Advertisement

Management International Review

, Volume 58, Issue 4, pp 541–570 | Cite as

A Meta-analysis of the International Experience–Ownership Strategy Relationship: A Dynamic Capabilities View

  • Ryan W. Tang
  • Siegfried P. Gudergan
Research Article
  • 328 Downloads

Abstract

This paper investigates the context in which firms’ ownership strategies in international ventures may be affected by their international experience, which shapes their dynamic capabilities. Based on a statistical synthesis of empirical insights accumulated in a large body of literature, this paper examines multiple firm-, industry-, and country-specific moderators simultaneously. With models tested drawing on data from 102 samples across 114,118 international entry decisions, this meta-analysis finds empirical evidence largely supporting theoretical predictions of sources of international experience, economic development stages of host countries and firm size that moderate the relationship between international experience and ownership strategy (IE–OS relationship), and this relationship is not contingent upon industries in which a firm resides. In particular, the contingency effect of country-specific experience is more important to the IE–OS relationship than others. This paper demonstrates the contextual nature of the IE–OS relationship and contributes insights into the contingencies that affect the impact of experience-based dynamic capability deployment in an international business setting.

Keywords

International experience Dynamic capabilities Ownership strategy International entry Meta-analysis 

Notes

Acknowledgements

The authors are grateful to Michael-Jörg Oesterle and two anonymous reviewers for their valuable comments on the earlier draft of this paper. The authors further acknowledge the feedback from reviewers and participants of the 58th Annual Meetings of the Academy of International Business and the 76th Annual Meeting of the Academy of Management. Any error remains to the authors.

