Abstracts
Abstracts
SESSION 1: Clusters and Entrepreneurial Dynamics
Path Dependence and the Development of Regulative Institutions Affecting Entrepreneurial Firms in Central and Eastern European Economies
Nir Kshetri, University of North Carolina at Greensboro
nbkshetr@uncg.edu
Abstract:
Central and Eastern European (CEE) economies differ significantly in terms of the development of formal institutions to support private enterprises. We use publicly available micro-level data to examine the differential rate of development of regulative institutions in CEE economies. We compare firms’ perceptions of various components of formal institutions in economies in the Orthodox countries and the Latin countries. Our data are from the World Bank’s World Business Environment Survey, which was administered during 1999-2000. We found that private businesses perceive the state more favorably in terms of regulatory, participatory and supportive roles in the Latin group than in the Orthodox group.
Keywords: Path dependence, Central and Eastern European Economies, Latin countries, Orthodox countries, regulative institutions, regulatory role, participatory role, supportive role
Organizational dynamic capabilities and the evolution of corporate entrepreneurship in emerging markets: A case study of Chinese automobile companies
Crystal Xiangwen Jiang, Bryant University
Chun Guo, University of Massachusetts-Amherst
Qin Yang, Robert Morris University
cjiang1@bryant.edu
Abstract:
Although emerging economies have experienced a rapid pace of economic growth and entrepreneurship plays a prominent role in its development, little is known about the corporate entrepreneurship process in emerging economies. This study examines whether corporate innovation, venturing and strategic renewal activities vary at different stages of corporate entrepreneurship. In addition, it further explores what specific dynamic capabilities such as technology-related, marketing-related and management-related capabilities matter to the organization’s entrepreneurial activities in the initiation, development and implementation stage. Based on our case analyses of a few leading automobile companies in China, we examine the evolution of corporate entrepreneurship in emerging market firms. This study enriches our understanding of corporate entrepreneurship in emerging contexts not only by capturing the dynamic process of entrepreneurship but also illustrating the detailed impact of specific capabilities on entrepreneurial activities.
Keywords: Corporate entrepreneurship, process, dynamic capability, evolution, emerging economy
Cluster Lifecycle and Diaspora Effects: Evidence from the Indian IT Cluster in Bangalore
Petra Sonderegger, Indian Institute of Management, Bangalore
Florian Täube, European Business School florian.taeube@ebs-siie.de
Abstract:
The role of local clusters has been of interest to scholars and policymakers in international business alike. Research found that clusters enable a region to develop faster compared to dispersed economic activity, mainly based on a local concentration of competing and cooperating firms and sophisticated domestic demand. For managers, it could be inferred that locating in a cluster has certain benefits and result in higher innovation output stemming from pooling of human capital and supporting institutions that vary by industrial and international specialization. In this paper, we complement the local view of clusters with the role of non-local linkages, namely Diaspora, in a life-cycle model of the cluster. We illustrate our model with the case of the evolution of the Bangalore IT cluster and find that both local and non-local networks and firms play their roles, which differ across life-cycle phases. Findings suggest that non-local factors can accelerate growth and bridge weaknesses in local clusters. However, local resources, institutions and networks remain crucial to a cluster's emergence and long-term success. We then discuss managerial implications and opportunities for future research.
Keywords: Cluster life cycle, Diaspora, local networks, “small ethnic worlds”, Bangalore
From Blind Spots to Hot Spots: How New Offshore Service Clusters Emerge and Attract Foreign Investment
Arie Lewin and Stephan Manning, Duke University
sdm24@duke.edu
SESSION 2: Entrepreneurship: Cultural and Institutional Contexts
Direct Selling in the Amazon: Global Entrepreneurship in an Emerging Economy
Jessica Chelekis, Indiana University
Susan M. Mudambi, Temple University
susan.mudambi@temple.edu
Abstract:
To explain the rise of direct selling networks of women in emerging countries, we introduce several propositions that build on a unifying theory from anthropology, the global structure of common difference (Wilk 1995). Specifically, we propose: (P1) Customer identification with global ideals of beauty and femininity, fueled by media access, leads to a higher level of embracing global brands; (P2) Customer desire to express local differences in ideals and values leads to narrower and adapted product choices; and (P3) Higher levels of direct selling occur in areas with (a) few other income opportunities for women, and (b) higher consumer access to IT and global media. We apply and test these propositions in an ongoing case study of direct sellers of Avon and other products in the remote Brazilian town of Ponta de Pedras. Preliminary results indicate that sales representatives and customers leverage a system of a global framework and local values, to the economic benefit of the individuals and the region. In this area, Western multinational direct sales companies such as Avon and Tupperware compete with Brazilian firms such as Hermes and Natura and provide growing entrepreneurial opportunities to women, even in remote areas. Future research will examine seller motivation and the spillover effect on the overall entrepreneurship culture.
