The hassle factor: An explanation for managerial location shunning

Journal of International Business Studies

Volumn 44, Issue 5, 2013, Pages 521-544

  Schotter, Andreas ^a   Beamish, Paul W ^b  

^a THUNDERBIRD SCHOOL OF GLOBAL MANAGEMENT   (United States)

^b UNIVERSITY OF WESTERN ONTARIO   (Canada)

Author keywords

behavioral geography; foreign location choice; hassle factor; microfoundations; multi methods; theory of FDI and the MNE (ownership location internationalization)

Indexed keywords

EID: 84879379790     PISSN: 00472506     EISSN: 14786990     Source Type: Journal    
DOI: 10.1057/jibs.2013.7     Document Type: Article

References (113)

1. Aharoni, Y. 1966. How to market a country. Columbia Journal of World Business, 1(2): 41-49.
2. Aharoni, Y. 2010. Behavioral elements in foreign direct investment decisions. In T. Devinney, T. Pederson, & L. Tihanyi (Eds), The past, present and future of international business and management, Advances in International Management, Vol. 23, 72-112. Bingley: Emerald Group.
3. Bingley: Emerald Group. Aiken, L., & West, S. 1991. Multiple regression: Testing and interpreting interactions. Newbury Park, CA: Sage.
4. Anderson, J., & Gerbing, D. 1988. Structural equation modeling in practice: A review and recommended two-step approach. Psychological Bulletin, 103(3): 411-439.
5. Barclay, D., Higgins, C., & Thompson, R. 1995. The partial least squares (PLS) approach to causal modeling: Personal computer adoption and use as an illustration. Technology Studies, 2(2): 285-309.
6. Barnes, T., & Sheppard, E. 1992. Is there a place for the rational actor? A geographical critique of the rational choice paradigm. Economic Geography, 68(1): 1-15.
7. Bathelt, H., Malmberg, A., & Maskell, P. 2004. Clusters and knowledge: Local buzz, global pipelines and the process of knowledge creation. Progress in Human Geography, 28(1): 31-56.
8. Beckerman, W. 1956. Distance and the pattern of intra-European trade. Review of Economics and Statistics, 38(1): 31-40.
9. Beugelsdijk, S., McCann, P., & Mudambi, R. 2010. Introduction: Place, space and organization-economic geography and the multinational enterprise. Journal of Economic Geography, 10(4): 485-493.
10. Birkinshaw, J., Morrison, A., & Hulland, J. 1995. Structural and competitive determinants of a global integration strategy. Strategic Management Journal, 16(8): 637-655.
11. Blonigen, B. 2005. A review of the empirical literature on FDI determinants. Atlantic Economic Journal, 33(4): 383-403.
12. Boeh, K., & Beamish, P. 2012. Travel time and the liability of distance in foreign direct investment: Location choice and entry mode. Journal of International Business Studies, 43(5): 525-535.
13. Brouthers, L., Brouthers, K., & Werner, S. 1999. Is Dunning's eclectic framework descriptive or normative? Journal of International Business Studies, 30(4): 831-844.
14. Buckley, P., & Casson, M. 1976. The future of the multinational enterprise. London: Palgrave Macmillan.
15. Buckley, P., Devinney, T., & Louviere, J. 2007. Do managers behave the way theory suggests? A choice-theoretic examination of foreign direct investment location decision-making. Journal of International Business Studies, 38(7): 1069-1094.
16. Central Intelligence Agency. 2008. The world factbook. http://www.cia.gov/cia/publications/factbook/index.html, accessed 1 March 2008.
17. Child, J. 2000. Theorizing about organization cross-nationally. In J.L.C. Cheng & R.B. Peterson (Eds), Advances in International Comparative Management, Vol. 13. Stamford, CT: JAI Press.
18. Child, J. 2009. Context, comparison, and methodology in Chinese management research. Management and Organization Review, 5(1): 57-73.
19. Clark, G., & Strauss, K. 2007. Human nature, the context of decision-making, and the methods of a new economic geography. American Association of Geographers. Version 5, http://www.geog.ox.ac.uk/research/ transformations/wpapers/wpg07-07. df, accessed 21 March 2013.
20. Cohen, J., Cohen, P., West, S. G., & Aiken, L. 2003. Applied multiple regression/correlation analysis for the behavioral sciences. Mahwah, NJ: Lawrence Erlbaum Associates.
21. Collier, P., & Hoeffler, A. 2005. Resource rents, governance, and conflict. Journal of Conflict Resolution, 49(4): 625-633.
22. Curry, J., & Dalpino, N. 2008. Global road warrior, (4th edn). Petaluma, CA: World Trade Press.
