AIB 2012 Conference Proceedings - Academy of International ...

TUESDAY
The Impact of Business Group Diversification on Emerging Market Multinationals: Evidence from Latin America
Armando Borda, Universidad ESAN/ Florida International University
Diversified business groups represent the most efficient organizational form to conduct transactions in the
presence of large institutional voids because they reduce transaction cost by internalizing activities. However,
Emerging economies are characterized by a reduction of government intervention and by the improvement of
governance mechanisms. Under the adoption of market oriented institutions, the organizational costs of
diversified business groups may be higher than their benefits and hence; these business groups face pressures
to refocus their operations. Nevertheless, given that the majority of business groups are old and large; they also
face strong inertial processes that constrain their capability to adapt to these environmental changes In this
article we explore this alternative avenue that diversified business groups have to distribute their large
overhead: the internationalization of their affiliates. Considering that firm specific assets tend to be regionally
bound and that the benefits of business group diversification are associated with the presence of institutional
voids, we explore the capacity of business group diversification to generate value in the internationalization
process of their affiliates and how this impacts varies depending on whether their affiliates expand to more or
less developed countries and on whether their affiliates are regionally or globally oriented. (For more
information, please contact: Armando Borda, Universidad ESAN/ Florida International University, USA:
abord001@fiu.edu)
Firm Specific Advantages in Managing the Risks of Internationalisation in Frontier Markets: Exploring the Role of
Government Linkages
Namukale M. Chintu, University of Cambridge
While there is a vast amount of research on firms' choice of ownership form when entering a foreign market, it
has largely focussed on firms behaving in a reactive manner to host country circumstances. Little attention has
been paid to how firms might overcome some of the root causes associated with the selection of joint ventures
and internationalise using wholly owned subsidiaries in the first instance. Using an embedded case study
developed in Zambia, we investigate the choice of ownership form among Chinese and Western firms. The
analysis of these cases leads to the development of 3 testable propositions focused on the behaviour of firms
with government linkages in nascent frontier economies. Our study aims to lay a foundation for future research
on government linkages and the internationalisation of firms, particularly in frontier market contexts. (For more
information, please contact: Namukale M. Chintu, University of Cambridge, United Kingdom: nc350@cam.ac.uk)
Innovation Process as a Mediator Linking Export Capabilities and Performance
Badri Munir Sukoco, Airlangga University
Muslich Anshori, Airlangga University
Indrianawati Usman, Airlangga University
Having export capabilities are necessary steps for exporters to be success in the international market. Based on
learning-based view of internationalization, this study argues that the capability to acquire information from
foreign market and being adaptive on foreign consumer needs need to go further through innovation process
before having effects on export performance. The developed hypotheses are tested among Indonesian smalland-medium-size
enterprises (SMEs) exporters. The results indicate that export capabilities contribute positively
on innovation process and export performance, which is also apply on the effect of innovation process and
export performance. Further findings indicate that innovation process partially mediates the effect of export
capabilities on export performance. (For more information, please contact: Badri Munir Sukoco, Airlangga
University, Indonesia: badri@feb.unair.ac.id)
AIB 2012 Conference Proceedings
Page 258