Economics at your fingertips  

Location still matters! How does geographic configuration influence the performance-enhancing advantages of FDI spillovers?

Elizabeth Yi Wang and Mario Kafouros

Journal of International Management, 2020, vol. 26, issue 3

Abstract: Although many studies on FDI spillovers either implicitly or explicitly consider the firm as a single-location entity, most countries are dominated by multi-location business groups that consist of several affiliates. Business groups and their affiliates operate in different subnational regions and vary in their responsibilities (i.e., research and development, manufacturing, and marketing & sales) as well as in their ability to coordinate internally and minimize spatial transaction costs. We argue that such variations in turn affect the ability of business groups to benefit from intra- and inter-regional FDI spillovers. We advance prior research by examining how the effects of FDI spillovers on the performance of indigenous business groups in China are influenced by 1) the location and the geographic dispersion of their portfolios of affiliates and 2) the responsibility of each affiliate. Our analysis shows that the geographic dispersion of business groups has a profound effect on how much they benefit from FDI spillovers. It also shows that business groups are particularly effective in exploiting FDI spillovers through affiliates with marketing & sales responsibilities, while affiliates with other responsibilities are not effective in doing so.

Keywords: FDI spillovers; Multi-location enterprises; Geographic dispersion; Emerging markets; China (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

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:

Ordering information: This journal article can be ordered from
http://www.elsevier. ... 601266/bibliographic

DOI: 10.1016/j.intman.2020.100777

Access Statistics for this article

Journal of International Management is currently edited by M. Kotabe

More articles in Journal of International Management from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2021-06-30
Handle: RePEc:eee:intman:v:26:y:2020:i:3:s1075425318305088