Mohammad Keyhani

Acquisitions as entrepreneurship: asymmetries, opportunities, and the internationalization of multinationals from emerging economies

We investigate the rapid internationalization of many multinationals from emerging economies through acquisition in advanced economies. We conceptualize these acquisitions as an act and form of entrepreneurship, aimed to overcome the ‘liability of emergingness’ incurred by these firms and to serve as a mechanism for competitive catch-up through opportunity seeking and capability transformation. Our explanation emphasizes unique asymmetries (and not necessarily advantages) of emerging multinationals due to their historical and institutional differences with advanced economy multinationals, as well as a search for advantage creation when firms possess mainly ordinary resources. The argument shifts the central focus from advantage to asymmetries as the starting point for internationalization.

Understanding Alliance Evolution and Termination: Adjustment Costs and the Economics of Resource Value

Alliances have been studied extensively in the past and various arguments have been suggested to explain their evolution and eventual termination. We argue that one important explanation of alliance termination has remained overlooked, one where the mechanism revolves around resource value and is independent of any mismanagement, opportunism, lack of trust, interpretive misunderstanding, or perceptions of inequity. In this explanation, we recognize explicitly that resources undergo transformation through an alliance, and this transformation reveals new previously imperfectly predicted costs to remain in the alliance as well as new opportunities outside the alliance. We apply the concepts of direct and indirect adjustment costs and inter-temporal economies of scope to explain these phenomena and demonstrate that, depending on the particular structure of incentive asymmetry between the two firms after alliance formation, the new circumstances may motivate a revised cost/profit sharing arrangement, a change in ownership of alliance resources, or a complete dissolution of the alliance. Some determinants of adjustment costs are explored in detail, covering resource characteristics, resource combination characteristics, and environment characteristics. Based on the economics of resource value, our argument has implications not just for alliance evolution and termination but also provides a distinct lens to explain the evolution of firm boundaries and the manner of transition of alliances into acquisitions.

Computer Simulation Studies of the Entrepreneurial Market Process

This chapter reviews a line of research that studies several different theoretical questions in entrepreneurship through novel applications of computer simulation. All of the simulation studies reviewed are based on a shared game-theoretical modeling framework that allows a high level of integration with existing theories. What made these simulations unique was their firm grounding in the theory of the entrepreneurial market process from Austrian economics, and the lack of previous simulation studies in the entrepreneurship field. The focus is on how and why the cooperative game theory framework was chosen, the justification and process of applying the simulation method and the lessons learned from doing so. The aim is to provide entrepreneurship scholars with a better understanding of where and why computer simulation may add something of value to their research as a tool for the analysis of complex systems. The reviewed studies involve artificial economies with a small number of agents, demonstrating that the emergence of complex macro patterns from micro behaviors does not require large numbers of agents.

Disentangling the Effect of Uncertainty Types on Alliance Governance Choice

The effect of uncertainty on governance choice remains a puzzle. In this paper we investigate the influence of behavioral uncertainty and ambiguity as determinants of alliance governance choice. We argue that different governance forms address different uncertainty problems: behavioral uncertainty resulting from appropriation hazards requires alignment of interests whereas ambiguity resulting from complex problems requires alignment of actions. With our model we are able to empirically distinguish the two logics and to match governance solutions to uncertainty adaptation problems. Based on a policy capturing approach and a 3-level HLM analysis, our results support a “discriminating alignment” logic of governance choice.