Strategic complexity and global expansion: an empirical study of newcomer Multinational Corporations from small economies

Oladottir, A. D., Hobdari, B., Papanastassiou, M., Pearce, R. and Sinani, E. (2012) Strategic complexity and global expansion: an empirical study of newcomer Multinational Corporations from small economies. Journal of World Business, 47 (4). pp. 686-695. ISSN 1878-5573 doi: 10.1016/j.jwb.2011.08.003

Abstract/Summary

The purpose of this paper is to analyse the determinants of global expansion strategies of newcomer Multinational Corporations (MNCs) by focusing on Iceland, Israel and Ireland. We argue that newcomer MNCs from small open economies pursue complex global expansion strategies (CGES). We distinguish four different types of global expansion strategies, namely, horizontal, vertical, lateral integration, and risk diversification. Building upon the traditions of Caves and Dunning and applying a multinomial logistic approach, we model CGES as a function of firm and country specific factors. The empirical evidence suggests that newcomer MNCs move away from simplistic dualities in the formulation of their strategic choices towards more complex options as a means of maintaining and enhancing their global competitiveness.