More than intent: A bundling model of MNE-SME interactions

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Abstract

As a counterpoint to Prashantham and Birkinshaw, I present an alternative model of MNE–SME cooperation where either type of firms can take the role of content provider or distributor. I argue that MNEs will interact with SMEs when there are differences in optimal scale between the content creation and distribution stages of the value chain, and it is not feasible or efficient for either party to vertically integrate between these two stages. I then build two 2 × 2 bundling models, one in which the SME provides content and the MNE distributes it, and another with the reverse configuration. In these 2 × 2s the axes are the transactional properties of the two complementary inputs, content and distribution, that MNEs and SMEs bundle to create value. I show that these models can explain the forms taken by MNE–SME cooperation and their dynamics.
Original languageEnglish
JournalJournal of International Business Studies
Volume51
Issue number7
Pages (from-to)1176-1194
Number of pages19
ISSN0047-2506
DOIs
Publication statusPublished - 2020

Keywords

  • MNE–SME cooperation
  • bundling model
  • networks
  • transaction cost theory
  • value chain

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