Learning from Risky Environments: Global Diversification Strategies of Spanish MNEs

Alfredo Jiménez (), Diana Benito-Osorio and Carmen Palmero-Cámara
Additional contact information
Alfredo Jiménez: University of Burgos
Diana Benito-Osorio: Rey Juan Carlos University
Carmen Palmero-Cámara: University of Burgos

Management International Review, 2015, vol. 55, issue 4, No 2, 485-509

Abstract: Abstract This paper seeks to investigate the bilateral impact of two components of global diversification: political risk and product diversification relatedness. By analyzing a sample of 119 Spanish firms we find empirical evidence that having experience in risky environments is a useful resource for multinational enterprises. The results obtained show that experience managing high levels of political risk in the foreign direct investment (FDI) portfolio increases the number of countries where the firm may potentially invest. This multinational flexibility encourages a higher degree of product diversification relatedness by facilitating the achievement of economies of scope in the activities carried out in foreign markets. By contrast, the degree of relatedness in product diversification did not show any significant impact on political risk, due to the existence of instruments available to cover or minimize this risk when investing abroad.

Keywords: Experience; Political risk; Product diversification relatedness; Simultaneous equations; Spanish multinational enterprises (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s11575-014-0232-5 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:55:y:2015:i:4:d:10.1007_s11575-014-0232-5

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

DOI: 10.1007/s11575-014-0232-5

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 ().