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Time compression diseconomies in foreign expansion

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  • Jiang, Ruihua Joy
  • Beamish, Paul W.
  • Makino, Shige

Abstract

Time compression diseconomies (TCD) in resource development impact the durability of competitive advantage according to the resource-based view. The Uppsala Model emphasizes experiential learning, which is subject to TCD. TCD joins the two perspectives and can help explain the foreign expansion process. We found the existence of TCD in post-entry expansion by examining the speed of establishing subsequent subsidiaries and the performance outcomes. Speed was negatively associated with subsidiary survival. TCD was exacerbated with environmental uncertainty and lack of vicarious learning, so that early mover subsidiaries are less likely to make a profit when they are established with faster speed.

Suggested Citation

  • Jiang, Ruihua Joy & Beamish, Paul W. & Makino, Shige, 2014. "Time compression diseconomies in foreign expansion," Journal of World Business, Elsevier, vol. 49(1), pages 114-121.
  • Handle: RePEc:eee:worbus:v:49:y:2014:i:1:p:114-121
    DOI: 10.1016/j.jwb.2013.02.003
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    1. repec:spr:manint:v:57:y:2017:i:2:d:10.1007_s11575-016-0284-9 is not listed on IDEAS
    2. García-García, Raquel & García-Canal, Esteban & Guillén, Mauro F., 2017. "Rapid internationalization and long-term performance: The knowledge link," Journal of World Business, Elsevier, vol. 52(1), pages 97-110.
    3. Hitt, Michael A. & Li, Dan & Xu, Kai, 2016. "International strategy: From local to global and beyond," Journal of World Business, Elsevier, vol. 51(1), pages 58-73.
    4. Christopher Williams & Ana Colovic & Jiqing Zhu, 2016. "Foreign Market Knowledge, Country Sales Breadth And Innovative Performance Of Emerging Economy Firms," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(06), pages 1-25, August.
    5. Mikael Hilmersson & Martin Johanson, 2016. "Speed of SME Internationalization and Performance," Management International Review, Springer, vol. 56(1), pages 67-94, February.
    6. Šárka Zapletalová, 2016. "Competitive Strategies: A New Perspective on the Internationalization of the Czech Enterprises," Working Papers 0035, Silesian University, School of Business Administration.
    7. repec:eee:iburev:v:27:y:2018:i:1:p:113-124 is not listed on IDEAS
    8. Martin Johanson & Igor Kalinic, 2016. "Acceleration and Deceleration in the Internationalization Process of the Firm," Management International Review, Springer, vol. 56(6), pages 827-847, December.

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