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Foreign Location Choice: Review and Extensions
Published on Apr 1, 2016in International Journal of Management Reviews 6.49
· DOI :10.1111/ijmr.12064
Jin Uk Kim3
Estimated H-index: 3
(University of Illinois at Urbana–Champaign),
Ruth V. Aguilera32
Estimated H-index: 32
(Ramon Llull University)
International Business (IB) research on foreign‐location choice has experienced a revival in recent years, yet a comprehensive review has been sorely lacking. The purpose of this review is to synthesize the findings of recently published articles on the topic of foreign‐location choice and offer fruitful directions for future research. This review consists of three sections: first, the authors provide a historical overview of this research stream by tracing its origins and analyzing the general trend that has shaped research on foreign‐location choice. Next, the authors conduct a review of 137 recent articles published in leading IB and business/management journals. These articles are categorized according to common topics, and the main findings of each category are synthesized in order to bring some cohesion to this fragmented field. Lastly, the authors identify issues that remain under‐researched or require re‐thinking some taken‐for‐granted assumptions. Through this effort, they are able to connect the past, present and future of research on foreign‐location choice and to shed some new light on the IB literature.
  • References (245)
  • Cited By (34)
Published on Sep 1, 2001in Administrative Science Quarterly 5.88
Witold J. Henisz31
Estimated H-index: 31
(University of Pennsylvania),
Andrew Delios36
Estimated H-index: 36
(National University of Singapore)
This paper combines neoinstitutional theory and research on the institutional environment to explain the process of organizational entry into new geographic markets. We extend neoinstitutional theory's proposition that prior decisions and actions by other organizations provide legitimization and information to a decision marked by uncertainty, by showing that the prevalence of this effect varies across imitation modes as determined by levels of organizational and market uncertainty. We exploit i...
522 Citations Source Cite
Published on Nov 1, 2003in Strategic Management Journal 5.48
Andrew Delios36
Estimated H-index: 36
(National University of Singapore),
Witold J. Henisz31
Estimated H-index: 31
(University of Pennsylvania)
We extend the stages model of internationalization to incorporate a sophisticated consideration of temporal and cross-national variation in the credibility of the policy environment. Using a sample of 6,570 international expansions of 665 Japanese manufacturing firms, we build on the concepts of uncertainty and experiential learning, to show that firms that had gathered relevant types of international experience were less sensitive to uncertain policy environments. We further highlight an import...
410 Citations Source Cite
Published on Jan 1, 2005in Management International Review 2.28
Kevin Ibeh18
Estimated H-index: 18
This paper explores the influence of key resource categories – managerial, physical, organisational, relational – and strategic orientation on the international performance of small and medium-sized firms within the relatively neglected agribusiness sector.
52 Citations
Published on Apr 1, 1999in Asia Pacific Journal of Management 2.47
M. Krishna Erramilli9
Estimated H-index: 9
(Nanyang Technological University),
Rajesh Srivastava1
Estimated H-index: 1
Seong-Soo Kim1
Estimated H-index: 1
(Samsung Economic Research Institute)
Is the internationalization theory, which has been employed to explain the international expansion patterns of Western firms, equally good for Asian MNCs? Employing South Korean foreign direct investment data from 1973 through 1990, the paper tests two central tenets of the internationalization theory. Results show that physical distance plays a critical role in market selection during the early waves of investment, but economic factors become more important in subsequent waves of investment. Fu...
40 Citations Source Cite
Published on Jan 1, 2000
Arthur L. Stinchcombe25
Estimated H-index: 25
The general topic of this chapter is the relation of the society outside organizations to the internal life of organizations. Part of the specific topics have to do with the effect of society on organizations, and part of them concern the effects of organizational variables on the surrounding social environment. I intend to interpret the term “social structure” in the title in a very general sense, to include groups, institutions, laws, population characteristics, and sets of social relations th...
3,359 Citations Source Cite
Published on Jan 1, 1983
Theodore Levitt15
Estimated H-index: 15
The worldwide success of a growing list of products that have become household names is evidence that consumers the world over, despite deep-rooted cultural differences, are becoming more and more alike or, as the author puts it, "homogenized." In consequence, he contends, the traditional MNC's strategy of tailoring its products to the needs of multiple markets may put it at a severe disadvantage vis-a-vis competitors who apply marketing imagination to the task of developing advanced, functional...
