AIB 2012 Conference Proceedings - Academy of International ...

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overconfidence bias. Our empirical evidence supports the positive relationship between the cultural dimension
of individualism and the level of takeover activity in a cross-country empirical analysis with 47 countries. The
results are robust to controlling for several institutional variables and corporate governance indicators as well as
using other proxies of takeover activity, other time periods, and subsamples of countries. (For more
information, please contact: Astrid Juliane Salzmann, RWTH Aachen University, Germany:
astrid.salzmann@bfw.rwth-aachen.de)
Exploiting Economic Distance: The Influence of Home Country Formal Institutions on International New Entrants
Lin Cui, Australian National University
Xiaoming He, Beijing Jiaotong University
This paper examines the effect of home country formal institutions on international new entrants' decisions to
exploit economic distance in their foreign direct investment. We advance an analytical framework that
incorporates the governance quality and executive power dimensions of home country formal institutions. Using
data from 366 international new entrants and their foreign market entry activities, we found empirical supports
to our theoretical arguments. Specifically, our results suggest that the two home country institutional factors
promote firms' decision to exploit economic distance, and that the factors reinforce the effect of each other.
Moreover, we examine the moderating effects of firm characteristics. Specifically, we found that home-based
international experience positively moderates the home country institutional effects, whereas the moderating
effect of unabsorbed organizational slack was not supported. (For more information, please contact: Lin Cui,
Australian National University, Australia: lin.cui@anu.edu.au)
Impact of Institutional Norms on Knowledge Sharing: The Mediating Role of Trust
Yu-Fang Yen, National Quemoy University
Hsing-Kuo Wang, National Quemoy University
Based on the Chinese schema, we propose that social capital can manifest itself in the form of guanxi, trust,
and norms. We discuss the concept of interpersonal relationships within the context of Chinese culture
embedding the concept of guanxi in the model to further investigate relationships among there three
dimensions. We used a survey-based methodology to collect from 230 employees of the top 100 hightechnology
firms in Taiwan and Structural equation modeling (SEM) with LISTERL 8.54 to examine the
hypotheses model. Results revealed that at the individual level, guanxi is positively related to both trust and
norms. In addition, trust and norms are positively related to knowledge sharing. The mediating effects of trust
and norms were also found to be significant. Trust direct influences knowledge sharing, and plays a mediating
role between guanxi and knowledge sharing. This suggests that knowledge sharing is likely to occur when trust
exists among employees. Furthermore, the results indicate that norms mediate the relationship between guanxi
and knowledge sharing. On the other hand, guanxi among members influences knowledge sharing, and
organizations require a feasible solution through the mechanism of relational norms. Past studies have
emphasized the direct influence of social capital or regarded all variables to be of similar importance with regard
to knowledge sharing; however, no clear explanations have been provided explaining how it influences
knowledge sharing. The present study advances our understanding regarding the reasons social capital
enhances knowledge sharing among employees and means by which this occurs. (For more information, please
contact: Yu-Fang Yen, National Quemoy University, Taiwan: yvonne@nqu.edu.tw)
AIB 2012 Conference Proceedings
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