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| Author: | Shaver, J. M. |
| Title: | The benefits of geographic sales diversification: how exporting facilitates capital investment |
| Journal: | Strategic Management Journal
2011 : OCT, VOL. 32:10 p. 1046-1060 |
| Index terms: | diversification capital investment cash flow exports manufacturing industry liquidity competitive advantage R&D foreign exchange business cycles |
| Language: | eng |
| Abstract: | This article argues that by geographically diversifying sales, companies' exporting signals more stable expected cash flows and company quality, which may increase external capital providers' willingness to fund investments. Investigating a representative sample of Spanish manufacturers from 1990 to 1998, it is found that exporting decreases investment liquidity constraints allowing companies to make strategic investments they would not otherwise be able to make. This indicates how diversification can be a strategy to develop and maintain competitive advantage. |
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