Performance Implications of MNEs' Diversification Strategies and Institutional Distance
Abstract
By proposing a conceptual outline for a general model that explains the link between multinational enterprises' (MNEs') diversification and their performance, this study tests the moderating effects of institutional distance empirically. Integrating literature from a strategic perspective within international business research, the proposed integrated, multidimensional framework can analyze MNEs' product diversification, international diversification, and institutional distance, as well as the impacts of these elements on firm performance. A sample of Fortune Global 500 companies confirms this moderation and extends prior research by establishing the importance of relationships among MNEs' product and international diversification, institutional distance, and performance. © 2012 Wiley Periodicals, Inc.
Introduction
The global economy creates borderless opportunities for multinational enterprises (MNEs) to grow and achieve profitability. Faced with abundant opportunities, MNEs seek to leverage their resources and skills creatively in foreign markets through both international and product diversification strategies. However, despite the fact that management scholars have dedicated considerable efforts to understanding the diversification–performance relationship, the existing literature offers conflicting empirical findings about the performance implications of diversification. The empirical evidences are inconsistent, indicating relationships that vary from linear (positive, negative, none) to nonlinear (U-shaped, inverted U-shaped, S-shaped) (for a review, see Contractor, Kundu, & Hsu, 2003, for international diversification; and Palich, Cardinal, & Miller, 2000, for product diversification).
These mixed results suggest the need for a contingency perspective to resolve the discrepancy. Recent studies by Wan and Hoskisson (2003); Ruigrok, Amann, and Wagner (2007); Hitt, Tihanyi, Miller, and Connelly (2006); and Kotabe, Srinivasan, and Aulakh (2002) all suggest that potential moderating variables may have been overlooked by the existing research on the diversification–performance link. Wan and Hoskisson (2003) specifically pointed out that most international and product diversification literature fails to account for the contextual influences of varying institutional environments in different national markets. Echoing these calls, this study therefore aims to explore the moderating effect of institutional distance between home and host countries of MNEs on the relationship between international/product diversification and company performance.
Institutional environment is a key determinant of firm structure and behavior (DiMaggio & Powell, 1983, 1991). According to international business literature, national-level institutional conditions represent pivotal factors for differentiating the behavior of domestic versus foreign MNEs (see Dunning & Lundan, 2008). This study proposes that because large institutional distances—“the extent of similarity or dissimilarity between the regulatory, cognitive, and normative institutions of two countries” (Xu & Shenkar, 2002, p. 608)—make it difficult for MNEs to establish external legitimacy in the host country and to transfer strategic resources to foreign subsidiaries (Kostova, 1996, 1999), the efficacies of diversification strategies on performance improvements are likely to be affected. Theoretically, relating the relationships of international and product diversifications to firm performance through a contingent institutional explanation provides valuable insights into the combined effects of both micro (firm international and product diversification strategy) and macro (national institution) factors that can explain the performance phenomenon. This approach also bridges the micro–macro divide by revealing how diversification strategies influence firm performance affected by institutional settings, because diverse institutional environments exert acute influences on management activities (DiMaggio & Powell, 1991).
The rest of this article is organized as follows. The next section contains a brief review of background literature. After developing a conceptual framework of the moderating role of institutional distance, this article derives several research hypotheses based on integrated literature (see Figure 1). The research methodology followed to test the hypotheses and the results of the data analyses follow. This article concludes with a delineation of the significance of the findings, managerial implications, and future research directions.