References4

  1. Agarwal, S., & Ramaswami, S. N. (1992). Choice of foreign market entry mode: Impact of ownership, location and internalization factors. Journal of International Business Studies, 23(1), 1–27.CrossRefGoogle Scholar
  2. Aguinis, H., Dalton, D. R., Bosco, F. A., Pierce, C. A., & Dalton, C. M. (2011). Meta-analytic choices and judgment calls: Implications for theory building and testing, obtained effect sizes, and scholarly impact. Journal of Management, 37(1), 5–38.CrossRefGoogle Scholar
  3. Anand, J., Mulotte, L., & Ren, C. R. (2015). Does experience imply learning? Strategic Management Journal, 37(7), 1395–1412.CrossRefGoogle Scholar
  4. Ando, N. (2011). The ownership structure of foreign subsidiaries and the effect of institutional distance: A case study of Japanese firms. Asia Pacific Business Review, 18(2), 259–274.CrossRefGoogle Scholar
  5. Argote, L. (2013). Organizational learning: Creating, retaining, and transferring knowledge (2nd ed.). New York: Springer.CrossRefGoogle Scholar
  6. Augier, M., & Teece, D. J. (2007). Dynamic capabilities and multinational enterprise: Penrosean insights and omissions. Management International Review, 47(2), 175–192.CrossRefGoogle Scholar
  7. Barkema, H. G., & Schijven, M. (2008). How do firms learn to make acquisitions? A review of past research and an agenda for the future. Journal of Management, 34(3), 594–634.CrossRefGoogle Scholar
  8. Barkema, H. G., & Vermeulen, F. (1998). International expansion through start up or acquisition: A learning perspective. The Academy of Management Journal, 41(1), 7–26.Google Scholar
  9. Bausch, A., & Krist, M. (2007). The effect of context-related moderators on the internationalization-performance relationship: Evidence from meta-analysis. Management International Review, 47(3), 319–347.CrossRefGoogle Scholar
  10. Bingham, C. B., Eisenhardt, K. M., & Furr, N. R. (2007). What makes a process a capability? Heuristics, strategy, and effective capture of opportunities. Strategic Entrepreneurship Journal, 1(1–2), 27–47.CrossRefGoogle Scholar
  11. Blomstermo, A., Sharma, D. D., & Sallis, J. (2006). Choice of foreign market entry mode in service firms. International Marketing Review, 23(2), 211–229.CrossRefGoogle Scholar
  12. Bowen, J., & Ford, R. C. (2002). Managing service organizations: Does having a “thing” make a difference? Journal of Management, 28(3), 447–469.CrossRefGoogle Scholar
  13. Brouthers, K. D., & Brouthers, L. E. (2003). Why service and manufacturing entry mode choices differ: The influence of transaction cost factors, risk and trust. Journal of Management Studies, 40(5), 1179–1204.CrossRefGoogle Scholar
  14. Brouthers, K. D., & Hennart, J.-F. (2007). Boundaries of the firm: Insights from international entry mode research. Journal of Management, 33(3), 395–425.CrossRefGoogle Scholar
  15. Budescu, D. V., & Azen, R. (2004). Beyond global measures of relative importance: Some insights from dominance analysis. Organizational Research Methods, 7(3), 341–350.CrossRefGoogle Scholar
  16. Canabal, A., & White Iii, G. O. (2008). Entry mode research: Past and future. International Business Review, 17(3), 267–284.CrossRefGoogle Scholar
  17. Chan, C. M., & Makino, S. (2007). Legitimacy and multi-level institutional environments: Implications for foreign subsidiary ownership structure. Journal of International Business Studies, 38(4), 621–638.CrossRefGoogle Scholar
  18. Chang, S. J. (1995). International expansion strategy of Japanese firms: Capability building through sequential entry. Academy of Management Journal, 38(2), 383–407.CrossRefGoogle Scholar
  19. Chang, S. J., & Rosenzweig, P. M. (2001). The choice of entry mode in sequential foreign direct investment. Strategic Management Journal, 22(8), 747–776.CrossRefGoogle Scholar
  20. Chen, M.-J., & Hambrick, D. C. (1995). Speed, stealth, and selective attack: How small firms differ from large firms in competitive behavior. The Academy of Management Journal, 38(2), 453–482.CrossRefGoogle Scholar
  21. Chen, S.-F. S., & Hennart, J.-F. (2002). Japanese investors’ choice of joint ventures versus wholly-owned subsidiaries in the US: The role of market barriers and firm capabilities. Journal of International Business Studies, 33(1), 1–18.CrossRefGoogle Scholar
