Electronic Thesis and Dissertation Repository

Degree

Doctor of Philosophy

Program

Business

Supervisor

Schotter, Andreas

Abstract

This dissertation contributes new insights to research on the internationalization of firms. Whereas prior research has focused mostly on the country as the main locational unit of analysis, I examine internationalization from both subnational and (supranational) regional perspectives. Moreover, I investigate the impact of digitalization on internationalization, by studying how ‘digital’ firms expand internationally.

Essay 1 examines how the initial subnational location choices of multinational enterprises (MNEs) in a host country (China) affect their subsequent investments in the same country. I argue that subnational locations with dense agglomerations of MNEs from the same home country can provide firms with co-ethnic support networks, which facilitate access to resources and information. I show that MNEs that establish their first subsidiary in a country-of-origin agglomeration are likely to choose similar locations for their subsequent subsidiaries. Moreover, these MNEs establish additional subsidiaries at a faster pace. This essay also introduces a novel approach for identifying the boundaries of subnational agglomerations.

Essay 2 links the international expansion of MNEs within supranational regions to the formation of regional management centers (RMCs). I distinguish between two types of RMCs: Dedicated regional headquarters and regional management mandates assigned to operating subsidiaries. I argue, and show empirically, that MNEs deploy these different RMCs in response to two different types of complexity arising from the structure of their regional subsidiary networks.

Essay 3 uses an inductive methodology to study the internationalization of digital firms, i.e., firms whose products and services are based on digital technologies and can be delivered virtually over the internet. I examine the foreign operating modes and internationalization trajectories of 14 cases of digital firms, and find evidence of considerable heterogeneity. Notably, the common perception of digital firms as ‘born global’ firms which internationalize primarily through virtual channels is overly restrictive and applies only to a subset of digital firms. I develop a typology of foreign operating modes, a theoretical framework, and testable propositions.

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