The Conceptual Framework
Theoretical Backgrounds and Hypothesis Development
Rewards and Risks of International Diversification
International diversity is perceived as a critical element in corporate strategy and a means for sustenance and growth. Because of its importance, researchers have dedicated considerable efforts to investigating its performance implication (Contractor, 2007). Corporate performance can be improved by international diversity, because international diversity increases sales in foreign markets and hence diversifies the risk of home country economic downturn. International diversity can also lower costs through economies of scale in manufacturing and through economies of scope in business functions like research and development (R&D), marketing, and distribution system. Firms can leverage their competitive advantages by expanding their operations globally and better exploiting their core competences (Hamel, 1991; Mustafa & Chen, 2010; Porter, 1990; Sallis & Sharma, 2009; Yang, Lim, Sakurai, & Seo, 2009). In other words, firms can use their existing rent-yielding core competences in foreign markets to generate economies of scale and scope and consequently achieve better firm performance. To summarize, the common rewards of international diversity are from the following four sources: (1) economies of scale and scope; (2) learning; (3) exploiting relationships among business segments and geographic areas; and (4) taking advantage of differences in factor markets.
However, international diversity comes with both rewards and risks. Unfamiliarity with foreign markets and a lack of knowledge about foreign cultures and environments causes MNEs to suffer from a liability of foreignness during their international expansion (Zaheer & Mosakowski, 1997). Moreover, if international diversity is adopted because of pure market share perseverance or domestic market saturation, the costs of international expansion may not be covered by the benefits it yields. In fact, operations in multiple countries with varied institutional contexts is likely to increase transaction costs as well as costs associated with information collection, processing, and dissemination, which may even exceed the benefits derived from international expansion (Hitt, Hoskisson, & Ireland, 1994). Similarly, Datta, Rajagopalan, and Rasheed (1991) argued that bureaucratic costs, inefficiency, and managers' limited ability to understand the complicated international environments adequately exert a negative impact on firm performance. The greater the difference between home- and host-country institutional contexts, the higher such costs are likely to become.
Hypothesis 1a: There is a linear relationship between international diversity and firm performance.
Hypothesis 1b: There is a curvilinear relationship between international diversity and firm performance.
Rewards and Risks of Product Diversification
The extensive discussion of product diversification in strategic management literature began with Rumelt's (1974) seminal work. Product diversification yields multiple rewards for firms; for example, Palepu (1985) notes that it creates operational synergies by combining complementary skills and the firm's market power, which results in profit maximization. Ghoshal (1987) proposes that product diversification forces divisions to share their physical assets, external relations, learning experiences, and marketing mix, which leads to economies of scale. According to the resource-based view, product diversification yields managerial economies of scale and efficiency gains through the creation of a coordinating function among various specialized divisions. Prahalad and Hamel (1990) also identify a core competency advantage: use an existing rents-yielding core competency that generates economies of scope and economies of scale and, therefore, greater profitability. Finance scholars also perceive product diversification as means to generate financial synergies of increased debt capacity and internal capital markets (Williamson, 1986). Therefore, various studies report a positive relationship between the degree of product diversification and performance (Boateng, Qian, & Tianle, 2008; Zhao & Luo, 2002).
However, there are costs associated with product diversification. Beyond a certain degree, it yields too much information, such that management cannot process it sufficiently to arrive at profitable decisions. Bureaucratic costs and inefficiency arise from the lack of adaptability to environmental changes (Datta et al., 1991). Bounded rationality concerns reflect managers' limited ability to grasp the complexities of the entire business spectrum. From a corporate financial management perspective, product diversification also generates two agency problems: free cash flow and overinvestment. Both problems may generate negative impacts on firm performance. In addition, transaction cost theorists focus on excessive growth through product diversification, which may raise governance costs because of the greater organizational complexity, cultural differences, structural inertia, uncertainty in transferring intangible assets, and erosion of competitive advantages (Hofstede, 1980; Nelson & Winter, 1982; Williamson, 1985). When firms diversify into new products to take advantage of scope economies, they must consider the increased associated costs. Many prior studies supported the contention that a negative relationship exists between firm performance and product diversification (Amit & Livnat, 1988; Servaes, 1996).
Hypothesis 2a: There is a linear relationship between product diversity and firm performance.
Hypothesis 2b: There is a curvilinear relationship between product diversity and firm performance.