  22. Cho, K. R., & Padmanabhan, P. (2005). Revisiting the role of cultural distance in MNC’s foreign ownership mode choice: The moderating effect of experience attributes. International Business Review, 14(3), 307–324.CrossRefGoogle Scholar
  23. Clarke, J. E., Tamaschke, R., & Liesch, P. W. (2013). International experience in international business research: A conceptualization and exploration of key themes. International Journal of Management Reviews, 15(3), 265–279.CrossRefGoogle Scholar
  24. Cohen, J. (1960). A coefficient of agreement for nominal scales. Educational and Psychological Measurement, 20–46(1), 37–46.CrossRefGoogle Scholar
  25. Cohen, J. (1988). Statistical power analysis for the behavioral sciences. New York: Lawrence Erlbaum Associates.Google Scholar
  26. Collins, J. D., Holcomb, T. R., Certo, S. T., Hitt, M. A., & Lester, R. H. (2009). Learning by doing: Cross-border mergers and acquisitions. Journal of Business Research, 62(12), 1329–1334.CrossRefGoogle Scholar
  27. Combs, J. G. (2010). From the editors: Big samples and small effects: Let’s not trade relevance and rigor for power. The Academy of Management Journal, 53(1), 9–13.CrossRefGoogle Scholar
  28. Connelly, B. L., Crook, T. R., Combs, J. G., Ketchen, D. J., & Aguinis, H. (2015). Competence- and integrity-based trust in interorganizational relationships: Which matters more? Journal of Management, 44(3), 919–945.CrossRefGoogle Scholar
  29. Cuypers, I. R., & Martin, X. (2010). What makes and what does not make a real option? A study of equity shares in international joint ventures. Journal of International Business Studies, 41(1), 47–69.CrossRefGoogle Scholar
  30. Daft, R. L. (2010). Organization theory and design. Mason: South-Western Cengage Learning.Google Scholar
  31. Davis, G. F., & Cobb, J. A. (2000). Resource dependence theory: Past and future. In C. B. Schoonhoven & F. Dobbin (Eds.), Stanford’s Organization Theory Renaissance, 1970–2000 (pp. 21–42). Bingley: Emerald.Google Scholar
  32. Delios, A., & Beamish, P. W. (1999). Ownership strategy of Japanese firms: Transactional, institutional, and experience influences. Strategic Management Journal, 20(10), 915–933.CrossRefGoogle Scholar
  33. Delios, A., & Henisz, W. J. (2000). Japanese firms’ investment strategies in emerging economies. The Academy of Management Journal, 43(3), 305–323.Google Scholar
  34. Dikova, D., Sahib, P. R., & Witteloostuijn, A. V. (2010). Cross-border acquisition abandonment and completion: The effect of institutional differences and organizational learning in the international business service industry, 1981–2001. Journal of International Business Studies, 41(2), 223–245.CrossRefGoogle Scholar
  35. Easterby-Smith, M., & Prieto, I. M. (2008). Dynamic capabilities and knowledge management: An integrative role for learning? British Journal of Management, 19(3), 235–249.CrossRefGoogle Scholar
  36. Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: What are they? Strategic Management Journal, 21(10/11), 1105–1121.CrossRefGoogle Scholar
  37. Erramilli, M. K. (1991). The experience factor in foreign market entry behavior of service firms. Journal of International Business Studies, 22(3), 479–501.CrossRefGoogle Scholar
  38. Erramilli, M. K., & Dsouza, D. E. (1993). Venturing into foreign markets: The case of the small service firm. Entrepreneurship: Theory and Practice, 17(4), 29–41.Google Scholar
  39. Figueira-De-Lemos, F., & Hadjikhani, A. (2014). Internationalization processes in stable and unstable market conditions: Towards a model of commitment decisions in dynamic environments. Journal of World Business, 49(3), 332–349.CrossRefGoogle Scholar
  40. Gelhard, C., Von Delft, S., & Gudergan, S. P. (2016). Heterogeneity in dynamic capability configurations: Equifinality and strategic performance. Journal of Business Research, 69(11), 5272–5279.CrossRefGoogle Scholar
  41. Harzing, A.-W. (2015). Journal Quality List (53rd ed.). http://www.harzing.com/jql.htm. Accessed on March 2015.
  42. Hedges, L. V., & Olkin, I. (1985). Statistical methods for meta-analysis. Orlando: Academic Press.Google Scholar
