The MNE as a Portfolio: Path-Dependence and Interdependencies in MNE Growth Trajectory

Posted: 4 Sep 2008 Last revised: 13 May 2010

See all articles by Lilac Nachum

Lilac Nachum

City University of New York - Department of Marketing and International Business

Sangyoung Song

Ewha Womans University

Date Written: September 3, 2008

Abstract

We conceptualize the MNE as a portfolio of interdependent sub-units and examine its growth trajectory in relation to its existing portfolio. The empirical testing is based on a unique dataset that details all the location moves of US legal-services MNEs during 1949-2006. These MNEs evolve in directions that follow from their past. Their portfolios affect their subsequent moves, speaking for the impact of interdependencies among sub-units on the evolution of MNEs. The portfolio exercises stronger impact on entry than on exit, suggesting that different forces affect MNEs’ expansion and contraction. We outline strategic and organizational implications of the MNE as a portfolio.

Keywords: Location portfolio, MNE location choices, path dependence, international expansion, legal service MNEs, discrete time hazard model

Suggested Citation

Nachum, Lilac and Song, Sangyoung, The MNE as a Portfolio: Path-Dependence and Interdependencies in MNE Growth Trajectory (September 3, 2008). Available at SSRN: https://ssrn.com/abstract=1262932 or http://dx.doi.org/10.2139/ssrn.1262932

Lilac Nachum (Contact Author)

City University of New York - Department of Marketing and International Business ( email )

One Bernard Baruch Way, B12-240
New York, NY 10010-5585
United States

Sangyoung Song

Ewha Womans University ( email )

11-1 Daehyun-dong
Seodaemun-gu
Seoul 120-750, Seoul Seoul 120
Korea, Republic of (South Korea)

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