Interactive Effects of International and Product Diversification on Performance
Many of the largest conglomerate firms operate simultaneously in diverse international markets. Product and international diversification may have multifaceted interactive effects. Depending on the financial and managerial resource constraints of firms, they may be both mutually reinforcing and mutually exclusive. This study investigates whether product and international diversification represent complementary or substitute dimensions of MNEs' diversification strategies.
In terms of mutually reinforcing effects, Hitt, Hoskisson, and Kim (1997) posit that firms without product diversification may find it difficult to implement international diversification strategies. The principal argument in support of the complementarities between product and international diversification focuses on enhancing the gains from learning and experience through product diversification and achieving efficient international diversification from a multiple decision structure (Kim, Kandemir, & Cavusgil, 2004; Hoskisson & Hitt, 1988; Hoskisson, 1987). Hitt et al. (1997) state that the integration of product and international diversification helps firms exploit interdependencies across their businesses to achieve potential synergy. Thus, the interactive effects of product and international diversification have a positive influence on performance. However, using questionnaire data, Sambharya (1995) examines the dynamic interaction of product and international diversification strategies and reports no significant individual gains from either international or product diversification strategies.
Hypothesis 3: Interaction between product and international diversification positively influences performance.
Moderating Effects of Institutional Distance
A general consensus indicates that when MNEs decide to expand to foreign markets, they must adjust their practices to the foreign institutional environment and be prepared for challenges, such as differences in laws, regulations, policies, enforcements, government's attitudes toward industries, and so forth. Institutions promote certain types of behavior and restrict others, and consist of three distinct pillars: regulative (i.e., setting, monitoring, and enforcement of rules), normative (i.e., desirable goals and appropriate means for attaining them, or societal beliefs and norms), and cognitive (i.e., internal representation of the environment by actors or culturally prevailing attitudes). International business scholars consider how institutional environments affect MNEs' behavior (Dunning & Lundan, 2008), as well as why MNEs that attain legitimate status tend to succeed more frequently in the global market.
“The cognitive and normative dimensions of the country institutional context are conceptually close to culture, whereas the regulatory dimension is unique to country institutional context and not captured by culture” (Kostova, 1999, p. 314). The institutional dimensions comprehensively capture the effect of cross-country differences on firm strategic behavior (Cho & Padmanabhan, 2005; Shenkar, 2001). By incorporating the regulative dimension as well as the cognitive and normative dimensions (which, to some extent, capture elements of culture), institutional distance provides for a more holistic view of cross-country differences. Though Redding contended that “culture provides meaning for institutions” (2008, p. 282) and provided a conceptual domain to separate culture from institutions, this paper acknowledges cultural distance is a powerful tool for measuring and analyzing cross-country differences and is also associated with institutional factors (House, Hanges, Javidan, Dorfman, & Gupta, 2004). Testing for the impact of cultural distance, however, is beyond the scope of the current study. This could potentially serve as an avenue for future research in this area. Furthermore, there is substantial theoretical overlap between the cognitive and normative institutional dimensions and is treated as a higher order factor (Gaur & Lu, 2007; Gaur, Delios, & Singh, 2007). The conceptualization of institutions and institutional distance set forth in this article is along similar lines. The moderating effect of regulative and normative institutional distances between a firm's home and host country on the link between international/product diversity and performance is tested for.