23. Dai, L., Eden, L., & Beamish, P. W. 2013. Place, space and geographical exposure: Foreign subsidiary survival in conflict zones. Journal of International Business Studies, advance online publication, 18 April; doi: 10.1057/jibs.2013.12.
24. DeFrank, R. S., Konopaske, R., & Ivancevich, J. M. 2000. Executive travel stress: Perils of the road warrior. Academy of Management Executive, 14(2): 278-293.
25. Delios, A., & Beamish, P. 1999. Geographic scope, product diversification, and the corporate performance of Japanese firms. Strategic Management Journal, 20(8): 711-727.
26. Devinney, T., Midgley, D., & Venaik, S. 2003. Managerial beliefs, market contestability and dominant strategic orientation in the eclectic paradigm. In R. Narula & J. Cantwell (Eds), International business and the eclectic paradigm. London: Routledge.
27. Dunning, J. 1988. The eclectic paradigm of international production: A restatement and some possible extensions. Journal of International Business Studies, 19(1): 1-31.
28. Dunning, J. 1998. Location and the multinational enterprise: A neglected factor? Journal of International Business Studies, 29(1): 45-66.
29. Dunning, J. 2000. The eclectic paradigm as an envelope for economic and business theories of MNE activity. International Business Review, 9(2): 163-190.
30. Dunning, J. 2009. Location and the multinational enterprise: John Dunning's thoughts on receiving the Journal of International Business Studies 2008 Decade Award. Journal of International Business Studies, 40(1): 20-34.
31. Eden, L., & Miller, S. 2004. Distance matters: Liability of foreignness, institutional distance, and ownership strategy. In M.A. Hitt & J.L.C. Cheng (Eds), Theories of the multinational enterprise: Diversity, complexity and relevance (Advances in International Management, Vol. 16): 187-221. Bingley UK: Emerald Group Publishing Limited.
32. Bingley, UK: Emerald Group Publishing Limited. Erez, M., & Earley, P. 1993. Culture, self-identity and work. New York: Oxford University Press.
33. Eisenhardt, K. 1989. Agency theory: An assessment and review. Academy of Management Review, 14(1): 57-74.
34. Felin, T., & Foss, N. 2005. Strategic organization: A field in search of micro-foundations. Strategic Organization, 3(4): 441-455.
35. Fornell, C., & Larcker, D. 1981. Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1): 39-50.
36. Galan, J., & Gonzalez-Benito, J. 2006. Distinctive determinant factors of Spanish foreign direct investment in Latin America. Journal of World Business, 41(2): 171-189.
37. Galan, J., Gonzalez-Benito, J., & Zuñiga-Vincente, J. 2007. Factors determining the location decisions of Spanish MNEs: An analysis based on the investment development path. Journal of International Business Studies, 38(6): 975-997.
38. Garnaut, R., & Ross, A. C. 1975. Uncertainty, risk aversion and the taxing of natural resource projects. The Economic Journal, 85(338): 272-287.
39. Gaur, A., Delios, A., & Singh, K. 2007. Institutional environments, staffing strategies, and subsidiary performance. Journal of Management, 33(4): 611-636.
40. Ghemawat, P. 2001. Distance still matters: The hard reality of global expansion. Harvard Business Review, 79(8): 137-147.
41. Gong, Y. 2003. Subsidiary staffing in multinational enterprises: Agency, resources, and performance. Academy of Management Journal, 46(6): 728-739.
42. Hakanson, L., & Ambos, B. 2010. The antecedents of psychic distance. Journal of International Management, 16(2): 195-210.
43. Hambrick, D., & Mason, P. 1984. Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9(2): 193-206.
44. Hanson, S. 2006. Thinking back, thinking ahead: Some questions for economic geographers. In S. Bagchi-Sen & H. Lawton Smith (Eds), Economic geography: Past, present and future. London: Routledge.
45. Henisz, W. 2000. The institutional environment for economic growth. Economics and Politics, 12(1): 1-31.
46. Heritage Foundation. 2012. Index of economic freedom. http://www.heritage.org/index, accessed 13 July 2012.
47. Herrmann, P., & Datta, D. 2006. CEO experiences: Effects on the choice of FDI entry mode. Journal of Management Studies, 43(4): 755-778.
48. Hitt, M. A., Beamish, P. W., Jackson, S. E., & Mathieu, J. 2007. Building theoretical and empirical bridges across levels: Multilevel research in management. Academy of Management Journal, 50(6): 1385-1399.
