In this paper we analyze in which way the expansion strategy of a hotel chain is influenced by the environmental quality of both the domestic and the foreign region. We show that the environment (which is a public good, and determines the competitive advantage of hotels in a region) plays a double role in shaping the strategy of the chain. Thus, a chain will expand internationally when the combined environmental potential of the two regions is large enough. Or, alternatively, for a home region with a medium-low environmental potential, the chain will expand internationally when the foreign region has a high enough potential in environmental quality.
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