AIB 2012 Conference Proceedings - Academy of International ...

TUESDAY
Corporate Reputation, Entry Mode Strategy, & Competitive Advantage: New Insights from an Integration of
Resource-based and Transaction Costs Logics
Charles Edward Stevens, University of Wyoming
Erin Elizabeth Makarius, Canisius College
Choosing the correct entry strategy is critical to firms' global success and survival. Traditional studies using
transaction cost economics (TCE) predict a firm's entry mode based on the degree of opportunistic behavior
expected based on transaction attributes. However, this does not consider that firms can—and often do—
engage in forbearance: choosing not to act opportunistically even when the ability to do so is present. To
address this, this paper incorporates the resource based view (RBV) with TCE to explore how a key attribute of
transacting firms—corporate reputation—affects firms' likelihood of forbearance, and thus their foreign market
entry strategy. (For more information, please contact: Charles Edward Stevens, University of Wyoming, USA:
csteve10@uwyo.edu)
Agglomeration, Entry and the Liability of Foreignness
Anna Lamin, Northeastern University
Grigorios Livanis, Northeastern University
Foreign entrants suffer from a liability of foreignness, influencing their location choices and leading them to
prefer clusters with other firms. However, prior research only examines foreign entrants, while the liability of
foreignness implies that these entrants would be more strongly attracted to clusters of firms than domestic
firms. We compare the location choices of 437 foreign and domestic entrants in India during 2005-2009 and
find that domestic firms exhibit a stronger preference than foreign ones for these city clusters. This suggests
that foreign entrants may not suffer from a liability of foreignness, anymore so than domestic entrants. (For
more information, please contact: Grigorios Livanis, Northeastern University, USA: g.livanis@neu.edu)
BOT Outsourcing Contracts - Boon or Bane to Emerging Market Vendor Firms
Peter D. Oerberg Jensen, Copenhagen Business School
Bent Petersen, Copenhagen Business School
Build-operate-transfer (BOT) contracting has been widely usen in the engineering and construction industry, but
has only recently been introduced in services industry domains. Notably, service provider firms from emerging
markets have recently started offering BOT outsourcing contracts. In this paper we investigate under which
circumstances a BOT outsourcing contract (i.e. a contract where the client firm exercises its call option) is
beneficial, or the opposite, to the emerging market vendor firm. We draw on various theoretical literatures
(transaction cost economics, real options, inter-firm linkages) and develop three scenarios for the implications
for vendor firms. We find that BOT contracts, under certain circumstances, may imply benefits of process and
knowledge upgrading for the emerging market vendor firm. However, given different sets of circumstances,
engaging in a BOT contract carries important competitive risks for the vendor firm, in terms of a gradual
downgrading of the vendor firm's role in the collaboration with clients, and the ensuing hollowing out of
knowledge competences. (For more information, please contact: Peter D. Oerberg Jensen, Copenhagen
Business School, Denmark: poe.smg@cbs.dk)
Does FDI Increase Market Concentration An Evaluation of the Portuguese Manufacturing Industries
Rosa Portela Forte, University of Porto
Paula Sarmento, University of Porto
The impact of foreign direct investment (FDI) on host country market concentration has been a controversial
issue, both at the theoretical and the empirical levels. Most existing empirical studies point to a positive
relationship, enhancing the negative effects of FDI on competition conditions, but there are also studies that
AIB 2012 Conference Proceedings
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