Buckley, Peter J, Chen, Liang, Clegg, L Jeremy and Voss, Hinrich (2016) Experience and FDI risk-taking: a microfoundational reconceptualization. Journal of International Management, 22 (2). pp. 131-146. ISSN 1075-4253
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Abstract
Studies of how firms respond to host country risk have assigned explanatory primacy to organizational capability and managerial risk preference. The organization-level account is built on the premise that capability is a prerequisite for risk-taking while the individual-level account focuses on the managers’ intrinsic behavioral attitude. Without integrating one with the other, the former is open to many alternative explanations while the latter remains only a source of heterogeneity. We propose that employing the microfoundations approach can address the limitations of each account and yield a fuller understanding of FDI risk-taking. Drawing upon behavioral decision theory and the concept of risk propensity, we describe the lower-level mechanisms that generate the empirical regularity between firm experience and risk-taking, which has been attributed to the macro-level capabilities paradigm. We finalize the framework with an account as to how individual-level mechanisms can be incorporated into the context of organizational strategic decision-making.
Item Type: | Article |
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Keywords: | country risk, risk propensity, microfoundations, behavioral decision-making, experience |
Schools and Departments: | University of Sussex Business School > Business and Management |
Subjects: | H Social Sciences |
Depositing User: | Liang Chen |
Date Deposited: | 25 Feb 2016 09:32 |
Last Modified: | 02 Jul 2019 16:15 |
URI: | http://sro.sussex.ac.uk/id/eprint/59753 |
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