Session 374

Antecedents and Consequences of Multinational Location Decisions

Track G

Date: Monday, September 22, 2014

 

Time: 16:30 – 17:45

Paper

Room: Bruselas


Session Chair:

  • Exequiel Hernandez, University of Pennsylvania

Title: Contextual and Geographic Distance between Headquarters and Subsidiaries and its Relationship with Headquarters Value Added

Authors

  • Phillip Christopher Nell, WU Vienna
  • Björn Ambos, University of St. Gallen
  • Sjoerd Beugelsdijk, University of Groningen

Abstract: Literature has highlighted that headquarters have substantial difficulties in adding value to their increasingly global and complex organizations. In this paper we examine the direct and indirect effects of geographical and contextual distance on headquarters ability to add value. Building on an original dataset of 124 manufacturing subsidiaries in Europe, we find no direct effect of distance. Instead, our results show that headquarters ability to add value depends on the interplay of distance and subunit power with larger power imbalances and greater distances causing the largest set back to headquarters value adding attempts. We discuss implications for the literature on headquarters-subsidiaries relations and distance research.

Title: Foreign Subsidiary Location Strategy and Financial Performance: A Global Value Chain Perspective

Authors

  • Deeksha Singh, Rutgers University
  • Yong Yang, University of Sussex
  • Ajai Gaur, Rutgers University

Abstract: We examine the role of value chain positioning on the performance of foreign subsidiaries. There has been a growing trend of value chain disintegration in MNCs. Based on the ownership-location-internalization framework, we argue that such disintegration has a differential impact on performance of different subsidiaries. Foreign subsidiaries that are lower in the value chain perform better than those that are higher in the value chain. Further, we argue that parent intangibles and parent’s ownership strategy for a given subsidiary moderates the relationship between value chain positioning and subsidiary performance. We test and find support for our arguments on a panel data covering 8,736 manufacturing multinational parents and 22,412 of their foreign subsidiaries in 105 countries during the period from 2004 to 2013.

Title: Rivalry on Multiple Fronts: The Effects of Domestic and Host Market Competition on New and Repeated Foreign Entry

Authors

  • Exequiel Hernandez, University of Pennsylvania

Abstract: When expanding abroad, firms can enter new markets or deepen their commitment to existing ones by making repeated investments. How competition affects this sequential entry decision has been understudied. We argue that competitive factors in the foreign market (entries by rivals) and in the domestic market (industry concentration) have different effects on the decision to explore new markets vs. increase investment in markets firms have already entered. These competitive factors are moderated by a firm’s dominance in its domestic market and its opportunities for learning vicariously about alternative foreign market opportunities. We largely find support for our ideas in a longitudinal study of the location choices of firms from France, Germany, and the UK into Eastern European countries between 1990 and 2008.

Title: State-owned vs. Private Multinationals: Two Motivations of International Expansion in the Electricity Supply Industry?

Authors

  • Sinziana Dorobantu, New York University
  • Bennet Zelner, University of Maryland

Abstract: Despite dramatic rise of state-owned multinationals (SOMs) in the global economy, strategic management research on the factors driving these firms’ location choices and the extent to which these influences differ from those shaping the expansion patterns of privately-owned multinationals is still relatively scarce. Using a comprehensive worldwide directory of more than 40,000 power plants and their owners, we analyze of the location choices of SOMs and their private sector counterparts in the global electricity utility and show that existing models of international location choice are not well-suited for understanding the location decisions of state-owned firms. We conclude that further research is needed to gain insight into how SOMs choose where to invest around the world.

All Sessions in Track G...

Sun: 08:00 – 09:15
Session 389: Managing the Multinational Organization in an Increasingly Complex World
Sun: 09:30 – 10:45
Session 221: Global Stakeholder Networks
Session 390: Local Determinants of Competitive Advantage and Disadvantage
Sun: 11:15 – 12:30
Session 2: Offshore Outsourcing, Dynamic Capabilities, and the Changing Nature of Firm Boundaries
Sun: 15:45 – 17:00
Session 270: Innovation in MNCs and Global Networks
Session 371: Inter and Intra Organizational Learning Across Borders: A Knowledge Management Perspective
Session 380: Small, Young and Entrepreneurial Firms: A Unique Perspective in Globalization
Sun: 17:15 – 18:30
Session 603: Global Strategy IG Business Meeting
Mon: 08:00 – 09:15
Session 335: Internationalization and Strategic Decisions
Session 379: Emerging Markets: Understanding the Importance of Context
Mon: 11:00 – 12:15
Session 372: The Challenges of Global Operations: Managing R&D and Complexity
Session 373: Global Diversification: Governance and Performance Implications
Mon: 14:45 – 16:00
Session 375: Changing External Environments: How do Multinationals Respond?
Session 381: Firm boundaries in Multinational Organizations: Antecedents and Consequences
Session 414: Global Networks and Business Groups
Mon: 16:30 – 17:45
Session 226: Culture, Norms and Institutions: The contextual influences on Entrepreneurship
Session 374: Antecedents and Consequences of Multinational Location Decisions
Session 382: Drivers of Multinational Performance:What, Where and When?
Tue: 08:00 – 09:15
Session 383: Globalization of R&D: Implications for Learning and Innovation
Tue: 11:00 – 12:15
Session 376: Headquarters Subsidiary Relationship: New Approaches to an Old Question
Session 384: Multinational Location Decisions: New Approaches Across Different Perspective
Tue: 15:30 – 16:45
Session 263: Innovation Models in Emerging Economies
Session 377: Organizing Assets Across Borders: Drivers and Consequences
Session 385: Multinational firms and the External Environment: The Role of Institutions
Tue: 17:15 – 18:30
Session 378: Global Outsourcing & Offshoring: Implications for Multinational Decisions


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