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

Author

Listed:
  • 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))

Abstract

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.

Suggested Citation

  • Antonios Georgopoulos & Felicitas Nowak-Lehmann D. & Vasilios Sogiakas, 2013. "Survival Characteristics and Adjustment of MNE Affiliates in the European Integrated Market," Ibero America Institute for Econ. Research (IAI) Discussion Papers 225, Ibero-America Institute for Economic Research.
  • Handle: RePEc:got:iaidps:225
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    File URL: http://www2.vwl.wiso.uni-goettingen.de/ibero/working_paper_neu/DB225.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Survival of MNE affiliates; Protectionism; Economic Integration; Greece;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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