Stewart R. Miller

Liability of foreignness and membership in a regional economic group: Analysis of the European Union

This study examines the performance of foreign vs. domestic firms in a regional economic group. In particular, we focus on host country and foreign-owned firms in the European Union. Results provide evidence of a liability of foreignness--foreign-owned firms underperform host country firms. However, there is also evidence that liability of foreignness can vary across countries, and that foreign firms can overcome the liability of foreignness in some host countries, even industrialized ones. The results show the moderating effects of the host country and home country environments on the relative performance of foreign firms. Lastly, the results reveal that foreign-owned banks from highly competitive home countries underperform foreign firms from less competitive home countries.

An exploratory analysis of resource utilization across organizational units: Understanding the resource‐based view

This study explores the applicability of the resource‐based view at the organizational unit level by investigating why resource utilization, as measured by efficiency, might differ within a firm. Using a downstream petroleum firm as the context for this study, the data envelopment analysis framework is applied to examine resource input congestion of its DCs (i.e. distribution centers). The study also provides a more granular analysis by decomposing distribution efficiency into managerial, scale, and programmatic efficiency, and examines the impact of corporate‐level decision making by including non‐discretionary variables. The analysis identifies opportunities to improve efficiency at the organizational unit level, using alternative views of the operational problem. The approach also provides practicing managers with an objective means to evaluate performance at the level of the organizational unit. Both the efficiency view and the managerial performance view are discussed simultaneously from a strategic view of firm resources.

An event study of the effects of partner and location cultural differences in joint ventures

This study focuses on one of the most important aspects of domestic joint venture and international joint venture (IJV) formation: culture difference. The study adapts the Makino and Beamish (1998) ownership-structure classification of IJVs and empirically examines the effects of JV partner and JV location cultural differences. Using an event-study methodology, our results reveal the impact of cultural difference on shareholder value creation. The article discusses the implications of using cultural difference measures in international research.

Revisiting Liability of Foreignness: Socio-Political Costs Facing Chinese Multinationals in the United States

This essential book analyzes the regulatory and operational challenges that foreign direct investors face in the United States, as well as the ways in which these challenges can be overcome.

Financial Implications of Local and Nonlocal Rival Isomorphism A Signaling Paradox

We develop an isomorphism-signaling framework to explain the likelihood of isomorphic behavior (and nonconformity) by a focal firm toward local rivals and nonlocal rivals and then predict financial performance associated with the action. In the presence of asymmetric information, we predict a causal relationship between rival isomorphism and financial performance that reveals a paradox—that is, we theorize and show conditions in which “conforming” reflected by rival isomorphic behavior is a signal that “separates” high-quality from low-quality firms. We consider a firm’s costs and benefits of local and nonlocal rival isomorphism and assert that a firm can signal its quality, which affects financial performance of the equity offering. We test and find support for our hypotheses using a sample of firms raising capital abroad from 1994 to 2005.

Entry Mode Decisions by Emerging-Market Firms Investing in Developed Markets

This study draws upon the interorganizational imitation theory and endorsement literatures to explain the entry mode decisions of emerging-market firms (EMFs) into developed markets. Specifically, the study argues that EMFs entering developed markets pay differential attention to the prior actions of reference groups – by type of country of origin (whom to follow?) and by entry mode (how to imitate?). We test our hypotheses with a sample of 591 entries by EMFs investing in the United States over a 10-year period. The results support an isomorphism-based framework with different influences across reference groups by country of origin and entry mode. We find a dominant form of isomorphism, even after controlling for transaction costs and resource-based explanations.

Obtaining global certification

Purpose The purpose of this paper is to examine predictors of obtaining global certification (ISO 9000) in an emerging market by focusing on ownership structure and total quality management (TQM) commitment. Design/methodology/approach This paper adapts the theory of planned behavior to explain organizations that obtain global certification in an emerging market (China). Using 269 service firms at different stages of ISO 9000 certification (a proxy for goal-directed behavior/excellence by organizations), the study examines the influence of ownership structures (a proxy for perceived behavioral control) and TQM commitment (a proxy for attitude toward a behavior), using a probit model. Findings The results showed that ownership structures that were state-owned enterprises, privately owned enterprises and township-village enterprises (TVEs) had a lower probability of obtaining global certification. However, TQM commitment moderates the relationship between ownership structure and obtaining ISO 9000 certification for POEs and TVEs. The study found stronger results for a subsample of organizations that intended to obtain ISO 9000 certification. Among organizations without ISO 9000 certification, we examined organizations that began the learning process for ISO 9000 and those that had not, and found differences based on competitive pressures, ownership structures, and the moderating effect of TQM commitment. Research limitations/implications Future research may consider manufacturing organizations and other countries to further validate the findings of our study. Practical implications Creating strong TQM commitment can be an effective means for POEs and TVEs to obtain ISO 9000 certification. Originality/value This study is the first to adapt the theory of planned behavior for an organization-level analysis of ISO 9000 certification, especially in the service operations setting. The study found that TQM commitment selectively moderates ownership structures in explaining the probability that an organization obtained ISO 9000 certification.

Influence of knowledge resources on exploratory and exploitative international strategic alliances: Effects of the institutional environment

We develop a framework that explains the role of knowledge resources in the formation of international strategic alliances by multinational corporations. The focus is on the value and uniqueness of knowledge resources and two types of learning international strategic alliances, exploratory and exploitative. Also, we explain how the institutional environment – a host countrys property and contractual rights, rule of law and the institutional distance between the countries of the partnering firms – affects the attractiveness of these two forms of alliances.

Selecting State or Private Joint Venture Partners in Emerging Markets: Impact of Liability of Foreignness and Rule of Law

The present study develops an international joint venture (IJV) partner selection framework to explain the choice between state-owned or privately owned local partners in the context of emerging economies. We suggest that once an IJV is selected as the mode of entry, a multinational enterprises strategic motivations – that is, efficiency seeking, market seeking and knowledge seeking – will influence its choice of IJV partner type: state-owned enterprise or privately owned firm. We argue that liability of foreignness and rule of law moderate the multinational enterprises selection of IJV partner type.

The effects of strategies on the management control-performance relationship in Sino joint ventures

Many studies of control and international joint venture (IJV) performance have focused on ownership and management control. We develop a conceptual framework to explain how strategies affect the relationship between management control and joint venture performance. Specifically, we focus on serving the host-country customer and extending the life cycle of the foreign partners products. Using a sample of Sino–U.S. and Sino–Japanese joint ventures, we found that serving the host-country customer strengthens the positive relationship between management control by the foreign partner and IJV performance. However, extending the product life cycle of the foreign partners products weakens the positive relationship between management control by the foreign partner and IJV performance. We discuss the performance implications of dealing with both strategies and reveal a complex relationship between equity ownership, management control, and IJV performance.