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Author: | Nachum, L. Zaheer, S. |
Title: | The persistence of distance? The impact of technology on MNE motivations for foreign investment |
Journal: | Strategic Management Journal
2005 : AUG, VOL. 26:8, p. 747 767 |
Index terms: | technology investment motivation USA markets knowledge offshore industry |
Language: | eng |
Abstract: | Technology has made it possible for firms to do business at a distance, but still some of them are going abroad. The authors argue that the costs of distance affect the motivations for investment across industries. A study of U.S. inward and outward FDI provides support for the hypothesis. In knowledge-intensive industries the most significant explanations for international activity are efficiency and knowledge seeking. In less knowledge-intensive industries the most important motivating factors for FDI are market seeking and low-cost export platforms. A significant addition to the debates about offshoring is the implication that inward FDI flows to the USA take place in high-paying industries and are knowledge driven. The search for efficiency and markets are the main drivers for outward flows from USA. |
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