José Pla-Barber

Strategic Variables That Influence Entry Mode Choice in Service Firms

This work investigates how a firms international strategy affects choice of entry mode in the service sector. The inherent complexity associated with studying a heterogeneous sector such as services requires researchers to investigate variables that go beyond those drawn from traditional empirical work on the manufacturing sector. The adoption of a broader theoretical perspective and the introduction of these new variables may well provide further evidence of the determinants of service firms’ entry mode choices. On the basis of 174 entry decisions of service firms, this studys results support the necessity of including additional strategic variables that specifically address this complex phenomenon, a decision that is not always associated just with efficiency and value-based considerations but with strategic issues as well. In addition, some variables that are routinely used in studies of the manufacturing sector were not significant or exhibited different results in different groups of service activities.

Accelerated internationalisation: evidence from a late investor country

Purpose – Recent studies are trying to adapt the explanation of the internationalisation process to new environmental conditions. This paper aims to offer evidence of the existence of a group of firms that use a speeded‐up internationalisation process.Design/methodology/approach – Cluster analysis and logit regressions are used on a sample of 271 Spanish export firms.Findings – The results obtained support the claim that substantial differences do exist between fast and gradual internationalising firms. The firms included in the more international active group are characterised by: a proactive attitude on the part of managers with regard to internationalisation activities, a strategy based on marketing differentiation advantages and strong relationships with clients and suppliers, which encourage or facilitate their international activities.Practical implications – The results may favour reflection upon what are the most important factors for achieving an active, international strategy and how to respond ...

The internalisation of foreign distribution and production activities: New empirical evidence from Spain

This paper, using a logit model applied to a sample of 323 Spanish companies with international activities, analyses the key factors in the creation of sales and production subsidiaries. A high degree of fit between the results and the established hypotheses can be observed. Many interesting findings related to the main streams of entry mode research (Transaction Cost Theory and the Uppsala Model) have been supported. The intangibility and tacit nature of the products/processes involved in the foreign venture have been directly associated to wholly owned sales and production subsidiaries. Moreover, modes of entry used by Spanish firms are adapted as an incremental, experiential learning process. Finally, we did not find evidence of a relevant influence of global or multidomestic strategies on the participation of Spanish companies in international networks.

Investment and Control Decisions in Foreign Markets: Evidence from Service Industries

We empirically investigate the entry mode choice in the service sector. In contrast to current models, we propose a model for choice of entry mode that breaks down the decision into two levels of analysis: first, at the more macro level, the choice of the degree of commitment is influenced mainly by country-related variables; second, at the more micro level, the choice of the degree of control is addressed by firm-related variables. Based on a sample of 328 foreign market entries, our study contributes to the literature of entry mode in two ways: first, by showing the explanatory capacity of the hierarchical model in the analysis of entry mode choice in the service sector; and second, through identifying and analysing the moderating role of two important contingencies in this decision – capital intensity and degree of customization. Moreover, the study advances our knowledge of some of the particularities in the internationalization of service firms.

Entry mode choice in the internationalisation of the hotel industry: a holistic approach

This paper empirically investigates the entry mode choice in the hotel industry. Based on more than 1200 entry decisions, which covers practically all operations carried out by the majority of Spanish hotel chains up to 2009, the study attempts to (a) identify the factors that influence the mode choice of incorporating each new hotel within the chain and (b) to reflect the specific nature of the hotel industry with regard to the results obtained from samples of other industries. The results suggest the importance of considering a holistic approach that facilitates the understanding of a complex phenomenon which is not always explained just by efficiency considerations. Additionally, the results show that some arguments used in manufacturing firms cannot be directly transferred to the hotel industry because unique characteristics of these special services condition the entry mode choice into international markets.

Organisational learning capability, product innovation performance and export intensity

The hypothesis that managerial characteristics which facilitate the organisational learning process can provide firms with a basis for competitive advantage has received a great deal of attention. While there is evidence that organisational learning affects export intensity, we argue that intermediate variables, such as innovation, should be used in order to evaluate its impact in organisations. This study shows that firms with a higher organisational learning capability tend to be more innovative, and for this reason, they are more likely to export a higher share of their production. From a longitudinal perspective, we use structural equation modeling on a database from Italian and Spanish ceramic tile producers, worldwide leaders in terms of technology. The database combines primary and secondary data. The results support our theoretical conjectures. Findings improve our understanding of the antecedents of export intensity and are related to previous research.

Service characteristics as moderators of the entry mode choice: empirical evidence in the hotel industry

Although a considerable amount of research has explored the entry mode choice, results regarding the direct influence of some variables on the entry mode choice evince a lack of a clear consistency. By introducing the moderator effect of the nature of the services being provided by the firm, we explain some of these inconclusive results. We use a comprehensive database on the Spanish hotel industry which covers nearly all the operations carried out by the majority of Spanish hotel chains up to 2011. We found that both intangibility and complexity of the services offered by the hotel moderate the relationship between environmental uncertainties and entry mode choice by increasing the propensity to use greater commitment entry modes when faced with conditions of country risk and cultural uncertainty.