  43. Helfat, C. E., Finkelstein, S., Mitchell, W., Peteraf, M. A., Singh, H., Teece, D. J., et al. (2007). Dynamic capabilities: Understanding strategic change in organizations. Malden: Wiley-Blackwell.Google Scholar
  44. Hennart, J.-F. (2009). Down with MNE-centric theories! Market entry and expansion as the bundling of MNE and local assets. Journal of International Business Studies, 40(9), 1432–1591.CrossRefGoogle Scholar
  45. Hitt, M. A., Li, D., & Xu, K. (2015). International strategy: From local to global and beyond. Journal of World Business, 51(1), 58–73.CrossRefGoogle Scholar
  46. Hotho, J. J., Lyles, M. A., & Easterby-Smith, M. (2015). The mutual impact of global strategy and organizational learning: Current themes and future directions. Global Strategy Journal, 5(2), 85–112.CrossRefGoogle Scholar
  47. Huff, J. O., Huff, A. S., & Thomas, H. (1992). Strategic renewal and the interaction of cumulative stress and inertia. Strategic Management Journal, 13, 55–75.CrossRefGoogle Scholar
  48. Hunter, J. E., & Schmidt, F. L. (2004). Methods of meta-analysis: Correcting error and bias in research findings. Newbury Park: Sage.CrossRefGoogle Scholar
  49. Hymer, S. (1960). The international operations of national firms: A study of direct foreign investment. Cambridge: Massachusetts Institute of Technology.Google Scholar
  50. Johanson, J., & Vahlne, J.-E. (1977). The internationalization process of the firm—a model of knowledge development and increasing foreign market commitments. Journal of International Business Studies, 8(1), 23–32.CrossRefGoogle Scholar
  51. Jones, N., & Klassen, R. D. (2001). Management of pollution prevention: Integrating environmental technologies in manufacturing. In J. Sarkis (Ed.), Greener manufacturing and operations: From design to delivery and back. Sheffield: Greenleaf.Google Scholar
  52. Jung, C. J., Beamish, W. P., & Goerzen, A. (2010). Dynamics of experience, environment and MNE ownership strategy. Management International Review, 50(3), 267–296.CrossRefGoogle Scholar
  53. Kang, J., Lee, J. Y., & Ghauri, P. N. (2017). The interplay of Mahalanobis distance and firm capabilities on MNC subsidiary exits from host countries. Management International Review, 57(3), 379–409.CrossRefGoogle Scholar
  54. Karna, A., Richter, A., & Riesenkampff, E. (2015). Revisiting the role of the environment in the capabilities–financial performance relationship: A meta-analysis. Strategic Management Journal, 37(6), 1154–1173.CrossRefGoogle Scholar
  55. Kirca, A. H., Roth, K., Hult, G. T. M., & Cavusgil, S. T. (2012). The role of context in the multinationality–performance relationship: A meta-analytic review. Global Strategy Journal, 2(2), 108–121.CrossRefGoogle Scholar
  56. Knight, G. (1999). International services marketing: Review of research, 1980–1998. Journal of Services Marketing, 13(4/5), 347–360.CrossRefGoogle Scholar
  57. Lebreton, J. M., Tonidandel, S., & Krasikova, D. V. (2013). Residualized relative importance analysis: A technique for the comprehensive decomposition of variance in higher order regression models. Organizational Research Methods, 16(3), 449–473.CrossRefGoogle Scholar
  58. Li, P. Y., & Meyer, K. E. (2009). Contextualizing experience effects in international business: A study of ownership strategies. Journal of World Business, 44(4), 370–382.CrossRefGoogle Scholar
  59. Liao, T.-J. (2015). Local clusters of SOEs, POEs, and FIEs, international experience, and the performance of foreign firms operating in emerging economies. International Business Review, 24(1), 66–76.CrossRefGoogle Scholar
  60. Lipsey, M. W., & Wilson, D. B. (2001). Practical meta-analysis. Thousand Oaks: Sage Publications.Google Scholar
  61. Lu, J. W., & Hébert, L. (2005). Equity control and the survival of international joint ventures: A contingency approach. Journal of Business Research, 58(6), 736–745.CrossRefGoogle Scholar
  62. Luo, Y. (2000). Dynamic capabilities in international expansion. Journal of World Business, 35(4), 355–378.CrossRefGoogle Scholar
  63. Luo, Y. (2001). Determinants of entry in an emerging economy: A multilevel approach. The Journal of Management Studies, 38(3), 443–472.CrossRefGoogle Scholar