2,434 Citations
Published on Apr 1, 2002in Asia Pacific Journal of Management 2.47
Changhui Zhou1
Estimated H-index: 1
(Peking University),
Andrew Delios36
Estimated H-index: 36
(National University of Singapore),
Jing Yu Yang1
Estimated H-index: 1
(Hong Kong University of Science and Technology)
This study examines 2,933 cases of Japanese investment in 27 provinces and regions in China to identify the role that policy determinants had in influencing the sub-national location decision of Japanese firms in China. The empirical results show that the Special Economic Zones (SEZs) and Opening Coastal Cities (OCCs) were a successful policy instrument initially, as SEZs and OCCs had a strong influence on Japanese foreign investment during the early years of China's liberalized foreign investme...
126 Citations Source Cite
Published on Jul 1, 2001in Asia Pacific Journal of Management 2.47
Stephen Nicholas17
Estimated H-index: 17
(University of Melbourne),
William Purcell5
Estimated H-index: 5
(University of New South Wales),
Sidney J. Gray40
Estimated H-index: 40
(University of New South Wales)
This paper develops a new model for testing the role of incentives in FDI location choice by integrating the theory of the MNE with new approaches to location theory. From the theory our paper derives four testable hypotheses related to the role of policy variables in the location choice of Japanese MNEs in Singapore. Specifically we test for the existence of regional investment clusters and national tournaments as key elements in the FDI location decision. We also test for differences in the in...
7 Citations Source Cite
Published on Oct 1, 2002in Management International Review 2.28
Jay Hyuk Rhee7
Estimated H-index: 7
Joseph L. C. Cheng12
Estimated H-index: 12
Abstract * This study first tests the basic proposition of Johanson and Vahlne's (1977) internationalization theory that foreign market uncertainty leads firms to adopt an incremental approach to international expansion. This is done using a pooled, within-country research design with historical data on firms' internationalization processes. * It then conducts a contingency analysis to investigate the theory's boundary conditions by examining the impact of firm, industry, and host country charac...
47 Citations
Published on Apr 1, 2005in Management International Review 2.28
Robert Grosse20
Estimated H-index: 20
(Standard Bank),
Len J. Treviño12
Estimated H-index: 12
(Washington State University)
Abstract * This paper links the new institutional economics with organizational decision making on foreign direct investment (FDI). We examine the relationship between FDI inflows in Central and Eastern Europe (CEE) and institution building--particularly governments' efforts to create a more favorable FDI environment by reducing uncertainty and, concomitantly, costs associated with long-term capital investments. * By combining institutional constructs with traditional factors that contribute to ...
84 Citations Source Cite
Cited By34
Published on Jun 1, 2016in Management International Review 2.28
Naveen Kumar Jain3
Estimated H-index: 3
(Middlesex University),
Tanvi Kothari3
Estimated H-index: 3
(San Jose State University),
Vikas Kumar27
Estimated H-index: 27
(University of Sydney)
Abstract Location decisions assume great significance for both managers and scholars as the choice of overseas location has the potential to either enhance or dissipate firms’ profitability. The aim of the paper is to conduct a critical review of the research articles that have been published on the topic of location determinants since 1975. We analyzed 151 articles published since 1975 until September, 2015 in 17 leading management and international business journals. Our analysis suggests that...
15 Citations Source Cite
Published on Jun 16, 2015
Igor Gurkov12
Estimated H-index: 12
(National Research University – Higher School of Economics)
The paper provides a summary of the existing literature on corporate parenting styles and discovers the missing elements in the theoretical constructs. New theoretical constructs fill the gaps. The paper presents a continuum of corporate parenting styles from pure predator’s (Cronos style) to pure benefactor (Rhea style). This paper outlines the most important factors that affect positioning a corporation on the continuum of corporate parenting styles. The most promising directions for further s...
Source Cite
Published on Jun 6, 2016in Nankai Business Review International
Ying Zheng1
Estimated H-index: 1
Daying Yan1
Estimated H-index: 1
Bing Ren6
Estimated H-index: 6
Purpose This paper aims to propose an integrated framework combining the cost-reduction rationale and the institution-leveraging rationale to explain how institutional distance, both formal and informal, influences emerging multinational enterprises (EMNEs)’ foreign direct investment (FDI) location choice. This paper also explores the moderating role of EMNEs’ FDI experience and strategic intent on value chain positioning as a reflection of firm heterogeneities, on the link between institutional...