Institutional distance, as defined earlier, affects the ability of MNEs to establish their legitimacy in a host country (Kostova & Zaheer, 1999) and transfer organizational competencies to foreign subsidiaries in host countries (Kostova, 1999). Xu, Pan, and Beamish (2004) empirically investigate the effects of institutional distance on the communication and legitimacy of MNEs and conclude that institutional differences create more difficulty for MNEs attempting to achieve legitimacy in a host country. Institutional distance also may represent a key determinant of MNEs' strategic behavior (Xu & Shenkar, 2002). Kostova (1996) and Kostova and Zaheer (1999) argue that the greater the institutional distance, the more difficult it is for MNEs to establish legitimacy in the host country and transfer strategic resources to foreign subsidiaries (Kostova, 1999). A large institutional distance triggers conflicting demands for external legitimacy in the host country and internal consistency (or global integration) within the MNE (Xu & Shenkar, 2002). Finally, Westney (1993) argues that the balance in these conflicting demands is the key to MNEs' success. That is, both international diversification and product diversification are important corporate strategies, but their impact on firm performance depends on the institutional environments of foreign markets.
Hypothesis 4: The relationship between international diversity and firm performance will become weaker when the (a) regulative and (b) normative distance between home and host countries increases.
Hypothesis 5: The relationship between product diversity and firm performance will become weaker when the (a) regulative and (b) normative distance between home and host countries increases.
Method
Sample
The Fortune Global 500 company list for 2004 serves as the study sample (see Table 1). These 500 companies all publish financial data and report figures partially or wholly to a government agency. Data pertain to the fiscal year that ended on or before March 31, 2005. Hoover's and Mergent Online (formerly Moody's) provided the two major data sources, including the firms' annual financial reports contained in Mergent Online. These firms are used for several reasons. First, “when holding the time period constant, a reasonably solid answer for a given region of the world such as North America may not necessarily hold in other regions such as Asia” (Peng & Delios, 2006, p. 4); as such, the Global 500 companies as a sample help generalize the empirical findings of this study. Second, most prior research uses Fortune 500 companies, enabling a good comparison with this stream of research. Finally, these companies exhibit sufficiently different degrees of international and product diversifications to offer variance for the statistical tests.
Measures
International Diversification
The most common measure of international diversification is the ratio of foreign sales to total sales (Sambharya, 1995). For example, Geringer and colleagues (1989) use the ratio of a firm's foreign subsidiaries' sales to its total worldwide sales to measure the degree of internationalization. The number of non-home-country subsidiaries appears in other studies, such as Sambharya (1995). In addition, the number of countries in which a firm operates represents country scope (Tallman & Li, 1996), because a country count seems to address scope issues (i.e., tax, currency, economic, political arbitrage) better and less arbitrarily than a subsidiary count.
The study's composite measure of international diversification uses the counts of foreign subsidiaries and countries in which a firm operates. These two measurement items have been used widely in extant literature and provide reasonable indicators of international diversification (Tallman & Li, 1996). Following Sanders and Carpenter's (1998) procedures, this study first gathered the respective counts of the number of foreign subsidiaries and number of foreign countries in which a firm operates. The two ratios divide, respectively, the subsidiary and country counts by the maximum number of each. Then, the average of these two ratios provides a single measure of international diversification that ranges from 0 to 1, with 1 representing the highest degree of international diversification. Ramaswamy (1993) similarly uses both foreign plant count and foreign country count. This composite measure captures the breadth of geographic diversification as well as its intensity. By employing the composite measure, this study partially responds to criticisms about the use of a unidimensional measure, as raised by Sullivan (1994).
Product Diversification
Similar to international diversification, various measures of product diversification appear in extant literature. For example, Rumelt's (1974) subjective method features single business, dominant business, related business, and unrelated business. The specialization, related, and vertical ratios indicate firms' classifications into Rumelt's categories. However, more researchers use Jacquemin and Berry's (1979) entropy measure of product diversification, which “retains the simplicity of the SIC count approach and captures the richness of Rumelt's classification scheme” (Sambharya, 1995, p. 207).
