The Influence of Spatial Heterogeneity between Source and Target Location on Performance: Differences between Expansions From, To and Between Global Cities and Other Location Types
Type
conference paper
Date Issued
2022-07-07
Author(s)
Abstract (De)
Global Cities represent preferred locations for firms’ FDIs. They increasingly resemble each other and set themselves apart from other locations. Literature has addressed the implications of similarity in various ways. Within IB literature, distance is split into various distance dimensions (e.g., in contextual distance), which are largely treated as cross-country variables in form of border effects that ease or impede business. In Economic Geography, the concept of within-country heterogeneity and the distinction between border and distance effects are much more pronounced. We combine distance and border effects between subnational source and target locations to understand how an MNE’s source location influences its international spread. Both effects’ influence on FDI performance is shown to vary depending on types of source and target locations. To this end, we distinguish the location types Global City (GC) and Non-Global City (Non-GC). We argue that an FDI’s performance is highest in the GC- to-GC constellation, making this a superior subnational combination. Performance weakens progressively in the constellations Non-GC to GC; GC to Non-GC; and Non-GC to Non-GC. These propositions apply particularly to market- and asset-seeking firms. Our paper makes necessary adjustments to the existing distance theories by taking spatial heterogeneity within the home country into consideration.
Language
English
HSG Classification
contribution to scientific community
Event Title
Academy of International Business Conference 2022
Event Location
Miami
Subject(s)
Division(s)
Eprints ID
268099