Collocation for what? Value and critical dimensions of MNE clustering

Urzelai, Berrbizne; Puig, Francisco

Abstract

Multinational operate and evolve in diverse and inter-related environments in home and host countries. Through their spatial interactions they can learn from other organizations and create externalities that reduce their liabilities. However there are costs and risks associated with doing business in a cluster. As result, there is a heterogeneous perception about the strategic value of location for MNEs in these kind of organizational contexts when doing business abroad.
Location is a multidimensional construct. While objective factors act as a pre-condition of location (mainly country), others depend on ex-post perceptions and are context-specific. This study focuses on the second approach by looking at country-of-origin clusters.
Specifically, the literature on IB has largely studied the value of location and the location mode, but few studies clarify which dimensions of the location are more valuable. Some firms could be more sensitive to the location and its value for their activities there, and some may find that location is not that determinant. We analyse these aspects of location in a sample of 24 managers from European SMEs subsidiaries in China. Evidence suggests that to be outside clusters is mainly associated to resource-seeking firms, is more cost-effective and a better option to access to business specific knowledge and resources. Collocation is valuable for networking (mainly for market-seeking firms) and to gain legitimacy in the host market (mainly for firms with mix entry reasons).

• Presentation Conference Type: Conference Paper (unpublished)
• Conference Name: EIBA 2018 Poznan Conference: International Business in a Transforming World – the Changing Role of States and Firms
• Start Date: Dec 13, 2018
• End Date: Dec 15, 2018
• Deposit Date: Apr 26, 2022
• Public URL: https://uwe-repository.worktribe.com/output/9314381
• Publisher URL: http://eiba2018.eiba.org/