Because most of the information necessary for these measures is not available from secondary data sources, this study instead uses a simple measure of product diversification offered by Varadarajan and Ramanujam (1987). The measure consists of two dimensions: broad spectrum diversity (BSD) and mean narrow spectrum diversity (MNSD). Whereas BSD is the number of two-digit Standard Industrial Classification (SIC) codes in which a firm operates, MNSD equals the number of four-digit SIC codes in which the firm operates divided by the number of two-digit SIC codes. Thus, a firm might be a low product diversifier if it is low on both BSD and MNSD measures but a high product diversifier if it rates high on both (Sambharya, 1995). Compared with the entropy measure, BSD and MNSD retain the related and unrelated concepts but avoid the use of detailed business segment sales data, which rarely are available in secondary sources. They also avoid the complicated computations required for the entropy measure.
Again following Sanders and Carpenter's (1998) procedures, the average of the two ratios (BSD and MNSD) can be calculated for each company, such that 1 represents the highest product diversification and 0 represents the lowest in the sample.
Firm Performance
Data availability has prompted previous studies to use return on sales (ROS) as a measure of firm performance (Haar, 1989). This study instead uses return on assets (ROA) and collects each firm's ROA from 2002 to 2004 from Mergent Online. This measure serves as an indicator of firm performance in several studies (Capar & Kotabe, 2003; Hitt et al., 1997) that indicate a high correlation between ROA and ROS (r = .91). Most prior studies pertaining to the relationship between international or product diversification and performance average the variables over a multiple-year period (Chang & Wang, 2007). This approach can smooth annual transient errors in the data, such as the potential problem that exists when the value of ROA fluctuates substantially from year to year. Therefore, this study also averages the variables over a three-year period (2002–2004).
Institutional Distance
Two measures proposed by Xu and colleagues (2004) capture institutional distance: regulative and normative distances (see Tables 2 and 3). These two measures reflect an institutional perspective and rely on information from the 1997 edition of The Global Competitiveness Report, which documents country differences on 170 items, categorized into eight factors: openness, government, finance, infrastructure, technology, management, labor, and institutions. Xu and colleagues (2004) consider two country difference factors in their report, “management” and “institutions,” to represent the normative and regulative pillars of the institutional environment, respectively.
Control Variables
Firm international experience, firm size, firm leverage ability, and industry profitability constitute the control variables in this study. Firm international experience is a simple count of the number of years in which a company has had international operations; the logarithm of total number of employees worldwide proxies for firm size; and the debt-to-equity ratio provides a proxy for firm leverage ability. These control variables have been used often in extant literature. Because of the nature of the sample (cross-industry data), industry profitability information (ROA) obtained for each company accounts for performance variances due to different industry competitive environments.
Ordinary multiple regressions were employed to test the linear or curvilinear relationships between either international or product diversification and firm performance (Hypotheses 1a, 1b, 2a, and 2b); hierarchical regressions test the moderating effects of international diversification/product diversification, regulative distance, and normative distance (Hypotheses 3, 4a, 4b, 5a, and 5b).
Results
The descriptive statistics and correlations appear in Table 4 and reveal that the regulative distance and normative distance are significantly and highly correlated (r = –.64; p = .000). The variance inflation factors (VIF) also show that multicollinearity is not a concern, because the VIF values are substantially lower than the cutoff point of 10 recommended by Neter and colleagues (1990).
The results for Model 1 (see Table 5) indicate significant relationships between industry profitability and firm performance (β = .396; p ≤ .001) and between firm leverage ability and firm performance (β = –.102; p ≤ .05). These findings are consistent with prior studies and indicate the importance of controlling for these variables when testing the research hypotheses.
The test results for Hypotheses 1a and 1b appear in Models 2 and 3. The ordinary multiple regression method uses Model 1 as the base model. Model 2 supports Hypothesis 1a, because international diversification relates positively to firm performance (β = .082; p ≤ .05). However, the hypothesized curvilinear relationship between international diversification and firm performance does not receive support, because the square term of international diversification does not relate significantly to firm performance (Model 3).
