 How do political and market exposure nurture ambidexterity?Alfredo Jiménez and Dirk Boehe Journal of Business Research, 2018, vol. 89, issue C, 67-76 Abstract: We empirically examine the simultaneous relationship between international market scope and political risk in the foreign direct investment (FDI) portfolio of multinational enterprises. We argue that firms can take advantage of their experience interacting with governments in risky locations when entering new markets and benefit from international diversification advantages. At the same time, companies with investments in a larger number of countries can adopt a more risk-tolerating approach and enter riskier locations in subsequent investments where they expect higher returns as a consequence of lower competition and a more efficient leverage of their existing knowledge and routines. We analyze a sample of 164 Spanish firms using a 3SLS simultaneous equation model and show that higher levels of political risk in FDI portfolios lead to broader international market scopes and vice-versa. Our results emphasize the increasing relevance of market-political ambidexterity, the capability of simultaneously managing political and market challenges. Keywords: Market-political ambidexterity; International market scope; Political risk; Experience by exposure; Foreign direct investment; Multinational enterprises (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:89:y:2018:i:c:p:67-76 DOI: 10.1016/j.jbusres.2018.03.016 Access Statistics for this article Journal of Business Research is currently edited by A. G. Woodside More articles in Journal of Business Research from Elsevier |
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