Distance and divestment of Korean MNC affiliates: the moderating role of entry mode and experience
In this study, we examine the impact of cross-national distance on the divestment of foreign affiliates. On the basis of the nine dimensions of cross-national distance (Berry et al. 2010. "An Institutional Approach to Cross-National Distance." Journal of International Business Studies 41 (9): 1460-1480), we empirically examine the impact of each measure of distance on the divestment of affiliates. Using a data set of 1697 multinational corporations (MNCs) headquartered in Korea and their 2435 affiliates in 67 host countries from 2000 to 2010, we find that distance created by economic, financial, political, administrative, cultural, demographic, knowledge and global connectedness leads to the divestment of foreign affiliates. We also find that the positive relationship between cross-national distance and affiliate divestment is likely to become stronger when an MNC enters the host country through a joint venture and weaker for affiliates with greater experience in the host country.
Year of publication: |
2014
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Authors: | Pattnaik, Chinmay ; Lee, Jeoung Yul |
Published in: |
Asia Pacific Business Review. - Taylor & Francis Journals, ISSN 1360-2381. - Vol. 20.2014, 1, p. 174-196
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Publisher: |
Taylor & Francis Journals |
Saved in:
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