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Managing MNEGeographic Overstretching: Regional Integration of FDI Locations Along the Value Chain
Type
conference paper
Date Issued
2022-08-09
Author(s)
Tang, Che
Abstract (De)
Research suggests that many MNFs face the challenge of geographical overstretching - defined as international expansion beyond what a company's dynamic capabilities allow. This issue is especially challenging for cornpanies pursuing global economies of scale while being locally responsive. This paper argues that the regional integration of FDI locations can alleviate the negative perfonmnce effect of certain international expansion. The analysis of global automotive industry from 2003 to 2019 shows that regional integration of FDI locations across the value chain helps MNEs to reduce the negative performance effect of inter-regional diversification. By contrast, regional integration of upstream investments or downstream investments has no such benefit and can even hinder organizational performance. Tue present research enriches our understanding of MNE geographic scope and regional strategy interface, by delineating the role of regional integration of investment locations in inter- and intra-regional diversification.
Language
English
HSG Classification
contribution to scientific community
Event Title
82nd Annual Meeting of the Academy of Management
Event Location
Seattle, Washington, USA
Event Date
5-9 August 2022
Subject(s)
Eprints ID
268351