49. Hofstede, G. 1983. The cultural relativity of organizational practices and theories. Journal of International Business Studies, 14(2): 75-89.
50. Holstein, J., & Gubrium, J. 1995. The active interview. London: Sage.
51. Hoskisson, R., Hitt, M., Johnson, R., & Moesel, D. 1993. Construct validity of an objective (entropy) categorical measure of diversification strategy. Strategic Management Journal, 14(3): 215-235.
52. Hosseini, H. 2005. An economic theory of FDI: A behavioral economics and historical approach. Journal of Socio-Economics, 34(4): 528-541.
53. Hsu, S., Chen, W., & Hsieh, M. 2006. Robustness testing of PLS, LISREL, EQS and ANN-based SEM for measuring customer satisfaction. Total Quality Management and Business Excellence, 17(3): 355-372.
54. Hulland, J. 1999. Use of partial least squares (PLS) in strategic management research: A review of four recent studies. Strategic Management Journal, 20(2): 195-204.
55. Hymer, S. 1960. The international operations of national firms. Cambridge, MA: MIT Press.
56. Japanese Ministry of Finance. 2007. Foreign direct investment, http://www.mof.go.jp/english/international-policy/reference/itn-transactions-in- securities/fdi/index.htm, accessed 25 May 2008.
57. Jarzabkowski, P. 2004. Strategy as practice: Recursiveness, adaptation and practices-in-use. Organization Studies, 25(4): 529-560.
58. Johanson, J., & Vahlne, J. 1977. The internationalization process of the firm: A model of knowledge development and increasing foreign markets commitments. Journal of International Business Studies, 8(1): 23-32.
59. Johanson, J., & Vahlne, J. 2009. The Uppsala internationalization process revisited: From liability of foreignness to liability of outsidership. Journal of International Business Studies, 40(9): 1411-1431.
60. Johanson, J., & Wiedersheim-Paul, F. 1975. The internationalization of the firm: Four Swedish cases. Journal of Management Studies, 12(3): 305-322.
61. Kahneman, D. 2003. Maps of bounded rationality: Psychology for behavioral economics. American Economic Review, 93(5): 1449-1475.
62. Kahneman, D., Schwartz, A., Thaler, R., & Tversky, A. 1997. The effect of myopia and loss aversion on risk taking: An experimental test. Quarterly Journal of Economics, 112(2): 647-661.
63. Kogut, B., & Singh, H. 1988. The effect of national culture on the choice of entry mode. Journal of International Business Studies, 19(3): 411-432.
64. Kostova, T. 1996. Success of the transnational transfer of organizational practices within multinational companies, Unpublished PhD Dissertation, University of Minnesota, Minnesota, MN.
65. Lewis, M. 1998. Iterative triangulation: A theory development process using existing case studies. Journal of Operations Management, 16(4): 455-469.
66. Lorenzen, M., & Mudambi, R. 2012. Clusters, connectivity and catch-up: Bollywood and Bangalore in the global economy. Journal of Economic Geography, Advance access 25 July. doi: 10.1093/jeg/lbs017.
67. McCormack, M. 1996. What they don't teach you at Harvard Business School about executive travel. West Hollywood: Dove Books.
68. McElroy, J., Tarlow, P., & Carlisle, K. 2007. Tourist harassment: Review of the literature and destination responses. International Journal of Culture, Tourism and Hospitality Research, 1(4): 305-314.
69. Mehlum, H., Moene, K., & Torvik, R. 2006. Cursed by resources or institutions? The World Economy, 29(8): 1117-1131.
70. Merchant International Group. 2008. Strategic research and corporate intelligence. http://www.merchant-international.co.uk, accessed 21 March 2013.
71. Miller, B. 1992. Collective action and rational choice: Place, community, and the limits to individual self-interest. Economic Geography, 68(1): 10-23.
72. Mudambi, R. 1995. The MNE investment location decision: Some empirical evidence. Managerial and Decision Economics, 16(3): 249-257.
73. Mudambi, R., & Navarra, P. 2003. Political tradition, political risk and foreign direct investment in Italy. Management International Review, 43(3): 247-265.
74. Nachum, L., & Zaheer, S. 2005. The persistence of distance? The impact of technology on MNE motivations for foreign investment. Strategic Management Journal, 26(8): 747-767.
75. Narula, R. 1996. Multinational investment and economic structure. London: Routledge.
