Advantage transfer on location choice and subsidiary performance

Fang-Yi Lo and Feng-Jyh Lin

Journal of Business Research, 2015, vol. 68, issue 7, 1527-1531

Abstract: Multinational enterprises (MNEs) conduct foreign investments by transferring advantages across borders. Such advantages have varying degrees of transferability. This study explores the effect of the location-boundedness of MNEs' advantage on international strategy and subsequent subsidiaries' performance. The empirical analysis draws on a combination of survey data and data from two databases. Using multiple sources avoids common method biases. Regression results show that marketing advantage has a higher degree of location-boundedness than production advantage does. Lower degrees of advantage's location-boundedness have an association with better subsidiary performance. This study extends the resource-based view into international context by examining what kinds of advantage have higher location-boundedness. The study also explores the barriers to international advantage transfer and their influences on MNE strategy.

Keywords: Advantage transfer; Location-boundedness; Location choice; Subsidiary performance (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:68:y:2015:i:7:p:1527-1531

DOI: 10.1016/j.jbusres.2015.01.046

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