Clusters and benchmarks on the dynamics of nanoscience and nanotechnology
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The persistence of distance? The impact of technology on MNE motivations for foreign investment

Book or journal references : Strategic Management Journal, vol. 26, pp. 747-767 (2005).

Author(s) : Nachum , L. and Zaheer , S.

Abstract :

Why do firms go abroad when technology makes it possible to do business at a distance? We argue that the cost of distance differentially affects investment motivations across industries. We find support for this hypothesis in a study of U.S. inward and outward FDI. Knowledge seeking and efficiency seeking are the two most important explanations for international activity in information-intensive industries, reinforcing the value of intangible resources in this sphere. In less information-intensive industries, market seeking and the search for low-cost export platforms are the dominant motivations for FDI. An important implication for the current debate on offshoring is that inward FDI flows into the United States occur in high-rather than low-paying industries, and are of the knowledge-seeking variety, while outward flows are driven by the search for efficiency and markets. Copyright (c) 2005 John Wiley & Sons, Ltd.

Keywords :

MNE motivations; technology; global organization of work; knowledge-seeking investment; information-intensive industries; offshoring RESEARCH-AND-DEVELOPMENT; UNITED-STATES; INTERNATIONAL EXPANSION; INDUSTRY; KNOWLEDGE; FIRM; DETERMINANTS; INTERNET; GEOGRAPHY; DYNAMICS

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