Charles E. Stevens

The Liability of Home: Institutional Friction and Firm Disadvantage Abroad

The international business literature has long acknowledged that firms face disadvantages when engaging in business abroad. This disadvantage is expressed in such constructs as the costs of doing business abroad, the liability of foreignness and the country-of-origin effect; however, none of these constructs fully captures the potential liability associated with the home base of the multinational enterprise. We develop a new construct, liability of home, aimed at filling this gap, providing insights into the theory and practice of international business.

Tether or Stepping Stone? The Relationship between Perceived External Reputation and Collective Voluntary Turnover Rates

Signaling theory suggests that resources such as firm reputation can send multiple signals that create dual pressures on stakeholders. These tensions are apparent when examining the relationship between a firm’s reputation and the collective voluntary turnover rates it experiences. On the one hand, a favorable reputation may tether employees to the firm due to the perceived desirability of working for a reputable company, resulting in lower voluntary turnover rates. On the other hand, a favorable reputation may make employees believe they are more marketable and thus may serve as a stepping stone relating to higher voluntary turnover rates. The purpose of this study is to investigate whether and when reputation acts as a signal of desirability or a signal of ease of movement in predicting collective voluntary turnover rates. We find some evidence for an overall tethering effect for more reputable firms. In addition, our findings demonstrate that reputation is more likely to result in stepping stone effects in certain signaling environments including when firms are in more munificent industries, are younger, and have higher pay levels. Tethering effects are observed when firms are in less munificent industries, are older, and have lower pay levels.

Drivers of Collective Human Capital Flow: The Impact of Reputation and Labor Market Conditions

An emerging body of research examines collective human capital flow via context-emergent turnover (CET) theory, which builds on resource-based theory and the literature on human capital. CET theory indicates that collective human capital flow—or employee movement into and out of organizations—is of growing significance to scholars and practitioners given the effects that it has on important organizational outcomes. Yet, a better understanding of what drives systematic variance in collective outflows and inflows is needed so that employers can strategize and plan ways to manage human capital flow. We use CET theory to highlight the role of a firm’s reputation as an antecedent to human capital flow. Moreover, because CET theory emphasizes the significance of context, we consider how labor market conditions change the nature of these relationships. We predict and find that a positive reputation helps employers reduce several types of collective human capital flow, yet more reputable employers are better able to do so in slack, rather than tight, labor markets. These results shed light on the importance of context on collective human capital flow and indicate the potential of CET theory to understand not only the consequences but also the drivers of collective movement in and out of organizations.