To test whether firms behave consistently with international law prohibiting anonymous incorporation, we conducted a global audit study and field experiment, using data from 1639 incorporation firms in 176 countries. We requested anonymous incorporation and randomly assigned references to international law, threat of penalties, norms of appropriate behavior, or a placebo. We find a substantial number of firms willing to flout international standards and show that those in OECD countries proved significantly less compliant with rules than in developing countries or tax havens. Firms in tax havens displayed significantly greater compliance and were sensitive to experimental interventions invoking international law.

We draw on transaction cost economics and the technology innovation management literature to advance a contextual model of the link between the perceived influence of China on technology strategy and MNC subsidiary sourcing strategy. In particular, we hypothesize that the relationship between a perceived influence of China on technology strategy and MNC subsidiary process technology sourcing strategy is moderated by the innovation context. Here, we consider the innovation context to be externally represented by the appropriability regime and dominant design, while internally it is measured by the subsidiary's level of complementary assets. We test our predictions on a multi-industry sample of 111 MNC subsidiaries from the Association of Equipment Manufacturers. We find support for the moderating influence of the innovation contexts of appropriability regime and complementary assets.

Countries enact various mechanisms, such as patent protection, to encourage, protect, and reward firm innovation. The degree to which these mechanisms afford firms protection over their intellectual property influences the innovation strategy that firms pursue and innovation investments they make. To date, empirical evidence on the relationship between patent protections and firm innovation is lacking, despite the relationship being the subject of intense theoretical and policy debate. To further consider the influences on firm innovation, we test the influence of a country's patent rights and changes in them on firm-level investment in innovation. Data for 706 firms competing in ten manufacturing industries across 29 countries were gathered and analyzed. Even after controlling for various firm, industry, and national factors, there is a strong positive influence of patent rights and changes in patent rights on a firm's propensity to invest in innovation. In addition, we consider the sensitivity of this result to alternative measures of patent and other intellectual property protection. We also find that the influence of patent rights on firm-level innovation varies across industries for example, the impact appears greatest in the scientific instruments and industrial chemicals industries.

Global standards of patent protection have been strengthened and harmonized in recent years. Despite the heated policy debates and theoretical controversies, empirical studies of the consequences for innovative activity are scant. This paper contributes to the debate by providing an empirical analysis of the effects of patent strength on different aspects of innovative activity, namely firm-level research and development (R&D), domestic patenting, and foreign patenting. The analysis employs an updated index of patent rights. The results show the complexity of evaluating the effects of patent reform on innovative activity, since the effects vary nonlinearly (depending on the initial level of patent strength) and vary by a country's level of economic development. Overall, for developing economies, patent strength negatively affects domestic patent filings and insignificantly affects R&D and foreign patent filings. For developed economies, patent strength positively affects R&D and domestic patent filings, and negatively affects foreign patent filings, after some critical level of patent protection is reached.

In this study, a model of industry structure and national context is developed and tested to better understand their influence on firm investment in innovation and performance. Archival financial data from 730 companies in 30 countries and 10 industries, along with industry- and national-level data, was collected to test the mediation model and hypotheses. The results of the analyses provide support that both industry structure and national context play an important role influencing firm investment in innovation and performance. In particular, industry dynamism and a country's patent protection were found to be positively related to firm performance. These relationships were mediated by the firm's investment in innovation. The findings of this study support the need to include both industry and national effects in international strategy research. Additionally, the role that information technology (IT) has on these variables, through the globalization issues of coordination, communication, and competition, is explored.

Economic explanations of mergers and acquisitions tend to focus on issues of efficiency and strategic fit. When acquisitions fail, economic arguments tend to dominate the reasoning and explanations. While cohesive theory exists, empirical studies of acquisitions and divestitures of failed acquisitions based upon economic models are inconsistent and have poor explanatory power to identify clear success or failure factors. Non-economic explanations, on the other hand, generally lack an integration that goes much beyond suggesting that non-economic differences create integration problems and cannot explain why the economic synergies that organizations hope for often fail to materialize.In an attempt to address these challenges, we draw upon the stepfamily literature to propose several new concepts that provide insights into the factors that influence the success of acquisition execution and implementation. Since diversified corporations bear a striking resemblance to human stepfamilies, stepfamily theory can provide new managerial insights and prescriptions. Three main perspectives frame our view of merger and acquisition success: Biological Discrimination, Incomplete Institutionalization, and Deficit-Comparison. From these perspectives, we propose important factors and characteristics that can influence the ultimate success or failure of a merger or acquisition. From this metaphor, we provide managerial prescriptions for firms engaged in merger and acquisition activities to improve the probability for ultimate success.

