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What Constitutes the Costs and Advantages of Firms Investing Overseas?
Author(s) -
Nachum Lilach
Publication year - 2011
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.1558
Subject(s) - multinational corporation , variety (cybernetics) , categorical variable , industrial organization , business , economics , microeconomics , finance , computer science , machine learning , artificial intelligence
Different theoretical perspectives offer conflicting views regarding the sources of costs and advantages of firms investing overseas. Empirical analyses of financial services affiliates in London illustrate considerable inconsistencies with the predictions of Multinational Enterprise (MNE) theory regarding the significance of these attributes and their classification as costs or advantages. These analyses suggest that the performance consequences of the costs and advantages depend on a variety of contingencies and change significantly over time, questioning the categorical assignment of these attributes as costs or advantages in MNE theory. The findings provide a basis for adequate and nuanced strategic treatment of the costs and advantages. Copyright © 2011 John Wiley & Sons, Ltd.