Focusing on US multinational enterprises from 2010 to 2020, the study explores the role of the firm-specific real option capacity in determining the equity share in cross-border acquisitions. We find that under high levels of exogenous uncertainty, firms engaged in cross-border acquisitions seek lower equity shares in foreign target firms. We also find that real option capacity strengthens the negative relationship between exogenous uncertainty and equity share in cross-border acquisitions. This study provides insights into the heterogeneous nature of firms’ real option-related capabilities and their influence on equity commitment choices in international business contexts, particularly in cross-border acquisitions.

Supply contracts and sales contracts are interconnected in modern manufacturing. It remains unclear how they collectively respond to external shocks. In this paper, we present some interesting empirical findings on how international outsourcing and ordinary international trade (export prices) change under external shocks (exchange rate fluctuations), propose related theory to explain the findings, and explore their implications for business’s strategy on how to manage their GVCs and international collaborations more effectively under external shocks.

Existing studies in the patent litigation literature have focused on firms’ behavior in navigating and responding to legal challenges. However, scant attention has been given to the outcomes of patent litigation and crucially, how they influence firms’ strategic decisions, particularly when entering diverse geographic markets. Drawing on transaction cost arguments, this study contends that firms’ patent litigation outcomes, particularly unfavorable ones, impact entry decisions. Furthermore, by leveraging on the organizational learning literature, we propose that firms learn both experientially and vicariously from their own patent litigation and those of their competitors. These learnings impact firms’ market entry decisions when faced with unsuccessful patent litigation outcomes. Additionally, we investigate how intellectual property protection (IP) distance, as a measure of institutional differences between home and host countries, moderates the relationship between unsuccessful patent litigation outcomes and entry decisions. Our findings reveal that high rates of unsuccessful patent litigation is associated with a reduced likelihood of market entry, with learning experience— experiential and vicarious— moderating this relationship. Moreover, the increased IP protection distance between the home and host countries reduces the likelihood of firms’ market entry in the presence of high unsuccessful patent litigation outcomes.