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Leveraging the benefits of location decisions into performance : a global view from matched MNE
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Yong, Yang and Driffield, Nigel L. (2022) Leveraging the benefits of location decisions into performance : a global view from matched MNE. Journal of Business Research, 139 . pp. 468-483. doi:10.1016/j.jbusres.2021.09.071
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Official URL: https://doi.org/10.1016/j.jbusres.2021.09.071
Abstract
We examine how firms leverage their resources, through FDI decisions into profits growth. Drawing on over 19,000 multinational firms, we employ a matching process and find that while investment in developed countries leads to productivity improvement, profits growth is not automatic, but requires continued productivity growth. Contrasting the emphasis placed on different firm-level resources by the resource-based view and the knowledge-based view, we show that a firm’s capability to invest in firm-specific assets accelerates the speed of reaping the rents from knowledge seeking FDI in developed countries. In addition, profits growth as a result from investing in developing countries is greater for firms who appoint foreign directors from the same global or regional cluster as their foreign subsidiaries. Moreover, developing country MNEs, if properly deploying their firm resources, can leverage the benefits of FDI location into performance better than developed country MNEs.
| Item Type: | Journal Article | ||||||||
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| Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce H Social Sciences > HG Finance |
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| Divisions: | Faculty of Social Sciences > Warwick Business School > Strategy & International Business Faculty of Social Sciences > Warwick Business School |
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| Library of Congress Subject Headings (LCSH): | Investments, Foreign, International business enterprises, Globalization -- Economic aspects, Industrial productivity | ||||||||
| Journal or Publication Title: | Journal of Business Research | ||||||||
| Publisher: | Elsevier Inc. | ||||||||
| ISSN: | 0148-2963 | ||||||||
| Official Date: | February 2022 | ||||||||
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| Volume: | 139 | ||||||||
| Page Range: | pp. 468-483 | ||||||||
| DOI: | 10.1016/j.jbusres.2021.09.071 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||||
| RIOXX Funder/Project Grant: |
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