[Abstract] Leveraging the recent research interest in emerging economies, this Perspective paper argues that an institution-based view of international business (IB) strategy has emerged. It is positioned as one leg that helps sustain the “strategy tripod ” (the other two legs consisting of the industry- and resource-based views). We then review four diverse areas of substantive research: (1) antidumping as entry barriers, (2) competing in and out of India, (3) growing the firm in China, and (4) governing the

“What determines the scope of the firm? ” is one of the most fundamental questions in strategic management. We argue that, in addition to product relatedness, a focus on institutional relatedness—defined as an organization’s informal linkages with dominant institutions that confer resources and legitimacy—helps answer this question. We address this question both longitudinally (firms in developed and emerging economies over time) and cross-sectionally (developed versus emerging economies), thus contributing to an institution-based theory of corporate diversification. As part of the broader intellectual movement centered on new institutionalism throughout the social sciences in recent decades (North, 1990; Powell & DiMaggio, 1991; Scott, 1995; Williamson, 2000), strategic approaches to organization are considering institutional forces much more explicitly than before (Henisz, 2003; Oliver, 1997; Peng, 2003, 2006). Researchers increasingly realize that institutions are more than background conditions and that “institutions directly determine what arrows a firm has in its quiver as it struggles to formulate and implement strategy” (Ingram & Silverman, 2002: 20; emphasis added). Positioned to deepen our understanding of how an institutional perspective adds to strategy re-

Do outside directors on corporate boards make a difference in firm performance during institutional transitions? What leads to the practice of appointing outside directors in the absence of legal mandate? This article addresses these two important questions by drawing not only on agency theory, but also resource dependence and institutional theories. Taking advantage of China’s institutional transitions, our findings, based on an archival database covering 405 publicly listed firms and 1211 company–years, suggest that outsider directors do make a difference in firm performance, if such performance is measured by sales growth, and that they have little impact on financial performance such as return on equity (ROE). The results also document a bandwagon effect behind the diffusion of the practice of appointing outsiders to corporate boards. The article not only highlights the need to incorporate multiple theories beyond agency theory in corporate governance research, but also generates policy implications in light of the recent trend toward having more outside directors on corporate boards in emerging economies. Copyright © 2004 John Wiley & Sons, Ltd. Do outside directors on corporate boards make a difference in firm performance? Agency theory suggests that a board comprised of a greater proportion of outside directors, due to their presumed independence, may theoretically lead to better firm performance (Jensen and Meckling, 1976; Shleifer and Vishny, 1997). However, empirical researchers report that overall, there is little significant relationship between outside directors and firm performance (Dalton et al., 1998; Finkelstein and Hambrick, 1996). Consequently, Dalton et al. (1998: 285) argue that ‘consideration of multiple theories [beyond agency theory]... may lead to a more complete understanding. ’ We agree, and add that Key words: outside directors; firm performance; institutional transitions; China

www.jibs.net Since the 1990s, Central and Eastern Europe (CEE) has provided unique societal quasi-experiments, which represent opportunities to test the applicability of existing theories in international business and management studies and to develop new ones. Specifically, three lines of theorising have been advanced: (1) organisational economics theories; (2) resource-based theories; and (3) institutional theories. For each of these theories, we discuss how they contribute to the understanding of key issues, such as entry strategies of foreign investors, restructuring strategies of local incumbents, and entry and growth strategies of entrepreneurs. On this basis, we assess how CEE research has influenced the overall trajectories of theory development. CEE research has in particular highlighted the importance of contextual influences such as institutions. Thus, scholars have aimed at incorporating institutions into theories (such as organisational economics theories and resource based theories) and advancing an institution-based view of business strategy as a complementary perspective. We outline how future research in CEE and other emerging economies may advance this research agenda further.

