Disentangling the Roles of International Experience and Distance in Establishment Mode Choice

Douglas Dow () and Jorma Larimo
Additional contact information
Douglas Dow: The University of Melbourne
Jorma Larimo: University of Vaasa

Management International Review, 2011, vol. 51, issue 3, No 2, 355 pages

Abstract: Abstract The empirical results concerning the role of international experience in establishment mode choice decisions have, until now, been ambiguous and mixed. In an attempt to resolve this dilemma, experiential knowledge in an international setting is decomposed into two distinct dimensions and a more comprehensive set of distance measures are incorporated into the models predicting the establishment modes of Nordic FDI. The empirical results indicate that the two forms of experiential knowledge (cluster-specific experiential knowledge and general internationalization knowledge) are both significantly related to establishment mode choice, but in opposite directions. The results for this data set also show that when used to predict establishment mode choice, the broader range of distance measures explain 2.6 times as much variance as the Hofstede-based Kogut and Singh index. Moreover, the results demonstrate that not fully controlling for this broader range of distance measures significantly distorts the relationship between cluster-specific experiential knowledge and establishment mode. It appears there may be a similar type of distortion with respect to general internationalization knowledge but the effect size is much weaker and non-significant within this sample.

Keywords: Establishment mode; International experience; Cultural distance; Psychic distance (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (37)

Downloads: (external link)
http://link.springer.com/10.1007/s11575-011-0080-5 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:manint:v:51:y:2011:i:3:d:10.1007_s11575-011-0080-5

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/11575

DOI: 10.1007/s11575-011-0080-5

Access Statistics for this article

Management International Review is currently edited by Michael-Jörg Oesterle and Joachim Wolf

More articles in Management International Review from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().