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Sequence of value-added activities in the multinationalization of developing country firms

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  • Cuervo-Cazurra, Alvaro

Abstract

This paper studies the sequence of value-added activities in the multinationalization of firms from developing countries. Analysis of twenty Latin American multinational firms, or Multilatinas, reveals three alternative sequences: start multinationalizing with marketing subsidiaries in all countries, start multinationalizing with production subsidies in all countries, or start multinationalizing with marketing subsidiaries in some countries and production subsidiaries in others. These alternative sequences are explained through the integration and extension of arguments from the incremental model of internationalization and its discussion of difficulties, and the eclectic paradigm of foreign production and its discussion of advantages. I argue that firms that benefit from a location advantage in the country of origin are more likely to start multinationalizing using marketing subsidiaries, firms that benefit from a location advantage in the host country are more likely to start multinationalizing using production subsidiaries, and firms that face difficulties in the transfer of products across countries are more likely to start multinationalizing using production subsidiaries.

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  • Cuervo-Cazurra, Alvaro, 2007. "Sequence of value-added activities in the multinationalization of developing country firms," Journal of International Management, Elsevier, vol. 13(3), pages 258-277, September.
  • Handle: RePEc:eee:intman:v:13:y:2007:i:3:p:258-277
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    Cited by:

    1. Demirbag, Mehmet & Tatoglu, Ekrem & Glaister, Keith W., 2009. "Equity-based entry modes of emerging country multinationals: Lessons from Turkey," Journal of World Business, Elsevier, vol. 44(4), pages 445-462, October.
    2. Xiao, Simon Shufeng & Jeong, Insik & Moon, Jon Jungbien & Chung, Chris Changwha & Chung, Jaiho, 2013. "Internationalization and Performance of Firms in China: Moderating Effects of Governance Structure and the Degree of Centralized Control," Journal of International Management, Elsevier, vol. 19(2), pages 118-137.
    3. Alessia Amighini & Claudio Cozza & Elisa Giuliani & Roberta Rabellotti & Vittoria Scalera, 2015. "Multinational enterprises from emerging economies: what theories suggest, what evidence shows. A literature review," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(3), pages 343-370, September.
    4. repec:spr:manint:v:52:y:2012:i:5:d:10.1007_s11575-011-0115-y is not listed on IDEAS
    5. Álvarez, Isabel & Marín, Raquel, 2010. "Entry modes and national systems of innovation," Journal of International Management, Elsevier, vol. 16(4), pages 340-353, December.
    6. Juanita Castro Olaya & Juliana Castro Olaya & Indira Jaller Cuéter, 2012. "Internationalization Patterns of Multilatinas," REVISTA AD-MINISTER, UNIVERSIDAD EAFIT, September.
    7. repec:eee:jbrese:v:88:y:2018:i:c:p:123-131 is not listed on IDEAS
    8. Morero, Hernan Alejandro, 2013. "Internacionalizacion y Sistema Nacional de Innovacion argentino: una perspectiva de tramas productivas. Los casos automotriz y siderurgico
      [Internationlization and argentinean National System of In
      ," MPRA Paper 44409, University Library of Munich, Germany.
    9. repec:spr:manint:v:52:y:2012:i:2:d:10.1007_s11575-012-0134-3 is not listed on IDEAS
    10. Parente, Ronaldo C. & Cyrino, Álvaro Bruno & Spohr, Nicole & Vasconcelos, Flavio Carvalho de, 2013. "Lessons learned from Brazilian multinationals’ internationalization strategies," Business Horizons, Elsevier, vol. 56(4), pages 453-463.
    11. Alvarez, Isabel & Fischer, Bruno & Natera, José Miguel, 2013. "Internationalization and technology in MERCOSUR," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    12. Luo, Yadong & Zhang, Huan, 2016. "Emerging Market MNEs: Qualitative Review and Theoretical Directions," Journal of International Management, Elsevier, vol. 22(4), pages 333-350.
    13. repec:ucm:wpaper:04-12 is not listed on IDEAS
    14. Barros, Henrique M., 2011. "The Effects of Innovation Partnership, Foreign Ownership and Enhanced Management Practices on the Use of Patents in Brazilian Manufacturing," Insper Working Papers wpe_255, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
    15. Conti, Claudio Ramos & Parente, Ronaldo & de Vasconcelos, Flávio C., 2016. "When distance does not matter: Implications for Latin American multinationals," Journal of Business Research, Elsevier, vol. 69(6), pages 1980-1992.
    16. Fiorenza Belussi & Giulia Rudello & Maria Savarese, 2016. "The Internationalization Of Mnes From And To Brics Countries: The Case Of The Industrial Machinery Industry," "Marco Fanno" Working Papers 0205, Dipartimento di Scienze Economiche "Marco Fanno".
    17. Jorge Basave Kunhardt, 2012. "Flujos de IED mexicana hacia Europa y presencia de grandes multinacionales mexicanas en España. Evidencia empírica y reflexiones teóricas," Working Papers del Instituto Complutense de Estudios Internacionales 1204, Universidad Complutense de Madrid, Instituto Complutense de Estudios Internacionales.

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