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FDI Structure, Investment Specificity, and Multinationality Value under Host Market Uncertainty

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Abstract

  • To address mixed results regarding the value of multinationality, we take into account some important but less explored contingent factors related to country and subsidiary asset specificity.

  • From our analyses using a panel dataset of Korean FDI, we find that subsidiaries’ local commitment in terms of FDI depth and local sales are negatively associated with multinationality value, whereas their intra-firm trade links to other affiliates are positively associated with the value.

  • We conclude from our findings that in addition to dispersed operations across countries, other country- and subsidiary-specific factors moderate the effect of FDI breadth on multinationality value.

  • We believe our study contributes to the literature by its fine-grained analysis of the environmental and organizational conditions wherein MNCs’ multinationality generates value.

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Acknowledgements:

We appreciate constructive comments of two anonymous reviewers and kind guidance of co-editor-in-chief Michael-Jörg Oesterle. This work was supported by the National Research Foundation of Korea Grant funded by the 447 Korean Government (NRF-2012-S1A3A2-2012S1A3A2033412).

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  1. College of Business, Saint Joseph’s University, Philadelphia, U.S.A.

    Sangcheol Song

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Song, S. FDI Structure, Investment Specificity, and Multinationality Value under Host Market Uncertainty. Manag Int Rev 53, 795–817 (2013). https://doi.org/10.1007/s11575-013-0181-4

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  • DOI: https://doi.org/10.1007/s11575-013-0181-4

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