Niron Hashai

Firm Configuration and Internationalisation: A Model

We present a discrete choice model that analyses the location and control dilemmas of internationalising firms. The model relates simultaneously to a foreign market and to a foreign resource abundant country, and distinguishes between costs of performing specific value adding activities, costs of transportation and knowledge flows cost. The model also offers an economics-based dynamic dimension to firm internationalisation and reflects the role of host country knowledge resources.

THE ARAB-ISRAELI TRADE POTENTIAL: THE ROLE OF DISTANCE-SENSITIVE PRODUCTS

Distance-sensitive products have a significant role in trade be tween neighboring countries that have not traded with each other because of political or economic reasons. Products that are sensitive to geographic distance are expected to become tradable between such countries, even though they may not be traced by common compara tive advantage measurements based on Hecksher-Ohlin theory. This effect is implemented in an attempt to forecast Arab-Israeli trade potential, together with the effect of economic distance. Economic distance in this case refers to products that are less affected by the Linder effect. The sensitivity of 66 different industries to economic and geographic distance is calculated by a gravity-type regression model that is based on Austria data and implemented in a later stage to predict candidate industries for trade between Israel and its Arab neighbors. Industries that will be characterized by high sensitivity to geographic distance and low sensitivity to economic distance are the best candidates for such trade.

The Performance Implications of Speed, Regularity, and Duration in Alliance Portfolio Expansion

Extant research on the management of time shows that the speed of undertaking new strategic moves has negative consequences for firm profitability. However, the literature has not distinguished whether this outcome results from the effects of speed on firms’ revenues or from the effects of speed on firms’ costs, or examined how firms can become more profitable by reducing the negative consequences of speed. We address these gaps for a specific strategic move: alliance portfolio expansion. We show that the speed at which firms expand their alliance portfolios increases managerial costs disproportionately relative to revenues, leading to an overall negative effect on firm profitability. However, a more regular rhythm of expansion and a longer duration of existing alliances reduce the negative profitability consequences of expansion speed by moderating the increase in managerial costs. These findings suggest that firms that make strategic moves, such as alliances, may reduce the negative profitability consequences of speed when they maintain a regular expansion rhythm and when their existing strategic engagements require modest managerial resources.

INDUSTRY COMPETITIVENESS—THE ROLE OF REGIONAL DISTANCE-SENSITIVE INPUT SHARING (THE ISRAELI-ARAB CASE)

This study offers a method to estimate how the availability of distance-sensitive inputs affects industrial performance of neighboring countries. It shows that replacing either distant foreign input suppliers or inefficient local ones with neighboring suppliers could enhance the competitiveness of specific industries within a country. Whereas the suggested method could be generalized for any type of regional trade liberalization, we focus on the case of removing trade barriers between former non-trading neighboring countries. More specifically, the case of regional distance-sensitive input sharing between Israel and three of its Arab neighbors (Egypt, Jordan, and Syria) is demonstrated.

Focusing the High-Technology Firm How Outsourcing Affects Technological Knowledge Exploration

This study argues and shows that the extent to which high-technology firms focus efforts by outsourcing production, assembly, and logistics activities enhances the extent of technological knowledge exploration. This occurs through three modalities: (1) intensifying the effect of internal R&D efforts on exploration; (2) intensifying the effect of learning from competing partners, through R&D alliances, on exploration; and (3) intensifying the effect of learning from customers on exploration. Empirical analysis of a panel data set of Israeli high-technology firms supports the view that the combination of these three modalities is associated with greater exploration of new technological knowledge.

The Costs of Creating Network Relations and the Implications for Firm Performance: The Case of High Technology Firms

Abstract The benefits of network relations for firms’ competitive advantage are increasingly acknowledged in the strategic management literature. Yet, the cost implications of engaging in network-specific relations, stemming from the irreversibility of sunk costs invested in creating network relations, are largely ignored. Such costs tend to be especially pronounced in high technology firms. It follows that the costs of creating network relations may mask the benefits of such relations, suggesting that networks can be a competitive risk for firms in cases where network relations unexpectedly terminate. This chapter adopts a cost-benefit approach to an empirical analysis showing that while in the long term, network relations enhance high technology firms’ performance, short-term efforts in creating network relations may hamper their performance. Furthermore, we show that greater technological intensity intensifies the negative performance implications of short term network participation and the positive performance implications of long term network participation.

INTRODUCTION: RESEARCH ON FDI AND MNEs IN A CHANGING WORLD

This chapter focuses on the four topics pertaining to foreign direct investment (FDI) and multinational enterprises (MNEs) that are the focus of this volume: (1) managerial decision-making processes that result in FDI and internationalization; (2) the changing national origin of MNEs, particularly those spawned by emerging markets; (3) the changing scope of MNEs, as they fine-tune and globally disperse their value chains, expand into new services, and rely increasingly on networks, alliances, and offshoring to enhance global competiveness, and speed up internationalization to the point of being “born global”; and (4) the changing relationship between MNEs and home and host countries. After surveying Yair Aharonis significant contributions in each of these areas, the chapter offers a preview of the volumes contents on each topic. It concludes with an agenda for future research by international business scholars.

Unraveling the Relationships Between Internationalization and Product Diversification Among the World's Largest Food and Beverage Enterprises

This chapter examines the interrelationships between internationalization and product diversification among the worlds l35 largest food and beverage enterprises. Based on the argument that food and beverage enterprises enjoy economies of scope when moderately diversifying into new countries and product areas, but encounter resource constraints when extremely diversified and internationalized, we expect to find an inverted U-shaped relationship between the two strategies. Nevertheless, we find that the relationships between the two strategies show both an inverted U-shaped (when geographic diversification is the dependent variable and product diversification the independent one) and a U-shaped pattern (when product diversification is the dependent variable and geographic diversification the independent one). These results imply that the relationships between internationalization and product diversification among food and beverage enterprises are more complex than currently conceived.

Crisis moderates the expansion of Israeli multinationals

The fourth annual survey of Israeli multinationals is being released today. It was conducted by a joint team composed of the Foreign Trade Division of the Manufacturers Association of Israel; The Recanati School of Business, Tel Aviv University; the School of Business Administration, the Hebrew University of Jerusalem; and the Vale Columbia Center on Sustainable International Investment (VCC), a joint undertaking of the Columbia Law School and The Earth Institute at Columbia University in New York. The survey is part of a long-term, multi-country study of the rapid global expansion of multinationals from emerging markets. The results released today cover the year 2009.