Survival Characteristics and Adjustment of MNE Affiliates in the European Integrated Market

Antonios Georgopoulos, Felicitas Nowak-Lehmann D. () and Vasilios Sogiakas
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Antonios Georgopoulos: Department of Business Administration, University of Patras / Greece
Felicitas Nowak-Lehmann D.: Ibero-America Institute for Economic Research, Goettingen / Germany
Authors registered in the RePEc Author Service: Felicitas Nowak-Lehmann D.

No 225, Ibero America Institute for Econ. Research (IAI) Discussion Papers from Ibero-America Institute for Economic Research

Abstract: This is one of the first studies which systematically investigate whether specific characteristics of foreign affiliates that reflect their MNE investment motivations prolong or undermine affiliate survivorship when the host country becomes member of a regional economic union. Using a unique database of 162 foreign affiliates established in the era of protectionism (1960-1980) in Greece, we explore the survival evolution of these affiliates within the European integration period (1981-2011). The study poses two research objectives: the exploration of the key characteristics per type of affiliate and the analysis of the impact of the specific characteristics on affiliate survival. We hypothesize and find that when the protected Greek economy enters the European market, closure risk is relatively high for those affiliates which exploit traditional location advantages such as tariffs and unskilled-labor cost, whereas it is relatively low for those units that adjust to the new institutional framework by investing in advertising and human capital intensity. The results have important implications for policy makers and managers.

Keywords: Survival of MNE affiliates; Protectionism; Economic Integration; Greece (search for similar items in EconPapers)
JEL-codes: C25 F15 F23 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2013-02-19
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Persistent link: https://EconPapers.repec.org/RePEc:got:iaidps:225

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