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International market selection and subsidiary performance: A neural network approach

  • Brouthers, Lance Eliot
  • Mukhopadhyay, Somnath
  • Wilkinson, Timothy J.
  • Brouthers, Keith D.
Registered author(s):

    How should multinational enterprises (MNEs) select international markets? We develop a model of international market selection that adds firm-specific advantages and transaction cost considerations to previously explored target market factors based on Dunning's Eclectic Framework. Results obtained using neural network (NN) analysis indicates that our model has strong predictive power in explaining international market selection. Further tests show that firms selecting international markets predicted by the model reported significantly higher subsidiary performance relative to firms whose investments were not predicted by the model. Our results provide strong initial evidence that a firm-level strategic approach to international market selection facilitates MNE success.

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    Article provided by Elsevier in its journal Journal of World Business.

    Volume (Year): 44 (2009)
    Issue (Month): 3 (July)
    Pages: 262-273

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    Handle: RePEc:eee:worbus:v:44:y:2009:i:3:p:262-273
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    21. Lance Eliot Brouthers & Keith D Brouthers & Steve Werner, 1999. "Is Dunning's Eclectic Framework Descriptive Or Normative?," Journal of International Business Studies, Palgrave Macmillan, vol. 30(4), pages 831-844, December.
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