Product differentiation, external economies and MNE location choices: M&amp;As in Global Cities

Nachum, Lilach; Wymbs, Cliff

doi:10.1057/palgrave.jibs.8400151

Cited by 67 publications

(47 citation statements)

References 69 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…show that firms with superior technology are less likely to agglomerate (e.g., Shaver & Flyer, 2000;Nachum & Wymbs, 2005;Martin, Salomon & Wu, 2007). Although the relative feature size effects are directionally consistent, they do not significantly differ from zero.…”

Section: Resultsmentioning

confidence: 99%

“…Firms also contribute to the knowledge pool within the agglomeration. Therefore, firms with superior technology have an incentive to locate away from the agglomeration to avoid information leakage and the potential for costly spillovers to competitors (Shaver & Flyer, 2000;Nachum & Wymbs, 2005).…”

Section: Literature Reviewmentioning

confidence: 99%

“…With respect to the agglomeration decisions of foreign firms, what little empirical work that exists suggests that the location decisions of foreign entrants are subject to many of the same forces that impact domestic firms (e.g., Woodward & Rolfe, 1993;Braunerhjelm & Svensson, 1996;6 Barrell & Pain, 1999;Shaver & Flyer, 2000;He, 2002;Chung & Song, 2004;Nachum & Wymbs, 2005). In contrast to existing studies however, we argue that in addition to the traditional firm-level drivers of agglomeration, foreign entrants also factor in the institutional environments of the host and home countries when deciding whether to agglomerate.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Firms with superior technology have an incentive to locate away from the agglomeration in order to avoid information leakage and because they ostensibly benefit less than their competitors from inward knowledge spillovers (Shaver & Flyer, 2000;Nachum & Wymbs, 2005). Therefore, we control for the impact of technological superiority on the decision to agglomerate.…”

Section: The International Fabs Onmentioning

confidence: 99%

“…Although scholars from various disciplines recognize the importance of the location choices of foreign entrants within host countries, most existing studies focus on the firm-level factors that drive those decisions (Shaver & Flyer, 2000;Chung & Song, 2004;Nachum & Wymbs, 2005). Few assess the impact of institutional factors on FDI location choice (see Benito & Gripsrud, 1992;Henisz & Delios, 2001 for notable exceptions), and those that do generally focus on which countries to enter rather than whether to agglomerate.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

When in Rome? Examining the Institutional Determinants of Agglomeration for Foreign Entrants.

Salomon¹

2008

AMPROC

View full text Add to dashboard Cite

Although scholars from various disciplines have examined the antecedents to foreign direct investment (FDI) location choice, we understand less than we should about how the institutional environment of both the host and home country impact those decisions. To fill that gap, this paper examines institutional factors impact the agglomeration patterns of foreign entrants. We theorize that institutional contexts characterized by collectivist cultures, as well as economic and political uncertainty, encourage foreign entrants to locate within existing geographic agglomerations. To test our hypotheses, we empirically examine the location patterns of 181 foreign plant investments made by 61 parent firms across 22 countries in the global semiconductor industry. The findings reveal that foreign entrants are more likely to agglomerate in host countries characterized by collectivist cultures and by political and economic uncertainty. Home country characteristics had very little impact on the agglomeration decision of the foreign entrants. These results enrich traditional literature on FDI location choice by suggesting that the decision to agglomerate is context-dependent. Moreover, when choosing a location within a given country, foreign entrants are more likely to adapt to characteristics of the host country.

show abstract

Section: Resultsmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: The International Fabs Onmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

When in Rome? Examining the Institutional Determinants of Agglomeration for Foreign Entrants.

Salomon¹

2008

AMPROC

View full text Add to dashboard Cite

show abstract

Multinational Enterprises Innovation Networks and the Role of Cities

Iammarino¹,

McCann²

2015

The Handbook of Global Science, Technology, and Innovation

View full text Add to dashboard Cite

Complex Strategic Choices: A New Approach and Application to Foreign Firm Agglomeration

Salomon

Martín

2017

Global Strategy Journal

View full text Add to dashboard Cite

Research summary: In this study, we introduce a new statistical technique to the field of strategy that accounts for complex interrelated decisions. The technique is meant for situations in which one strategic decision depends critically upon another-e.g., where companies must commit to one decision before making another. We demonstrate the value of the technique in the context of companies choosing countries in which to invest, followed by areas within those countries in which to locate their facilities. We then describe the generic benefits of the statistical technique, offer guidance for how to use it, and provide the programming code so that others can implement it. We explain how the technique is particularly well suited to problems in which companies must decide between multiple options and the sample size is small relative to the number of initial options.Managerial summary: Research in strategy and international business has increasingly adopted two-stage models to account for endogeneity. Established approaches, however, deal most effectively with problems characterized by binary first-stage models. We introduce an alternative that allows for multiple choices in the first stage. We use the technique to examine the agglomeration patterns of foreign firms, while accounting for country selection. We find that, conditional on country selection, foreign firms tend to agglomerate in host countries characterized by collectivist cultures, political uncertainty, and economic uncertainty. The results imply that host country characteristics exert a strong influence on the agglomeration preferences of foreign firms. We provide guidance on when to use the empirical estimation technique and furnish details of the estimation procedure so that others can apply the technique to a broader class of selection problems.

show abstract

Product differentiation, external economies and MNE location choices: M&As in Global Cities

Cited by 67 publications

References 69 publications

When in Rome? Examining the Institutional Determinants of Agglomeration for Foreign Entrants.

When in Rome? Examining the Institutional Determinants of Agglomeration for Foreign Entrants.

Multinational Enterprises Innovation Networks and the Role of Cities

Complex Strategic Choices: A New Approach and Application to Foreign Firm Agglomeration

Contact Info

Product

Resources

About