The effect of host country Internet infrastructure on foreign expansion of Korean MNCs |
| |
Authors: | Seung-Hyun Lee Chang Hoon Oh |
| |
Institution: | 1. Jindal School of Management, The University of Texas at Dallas, Richardson, Texas, USA;2. Beedie School of Business, Simon Fraser University, Vancouver, Canada |
| |
Abstract: | This study examines the effect of host country Internet infrastructure on a multinational corporation (MNC) foreign expansion. Using Heckman’s selection model on a sample of 2589 subsidiaries of 487 Korean MNCs between 1990 and 2011, we find that host country Internet infrastructure is important in MNC expansion decisions. In addition, we find that a well-developed Internet infrastructure within a host country leads to more investments from MNCs producing consumer over industrial goods and is more attractive to domestic market followers than market leaders. We find that the host country’s Internet infrastructure is important for an MNC foreign expansion decision, suggesting that efficient communication within an MNC is critical in coordinating globalized MNC subsidiary operations. |
| |
Keywords: | Consumer goods versus industrial goods industries Internet infrastructure market leader versus market follower MNC expansion |
|
|