  64. Maekelburger, B., Schwens, C., & Kabst, R. (2012). Asset specificity and foreign market entry mode choice of small and medium-sized enterprises: The moderating influence of knowledge safeguards and institutional safeguards. Journal of International Business Studies, 43(5), 458–476.CrossRefGoogle Scholar
  65. Magnusson, P., Baack, D. W., Zdravkovic, S., Staub, K. M., & Amine, L. S. (2008). Meta-analysis of cultural differences: Another slice at the apple. International Business Review, 17(5), 520–532.CrossRefGoogle Scholar
  66. Malhotra, N. K., Agarwal, J., & Ulgado, F. M. (2003). Internationalization and entry modes: A multitheoretical framework and research propositions. Journal of International Marketing, 11(4), 1–31.CrossRefGoogle Scholar
  67. Mayer, M. C. J., Stadler, C., & Hautz, J. (2015). The relationship between product and international diversification: The role of experience. Strategic Management Journal, 36(10), 1458–1468.CrossRefGoogle Scholar
  68. Mcmillan, J. (2008). Market institutions. In S. N. Durlauf & L. E. Blume (Eds.), The New Palgrave Dictionary of Economics (2nd ed.). London: Palgrave Macmillan.Google Scholar
  69. Meyer, K. E., & Wang, Y. (2015). Transaction cost perspectives on alliances and joint ventures: Explanatory power and empirical limitations. In J. Larimo, N. Nummela, & T. Mainela (Eds.), Elgar Handbook of International Alliances and Network Research. Cheltenham: Elgar.Google Scholar
  70. Miller, D., & Ming-Jer, C. (1994). Sources and consequences of competitive inertia: A study of the U.S. airline industry. Administrative Science Quarterly, 39(1), 1–23.CrossRefGoogle Scholar
  71. Morschett, D., Schramm-Klein, H., & Swoboda, B. (2010). Decades of research on market entry modes: What do we really know about external antecedents of entry mode choice? Journal of International Management, 16(1), 60–77.CrossRefGoogle Scholar
  72. Musteen, M., Datta, D. K., & Herrmann, P. (2009). Ownership structure and CEO compensation: Implications for the choice of foreign market entry modes. Journal of International Business Studies, 40(2), 321–338.CrossRefGoogle Scholar
  73. Nelson, R. R., & Winter, S. G. (1982). An evolutionary theory of economic change. Cambridge: Belknap Press of Harvard University Press.Google Scholar
  74. Nguyen, T., & Cai, C. X. (2015). Value-enhancing learning from industry-wide diversification experience. British Journal of Management, 27(2), 323–337.CrossRefGoogle Scholar
  75. Nielsen, B. B., & Nielsen, S. (2011). The role of top management team international orientation in international strategic decision-making: The choice of foreign entry mode. Journal of World Business, 46(2), 185–193.CrossRefGoogle Scholar
  76. Padmanabhan, P., & Cho, K. R. (1996). Ownership strategy for a foreign affiliate: An empirical investigation of Japanese firms. Management International Review, 36(1), 45–65.Google Scholar
  77. Peng, M. W., Wang, D. Y. L., & Jiang, Y. (2008). An institution-based view of international business strategy: A focus on emerging economies. Journal of International Business Studies, 39(5), 920–936.Google Scholar
  78. Pfeffer, J., & Salancik, G. R. (1978). The external control of organizations: A resource dependence perspective. New York: Harper and Row.Google Scholar
  79. Pfeffer, J., & Salancik, G. R. (2003). The external control of organizations: A resource dependence perspective. Stanford: Stanford Business Books.Google Scholar
  80. Sanchez-Peinado, E., & Pla-Barber, J. (2006). A multidimensional concept of uncertainty and its influence on the entry mode choice: An empirical analysis in the service sector. International Business Review, 15(3), 215–232.CrossRefGoogle Scholar
  81. Santos, F. M., & Eisenhardt, K. M. (2005). Organizational boundaries and theories of organization. Organization Science, 16(5), 491–508.CrossRefGoogle Scholar
  82. Shadish, W. R., Cook, T. D., & Campbell, D. T. (2002). Experimental and quasi-experimental designs for generalized causal inference. Boston: Houghton Mifflin Co.Google Scholar
  83. Shenkar, O. (2001). Cultural distance revisited: Towards a more rigorous conceptualization and measurement of cultural differences. Journal of International Business Studies, 32(3), 519–535.CrossRefGoogle Scholar
