International Business Expansion: The Roles of Affiliation and Ownership

Abstract

The study provides a unique perspective that transcends firm motivations to understand business expansion outcomes, investigating the expansion connection with geography and the characteristics of the companies that pursue it. Specifically, the research evaluates whether selected factors related to the origin and location of expansion, the company’s ownership status and affiliation, and the ho me and host regions predict a compa ny’s expansion actions as international or domestic. The study uses a random sampling research design and a large sample of instances of company expansion, defined broadly as direct and indirect investments and business development actions. The procedure investigates the phenomenon over the long run, with a focus on prediction. The analysis concludes that affiliation position determines expansion type, with parent companies more likely to pursue international expansion. The paper also offers better understanding of the regions where international business development is more likely, with comparative findings in North America and Europe. Contribution/Originality: This study documents direct and indirect investments and business development actions based on a large data set, providing a unique perspective on international expansion. This study is one of very few studies which have investigated business expansion in the aggregate and in relation to business group affiliation and ownership status. type, of and host of home gross fixed predictive status.