0238820). All views expressed are ours and do not necessarily represent those of the funding organizations. INTERNATIONAL JOINT VENTURES AND THE VALUE OF GROWTH OPTIONS Real options theory predicts that international joint ventures (IJVs) confer valuable growth options to firms, yet there has been no direct evidence on whether firms actually capture growth option value from such investments or under what conditions. We bridge the gap between theory and evidence by empirically testing this prediction, and we also develop the theoretical arguments that an IJV’s ownership structure, product market focus, and geographic location are important contingencies affecting the value of embedded growth options. The empirical evidence confirms that IJVs do enhance firms ’ growth option values, but only under certain circumstances. Specifically, minority IJVs and diversifying IJVs contribute to growth option value, but other types of IJVs do not. The findings also challenge recent claims on the growth option value of investments in emerging economies. Key words: International joint ventures; real options theory; growth option value; international

Abstract. This article contributes to the literature on network strategies and institutional transitions in emerging economies in Asia by identifying a realistic, intermediate phase between the early and late phases of institutional transitions suggested by Peng (2003). Focusing on the intermediate phase, we advance two arguments based on network strength and network content. First, in terms of network strength, we leverage earlier insights that networks can be classified as strong ties and weak ties. Consequently, we suggest that as institutional transitions unfold, strong-tie-based networks, instead of being phased out, are being transformed into weak-ties-based networks. Second, from a network content standpoint, we argue that the various scale and scope of institutional transitions shape the content of different networks which focus on business-to-government (B2G) ties and business-to-business (B2B) relationships. Our propositions delineate how different transitions of political and legal institutions affect the evolution of B2G and B2B networks. Overall, we suggest that networks not only differ in strength but also in content, and that their evolution is driven by the impact of different dimensions of institutional transitions governing B2G and B2B relationships.

Abstract. This article focuses on a key question: Why do strategies of firms from different countries differ? Drawing from recent research on business strategies in Asian organizations, this article outlines the emergence of an institution-based view of business strategy which sheds light on why firms differ, reviews four streams of research in a broad range of countries, and critiques and extends some of the current work by suggesting a number of future research directions. Keywords: institution, business strategy, Asia This article focuses on a key question: Why do strategies of firms from different countries and regions differ? This is the very first question among the five most fundamental questions in strategic management raised by Rumelt, Schendel and Teece (1994:564). 1 Since the diversity of firm strategies around the world can arise as the result of many possible forces internal or external to the organization, this question engenders a wide variety of disparate answers from economists (Nelson, 1991) and sociologists (Carroll, 1993). Thus far, strategy researchers have primarily focused on industry conditions (Porter, 1980) and firm resources (Barney, 1991) as drivers of firm differences, leading to competition- and resource-based

The capitalist and socialist societies of the 20 th century assigned firms different roles within their economic systems. Enterprises transforming from socialist to market economies thus face fundamental organizational restructuring. Many former state-owned firms in the transition economies of Central and Eastern Europe have failed at this task. These firms have pursued primarily defensive downsizing, rather than strategic restructuring, as a result of both internal and external constraints on restructuring strategies. Building on the organizational learning and resource-based theories, we analyze strategies available to management in privatized, former state-owned enterprises in transition economies to restructure their organization. Both internal forces promoting or inhibiting the restructuring process, and external constraints arising in the transition context are examined. A model and testable propositions are developed that explain post-privatization performance. Implications of our research point to the ways in which firms should manage and develop their resource base to transform to competitive enterprises.

Buckley (2002) argues that the international business (IB) research agenda may be running out of steam, because no big research question has currently been identified. Buckley also asks whether the field needs a big question, and if so challenges IB scholars to discover it. Buckley and Ghauri (2004) elaborate on the third question of globalization discussed in Buckley (2002) as a possible candidate for the big question. In response, this article is written to take up Buckley’s challenge and also to comment on Buckley and Ghauri’s more recent work. I agree that IB needs a big question, the pursuit of which can serve to unite and energize scholars, make scientific progress, and enhance the status and prestige of the field. Toward that end, I argue that ‘What determines the international success and failure of firms?’ has always served as a fundamental research question, which has permeated IB research in the past and present and is likely to propel its progress in the future. Therefore, I am of the opinion that the IB research agenda is not likely to run out of steam, because focusing on this question will leverage IB’s comparative advantage and keep the field engaged in generating exciting and disciplined theories and findings in the 21st century.

Abstract not found