Keywords: Marketing at the Base of the Pyramid, entrepreneurship, emerging economies, direct selling
Diaspora Transnational New Ventures in Emerging Markets: The Role of Business Incubators
George A. Hrivnak, Jr., Tjai M. Nielsen and
Liesl Riddle, The George Washington University
lriddle@gwu.edu
Abstract:
How can business incubators help transnational entrepreneurs overcome the obstacles that they face as they build their multi-territorial ventures? We apply Bergek and Norrman’s (2008) assessment framework to the case of IntEnt, an incubator offering services exclusively to transnational entrepreneurs. We demonstrate how multi-territorial stakeholders shape transnational incubators’ goals, models, and outcomes. We suggest that when transnational ventures involve weak institutional domains, an incubator’s goals, model, and outcomes may be broadened to encompass not only entrepreneurial support but also institutional development. Implications for theory and future research are discussed.
Keywords: Incubator, Transnational Entrepreneurship, Selection, Business Support, Mediation
Entrepreneurial orientation as a function of national cultural variations in two countries
Andreas Engelen, University of Aachen (RWTH)
engelen@win.rwth-aachen.de
Abstract:
Building on a large-scale survey study in Germany and China, this research develops and validates a model of internal variables fostering entrepreneurial orientation. The objective of the research is to understand the extent to which organizational mechanisms such as organizational structure or leadership style that underlie entrepreneurial organizations are universal or, alternatively, contingent on national culture. The findings of this study indicate that some components are universal and some are contingent on culture. For instance, cross-functional integration, consideration, and development culture impact most entrepreneurial orientation’s dimensions across cultures positively, whereas centralization does so negatively, suggesting strong similarities of entrepreneurial organizations. On the other hand, participation exerts an influence on entrepreneurial orientation in Germany only. Further, differences in the strength of relationships exist: cross-functional integration and consideration have stronger effects in China compared to Germany. One major implication is that commonalities of entrepreneurial organizations are generally not strong enough to completely outweigh the influences of national culture. This research provides managers with knowledge about how to foster the degree of entrepreneurial orientation in their internationally operating businesses.
Keywords: Entrepreneurial orientation, national culture, China, organizational structure
SESSION 3: Entrepreneurship in MNC Networks
Functional Innovation, Bargaining Power and Value Appropriation of Emerging Economy Exporters
Pham Thi Song Hanh, Sheffield University
Ram Mudambi, Fox School of Business, Temple University
Bent Petersen, Copenhagen Business School
bp.smg@cbs.dk
Abstract:
In order to accrue economic rent a firm not only has to create value for its customers, it must also be capable of appropriating this value. Without possessing value appropriation capabilities the firm is at risk of passing on the created value to its suppliers, customers or competitors. There is ample evidence that emerging economy firms inserted in global value chains generally have difficulties in appropriating the added value they create - either due to a very competitive industry structure with low entry barriers and numerous suppliers, or because buyers are controlling critical resources, such as strategic information about, and access to, end-users. This study explores two basic initiatives emerging economy firm may take to achieve higher value appropriation. One initiative is to appropriate more value from existing activities - typically assembly manufacturing - by acquiring more market knowledge and better negotiation skills. In this way bargaining power improves vis-à-vis buyers and emerging economy firms achieve more equal gains from the global value chain. Another initiative of emerging economy firms is to embark on functional innovation, i.e. engage in new business activities that are less exposed to fierce price competition and therefore more lucrative. We test to what extent the two basic value appropriation initiatives have a positive effect on export performance of Vietnamese wood furniture manufacturers inserted in global value chains. 302 manufacturing companies were asked about functional innovation in terms of the extent to which they had engaged in export-related down-stream activities (i.e. export marketing and sales) and export market intelligence. The companies also reported their negotiation skills (self-assessment) and export performance. The results of a path analysis (AMOS, SPSS) suggest that both of the two value appropriation initiatives have positive pay-offs inasmuch as they improve export performance significantly, though with bargaining power improving measures as the more rewarding initiative. Furthermore, the two initiatives are to some extent mutual supportive in achieving higher value appropriation.
