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Business relatedness in international diversification: Achievements, gaps, and propositions
Linnaeus University, School of Business and Economics, Department of Marketing.ORCID iD: 0000-0003-0455-0643
2019 (English)In: European Business Review, ISSN 0955-534X, E-ISSN 1758-7107, Vol. 31, no 2, p. 197-217Article in journal (Refereed) Published
Abstract [en]

Purpose Business relatedness is important in international diversification because it enables a firm's transfer of resources to business units operating in foreign markets. The purpose of this paper is to develop a conceptual model based on a review of the major contributions of studies regarding the relatedness of subsidiaries, joint ventures or any other foreign unit. Design/methodology/approach The paper examines theory bases, the relatedness construct, data issues and the key achievements of previous studies. Drawing on organizational learning, transaction costs economics and industrial organization, a conceptual model and propositions are developed that intend to close important research gaps. Findings The model includes competitive strategy as a mediator of the effects of relatedness on foreign unit performance, type of foreign unit - that is, a wholly owned unit or joint venture - as a moderator; and competition barriers as a moderator. Research limitations/implications In future research, the propositions need to be transformed into testable hypotheses. It is recommended to treat relatedness as a multidimensional concept. Practical implications A firm is primarily advised to evaluate how its relatedness with foreign units enables knowledge transfer. A foreign cost leadership strategy benefits from product relatedness, while a differentiation strategy calls for resource relatedness. Originality/value The proposed model is unique as it includes an actionable component that mediates the effects of relatedness on international performance, i.e. competitive strategy, and concerns both wholly owned foreign units and international joint ventures.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2019. Vol. 31, no 2, p. 197-217
Keywords [en]
Competitive strategy, Subsidiary, International diversification, Joint venture, Business relatedness
National Category
Business Administration
Research subject
Economy, Business administration
Identifiers
URN: urn:nbn:se:lnu:diva-86868DOI: 10.1108/EBR-03-2018-0069ISI: 000470893900003Scopus ID: 2-s2.0-85066899693OAI: oai:DiVA.org:lnu-86868DiVA, id: diva2:1337563
Available from: 2019-07-16 Created: 2019-07-16 Last updated: 2019-08-29Bibliographically approved

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Pehrsson, Anders

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CiteExportLink to record
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Citation style
  • apa
  • harvard1
  • ieee
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  • vancouver
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More styles
Language
  • de-DE
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  • nn-NO
  • nn-NB
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  • Other locale
More languages
Output format
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  • asciidoc
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