Internationalization of service industry firms: understanding distinctive characteristics

Internationalization process and strategies has been a popular topic among international business researchers for some time. However, most of these studies deal with manufacturing firms and research on internationalization of service industry firms is rather scarce (Buckley, Pass, & Prescott 1999; Pla-Barber, Sanchez, & Madhock, 2010). Globally, services have recently become the most important sector for employment. At the same time, in the last decade, service industry firms have been most active in internationalizing their operations. Service sector firms now represent the largest share of global foreign direct investment (FDI) flows accounting to 62% of world inward FDI stock in 2006 (UNCTAD, 2008). This process of internationalization has been reinforced by the important outsourcing trend experienced in many value chain activities, the liberalization of many national and international regulations, and the creation and development of new service firms, based on telecommunication and information technologies, in an international framework (Sanchez & Pla-Barber, 2006). However, the heterogeneity of services implies considerable differences between sub-sectors in a range of factors, including competitiveness and patterns of geographical distribution and internationalization. Therefore, there is a need to investigate variables and models that go beyond those drawn from traditional empirical work focusing on the manufacturing sector. Moreover, services and manufacturing is becoming intertwined meaning that proportion of services even in manufactured goods is increasing and becoming more tangible. Most manufactured goods now contain a major proportion of service element. In the last decade or so many Western firms have moved their service components or operations to emerging markets to achieve cost benefits or other types of efficiencies (Buckley & Ghauri, 2004; Lewin &Volberda, 2011). Many authors have discussed the question of whether services are different from goods and have pointed out the characteristics that distinguish services from goods (Cowell, 1986; Buckley et al., 1999) such as intangibility, inseparability, heterogeneity, perishability and ownership. Although few services contain all these characteristics, most feature some of these. Moreover, many goods include intangible parts (services) and many services have some tangible parts and the distinction between goods and services is becoming blurred. However, it is assumed that the greater the intangible content, the more different it is from traditional goods and the more it requires different internationalization effort and process. Some authors claim that service firms are more international, as in many cases the production and consumption of a service are not separable and demands an international presence (Ghauri, Hadjikhani, & Johanson, 2005) and a certain entry mode (Sánchez, Pla-Barber, & Hébert, 2007). According to Buckley and Ghauri (2004), globalization presents new challenges to all type of firms, where they need to look at their location and ownership strategies. These developments demand more sophisticated decision making from multinational enterprises (MNEs), as new challenges demand fine slicing of activities and finding optimal locations for each activity. The ownership strategies are also becoming more complex as a number

Fine slicing of the value chain and offshoring of essential activities: empirical evidence from European multinationals

The offshoring of more advanced activities is increasing and a debate about the limits of offshoring has emerged. Companies are fine-slicing their value chains, and moving beyond the offshoring of peripheral and non-core activities to the offshoring of advanced and essential activities that are closer to their core (e.g. research, design and product development). The challenge is to understand the limits of offshoring and the most appropriate modes of offshoring. The purpose of this paper is to analyze what activities are offshorable and how best to govern offshored activities. We argue that companies are redefining their core activities and in this process, some essential activities previously viewed as core activities are being detached from the core, and they become more offshorable.The study uses a sample of 565 offshoring operations conducted by 263 multinational companies from 15 European countries. A logistic regression was used to analyze the relationship between the activities offshored (non-core versus essential activities) and the offshoring mode implemented (captive offshoring versus offshore outsourcing). We find that essential activities are typically offshored using the captive mode, while offshore outsourcing is commonly used to offshore non-core activities; and this trend is even more pronounced in knowledge-intensive companies where interfaces between the various activities are less standardized.This paper offers managers and CEOs an integrative tool that can make easier decisions regarding offshoring modes (captive versus offshore outsourcing) and serves as a reference point for further analyses of the implementation of offshoring strategies in multinational enterprises.

Unravelling the moderating effects of size and experience on product innovations and exports: a study in a medium knowledge-intensive industry

This paper contributes to improve our knowledge on the important role of product innovation in export strategy by introducing the moderating effects of organizational variables. We argue that in a medium knowledge-intensive industry, these variables might strengthen the relationship between innovations and exports. Research on innovation and export strategy has addressed these issues increasingly during last decades; however, the divergence on the empirical approaches difficult the understanding of the linkages among variables, which are highly dependent on the industry technological characteristics. We carry out a time-lagged study using the literature-based innovation output (LBIO) method to account for product innovations and its degree of complexity during the period from 2000 to 2007. Our results evidence that, when considering the moderating role of size and experience, the influence of innovations on exports becomes stronger. Important implications for researchers, managers and policy makers arise from these findings.