Journal of International Business Studies

This paper examines the ability of forward rates that are implicit in the term structure of Eurocurrency interest rates to predict future interest rates and to incorporate the information in past interest rates. The findings suggest that forward rates are unbiased estimators of future interest rates but are not optimal predictors of future interest rates. Further evidence does not provide support for the presence of a systematic risk premium on forward rates. The findings of this study suggest also that the Eurocurrency market is efficient in incorporating information contained in the history of interest rates into the forward rate. In addition, this paper shows that, in conformity with the efficient market hypothesis, errors of prediction based on forward rates are not related to past changes of interest rates.

Research conducted primarily in the United States has shown that interpersonal influence arising from opinion exchange behavior is an important factor in consumers' product adoption and brand choice decisions. An important managerial question in the international arena is whether information-giving and seeking behaviors depend on culture. In a study representing eleven nationalities, we explore the role of culture in moderating consumers' opinion exchange behavior. Results indicate that the cultural characteristics of power distance and uncertainty avoidance [Hofstede 1980] influence the focus of consumers' product information search activities, but not their tendencies to share product-related opinions with others. Following earlier opinion leadership studies, we find that individual characteristics such as product category interest and involvement are most indicative of active opinion leadership behavior.

Global teams may help to integrate across locations, and yet, with formalized rules and procedures, responsiveness to those locations’ effectiveness, and the team members’ experiences of work as meaningful may suffer. We employ a mixed-methods approach to understand how the level and content of formalization can be managed to resolve these tensions in multinationals. In a sample of global teams from a large mining and resources organization operating across 44 countries, interviews, observations, and a quantitative 2-wave survey revealed a great deal of variability between teams in how formalization processes were enacted. Only those formalization processes that promoted knowledge sharing were instrumental in improving team effectiveness. Implementing rules and procedures in the set-up of the teams and projects, rather than during interactions, and utilizing protocols to help establish the global team as a source of identity increased this knowledge sharing. Finally, we found members’ personal need for structure moderated the effect of team formalization on how meaningful individuals found their work within the team. These findings have significant implications for theory and practice in multinational organizations.

Out-group trust is a crucial driver of international business performance. However, employees from different countries vary in their levels of out-group trust. The aim of this study is therefore to capture national forces driving out-group trust. Based on Kramer's theorizing on the multiple bases of trust, we argue that, at the societal level, dispositional, categorization-based and rule-based trust influence employees’ out-group trust. In particular, we argue for dispositional and rule-based societal trust to increase, and for categorization-based societal trust to decrease employees’ out-group trust through different types of socialization. Using data on 25,622 employees from 42 countries, we find partial support for the coexistence of these bases of societal trust. Disentangling trust-forming and trust-impeding models, we find support for dispositional and rule-based societal trust as drivers of employees’ out-group trust, and for categorization-based societal trust as impeding employees’ out-group trust. In a combined model, however, rule-based trust is not significantly related to employees’ out-group trust. Considering the coexistence of trust and distrust, employees’ out-group trust develops through socialization effects conveying general trust in others (i.e., high dispositional trust) and the equality of social groups (i.e., low categorization-based trust).

This paper examines the extent of foreign currency and/or parent company currency financial measures used by 105 U.K.-based MNCs in the process of evaluating foreign subsidiary operations and their managers' performance. The results of the empirical study indicate a preference towards the use of local currency measures and the extent of this preference tends to be greater than those found in recent similar studies of U.S.-based MNCs.

An empirical test of 290 U.S. and 653 Japanese managers, using the Miles and Snow typology, provides a cross-national examination of strategy's impact on conflict. Results substantially support the study's predictions and indicate that firms should: (1) monitor their conflict handling mechanisms; (2) emphasize integrative approaches; and (3) appropriately use formalization for conflict handling. Despite a convergence of management practices globally, findings indicate that considerable differences still exist between U.S. and Japanese firms.

This paper offers a social network explanation for the purported relationship between internationalization and firm performance in the context of born-global small and medium enterprises (SMEs). We argue that home-based social networks play a mediating role in the relationship between inward and outward internationalization and firm performance. The mediating mechanism is attributed to three information benefits of social networks: (1) knowledge of foreign market opportunities; (2) advice and experiential learning; and (3) referral trust and solidarity. Using survey data from SMEs in the largest emerging economy of China, we found some support for this mediating role of social networks in the form of guanxi. The results imply that international business managers should consider social networks as an efficient means of helping internationally oriented SMEs to go international more rapidly and profitably.