Exploring location-specific assets and exploiting firm-specific advantages

An integrative perspective on foreign ownership decisions

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

Exploiting existing assets and exploring new assets are two major and often concurrent forces driving firms to invest abroad. Moving beyond prior attention to their separate effects on foreign ownership decisions, this study examines their integrative impact. I develop hypotheses aligning a set of firm-specific advantages with asset-seeking motives, and test these relationships on a sample of Taiwanese overseas investments. I find that wholly-owned subsidiaries are preferred to joint ventures when multinationals are able to tap into host innovatory dynamism by employing extant technological capabilities and to access local natural resources by leveraging corporate scales. Nonetheless, multinationals face difficulties in deploying marketing knowledge in different contexts and thus are more likely to choose joint ventures for an aggressive foreign market entry.

Original languageEnglish
Pages (from-to)120-134
Number of pages15
JournalCanadian Journal of Administrative Sciences
Volume24
Issue number2
DOIs
Publication statusPublished - 2007 Jun 1

Fingerprint

Natural resources
Marketing
assets
joint venture
firm
opening up of markets
dynamism
overseas
natural resources
marketing
Assets
Firm-specific advantages
Foreign ownership
Joint ventures
Multinationals

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Public Administration
  • Marketing
  • Management of Technology and Innovation

Cite this

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