures influence firms ’ propensity to franchise, but that responsiveness to internal institu-tional pressures declines as economic reasons to franchise increase. Overall, social factors appear to actively influence franchising, but their impact is muted by economic factors. The results also suggest that perhaps franchising is itself becoming an institutionalized norm. For researchers, institutional theory promises to be a fruitful avenue for increasing understanding about franchising. For franchisors, results highlight the value of systematic analysis of franchising decisions.
MODEL TO THE CORPORATE CONTEXT: IMPLICATIONS FOR THE PERFORMANCE OF CORPORATE VENTURE UNITS
"... Transferability of the venture capital model to the corporate context: Implications for the performance of corporate venture units ..."
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Transferability of the venture capital model to the corporate context: Implications for the performance of corporate venture units
REAL OPTIONS LOGIC REVISITED: THE PERFORMANCE EFFECTS OF ALTERNATIVE RESOURCE ALLOCATION REGIMES
"... We delineate three dimensions of resource allocation behavior that allow us to distin-guish between real options logic and alternative resource allocation regimes: sequenc-ing, low initial commitment, and reallocation. We then measure these in a product innovation context to test for the performance ..."
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We delineate three dimensions of resource allocation behavior that allow us to distin-guish between real options logic and alternative resource allocation regimes: sequenc-ing, low initial commitment, and reallocation. We then measure these in a product innovation context to test for the performance effect of real options logic vis-à-vis its alternatives. Sequencing, which distinguishes dynamic allocation regimes more gen-erally, is associated with higher new product sales. Low initial commitment and reallocation do not show individual direct effects on new product sales. However, when assessed as a match, we find that the fit between low initial commitment and reallocation (yes–yes; no–no) increases performance significantly. After controlling for such fit as well as sequencing, we find no significant performance difference between real options logic and other regimes. Our findings imply that insufficient identifica-tion of real options logic picks up confounding effects, which may provide an expla-nation for the inconclusive results in prior studies of real options and performance. In addition to bounding the concept more precisely, we contribute to theory by situating real options logic within the broader set of allocation regimes conducive to innovation performance in uncertain, competitive markets. Our aim in this paper is to delineate elements of real options logic that distinguish it from other resource allocation regimes, in order to test for performance effects. We are motivated by the re-cent debate on the usefulness of real options per-spectives for explaining performance differen-tials in competitive market environments (Adner
A Service of zbw Leibniz-Informationszentrum Wirtschaft Leibniz Information Centre for Economics On the sunk-cost effect in economic decision- making: A meta-analytic review Business Research Provided in Cooperation with: VHB -Verband der Hochschullehrer
, 2015
"... Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, ..."
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Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract Although the effect of monetary sunk costs on decision-making is widely discussed, research is still fragmented, and results are sometimes controversial. One reason for this incomplete picture is the missing differentiation between the effect of sunk costs on utilization and progress decisions and its respective moderators. This article presents the results of a meta-analytic review of 98 effect sizes of the sunk-cost effect, with special emphasis on the decision-specific influence of moderators. The results show clear evidence that the sunk-cost effect emerges, though its effect size and the influence of the moderators are contingent on the respective decision type. In particular, we find support for the idea that the sunkcost effect is attenuated by time in utilization decisions. The results also reveal that older adults are less likely to fall prey to the sunk-cost effect than younger adults. Terms of use: Documents in EconStor may
Association of Researchers in Construction Management
"... Construction projects routinely overrun their cost estimates. A plethora of studies have thus been dedicated to investigating the root causes, sizes, distribution and nature of overruns. The causes range from a poor understanding of the impact of systemicity and complexity projects, unrealistic cos ..."
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Construction projects routinely overrun their cost estimates. A plethora of studies have thus been dedicated to investigating the root causes, sizes, distribution and nature of overruns. The causes range from a poor understanding of the impact of systemicity and complexity projects, unrealistic cost targets and misguided trade-offs between project scope, time and cost to suspicions of foul play and even corruption. In spite of the vast attention dedicated to the problem of cost overrun, there has been limited evidence to support the claim that the size or occurrence of cost overruns is reducing in practice. A review of the literature reveals that it may not be an exaggeration to claim that the bulk of our current cost overrun research may be largely inadequate and deficient to deal with the complexity posed by construction projects. This paper provides a critique of current cost overrun research and suggests that the adoption of systems thinking is required to better understand the nature of cost overruns. We explore some of the embedded methodological weaknesses in the approaches adopted in a majority of cost overrun research, particularly the lack of systems thinking and demonstrable causality. We reach the following conclusioncost overrun research has largely stagnated in the refinement and advancement of the knowledge area. It has largely been superficial and replicative. A significant paradigm and methodological shift may be required to address this perennial and complex problem faced in construction project delivery.
IF THEY CAN DO IT, WHY NOT US? COMPETITORS AS REFERENCE POINTS FOR JUSTIFYING ESCALATION OF COMMITMENT
"... This study highlights competitive market conditions as an important structural deter-minant of escalation of commitment. Bridging escalation behavior literature and competitive dynamics research, we argue that reference to certain rivals may enable or disable decision makers to justify continuing in ..."
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This study highlights competitive market conditions as an important structural deter-minant of escalation of commitment. Bridging escalation behavior literature and competitive dynamics research, we argue that reference to certain rivals may enable or disable decision makers to justify continuing investment in an underperforming ini-tiative, thereby influencing a firm’s tendency toward escalating commitment. We test our ideas using data on a set of leading companies in the information technology industry and their investment activities in China. Empirical analysis reveals strong evidence that a firm’s escalating tendency is increased by larger competitors ’ high action volume and smaller competitors ’ positive performance. In contrast to prior research focus on decision makers ’ persistence irrespective of external cues, we also find that a firm’s escalation behavior is decreased by larger rivals ’ negative performance. When firms enter an unfamiliar territory such as a new overseas location, investing sequentially al-lows them to adjust their investment plans for each
