Session 141

Entry Strategy & Location Choice

Track G

Date: Tuesday, October 13, 2009


Time: 14:30 – 15:45


Room: Meeting Room 15

Session Chair:
Susan Segal-Horn, Open University

Title: Changing Landscapes: Reconfiguring the International Value Chain for Professional Service Firms


  • Susan Segal-Horn, Open University
  • Alison Dean, University of Kent

Abstract: This paper explores the impact of the changing world in which international professional service firms (IPSFs) operate. Competition has increased; clients have become more sophisticated; client projects are of greater geographic spread and complexity; technology has become an enabler for considerable unbundling of professional activities. As a result, IPSFs are disaggregating and re-aggregating their international value chains. Projects are being broken down into tasks. We discuss a shift from professional projects to professional tasks such that larger global firms now contain all varieties of professional work. We develop a typology to explore the consequences for both professionals and firms. Examples summarise commonly-shared changes in professional activities, and reconfigurations of the task network of the firm, as found within contemporary accounting, law, management consulting firms.

Title: How Cross-Border Government Investments Influence Multinational Firms’ Location Choices: Empirical Evidence from Norway


  • Gurneeta Vasudeva, University of Minnesota
  • Joel Malen, University of Minnesota

Abstract: We examine the influence of national governments on the internationalization decisions of resident firms by tracking the location choices of Norwegian firms against investments made by the Norwegian sovereign wealth fund over a ten year period. We propose that prior government investment in a foreign country creates a relationship between the government and the foreign country that increases knowledge and legitimacy benefits for investing multinational Norwegian firms. Therefore, these firms will be more likely to invest in a country where the government already has substantial investments. Our results show that multinational firms continue to be embedded in their national context, and follow their government in making international location choices. This relationship, however, is more valuable to firms lacking prior investment experience in a prospective country.

Title: How Global is R&D? Drivers of Home Country Bias in R&D Location


  • Shinya Suzuki, Musashi University
  • Bart Leten, University of Leuven

Abstract: Despite an increasing importance of international R&D by multinational firms, a major portion of corporate R&D is still concentrated in their home countries. This paper assesses and analyzes the degree of home country bias in the location of R&D activities by 170 European, US and Japanese firms during 1995-2002. First, the extent of home country bias is assessed by examining the difference between actual home country R&D and a level to be ‘expected’ based on the country’s attractiveness for R&D activities. Second, we identify the firm-level determinants of home country bias. We hypothesize that firm traits such as technological diversification and scope economies in R&D, embeddedness in the innovation system of home country, the level of coordination costs between headquarters and foreign affiliates, and international experience drive the extent of home bias.

Title: Immigrant Agglomeration, Firm Heterogeneity, and FDI Location Choice: Evidence From the United States


  • Exequiel Hernandez, University of Pennsylvania

Abstract: Scholars have found a positive relationship between immigration and FDI at the country level, suggesting that immigrant agglomeration is an important factor explaining subsidiary location—a crucial strategic decision. However, scholars in management have not explored this issue at the firm level. I fill this research gap by providing a strategic perspective on the relationship between immigration and subsidiary location. I argue that firms’ responses to the opportunities created by immigrant agglomeration vary due to inter-firm heterogeneity in capabilities and market profiles. Thus, some firms are more likely than others to establish foreign subsidiaries in locations with immigrant cluster because such a strategy is not equally beneficial for all firms. I find support for this notion through an analysis of foreign subsidiaries in the US.

All Sessions in Track G...

Sun: 10:00 – 11:30
Session 270: Globalizing the Young Venture: A Conversation with Four High Tech CEOs
Sun: 13:00 – 14:30
Session 271: The Duke Offshoring Research Network Project: Implications for Research and Practice
Sun: 15:00 – 16:30
Session 272: Location, Knowledge, and Competitive Dynamics: New Research Directions
Sun: 16:30 – 17:30
Session 311: Global Strategy, IG Meeting
Mon: 12:45 – 14:00
Session 138: Doing Business in China
Mon: 15:45 – 17:00
Session 139: Offshoring & Outsourcing
Mon: 17:15 – 18:30
Session 142: Liability of Foreignness
Tue: 10:00 – 11:15
Session 140: Global Diversification and Firm Performance
Tue: 11:30 – 12:45
Session 145: Institutions and Governance in an Uncertain World
Tue: 14:30 – 15:45
Session 141: Entry Strategy & Location Choice
Session 143: Managing MNC Subsidiaries: Innovation, Control and Subsidiary Initiatives
Wed: 10:00 – 11:15
Session 146: Global Knowledge Search
Wed: 11:30 – 12:45
Session 147: Internationalizing the Firm: Institutions, Emerging Markets and Performance Considerations

Strategic Management Society

Washington DC