The Relationship between Location-Bound Advantages and International Strategy: An Empirical Investigation

Fang-Yi Lo, Joseph T. Mahoney and Danchi Tan
Additional contact information
Fang-Yi Lo: Feng Chia University
Joseph T. Mahoney: University of Illinois
Danchi Tan: National Chengchi University

Working Papers from University of Illinois at Urbana-Champaign, College of Business

Abstract: This paper examines the impact of location-bound advantage on the internationalization strategy of multinational enterprises (MNEs). The extant research literature suggests that an advantage's location boundedness may be driven by: the nature of the firm advantage; organizational embeddedness, and environmental embeddedness. We posit that these different drivers of location boundedness exert different impacts on internationalization strategies. Our empirical results reveal that organizational embeddedness lowers the breadth of internationalization of MNEs, and increases the tendency of these firms to employ a global strategy. We also find that MNEs whose advantages are tacit and complex have a lower depth of internationalization and are more likely to expand into culturally similar countries. Finally, our results show that MNEs whose advantages are highly embedded in the home environment tend to adopt a multi-domestic strategy and decentralized organizational structures.

Date: 2010
New Economics Papers: this item is included in nep-cse and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.business.illinois.edu/Working_Papers/papers/10-0103.pdf
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.business.illinois.edu/Working_Papers/papers/10-0103.pdf [301 Moved Permanently]--> https://giesbusiness.illinois.edu/Working_Papers/papers/10-0103.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecl:illbus:10-0103

Access Statistics for this paper

More papers in Working Papers from University of Illinois at Urbana-Champaign, College of Business Contact information at EDIRC.
Bibliographic data for series maintained by ().