The curvilinear (inverted U-shaped) relationship between product diversification and firm performance emerges from the results of Models 4 and 5, in support of Hypotheses 2a and 2b. The coefficient beta of the interaction of international diversification and product diversification (international diversification × product diversification) is positive and significant (β = .058; p ≤ .05), which means that statistical results support the proposed interactive effects of product and international diversification on firm performance (Model 6), in support of Hypothesis 3 (see Table 6).
Two regressions test Hypotheses 4a and 5a, and the results in Model 7 indicate that regulative distance significantly and negatively moderates the relationship between international diversification and firm performance (β = –.077; p < .05), in support of Hypothesis 4a. The results in Model 9 also prove that regulative distance moderates the relationship between product diversification and firm performance (β = –.054; p < .05). Thus, Hypothesis 5a receives support. Two more regressions (Models 8 and 10) testing Hypotheses 4b and 5b indicate a lack of support for either. However, normative distance significantly but positively moderates the relationship between international diversification and firm performance (β = .115; p < .10). Table 7 summarizes the results.
Conclusion
This study sets out to examine the relationships between MNEs' diversification strategies (international and product) and firm performance, and the moderating effects of institutional distance. Based on the analyses of Fortune Global 500 firms, the results of the statistical tests confirmed primarily the proposed hypotheses. The current study contributes to the international business literature in two ways. First, because “Product scope and geographic scope need to be examined simultaneously in future research” (Peng & Delios, 2006, p. 5) to enhance our knowledge about international business strategies, this study combines diversification research with institutional theory and offers empirical evidence on their interactive impacts on MNEs' performance. Second, in response to Wan and Hoskisson's (2003) call to include more macro-environmental factors in integrated diversification–performance frameworks and Peng and Delios's (2006) demand for an institutional-based view of diversification strategies, the current study contributes to the literature by introducing a contingent perspective explaining institutional distance as a moderator in affecting the relationships among firm performance, international diversification, and product diversification.
Managerial Implication
The curvilinear relationship between international diversification and firm performance does not receive support; instead, the sample indicates a positive, linear relationship. On average, companies in this study possessed 33 years of prior international experience, so this finding might reflect Tallman and Li's (1996, p. 185) argument that “losses due to overexpansion should be mitigated by the typical gradualism of internationalization and by highly developed skills at managing international subsidiaries in a sample of multinational firms.” If they lack the necessary experience and knowledge, managers should anticipate a curvilinear relationship between international diversification and firm performance.
Managers also should try to find solutions to the problems caused by the complexity of product diversification; adopting an international diversification strategy appears to be a good option, according to the findings of this study. Experiences learned from international diversification can enhance abilities to manage the problems caused by product diversification. However, whether adopting international and product diversifications simultaneously causes overexpansion and increases transaction costs remains an open question. Managers should interpret this empirical finding carefully.
With regard to institutional distance, regulative distance creates the greatest barrier to firms' operations in foreign countries, whereas normative distance surprisingly emerges as a positive moderator. The results indicate that managers should conduct careful investigations of host countries' cultures and their regulatory institutions. Because of the nature of this sample and globalization's influence, the impact of normative distance (or cultural distance) on international business appears to be decreasing slowly. Fortune's Global 500 might possess the abilities to take advantage of normative (or cultural) differences in host countries by turning them into innovations (e.g., host countries might provide different knowledge, technology know-how, ideas) that improve the firms' performance. In addition, globalization makes host countries' cultures more accessible to managers from foreign countries or enables managers to become more prepared before they go to host countries. However, for managers in firms that lack the learning abilities to turn cultural differences into innovations, normative distance should still represent a threat.
Limitations and Future Research
First, this study uses the number of foreign subsidiaries and number of countries as measures of international diversification. However, international diversification consists of the multinational and geographical scope of international operations (Tallman & Li, 1996). This study actually tests the performance implications of the geographical scope; further research should also use foreign sales ratios to measure multinationality or the overall strategic importance of foreign operations to a firm and investigate their impact on firm performance. Moreover, the performance implications of the interaction between multinationality and geographical scope should be considered.
