Business group reputation and affiliates’ internationalization strategies

The literature on business groups (BGs) has identified reputation as a critical factor in their success and survival. However, most studies have assumed that BGs are well-known and well-regarded—an assumption that may not be tenable in the context of international expansion. We use signaling theory to explore the causes of an unacknowledged source of BG heterogeneity—variance in their reputation prominence (whether they are well-known or not) and reputation quality (whether they are regarded favorably or unfavorably)—and seek to understand how this heterogeneity may result in differences in BG affiliates’ geographic scope and location choices as they internationalize.