Academy of Management Annual Meeting Proceedings includes abstracts of all papers and symposia presented at the annual conference, plus 6-page abridged versions of the “Best Papers” accepted for inclusion in the program (approximately 10%). Papers published in the Proceedings are abridged because presenting papers at their full length could preclude subsequent journal publication. Please contact the author(s) directly for the full papers.

How Do Formal and Informal Economies Fuel International Entrepreneurship in R&D-intensive Firms?

    R&D intensive firms have become increasingly important over the past a few decades, at least partly because of the value they create for stakeholders. The research dealing with such firms has begun to focus on their international strategies in that these firms demonstrate a different foreign investment trajectory compared to traditional firms. Built on the international entrepreneurship literature, our study extends the current understanding by showing that contrary to the research based on transaction cost logic, firms with high R&D intensity prefer to enter into a foreign country with lower equity ownership. This investment preference is also influenced by the formal and informal economies in the host countries. In particular, countries with a developed formal economy have a higher likelihood of hosting entry with greater equity control. In contrast, when the informal economy is prominent, the likelihood of entry is stronger but with a lower preference for high equity control. The findings demonstrate that the preference of entry mode for R&D intense firms has changed, catalyzed by the importance of innovation across industries to remain globally competitive. .