Why Does MNE Performance Vary Across Countries? An Inquiry into the Competitive Value of MNE Assets
44 Pages Posted: 22 Aug 2015 Last revised: 19 Jul 2017
Date Written: August 20, 2015
Variations in MNEs’ competitive positions across countries are prevalent phenomena in the business landscape, but are not fully explained by MNE theory. Building on competition theories and applying them to the context of the MNE, we hypothesize that the value of MNEs’ assets varies in relation to competitors of different nationalities and varying geographic scope, and across locations. These predictions are tested on US legal-services MNEs in competition with US domestic firms and non-US MNEs in the US and abroad. We find support for the hypothesized variations that are particularly strong for competitors’ location. These variations suggest that the value of MNE assets is relative, and their varying competitive positions across countries is an inherent feature of international competition, calling for corresponding positioning and strategies.
Keywords: MNE competitive advantage theory, legal services, MNE assets, competition theory
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