Creating Subsidiary Entrepreneurship: The Mediating Effects of Subsidiary Entrepreneurship on Context and Contribution
Pamela Scott-Sharkey, Dublin Institute of Technology
Patrick Gibbons, University College Dublin
Joseph Coughlan, Dublin Insitute of Technology
pamela.sharkeyscott@dit.ie
Abstract:
Despite its theoretical and managerial significance, subsidiary entrepreneurship remains underexplored in the literature. We theorise that subsidiary entrepreneurship is a mediating variable through which subsidiary context influences subsidiary contribution to the MNC, particularly subsidiary strategy creativity, a measure not previously investigated. We test our propositions on data generated from surveying the total population of Irish subsidiaries of foreign MNCs, using structural equation modelling, and find strong support for our theoretical predictions. We then discuss the managerial implications of subsidiary entrepreneurship in generating creative strategy and improving performance.
Keywords: Subsidiary, Entrepreneurship, Strategy Creativity
FDI entry modes and the relevance of host country differences
Isabel Alvarez, Uiversidad Complutense de Madrid
Raquel Marin, Universidad Complutense de Madrid
isabel.alvarez@ccee.ucm.es
Abstract:
Foreign direct investment (FDI) flows have contributed to the productive and technological upgrading of many host economies, whereas the discussion about the entry modes of multinational companies (MNC) and developmental effects is far from being concluded. Our aim is to exam the relative importance of host country differences in the understanding of FDI configuration and their modes of entry, considering cross-border merger and acquisitions (M&A) explicitly. The paper explores the interplay between the effects of FDI in locations and to what extent the structural transformations in host countries could raise their capacities for the attraction of FDI via M&A. We hypothesise that, adopting a dynamic perspective, the behaviour of inward FDI and a country’s level of development would describe a co-evolutionary process in which institutional stability and the consolidation of absorptive capacities become key driver mechanisms. The empirical analysis is built upon a sample of countries with dissimilar level of development using longitudinal data for the period 1998-2004. The findings confirm that the relative weigh of host countries characteristics may differ for cross-border M&A, being noticeable the diversity of the developing world and the potential of emerging economies, supporting the need to investigate new drivers for the attraction of FDI.
Keywords: Absorptive capacities, Development, Entry mode, FDI, Greenfield, M&A
Modes of International External Technology Innovation: Evidence from Emerging and Industrialized Economies
Malika Richards, Penn State University-Berks
Yi Yang, University of Massachusetts
mur12@psu.edu
Abstract: We investigate the factors that may influence a firm’s choice of external technology innovation in foreign countries. Grounded in the eclectic theory, we examine the impact of three firm-level ownership endowments—technological competency, organizational slack, and firm size, as well as location factors on such decisions. Our results provided mixed support for the notion that firms with technological competency, organizational slack, and large size would employ higher-control governance modes in international external technology innovation. Specifically, companies with technological competency tend to use high-control governance modes, such as R&D joint ventures, rather than corporate venture capital (CVC) investments or non-equity R&D alliances, when taking on external technology innovation in foreign countries. Larger firms and those with organizational slack seem to favor riskier modes, yet those with quicker access to external technology innovation. For these firms, CVC investments are preferred to non-equity R&D alliances and R&D joint ventures. Cultural distance does not play an important role in moderating the above relationships, but is an important factor by itself. In culturally distant locations, multinationals are more likely to use joint ventures than CVC investments. In addition, multinationals tend to use a low-control governance mode when they participate in countries with high levels of economic development.
Keywords: International R&D collaboration, Governance mode, Eclectic theory
SESSION 4: Panel Discussion
Beyond Silicon Valley: Emerging Economies and Global Entrepreneurship
Ram Mudambi, Temple University: Moderator
Panelists:
Mercedes Delgado, Temple University
Masaaki 'Mike' Kotabe, Temple University