With the increasing desire for products suitable for widely varying markets worldwide, this study offers insight into capabilities associated with successful robust design in global product markets. These robust design capabilities (i.e., the possibility for success under varying circumstances or scenarios) are a potential organizational response to rapid change and uncertainty, which also improve the likelihood of product acceptance on a global basis. From literature, executive interviews, and anecdotal evidence, four capabilities associated with robust product design are derived: (1) functional; (2) aesthetic; (3) technological; and (4) quality based. A model is proposed and an empirical test conducted that considers the moderating influence of environmental uncertainty on the relationship between these robust capabilities and firm performance. The findings suggest that the use of robust design capabilities are affected by uncertainty and have an important influence on firm performance and speed to market. Specifically, the product development process tends to be characterized by aesthetic and technological robust design capabilities in more certain environments and functional robust design capabilities in more uncertain environments when seeking to improve firm performance. Alternatively, technological design capabilities in more certain environments and functional design capabilities in more uncertain environments are associated with improved speed to market.

This paper provides an empirical analysis of the effects of patent protection on innovative activity. It provides evidence from both an output perspective of innovation (namely patent applications) and an input perspective (namely research and development). In order to implement the empirical analyses, the paper updates an index of patent rights to year 2000 and provides an index of enforcement effectiveness (in practice). Using both firm-level and national level panel data, the paper finds that the relationship between patent protection and innovation typically is U-shaped (or inverse U-shaped), holding other factors constant. The idea is that patent protection can both stimulate as well as deter innovation, depending on circumstances. For poorer economies dependent on imitative and adaptive research, patent protection tends to raise the cost of innovation and thereby reduce the rate of innovation. For richer economies, where patent strength is already fairly high, a further strengthening of patent rights may enhance market power to the extent that incentives to introduce new technologies are reduced. For other situations, stronger patent regimes can encourage domestic innovation and attract foreign innovation.

This study examines the relationship of national culture to firm innovation, moderated by the type of industry in which the firm competes.Hypotheses are developed and tested using data from 536 companies across ten countries competing in four global and four multidomestic industries.

We seek to test a broad range of factors that influence the technology sourcing decision of international subsidiaries in acquiring product technology from outside the firm (i.e., outsourcing) versus internal development. A regression model, used to analyze data from 187 international subsidiaries in six industries and with parents based in 14 countries, identifies the environmental, strategic, configurational, and resource endowment factors that influence the technology sourcing decision. Specifically, the level of product dynamism in the subsidiary's industry and the distance between the subsidiary's primary marketing and R&D operations are associated with a greater reliance on outsourcing. A differentiation goal, a low-cost goal, along with the level of the subsidiary's human and financial resources are associated with a greater reliance on internal development.

The technology‐sourcing decision traditionally has examined the choice either to innovate internally or to acquire technology from outside sources. The increasing complexity of this decision requires a move beyond the simple “make‐versus‐buy” dichotomy. We seek to test factors that influence the technology decision of subsidiaries for product and process technology across the continuum of options from internal development to outsourcing. We also explore concordance between the research streams of new product development and technology sourcing.Regression models are used to analyze data from 187 subsidiaries that suggest product and process technology development decisions sometimes are associated with similar factors and at other times they diverge. In particular, we find that external product and process technology acquisition decisions are associated negatively with differentiation goals and associated positively with product dynamism. While external product acquisition is associated negatively with a low cost goal and positively with increasing distance between primary marketing and R&D operations, external process technology acquisition is associated positively with high competitive intensity.Implications include the following: (1) While external product technology acquisition may provide quicker or even less expensive initial solutions, external reliance makes it difficult to maintain a long‐term positional advantage; (2) When greater distances separate key functional activities, external partners may provide solutions that are more responsive to local consumer needs, and the potential for improved communication may allow for quicker adaptation and increased flexibility; (3) In highly dynamic product situations, internal development, while providing greater control, can be expensive and can result in technologies that are not accepted by the marketplace; and (4) As competitive intensity increases, strategic imperatives may reduce the focus on product design and development and may require increasing concentration on manufacturing costs and efficiencies.

We employ transaction cost economics ( TCE ) and inspiration from technology innovation management to advance a model of technology sourcing governance and performance in the international environment. We hypothesize that the innovation context moderates the relationship between process technology sourcing and performance. The innovation context is defined as external factors reflected in the appropriability regime and whether the industry is characterized by a dominant design. Moreover, we suggest that, contingent upon the innovation context, subsidiaries prefer internal development to secure a positional advantage. A multi‐industry sample of 105 subsidiaries is used to test the hypotheses. We find support for a contextual model linking process technology sourcing strategy to subsidiary performance. Motivated by TCE , we find tentative evidence for a preference order of technology sourcing beginning with internal development and ending with market sourcing, particularly when the appropriability regime is weak.

The article reviews the book “Enabling Knowledge Creation: How to Unlock the Mystery of Tacit Knowledge and Release the Power of Innovation,” by Georg Von Krogh, Kazuo Ichijo and Ikujiro Nonaka.