Impact of the Home Country on Internationalization

Journal of World Business, 53 (5): 593-604

23 Pages Posted: 27 Dec 2018

See all articles by Alvaro Cuervo-Cazurra

Alvaro Cuervo-Cazurra

Northeastern University - Department of International Business and Strategy

Yadong Luo

University of Miami - Department of Management

Ravi Ramamurti

Northeastern University - D’Amore-McKim School of Business

Siah Hwee Ang

Victoria University of Wellington

Date Written: June 10, 2018

Abstract

We analyze how a firm’s home country influences its internationalization. We propose two complementary types of influence. First, we conceptualize a firm’s international trade as shaped by four drivers: comparative advantage, comparative disadvantage, country-of-origin advantage, and country-of-origin liability. Second, we conceptualize the firm’s foreign direct investment as shaped by four other drivers: institutional learning, competitive learning, institutional escape, and competitive escape. Taken together, these eight drivers help pull together recent theoretical advances on topics such as emerging-market multinationals, investment in tax havens, and cross-border acquisitions of firms in advanced countries. We also highlight other home-country related issues, such as strategic responses and home-host country links, in the spirit of fostering future research on home-country effects that warrant a more nuanced understanding.

Keywords: Home country, multinational enterprise, internationalization, emerging markets, institutions

JEL Classification: F23

Suggested Citation

Cuervo-Cazurra, Alvaro and Luo, Yadong and Ramamurti, Ravi and Ang, Siah Hwee, Impact of the Home Country on Internationalization (June 10, 2018). Journal of World Business, 53 (5): 593-604. Available at SSRN: https://ssrn.com/abstract=3298384

Alvaro Cuervo-Cazurra (Contact Author)

Northeastern University - Department of International Business and Strategy ( email )

D'Amore-McKim School of Business
313 Hayden Hall, 360 Huntington Avenue
Boston, MA 02115
United States
16173736568 (Phone)
16173738628 (Fax)

HOME PAGE: http://cuervo-cazurra.com

Yadong Luo

University of Miami - Department of Management ( email )

United States

Ravi Ramamurti

Northeastern University - D’Amore-McKim School of Business ( email )

360 Huntington Ave.
Boston, MA 02115
United States

Siah Hwee Ang

Victoria University of Wellington ( email )

P.O. Box 600
Wellington, 6140
New Zealand

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