  84. Singh, J. V., House, R. J., & Tucker, D. J. (1986). Organizational change and organizational mortality. Administrative Science Quarterly, 31(4), 587–611.CrossRefGoogle Scholar
  85. Singh, H., & Kogut, B. (1989). Industry and competitive effects on the choice of entry mode. Academy of Management, 1989, 116–120.Google Scholar
  86. Somlev, I. P., & Hoshino, Y. (2005). Influence of location factors on establishment and ownership of foreign investments: The case of the Japanese manufacturing firms in Europe. International Business Review, 14(5), 577–598.CrossRefGoogle Scholar
  87. Starbuck, W. H. (1985). Acting first and thinking later: Theory versus reality in strategic change. Organizational strategy and change (pp. 336–372).Google Scholar
  88. Swoboda, B., Elsner, S., & Olejnik, E. (2015). How do past mode choices influence subsequent entry? A study on the boundary conditions of preferred entry modes of retail firms. International Business Review, 24(3), 506–517.CrossRefGoogle Scholar
  89. Teece, D. J. (2014). A dynamic capabilities-based entrepreneurial theory of the multinational enterprise. Journal of International Business Studies, 45(1), 8–37.CrossRefGoogle Scholar
  90. Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533.CrossRefGoogle Scholar
  91. Tihanyi, L., Griffith, D. A., & Russell, C. J. (2005). The effect of cultural distance on entry mode choice, international diversification, and MNE performance: A meta-analysis. Journal of International Business Studies, 36(3), 270–283.CrossRefGoogle Scholar
  92. Tsai, M.-T., & Cheng, Y.-M. (2004). Asset specificity, culture, experience, firm size and entry mode strategy: Taiwanese manufacturing firms in China, South-East Asia and Western Europe. International Journal of Commerce and Management, 14(3/4), 1–27.CrossRefGoogle Scholar
  93. Tushman, M. L., & Romanelli, E. (1985). Organizational evolution: A metamorphosis model of convergence and reorientation. Research in organizational behavior, 7, 171–222.Google Scholar
  94. Uhlenbruck, K., Rodriguez, P., Doh, J., & Eden, L. (2006). The impact of corruption on entry strategy: Evidence from telecommunication projects in emerging economies. Organization Science, 17(3), 402–416.CrossRefGoogle Scholar
  95. Van De Ven, A. (2004). The context-specific nature of competence and corporate development. Asia Pacific Journal of Management, 21(1/2), 123–147.CrossRefGoogle Scholar
  96. Werner, S. (2002). Recent developments in international management research: A review of 20 top management journals. Journal of Management, 28(3), 277–305.CrossRefGoogle Scholar
  97. Whetten, D. A. (1987). Organizational growth and decline processes. Annual Review of Sociology, 13, 335–358.CrossRefGoogle Scholar
  98. Wilden, R., & Gudergan, S. (2015). The impact of dynamic capabilities on operational marketing and technological capabilities: Investigating the role of environmental turbulence. Journal of the Academy of Marketing Science, 43(2), 181–199.CrossRefGoogle Scholar
  99. Wilden, R., Gudergan, S. P., Nielsen, B. B., & Lings, I. (2013). Dynamic capabilities and performance: Strategy, structure and environment. Long Range Planning, 46(1), 72–96.CrossRefGoogle Scholar
  100. Yang, Y., & Driffield, N. (2012). Multinationality–performance relationship. Management International Review, 52(1), 23–47.CrossRefGoogle Scholar
  101. Yiu, D. W., Lau, C., & Bruton, G. D. (2007). International venturing by emerging economy firms: The effects of firm capabilities, home country networks, and corporate entrepreneurship. Journal of International Business Studies, 38(4), 519–540.CrossRefGoogle Scholar
  102. Zhao, H., Luo, Y., & Suh, T. (2004). Transaction cost determinants and ownership-based entry mode choice: A meta-analytical review. Journal of International Business Studies, 35(6), 524–544.CrossRefGoogle Scholar
  103. Zollo, M., & Winter, S. G. (2002). Deliberate learning and the evolution of dynamic capabilities. Organization Science, 13(3), 339–351.CrossRefGoogle Scholar

Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  1. 1.University of South AustraliaAdelaideAustralia
  2. 2.University of NewcastleCallaghanAustralia
  3. 3.University of WaikatoHamiltonNew Zealand

Personalised recommendations