Laura M. Fernández-Méndez, Esteban García-Canal, R. García-García
{"title":"Litigations with the home State and internationalization","authors":"Laura M. Fernández-Méndez, Esteban García-Canal, R. García-García","doi":"10.1108/mbr-03-2021-0036","DOIUrl":null,"url":null,"abstract":"\nPurpose\nThis paper aims to investigate whether Foreign Direct Investment (FDI) can be driven by the creative compliance knowledge that firms gather in their home country through litigations with the government.\n\n\nDesign/methodology/approach\nThe authors draw on the knowledge-based view and organizational learning theory to argue that there is an inverted U-shaped relationship between experience in litigating with the home State and a firm’s level of FDI. The authors test this hypothesis using negative binomial regressions on a sample of Spanish listed firms for the period between 1986 and 2008.\n\n\nFindings\nThe findings of this study confirm the hypothesized inverted U-shaped relationship between a firm’s experience in litigating with the home State and its FDI levels. Firms seem to face an exploration–exploitation dilemma regarding their compliance with domestic regulation. Once they have accumulated a certain amount of creative compliance knowledge, it would be better for them to exploit it both domestically and internationally in the form of creative compliance routines, instead of continuing to push the limits of regulation.\n\n\nOriginality/value\nFirms willing to explore the gray areas of the law are usually forced to litigate with the State. As a result, they develop creative compliance knowledge that they can incorporate into their legal routines and capabilities so that they can later exploit it in foreign countries. To the best of the authors’ knowledge, this is the first paper that attempts to understand the influence of creative compliance knowledge on a firm’s international investments.\n","PeriodicalId":2,"journal":{"name":"ACS Applied Bio Materials","volume":null,"pages":null},"PeriodicalIF":4.6000,"publicationDate":"2021-10-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"ACS Applied Bio Materials","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1108/mbr-03-2021-0036","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"MATERIALS SCIENCE, BIOMATERIALS","Score":null,"Total":0}
引用次数: 1
Abstract
Purpose
This paper aims to investigate whether Foreign Direct Investment (FDI) can be driven by the creative compliance knowledge that firms gather in their home country through litigations with the government.
Design/methodology/approach
The authors draw on the knowledge-based view and organizational learning theory to argue that there is an inverted U-shaped relationship between experience in litigating with the home State and a firm’s level of FDI. The authors test this hypothesis using negative binomial regressions on a sample of Spanish listed firms for the period between 1986 and 2008.
Findings
The findings of this study confirm the hypothesized inverted U-shaped relationship between a firm’s experience in litigating with the home State and its FDI levels. Firms seem to face an exploration–exploitation dilemma regarding their compliance with domestic regulation. Once they have accumulated a certain amount of creative compliance knowledge, it would be better for them to exploit it both domestically and internationally in the form of creative compliance routines, instead of continuing to push the limits of regulation.
Originality/value
Firms willing to explore the gray areas of the law are usually forced to litigate with the State. As a result, they develop creative compliance knowledge that they can incorporate into their legal routines and capabilities so that they can later exploit it in foreign countries. To the best of the authors’ knowledge, this is the first paper that attempts to understand the influence of creative compliance knowledge on a firm’s international investments.