1 Citations Source Cite
Published on Jun 1, 2017in Journal of World Business 3.99
Ferran Vendrell-Herrero13
Estimated H-index: 13
(University of Birmingham),
Emanuel Gomes10
Estimated H-index: 10
(University of Birmingham)
+ 1 AuthorsJohn Child33
Estimated H-index: 33
(University of Birmingham)
This paper focuses on the internationalization of SMEs located in geographically isolated contexts like Latin America. We argue that strategic priorities towards foreign markets, Foreign Market Focus (FMF), as well as “Outward Looking Competences” (OLC) are important factors in enhancing productivity, and ultimately achieving a sustainable competitive presence abroad. FMF and OLC lay the foundation for setting better international business relations with foreign clients and increase opportunitie...
19 Citations Source Cite
Published on Aug 1, 2017in Organization Studies 3.13
Lin Cui13
Estimated H-index: 13
(Australian National University),
Di Fan9
Estimated H-index: 9
(Curtin University)
+ 1 AuthorsYi Li4
Estimated H-index: 4
(China Europe International Business School)
Emerging multinational enterprises (EMNEs) often engage in strategic-asset-seeking foreign direct investment (FDI) for competitive catch-up. This study explores the linkages between an EMNE’s competitive scenario consisting of a configuration of its awareness-motivation-capability (AMC) conditions and the comparative institutional advantages of its strategic-asset-seeking destination. Our configurational analyses of Chinese FDIs in the technology-intensive industries of OECD countries reveal a t...
5 Citations Source Cite
Published on Jan 1, 2017in Journal of World Business 3.99
Bo Bernhard Nielsen21
Estimated H-index: 21
(University of Sydney),
Christian Geisler Asmussen13
Estimated H-index: 13
(Copenhagen Business School),
Cecilie Dohlmann Weatherall1
Estimated H-index: 1
The choice of location of foreign direct investments (FDI) by multinational enterprises (MNEs) has been the subject of intense scrutiny for decades and continues to be so. Yet, the vast diversity in methodological approaches, levels of analysis, and empirical evidence precludes a comprehensive understanding of the phenomenon. We review and evaluate 153 quantitative studies on FDI location choice over four decades from 1976 to 2015 across multiple disciplines, including international business, ma...
21 Citations Source Cite
Published on Jun 1, 2017
Francisco Puig6
Estimated H-index: 6
(University of Valencia),
Borja Portero1
Estimated H-index: 1
(Polytechnic University of Valencia),
Miguel González-Loureiro1
Estimated H-index: 1
(University of Vigo)
Abstract Location is a critical decision for multinational enterprises as it affects the growth of their foreign direct investment (FDI) in the host country. Although clustering provides information- and knowledge-based advantages, it also entails costs and risks associated with the hazards of competition, congestion and imitation. Consequently, heterogeneous influences may arise from the clustering, producing unexpected results. This paper aims to analyse the association between the portfolio o...
2 Citations Source Cite
Published on Nov 1, 2016
Employing the micro data on China's Foreign Direct Investment(FDI) in the United States in the Information and Communications Technology (ICT) industry from 2001 to 2014, a negative binomial regression model is performed to examine the effects of internet usage and high-tech talent on ICT firms' location choice. Findings indicate that Internet usage in USA and Chinese ICT investment in the U. S. is not significantly related, namely China's ICT firms will not consider the internet usage in the U....
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Published on Jun 1, 2017in Journal of Business Research 2.51
Lin Cui13
Estimated H-index: 13
(Australian National University),
Xiaoming He2
Estimated H-index: 2
(Beijing Jiaotong University)
The extent of the economic distance between a firm's home origin and its foreign direct investment (FDI) is an important strategic decision for the investing firm. This study fills an important knowledge gap by investigating the home institutional antecedents of FDI economic distance. Drawing insights from comparative institutionalism, we argue that home-country states vary in both their power to coordinate the economy and the external and internal channels through which they exercise that power...
2 Citations Source Cite
Published on Oct 2, 2017in Journal of The Asia Pacific Economy 0.63
Diego Quer12
Estimated H-index: 12
(University of Alicante),
Enrique Claver19
Estimated H-index: 19
(University of Alicante),
Laura Rienda10
Estimated H-index: 10
(University of Alicante)
The international expansion of emerging-market multinational enterprises (MNEs) is becoming a research topic of increasing interest among international business scholars. One of the specific research questions arising is whether conventional theoretical arguments originated in studies on developed-country MNEs are still valid for explaining the international behavior of emerging-market MNEs. Drawing on the institutional theory, this paper argues that the influence of host country institutional f...
1 Citations Source Cite
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