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PurposeThis study seeks to explicate how institutional disruptions impact multinational corporation (MNC) subsidiary control choices. It uses institutional theory to understand the influence of formal and informal institutions across countries on the type of control system employed in an MNC manufacturing subsidiary.Design/methodology/approachThis study's sample is based on a unique dataset from five trustworthy sources. We use multi-level models to account for the hierarchical nature of the sample of 1,630 multinational subsidiaries spread across 26 host countries by firms from 21 home countries.FindingsThe institutional distance between the host and the home country has a negative relationship with strategic control. In contrast, the home country's power distance has a positive relationship with strategic control.Originality/valueStudy findings indicate the need to incorporate formal and informal institutional elements in the control system's conceptual framing and design. This notion complements existing visualizations of optimizing MNC controls through extant articulations of minimizing governance costs through organizational design choices or strategic needs.

This study tests for the relationship between internationalization and performance in the emerging market context using a sample of 719 firms from 12 emerging markets. This study also incorporates the quality of governance in the emerging market studied to test for the interactive influence of the environmental context on the internationalization performance relationship. Findings indicate support for an inverted U‐shaped relationship between internationalization and performance for manufacturing firms and a positive linear relationship for service firms. In explaining the relationship between internationalization and performance, the quality of governance of the home country of the firm was found to interact with internationalization.

PurposeInternational strategy literature has shown that market context varies in terms of importance to international operations and competition. The purpose of this paper is to examine the role of market context in influencing the relationship between internationalization and performance.Design/methodology/approachUsing cluster analysis, this study categorizes market context into two distinct groups: global and multidomestic. Later, it investigates the internationalization‐performance relationship for 263 firms distributed across two market contexts.FindingsSupport for an inverted U‐shaped relationship was found in the case of market contexts which have global characteristics, while a U‐shaped relationship was found in the market contexts which have multidomestic characteristics. Additionally, findings indicate that the moderating influence of diversification on the internationalization‐performance relationship varies by the market context of the firm.Originality/valueThe paper seeks to contribute to one of the most critical issues in the international strategy literature, namely, the linkage between internationalization and firm performance. While many studies have been conducted on the topic of internationalization and performance, specific research linking market context and the internationalization‐performance relationship has been lacking. The paper's findings offer strong support to the notion that the nature of the relationship between internationalization and performance varies by market context. Implications for managerial and researchers are presented.

PurposeIn this paper, the authors aim to introduce the notion of region of origin effect and articulate why home region boundaries should be factored in when understanding firm strategy and outcomes.Design/methodology/approachThe paper validates the region of origin effect on internationalization using a sample of 11,677 firms from 99 developing countries in a multilevel model, with both frequentist and Bayesian approaches.FindingsThe findings of this paper indicate consistent support for the notion of region of origin effect. The relative importance of direct region effects in explaining variation in firm internationalization was found to be 17.8 per cent. When indirect effects (i.e. varying slopes) were factored in, the relative importance was 16.6 per cent. Additionally, the findings show that the region of origin effect impacts the degree of strength of the well-established firm drivers of internationalization.Originality/valueAlthough the importance of the home region location is well known to researchers and practitioners of international business, it has not received the attention it deserves. The findings of this paper clearly demonstrate the need for researchers and practitioners to recognize the role of the region of origin effect in formulating and implementing global strategies.

The previous decade has been characterized by emerging market firms expanding into international markets. This trend has led to scholars in the IB arena to grapple with the new phenomenon of emerging multinational enterprises (EMNEs), specifically the relationship between internationalization and performance of the EMNEs. This paper seeks to add to the literature by capturing the impact of firm resources on the internationalization‐performance relationship. Empirical analysis on a sample of 787 Indian manufacturing firms indicates that there is a non‐linear relationship between internationalization and performance. Findings also indicate that a firm's capabilities in cost efficiency and marketing have a moderating impact on this relationship.

Purpose
– The importance of regional strategy as a separate paradigm in the international business literature has grown in recent years, and the initial connections between regionalization and firm performance appear promising. What is lacking, however, is an empirical analysis quantifying the impact of regional effects on firm profitability. This topic is an important one for the field of international business, as drivers of firm profitability are some of the key motivators of research in international strategy. The aim of this paper is to empirically quantify the role of regional effects on the performance of service firms in a manner such that regional effects can be directly compared with country and firm effects on firm profitability.


Design/methodology/approach
– Using a hierarchical linear model (HLM) with four levels, the proportion of variation driven by regional effects is estimated. These estimates are obtained from a data panel of 48,083 units from 7,129 service firms across the three triad regions (North America, Europe, and Asia Pacific) over a ten-year time-frame (1999-2008).


Findings
– It was found that regional effects, in terms of relative importance, explain approximately 9 percent of the variance in firm performance. This pattern of results is consistent when the analysis was conducted during periods of increasing or decreasing profits, firm type, and ownership structure.


Originality/value
– Within the context of international business, work on regional strategy/regionalization has emerged as a separate stream of literature. This study is one of the first to quantify the influence of regional effects on performance using a 4-level HLM model. Additionally, this paper demonstrates the application of a 4-level model, potentially increasing awareness of this technique and usage in other multilevel topics in the IB literature, which offers several avenues for future research.

Purpose
The purpose of this paper is to introduce the notion of social responsibility skepticism (SRS) and demonstrate its importance to the existing social responsibility literature. Stakeholder-emphasizing perspective (STEP) and shareholder-emphasizing perspective (SHEP) are tested as independent constructs that both serve to reduce skepticism. SHEP, STEP and SRS are shown to be interrelated but independent ideas.


Design/methodology/approach
The study is based on a primary questionnaire survey of managers. Multivariate regression analysis is used for analysis, level of management is a moderating variable and age and gender are control variables.


Findings
Managers who accept either the shareholder emphasis or the stakeholder emphasis have lower social responsibility skepticism. STEP and SHEP appear to be two independent constructs that both serve to reduce skepticism, although STEP is slightly more effective. The relationship is stronger for STEP managers and for higher level managers.


Research limitations/implications
Findings may be influenced by the existing political or business milieu. Findings on the moderating effect of level of management and age may reflect generational differences. Changes in gender roles may also affect findings.


Practical implications
Acceptance of management theories oriented either toward a stakeholder perspective or a shareholder perspective is associated with less skepticism. The legitimacy and value of each perspective should be acknowledged.


Social implications
Managers require support for decisions taking social responsibility into account. This study demonstrates that grounding in stakeholder theory or shareholder theory can reduce SRS.


Originality/value
This study introduces the new concept of SRS and provides a scale to measure this new variable. New scales are also provided for SHEP and STEP. Both perspectives negate tendencies toward SRS.

ABSTRACTThis article investigates whether international operations of service firms increase performance while reducing risk. The article draws on a longitudinal dataset of 584 internationally operating service firms from the United States. Analysis indicates that international diversification is negatively related to risk‐adjusted performance. However, it is established that international diversification interacts with internationalization and positively influences risk‐adjusted performance. This finding offers significant promise for firms, as it indicates that international operations (if managed well), through exposure to varied foreign markets coupled with adequate global scope, can lead to firms' increased risk‐adjusted performance. The results provide a mechanism for decision‐makers to better understand international operations of service firms and present a strategy for achieving success in international markets by effectively managing two important levers: internationalization and international market diversification.