AIB 2012 Conference Proceedings - Academy of International ...

MONDAY
The Effectiveness of Business Entertainment in Facilitating Transactional Relationships: The Case of Chinese
Sales Managers
Francis Yonglin Sun, Woodbury School of Business
Shih-Fen S. Chen, University of Western Ontario
We develop and test a theory that can predict the effectiveness of business entertainment in facilitating
transactional relationships. Our analysis is based on a broader theoretical framework where exchange
relationships are regulated through a transaction governance structure (TGS) featuring a combination of
market, social, and legal sanctions. Business entertainment serves to reinforce the power of social sanctions in
regulating the behavior of economic agents, especially in cases where market and legal infrastructures are less
developed. Survey data collected from a sample of Chinese sales managers indicate that the effectiveness of
business entertainment in facilitating transactional relationships is associated with the intensity and format of
the focal entertainment practice. These findings support our transaction governance approach to business
entertainment. (For more information, please contact: Francis Yonglin Sun, Woodbury School of Business, USA:
francis.sun@aya.yale.edu)
Social Capital and its Necessary Evolution for Internationalization
Angelika Lindstrand, Stockholm School of Economics
Sara Hånell Melén, Stockholm School of Economics
In this study we examine the continuous effects of social capital on SMEs' exploitation of international business
opportunities during their international expansion. To do so, we test the effects of two forms of social capital,
conceptualized as the preceding and the current social capital of the internationalizing SME. Based on
internationalization process theory and social capital theory we argue for an evolutionary development of social
capital during a firm's internationalization process. Three hypotheses are tested using structural equation
modeling and linear regression on a data set covering 308 Swedish internationalizing SMEs. The results show no
support for a direct positive effect of internationalizing SMEs' preceding social capital on their international
opportunity exploitation. However, when the preceding social capital is mediated by the use of the firm's current
social capital, the model demonstrates a positive effect. The overall results contribute to internationalization
process theory by highlighting the necessity of internationalizing SMEs to be able to develop and extend their
social capital during the international expansion. (For more information, please contact: Angelika Lindstrand,
Stockholm School of Economics, Sweden: angelika.lindstrand@hhs.se)
The Role of Formal and Informal HQ-Subsidiary Relationships for Knowledge Transfer in Multinationals
B. Sebastian Reiche, IESE Business School
Anne-Wil Harzing, University of Melbourne
Markus Pudelko, Tübingen University
This study draws on foreign entry mode, organization and social capital theories to investigate the role of formal
and informal HQ-subsidiary relationships for knowledge transfer from the corporate headquarters to foreign
subsidiaries. Building on a large-scale empirical study of 817 subsidiaries located in nine different
countries/regions, we find support for our hypotheses that both formal and informal social structure are
conducive to knowledge transfer from headquarters. We also identify two specific conditions – subsidiary type
and language proximity – that moderate these relationships. Implications for research on MNC knowledge flows,
social capital and international business are discussed. (For more information, please contact: B. Sebastian
Reiche, IESE Business School, Spain: sreiche@iese.edu)
AIB 2012 Conference Proceedings
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