Second, this study appears to be the first to find a curvilinear (inverted U-shaped) relationship between product diversification and MNEs' performance (Qian's [2002] findings were based on small and medium-sized enterprises). Research should adopt a more widely used measure, such as Jacquemin and Berry's (1979) entropy measure. Future studies need to collect detailed business segment sales data to capture a firm's degree of product diversification precisely.
Third, Gomez-Mejia and Palich (1997) find insignificant cultural effects on firm performance, and Tihanyi, Griffith, and Russell's (2005) meta-analysis results indicate cultural distance has no significant relationships with entry mode choice, international diversification, or MNE performance. Similarly, the empirical findings of this study implicitly indicate the possibility that regulatory institutions have more influence on international business than culture. Researchers should focus on this issue, which could create a new paradigm for international business studies.
Fourth and finally, this study reveals no moderating influence of normative distance on the relationship between product diversification and firm performance, but the data related to product diversification could be to blame. The data do not indicate which items the firms are selling in foreign countries but, instead, offer only SIC codes. Further research should investigate whether these SIC codes also exist in the foreign countries to measure firms' international product diversification more precisely. Doing so can offer more accurate insights into whether normative distance influences the product diversification–firm performance link.
Biographical Information
Mike Chen-Ho Chao, MBA, PhD, is an Associate Professor of Marketing at Cotsakos College of Business, William Paterson University of New Jersey. His research and teaching interests center on the internationalization/regionalization of multinational enterprises (MNEs), standardization vs. localization of MNEs' websites, consumers and MNEs from the “Greater China Region” (mainland China, Hong Kong, Macao, and Taiwan), and country-of-origin (COO) effects in international marketing. Mike has published his research findings in several academic journals such as Journal of World Business, Journal of International Marketing, and International Marketing Review.
Seung H. Kim, Paul G. Lorenzini Endowed Professor in International Business, is director of the Boeing Institute of International Business, John Cook School of Business, Saint Louis University. He has authored or coauthored seven books and many journal publications. Professor Kim received an outstanding teacher award at the School of Business Administration, Saint Louis University. He has served as a consultant for multinational companies and international banks, and on the boards of the following organizations: the Missouri District Export Council, appointed by the US Commerce Secretary; the State of Missouri Governor's Office; the World Trade Center of St. Louis; and the World Affairs Council of St. Louis. Dr. Kim attended the Seoul National University Law School, and received his MBA and PhD from New York University.
Hongxin Zhao received his PhD from George Washington University and is David Orthwien Professor of International Business, Boeing Institute of International Business at the John Cook School of Business, Saint Louis University. His research focus is in international business strategy. His articles appear in such publications as the Journal of International Business Studies, Journal of International Marketing, Management International Review, and the International Business Review, among others. Dr. Zhao taught previously at National University of Singapore and was the international program coordinator at the Chinese Ministry of Foreign Trade (now Ministry of Commerce) and the Chinese Ministry of Science and Technology, respectively. Dr. Zhao is the founding member of the International Academy of E-commerce and the editor of Multinational Business Review.
Dr. Chin-Chun Hsu received his PhD in international business from Saint Louis University. His research is in the areas of internationalization strategy of multinational enterprises, international entrepreneurship, global supply chain management, and methodological issues. He has published articles in academic journals such as the Journal of International Business Studies, Management International Review, Journal of Business Research, OMEGA-International Journal of Management Science, International Journal of Production Research, International Journal of Logistics Management, International Journal of Physical Distribution and Logistics Management, and the Multi-national Business Review. He is listed in United Who's Who and AcademicKeys Who's Who. He serves as an editorial review board member of the International Journal of Applied Management Science. He holds the 2007 Management Department Researcher of the Year Award and was the Highly Commended Award Winner at the Emerald Literati Network Awards for Excellence 2009 for his paper published in the International Journal of Physical Distribution and Logistics Management.
