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Business groups' outward FDI: A managerial resources perspective

  • Tan, Danchi
  • Meyer, Klaus E.
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    Outward FDI strategies are driven by firms' resource endowments, which in turn are conditioned by their home environment. In emerging economies, thus, the pattern of outward FDI is shaped by local firms' idiosyncratic contexts and the resources that these firms developed to fit the contexts. This includes business groups, a dominant organizational form in many emerging economies, competing with context-bound resources. When they wish to transcend their home context, they need internationally valuable resources, especially managerial resources, which may be quite different than the resources that enable domestic growth. This paper thus explores what resources drive this international growth in the case of Taiwanese business groups. Starting from Penrosian Theory, we focus on managerial resources that are shared across the member firms of a group, and thus shape the profile of the group. We find that international work experience favors internationalization while international education does not. Moreover, domestic institutional resources distract from internationalization, presumably because they are not transferable into other institutional contexts, and thus favor other types of growth.

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    Article provided by Elsevier in its journal Journal of International Management.

    Volume (Year): 16 (2010)
    Issue (Month): 2 (June)
    Pages: 154-164

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    Handle: RePEc:eee:intman:v:16:y:2010:i:2:p:154-164
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