Academy of International Business INSIGHTSVol. 19, No. 3, 2019 Special Issue on the 2019 Peter J. Buckley and Mark Casson AIB Dissertation Award Essays on Organization, Creativity, and Globalization Sungyong Chang p3 Foreign Direct Investment in Global Cities and Co-Ethnic Clusters: Characteristics, Profitability, and Survival Dwarka Chakravarty p7 Contemporary Perspectives on Internationalization: Subnational, Regional, Digital Maximilian Stallkamp p12 Bloody Business: Multinational Investment in an Increasingly Conflict-Afflicted World Caroline Theresia Witte p16 An official publication of the Academy of International Business LEtter from the editors This issue of AIB Insights is our seventh annual focused issue highlighting research from fi- nalists of the Peter J. Buckley and Mark Casson AIB Dissertation Award. Since 2013, these issues have served as an invaluable conduit for the timely dissemination of the latest, state-of- the-art dissertation research in international business, and we proudly continue this tradition. As in the six previous years, this special issue publishes extended dissertation abstracts of this year’s award-winning and award-nominated dissertations. Our contributing authors summa- rize their dissertation research to capture their extensive and exceptional scholarly endeavors in a “nutshell.” John Mezias, Editor 2019 Buckley and Casson AIB Dissertation Award winner: “Essays on Organization, Creativity, and Globalization” by Sungyong Chang, London Busi- ness School (Ph.D. awarded by Columbia University) BIG Question: How does the globalization of digital innovations facilitate the discovery of talent and how can firms benefit from the globalization of digital innovations? Award-nominated dissertations (in alphabetical order): “Foreign Direct Investment in Global Cities and Co-ethnic Clusters: Characteristics, Perfor- William Newburry, mance, and Survival” by Dwarka Chakravarty, San Diego State University (Ph.D. awarded by Associate Editor Ivey Business School, Western University) BIG Question: How does subsidiary location within global cities and co-ethnic clusters impact the characteristics, profitability, and survival of foreign direct investment? “Subnational, Regional, Digital: Contemporary Perspectives on the Internationalization of Firms” by Maximilian Stallkamp, Virginia Tech (Ph.D. awarded by Ivey Business School, Western University) BIG Question: How is the internationalization of contemporary firms shaped by (1) subnational/regional factors and (2) by digital business models? “Bloody Business: Multinational Investment in an Increasing Conflict-Afflicted World” by Caroline Witte, Copenha- gen Business School (Ph.D. awarded by Erasmus University Rotterdam) BIG Question: What determines multinational enterprises engagement in conflict countries? On behalf of the AIB community, we would like to thank this year’s Buckley and Casson AIB Dissertation Award Se- lection Committee for their invaluable and dedicated efforts, work, and commitment: Shige Makino (Chair), David Reeb, Marcus Møller Larsen, and Tatiana Kostova. On pages 20-21 in this issue, we provide an overview of previous winners of this prestigious award, starting with the award’s founding year of 1968. Congratulations to the 2019 AIB dissertation awardee and finalists for their significant accomplishments! 2 AIB insights Special Issue on the 2019 Peter J. Buckley and Mark Casson AIB Dissertation Award Essays on Organization, Creativity, and Globalization Sungyong Chang Ph.D. awarded by Columbia University, USA (May 2018) and media companies, which is the main focus of the Uppsala BIG Question: model. My dissertation investigates when global platforms are How does the globalization of digital innovations facil- conducive to the discovery of new talent, and how global me- itate the discovery of talent and how can firms benefit dia companies may overcome the liability of foreignness and from the globalization of digital innovations? how they can overcome this liability. Thus, my dissertation at- tempts to contribute to a burgeoning literature in international business, specifically, the globalization of digital platforms and Introduction media companies (e.g., Johanson & Vahlne, 2009; Alcácer, Cantwell, & Piscitello, 2016; Chen, Shaheer, Yi, & Li, 2019) Do technological advancements such as digital innovation or and produce useful managerial insights. artificial intelligence facilitate human creativity and innova- tion? Global media and Internet conglomerates such as Apple To explore the relationship between technological innovation and Google have been introducing new digital innovations all and human creativity, we need a better understanding of the over the world and have been dominating the global market. topic of discovery