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Survival Characteristics and Adjustment of MNE Affiliates in the European Integrated Market

  • Antonios Georgopoulos

    (Department of Business Administration, University of Patras / Greece)

  • Felicitas Nowak-Lehmann D.

    ()

    (Ibero-America Institute for Economic Research, Goettingen / Germany)

  • Vasilios Sogiakas

    (Adam Smith Business School (Economics), University of Glasgow (UK))

This is one of the first studies which systematically investigate whether specific characteristics of foreign affiliates that reflect their MNE investment motivations prolong or undermine affiliate survivorship when the host country becomes member of a regional economic union. Using a unique database of 162 foreign affiliates established in the era of protectionism (1960-1980) in Greece, we explore the survival evolution of these affiliates within the European integration period (1981-2011). The study poses two research objectives: the exploration of the key characteristics per type of affiliate and the analysis of the impact of the specific characteristics on affiliate survival. We hypothesize and find that when the protected Greek economy enters the European market, closure risk is relatively high for those affiliates which exploit traditional location advantages such as tariffs and unskilled-labor cost, whereas it is relatively low for those units that adjust to the new institutional framework by investing in advertising and human capital intensity. The results have important implications for policy makers and managers.

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File URL: http://www2.vwl.wiso.uni-goettingen.de/ibero/working_paper_neu/DB225.pdf
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Paper provided by Ibero-America Institute for Economic Research in its series Ibero America Institute for Econ. Research (IAI) Discussion Papers with number 225.

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Length: 34 pages
Date of creation: 19 Feb 2013
Date of revision:
Handle: RePEc:got:iaidps:225
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