Firms choose strategies based on their attributes and industry conditions; therefore, strategy choice is endogenous and self-selected. Empirical models that do not account for this and regress performance measures on strategy choice variables are potentially misspecified and their conclusions incorrect. I highlight how self-selection on hard-to-measure or unobservable characteristics can bias strategy performance estimates and recommend an econometric technique that has been developed to account for this effect. Although this concern applies to a wide range of strategy questions, to demonstrate its effect I empirically examine if entry mode choice (acquisition versus greenfield) influences foreign direct investment survival. In specifications that do not account for self-selection, I find that greenfield entries have survival advantages compared to acquisitions. This confirms previous findings. However, the significance of this effect disappears once I account for self-selection of entry mode in the empirical estimates. The results confirm that estimates from models that do not account for self-selection of strategy choice can lead to incorrect or misleading conclusions.Endogenous Strategy Choice, Foreign Direct Investment, Survival, Entry Mode

Empirical findings across many nations show that exporters have superior productivity compared to nonexporters and that this relationship is driven by productive firms becoming exporters. The conclusion drawn from these studies is that there is little learning from exporting. We, however, assess if there are ex post benefits that accrue to exporting firms by examining innovation outcomes. We argue that exporters can often access diverse knowledge inputs not available in the domestic market, that this knowledge can spill back to the focal firm, and that such learning can foster increased innovation. We examine product innovation and patent application counts of a representative sample of Spanish manufacturing firms from 1990 to 1997. To conduct the analysis, we use a nonlinear GMM estimator for exponential models with panel data that allows for predetermined regressors and linear feedback. We find that exporting is associated with innovation. Moreover, the panel data allow us to explore the temporal relationship between exporting and innovation. In contrast to existing findings, we find evidence of learning by exporting-albeit in dimensions not previously examined in the literature.

By highlighting conditions under which viable interorganizational relationships do not materialize, we explore the limitations of interorganizational knowledge acquisition. In the empirical context of corporate venture capital (CVC), we analyze a sample of 1,646 start-up-stage ventures that received funding during the 1990s. Under a regime of weak intellectual property protection (IPP), an entrepreneur-CVC investment relationship is less likely to form when the entrepreneurial invention targets the same industry as corporate products. In contrast, under a strong IPP regime, industry overlap is associated with an increase in the likelihood of an investment relationship. Our findings suggest that many relationships do not form because the corporation will not invest unless the entrepreneur discloses his or her invention, and the entrepreneur may be wary of doing so, fearing imitation. To the extent that a CVC has greater capability and inclination to target same-industry ventures, such industry overlap would exacerbate imitation concerns under a weak IPP regime, yet facilitate an investment relationship under a strong IPP regime. Beyond CVC, this insight may explain patterns of other interorganizational relationships, including research and development alliances and technology licensing between start-ups and incumbents. of giving them early warning of what we were up to.Charles Ferguson, founder of Vermeer Technologies Inc. (Ferguson, 1999) Interorganizational partnership is an important strategy for knowledge acquisition that would be most effective if firms would ally with the highest quality partners. However, this is not a trivial task, as illustrated by the above quotes. Microsoft seeks investments in innovative start-ups; yet Vermeer-a pioneer in the field of Web editors and an ideal target for such an investment strategy-chose not to disclose its activities as fears of imitation outweighed the substantial benefits associated with Microsoft backing.

We argue that foreign firms operating in a host country generate information spillovers that have potential value for later foreign direct investment. We test two predictions. First, we expect foreign direct investments by firms with experience in a host country to be more likely to survive than investments made by first‐time entrants. Second, foreign direct investments will be more likely to survive the greater the foreign presence in the target industry at the time of investment, subject to two contingencies. The first contingency is that the relationship will be weak or nonexistent among firms with no experience in the host country, because these firms have difficulty evaluating and taking advantage of the information spillovers. The second contingency is that the presence of other foreign firms will not affect investment survival among firms that already have a presence in the target industry and undertake expansion. These firms already possess general information about the target industries and are unlikely to gain additional benefit from information spillovers. We find supportive evidence based on the survival to 1992 among 354 U.S. investments undertaken by foreign firms in manufacturing industries during 1987. © 1997 John Wiley & Sons, Ltd.

Research summary: A replication study assesses whether the results of a particular prior study can be reproduced, including in new contexts with different data. Replication studies are critical for building a cumulative body of research knowledge. This article discusses and provides a typology of different types of replications, compares replications with other approaches to cumulating knowledge, and provides guidelines toward producing high-quality replication studies. The articles in this Special Issue provide examples of replication studies in strategic management. Managerial summary: Research studies sometimes draw implications for managerial practice.A single empirical study, however, is specific to a particular context, relies on a particular set of data, and uses a particular research design. As a consequence, a single study cannot establish whether the findings generalize to a different context and whether the research design is robust to alternative approaches. Replication studies can help to establish the range of applicability of prior studies and better support what implications can be drawn for managerial practice. 6 However, in some cases, such as for qualitative studies, the measures and the methods go together (e.g., for quantitative coding of cases and analysis), so varying one may entail varying the other.