GEM Research

Director: Prof. Bart Los

The research in our programme deals with the firm in a globalizing world. Using the onion model to depict the topic, it consists of three layers. First, globalization affects the environment within which the firm is operating. Studying the effects can be done at various levels, ranging from the relations between countries to the level of the market for an individual good. The changing surroundings of the today’s multinational firms are studied in international economics (IE). Second, how the economic environment of the firm (and in particular the market in which it operates) affects the strategic choices and behavior of the firm is analyzed in international business (IB). Third, the changing surroundings of the firm also induce changes in the internal structure of the firm, which is at the heart of international management (IM). In a nutshell, the outside, the inside and their interaction.

Research in International Economics in our programme, distinguishes two major areas. The first, International Trade and Geography, deals with international relations between countries. Focusing on multinational firm behavior this covers the analysis of mergers and acquisitions. In imperfectly competitive markets, strategic interaction between firms might stimulate foreign investment if a competitive edge can be derived from a comparative advantage. Focusing on countries, multi- and intercountry input-output tables are used to study linkages between countries and, for example, the emission or water content of trade flows. Focusing on locations, it appears that economic activity is unevenly spread over the globe and highly clustered. Using the theory of economic geography helps to answer central questions, such as why do firms move and to what location?

The second major area within international economics deals with International Productivity and Growth. This body of research looks at comparative differences in sources of economic growth between countries, with an emphasis on the drivers of productivity performance and the role of technology and innovation. An important project within this group is EUKLEMS (financed by the European Commission in its 6^th Framework Programme). The project creates a database on measures of economic growth, productivity, employment creation, capital formation and technological change at the industry level for all European Union member states from 1970 onwards. The input measures include various categories of capital, labor, energy, material and service inputs. Productivity measures are developed, in particular by applying growth accounting techniques. Also, several measures on knowledge creation are constructed.

The research in International Business focuses on studying the dynamics of multinational corporations preferably in a comparative perspective. It addresses the strategies of internationally operating firms (both large scale and medium sized) and the determinants of their performance. For example, using a huge database with information on mergers and acquisitions, the incidence and success of international ownership transfers are analyzed. Other important topics are headquarter-subsidiary ties, the choice of entry modes in new markets, and the effects of foreign direct investments.

The research in International Management deals with corporations (both profit and non-profit) that face a process of profound restructuring due to globalization. This process induces a greater flexibility in management approaches. Cross functional forms of cooperation, cross border activities and cross cultural issues characterize these new approaches. Decentralization and networking of firms, both internally and in their relationships to other firms, become common phenomena. The following three main directions in IM research may be distinguished. First, research that looks at the management of firms in the multinational context. Second, research that compares management practices of different cultures, nations (including their institutions) and functions (cross functional studies). Third, research that examines how organizational logics are changed, transformed, and translated under globalization. Specific topics include knowledge transfer and organizational learning within multinationals, international human resources management, international composition of boards of directors and institutional embeddedness.

It goes without saying that several of our research projects are characterized by co-operation, both within and across themes. On the one hand, a series of data collection efforts have been undertaken that aim at multi-disciplinary and multi-level research. These include the database on international mergers and acquisitions and the EUKLEMS database with macro-level growth and productivity statistics. The databases can be used for a wide variety of studies. On the other hand, several cross-border projects have been carried out. These include the relation between micro-level innovation management and macro-level productivity, the ecology of political parties in three countries, and foreign direct investment and trade.