of new talent. I want to emphasize that the As this trend has intensified, there has been a growing concern discovery of new talent is an essential yet underexplored type of around the relationship between technological innovations and innovation. This goes back to the classic classification of inno- creativity. This concern has called for more systematic research vation types proposed by Schumpeter (1934). He distinguishes on whether these new digital technologies will have a comple- among the following five types of innovation: new products, mentary relationship with human creativity, especially in firms’ new processes, new organizations, new markets, and new re- discovery of creative talent. My dissertation aspires to produce sources. Most prior work focuses on the first four types of in- useful insights on how managers can leverage opportunities novation. This study focuses on the last type of innovation, the from the globalization of new digital innovation. To attain this discovery of new resources, in creative industries where artist goal, my dissertation first explores opportunities and threats talent – a type of resource – is the most important source of from the globalization of digital innovations and then exam- creativity and profit (Caves, 2000; Tervio, 2009). ines how managers can leverage such opportunities and avoid threats in talent discovery and competitive dynamics. This article summarizes my dissertation which examined the following three-related questions. The first essay explores how The emergence of platforms and media companies in the mod- managers in music companies benefit from the globalization of ern digital economy challenges the existing internationalization the digital market for unbundled products by unleashing hu- theory and practice. Due to their multisided market nature man creativity and innovation in local users and complemen- of many digital innovations, the internationalization process tors. I utilize the staggered entry of iTunes into 29 countries of platforms and media companies depends critically on lo- to identify a causal impact of the introduction of the digital cal complementors (i.e., content providers) in the host coun- market for unbundled products. try market, as well as the commitments of global platforms Vol. 19, no. 3, 2019 3 The second essay examines how entrepreneurs benefit from the from a one-shot unbundled experimentation is less accurate globalization of the digital self-release market. The second essay than that from albums, single-producing firms make 29.75% focuses on the competitive dynamics between incumbents and more omission errors. Overall, the results suggest that the pos- entrepreneurial firms in the host country to identify opportu- itive effect from the decreased cost of experimentation out- nities and threats from the globalization of the digital self-re- weighs the negative effect from the loss of information quality lease market. I exploit the staggered entry of YouTube into 29 on talent; Single-producing firms discover artists with greater countries to identify a causal impact of the introduction of the talent and produce more popular songs; that is, the most pop- digital market for self-releases. ular artist and song in single-producing firms are more popular than those in album-only-producing. Finally, single-producing In the third essay, I explore how the subsidiaries of global me- firms are more likely to discover artists who created at least one dia companies can overcome the liability of foreignness in dis- new genre, suggesting that unbundling facilitates the creation covering local talent in the host countries. I analyze all global of new markets. media conglomerates’ acquisitions of foreign country music labels during 1988-2015. The first essay exploits a unique empirical setting to make a credible causal inference about the impact of unbundling on To answer these questions, I build a dataset collected and experimentation and creativity. However, the idiosyncrasies of matched from multiple large-scale datasets, including the Spotify the music industry should not cloud the general applicability APIs, MusicBrainz, Discogs, and Quantone databases. The sam- of the conceptual approach to a broad range of firms and in- ple covers 165,464 artists, 2,349,776 songs, and 22,157 music dustries. The first essay highlights how the introduction of the companies in 29 countries for the period from 1950 to 2015. digital market for unbundled products changes the business environment for managers who are in charge of discovering new talent. On the one hand, the low cost of experimentation from unbundling helps small and young firms that are under How Can Managers Benefit from financial constraints. The findings suggest that managers in the Digital