We argue that pre-existing organizational ties can partially buffer against the adverse effects of populist deinstitutionalization. In contrast with the chronic institutional weakness emphasized in prior literature, populist deinstitutionalization reflects a politically driven weakening of institutions that firms had previously relied on. This disrupts established routines and increases the transaction costs of cross-border exchange. For SMEs, which are highly dependent on external institutional support for internationalization, pre-existing ties to government actors, international suppliers, and foreign owners can provide partial buffering by replacing some of the coordination, information, and enforcement functions lost through institutional erosion. We test these arguments using data on 10,399 SMEs across 29 economies in Central and Eastern Europe and Central Asia. The results support our theoretical expectations: while populism is negatively associated with SME exporting, pre-existing organizational ties attenuate this adverse association, with foreign ownership providing the strongest buffering effect. Our findings extend institution-based research by identifying politically driven institutional erosion as a distinct challenge for international business and by showing that organizational ties can function as selective, imperfect buffers rather than substitutes for formal institutions.
This paper introduces a simulation model based on deep reinforcement learning to study competitive collocation strategies of two internationalizing firms. Drawing on the strategic interaction and competitive collocation literature in IB, we explore the factors determining the performance-optimizing degree of collocation in market-seeking internationalization for a duopoly in product markets. Our simulation suggests that a high degree of collocation between the two firms is optimal in many circumstances. Whereas mid-to-high levels of collocation are driven by low competitive intensity, low entry barriers, low home-market size, and high market-size variation, complete collocation emerges under high competitive intensity, low first-mover advantage, and smaller home-market size. High entry barriers, combined with low variation in market size and strong liabilities of foreignness, drive the opposite case of complete mutual avoidance. A key takeaway from the simulation is a focus on the competing firm in global expansion: in many cases, it becomes key to limit the rival’s growth options and to enter key markets before access becomes more restricted. We discuss the possibilities of using computer-simulation-based approaches to theorizing on internationalization.
This study examines how the tightening of global environmental regulations affects the market valuation of multinational corporations (MNCs) diversified across pollution havens. We conceptualize international diversification across pollution havens (ID-PH) as a distinctive form of geographic diversification through which MNCs have exploited cross-country differences in environmental regulation to achieve cost advantages. However, the growing international attention to environmental standards may redefine the strategic value of ID-PH by amplifying compliance-related burdens, challenging MNCs to adapt to heightened investor expectations regarding environmental sustainability. Leveraging the 2021 Glasgow Climate Conference (COP26) as an exogenous global policy shock that converted voluntary climate pledges into binding international commitments, we find that MNCs with greater ID-PH exposure experienced significantly more negative abnormal stock returns following COP26. Nonetheless, MNCs that possessed strong environmental and digital capabilities were able to mitigate the valuation decline, demonstrating superior adaptive capacity under heightened regulatory scrutiny. By integrating environmental-policy heterogeneity into the logic of international diversification, this study advances understanding of how global policy shocks reshape the valuation of MNC cross-country portfolios. These findings also offer actionable implications for managers and policymakers by demonstrating that investments in environmental and digital capabilities can help MNCs resiliently navigate climate-related regulatory transitions.
Global sourcing is increasingly caught between two persistent pressures: to be sustainable and resilient. While this relationship is often framed as a trade-off, we draw on paradox theory to conceptualize it as a persistent paradox, especially for MNEs coordinating complex supplier networks. Most paradox research addresses either how tensions are embedded in organizational systems or how they are socially constructed by managers, but rarely both. Drawing on the "quantum" approach to paradox, we bridge these ontological and epistemological perspectives, arguing that the resilience–sustainability tension is rooted in the structure of global sourcing systems and made salient through how managers interpret and combine sourcing decisions. Following a configurational roadmap of three stages—scoping, linking, and naming—we theorize five systemic sourcing factors (location choice, supplier redundancy, inventory buffer, green certification, and the sustainability premium) and examine how they are evaluated by 72 Italian procurement managers through a factorial survey, a fuzzy-set qualitative comparative analysis, and interviews. Managers favor coherent bundles over standalone levers, combining certification-based sustainability assurance alongside resilience-oriented levers such as proximity, redundancy, and buffers. We conceptualize three archetypal sourcing logics—integrator, resilience-first, and cost-only—offering managers a practical vocabulary for framing and legitimating sourcing choices when both pressures collide.
Longstanding debates persist about the impact of new technologies on firms, particularly as it relates to internationalization. Some scholars suggest that digitalization will enhance the benefits of export activity by facilitating connections with partners and customers. Others, however, suggest that digitalization will simply fail to live up to the hype—or perhaps even worse. This debate is especially relevant for SMEs given that export activity is the primary route to global markets for such firms. We propose that digitalization will exert dual effects on SMEs: on the “bright” side, larger investments in digital technologies will lead to greater export activity (i.e., higher export sales); on the “dark” side, however, digitalization-induced export activity will generate fewer learning opportunities from export partners (i.e., smaller productivity gains). The proposed hypotheses were tested and supported using detailed firm-level panel data from 20,133 Portuguese firms from 2010 to 2019. Additional analyses and case studies corroborate the proposed mechanisms and point to hybrid approaches as one possible way to balance these dual effects of digitalization. Taken together, the findings shed new light on the debate about the role of digitalization in internationalization efforts.
