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How firms grow: clustering as a dynamic model of internationalization

Author

Listed:
  • Elizabeth Maitland

    (School of Organisation and Management, University of New South Wales, Sydney, Australia)

  • Elizabeth L Rose

    (Victoria University of Wellington, New Zealand, and University of Hawaii at Manoa, USA)

  • Stephen Nicholas

    (University of Sydney, Sydney, Australia)

Abstract

This paper provides a methodology for identifying the dynamics of international firm expansion, demonstrating systematic evidence of both ‘toe in the water’ and concentrated bursts of internationalization by US multinational enterprises. We use the methodology of statistical process control to analyze initial investments in host countries and develop a numerical measure of temporal clustering or bunching. Using this measure, we identify two distinct patterns of growth; whereas some firms cluster their investments over time, others do not cluster their investments. For firms that cluster, three types of clustering strategy are identified: concentrating, hibernating, and hybrid. Arguments based on internal firm architecture, experience, and learning are advanced to explain these findings. Journal of International Business Studies (2005) 36, 435–451. doi:10.1057/palgrave.jibs.8400140

Suggested Citation

  • Elizabeth Maitland & Elizabeth L Rose & Stephen Nicholas, 2005. "How firms grow: clustering as a dynamic model of internationalization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 36(4), pages 435-451, July.
    • Handle: RePEc:pal:jintbs:v:36:y:2005:i:4:p:435-451
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    Citations

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    Cited by:

    1. Jae C. Jung & Paul W. Beamish & Anthony Goerzen, 2010. "Dynamics of Experience, Environment and MNE Ownership Strategy," Management International Review, Springer, vol. 50(3), pages 267-296, June.
    2. Danchi Tan & Weichieh Su & Joseph T. Mahoney & Yasemin Kor, 2020. "A review of research on the growth of multinational enterprises: A Penrosean lens," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 498-537, June.
    3. Kyung Park & Kiwon Jung & Kyung Noh, 2014. "Strategic action and customer mobility: Antecedents and consequences of strategic actions in the Korean mobile telecommunication service industry," Asia Pacific Journal of Management, Springer, vol. 31(1), pages 171-193, March.
    4. Wim Naudé & Stephanié Rossouw, 2010. "Early international entrepreneurship in China: Extent and determinants," Journal of International Entrepreneurship, Springer, vol. 8(1), pages 87-111, March.
    5. Thomas Hutzschenreuter & Johannes Voll, 2007. "Internationalisierungspfad und Unternehmenserfolg — Implikationen kultureller Distanz in der Internationalisierung," Schmalenbach Journal of Business Research, Springer, vol. 59(7), pages 814-846, November.
    6. Hitt, Michael A. & Franklin, Victor & Zhu, Hong, 2006. "Culture, institutions and international strategy," Journal of International Management, Elsevier, vol. 12(2), pages 222-234, June.
    7. In Hyeock (Ian) Lee & Eunsuk Hong & Shige Makino, 2016. "Location decisions of inward FDI in sub-national regions of a host country: Service versus manufacturing industries," Asia Pacific Journal of Management, Springer, vol. 33(2), pages 343-370, June.
    8. In Hyeock (Ian) Lee, 2022. "Startups, relocation, and firm performance: a transaction cost economics perspective," Small Business Economics, Springer, vol. 58(1), pages 205-224, January.
    9. Lee, In Hyeock & Hong, Eunsuk & Sun, Laixiang, 2013. "Regional knowledge production and entrepreneurial firm creation: Spatial Dynamic Analyses," Journal of Business Research, Elsevier, vol. 66(10), pages 2106-2115.
    10. Prenkert, Frans & Følgesvold, Atle, 2014. "Relationship strength and network form: An agent-based simulation of interaction in a business network," Australasian marketing journal, Elsevier, vol. 22(1), pages 15-27.
    11. Liu, Xiaming & Xiao, Wen & Huang, Xianhai, 2008. "Bounded entrepreneurship and internationalisation of indigenous Chinese private-owned firms," International Business Review, Elsevier, vol. 17(4), pages 488-508, August.
    12. In Lee & Matthew Marvel, 2014. "Revisiting the entrepreneur gender–performance relationship: a firm perspective," Small Business Economics, Springer, vol. 42(4), pages 769-786, April.
    13. Eunsuk Hong & In Lee & Laixiang Sun & Richard Harrison, 2015. "Entrepreneurship across time and space: empirical evidence from Korea," Small Business Economics, Springer, vol. 44(3), pages 705-719, March.
    14. Tag, Mehmet Nasih & Degirmen, Suleyman, 2022. "Economic freedom and foreign direct investment: Are they related?," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 737-752.
    15. Thomas Hutzschenreuter & Fabian Guenther, 2009. "Complexity as a constraint on firm expansion within and across industries," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(6), pages 373-392.

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