Time compression diseconomies in foreign expansion

Ruihua Joy Jiang, Paul W. Beamish and Shige Makino

Journal of World Business, 2014, vol. 49, issue 1, 114-121

Abstract: Time compression diseconomies (TCD) in resource development impact the durability of competitive advantage according to the resource-based view. The Uppsala Model emphasizes experiential learning, which is subject to TCD. TCD joins the two perspectives and can help explain the foreign expansion process. We found the existence of TCD in post-entry expansion by examining the speed of establishing subsequent subsidiaries and the performance outcomes. Speed was negatively associated with subsidiary survival. TCD was exacerbated with environmental uncertainty and lack of vicarious learning, so that early mover subsidiaries are less likely to make a profit when they are established with faster speed.

Keywords: Time compression diseconomies; Speed of foreign expansion; Uppsala Model; Resource-based view; Subsidiary performance (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (49)

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DOI: 10.1016/j.jwb.2013.02.003

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