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Sequential expansion in a foreign market: knowledge drivers and contingencies of establishments of additional subsidiaries
Linnaeus University, School of Business and Economics, Department of Marketing. (Marknadsföring)
2016 (English)In: European Business Review, ISSN 0955-534X, E-ISSN 1758-7107, Vol. 28, no 3, 285-311 p.Article in journal (Refereed) Published
Abstract [en]

Purpose – A multinational firm’s expansion in a foreign market is a key issue of internationalbusiness. The purpose of this study is to extend the understanding of essential drivers that will facilitatefirm’s assessment of alternative modes of sequential expansion.

Design/methodology/approach – The study applies the knowledge-based view and explores amultinational firm’s sequential post-entry expansion in a foreign market. Event histories of Swedishindustrial firms’ establishments of wholly owned subsidiaries in Germany, the UK and the USA wereexplored using Cox regression.

Findings – Broad market experiences stemming from corporate strategy and deep experiences fromthe preceding subsidiary increase the likelihood of a sequential investment. Effects of broad experiencesare contingent on the context specified by the geographic scope of the firm and its general subsidiaryexperience.

Research limitations/implications – The study contributes to international expansion theory andintegrates sources of knowledge originating from strategy theory and internationalization theory. Thestudy shows that the dual approach is needed to understand international expansion.

Practical implications – In evaluating a further subsidiary investment in a foreign market, themultinational firm is advised to assess whether it possesses enough market experiences to justify theinvestment. The experiences should be associated with corporate strategy, the previous wholly ownedsubsidiary and the context specifications identified in the study.

Originality/value – The study is unique, as it addresses the simultaneous impact of broad and deepmarket experiences. Also, the inclusion of central context specifications makes the study novel.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2016. Vol. 28, no 3, 285-311 p.
Keyword [en]
Knowledge-based view, Strategy, Subsidiary, Post-market entry, Sequential expansion
National Category
Business Administration
Research subject
Economy, Business administration
Identifiers
URN: urn:nbn:se:lnu:diva-59311DOI: 10.1108/EBR-01-2016-0017OAI: oai:DiVA.org:lnu-59311DiVA: diva2:1058128
Available from: 2016-12-20 Created: 2016-12-20 Last updated: 2017-01-12Bibliographically approved

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf