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The limits to the growth of multinational firms in a foreign market
Author(s) -
Tan Danchi
Publication year - 2003
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.1129
Subject(s) - multinational corporation , constraint (computer aided design) , foreign direct investment , business , investment (military) , international market , industrial organization , economics , monetary economics , international trade , macroeconomics , finance , mechanical engineering , politics , political science , law , engineering
Theories of growth for firms have suggested that slow managerial growth is a major constraint why firms cannot grow faster. This paper is built on such a view and explores the factors that may influence the growth rate of Japanese firms in a given US industry. It is found that Japanese firms that allocated more internal and international managerial resources (proxied by expatriates) to their US operations tended to achieve higher growth rates. Japanese firms that were geographically diversified and those that spread their international investment projects evenly over time also achieved higher growth rates. Copyright © 2003 John Wiley & Sons, Ltd.