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Experience and FDI risk-taking: a microfoundational reconceptualization
journal contribution
posted on 2023-06-09, 00:23 authored by Peter J Buckley, Liang Chen, L Jeremy Clegg, Hinrich VossStudies 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.
History
Publication status
- Published
File Version
- Accepted version
Journal
Journal of International ManagementISSN
1075-4253Publisher
ElsevierExternal DOI
Issue
2Volume
22Page range
131-146Department affiliated with
- Business and Management Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2016-02-25First Open Access (FOA) Date
2018-03-25First Compliant Deposit (FCD) Date
2016-02-24Usage metrics
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