Multinationals without Advantages
Abstract
We question the widespread argument that firms embarking on foreign direct investments must possess some specific advantages to offset the penalties of operating across national and cultural boundaries. A simple model shows that firms might invest abroad to capture local advantages through geographical proximity of plant location, rather than to exploit existing ones. Because of spatially bounded spillovers, laggard firms might use foreign investments to acquire location-specific knowledge, whereas leading firms might prefer costly exports to avoid the dissipation of their advantages. Copyright 1999 by The editors of the Scandinavian Journal of Economics.Download Info
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Bibliographic Info
Article provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.
Volume (Year): 101 (1999)
Issue (Month): 4 (December)
Pages: 617-30
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Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442
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Web: http://www.blackwellpublishing.com/subs.asp?ref=0347-0520
Related research
Keywords:Other versions of this item:
- Motta, M., 1996. "Multinationals without Advantages," Research Institute of Industrial Economics Working Papers 464, Research Institute of Industrial Economics (IFN).
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
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