76. Nebus, J., & Chai, K. 2013. Putting the "psychic" back in psychic distance: Awareness, perceptions, and understanding as dimensions of psychic distance. Journal of International Management, in press; doi: 10.1016/j.intman.2013.01.001.
77. Nielsen, B., & Nielsen, S. 2011. The role of top management team international orientation in international strategic decision-making: The choice of foreign entry mode. Journal of World Business, 46(2): 185-193.
78. OAG (Official Airline Guide). 2008. http://oag.com. accessed 5 March 2008.
79. OECD. 2008. For a better world economy. Paris: Organization for Economic Cooperation and Development.
80. Pouder, R., & St John, C. H. 1996. Hot spots and blind spots: Geographical clusters of firms and innovation. Academy of Management Review, 21(4): 1192-1225.
81. Powell, T., Lovallo, D., & Fox, C. 2011. Behavioral strategy. Strategic Management Journal, 32(13): 1369-1386.
82. Pred, A. 1967. Behavior and location: Foundations for a geographic and dynamic location theory. Lund: C.W.K Gleerup.
83. Punnett, B., & Shenkar, O. 2004. Handbook for international management research. Ann Arbor: University of Michigan Press.
84. Rabin, M. 1998. Psychology and economics. Journal of Economic Literature, 36(1): 11-46.
85. Raturi, A., & Jack, E. 2006. Lessons learned from methodological triangulation in management research. Management Research News, 29(6): 345-357.
86. Reiljan, J., Reiljan, E., & Andresson, K. 2001. Attractiveness of central and Eastern European countries for foreign direct investment in the context of European integration: The case of Estonia. Paper presented at 41st ERSA Congress, Zagreb.
87. Ringle, C., Wende, S., & Will, A. 2005. SmartPLS. 2.0 (beta) ed. Hamburg: University of Hamburg.
88. Rodriguez, C., Gomez, C., & Ferreiro, J. 2009. A proposal to improve the UNCTAD's inward FDI potential index. Transnational Corporations, 18(3): 85-114.
89. Rousseau, D. M. 1985. Issues of level in organizational research: Multi-level and cross-level perspectives. In L.L. Cummings & B.M. Staw (Eds), Research in organizational behavior, Vol. 7. Greenwich, CT: JAI Press.
90. Sachwald, F. 1995. Japanese firms in Europe. Luxembourg: Harwood Academic Publishers.
91. Samuelson, W., & Zeckhauser, R. 1988. Status quo bias in decision making. Journal of Risk and Uncertainty, 1(1): 7-59.
92. Scandura, T., & Williams, E. 2000. Research methodology in management: Current practices, trends, and implications for future research. Academy of Management Journal, 43(6): 1248-1264.
93. Schotter, A., & Beamish, P. W. 2011. Performance effects of MNC headquarters-subsidiary conflict and the role of boundary spanners: The case of headquarter initiative rejection. Journal of International Management, 17(3): 243-259.
94. Simon, H. 1956. Rational choice and the structure of the environment. Psychology Review, 63(2): 129-138.
95. Slangen, A., & Beugelsdijk, S. 2010. The impact of institutional hazards on foreign multinational activity: A contingency perspective. Journal of International Business Studies, 41(6): 980-995.
96. Smith, G. 2007. Travelindependent. http://www.travelindependent .info, accessed 5 December 2007.
97. Strauss, K. 2008. Re-engaging with rationality in economic geography: Behavioural approaches and the importance of context in decision-making. Journal of Economic Geography, 8(2): 137-156.
98. Tenenhaus, M., Vinzi, V., Chatelin, Y., & Lauro, C. 2005. PLS path modeling. Computational Statistics and Data Analysis, 48(1): 159-205.
99. Toyo Keizai. 2007. Kaigai Shinshutsu Kigyo Souran-kuni Betsu. Tokyo: Toyo Keizai.
100. Transparency International. 2012. Corruption perception index. http://www.transparency.org/cpi2011, accessed 21 March 2013.
101. Tsang, E. 2002. Sharing international joint venturing experience: A study of some key determinants. Management International Review, 42(2): 183-206.
102. Tversky, A., & Kahneman, D. 1991. Loss aversion in riskless choice: A reference dependent model. Quarterly Journal of Economics, 106(4): 1039-1061.
103. UNCTAD. 2007. Inward FDI potential index 2002-2004. New York: United Nations.
104. Van de Laar, M., & de Neubourg, C. 2006. Emotions and foreign direct investment: A theoretical and empirical exploration. Management International Review, 46(2): 207-233.
105. Venaik, S., Midgley, D., & Devinney, T. 2005. Dual paths to performance: The impact of global pressures on MNC subsidiary conduct and performance. Journal of International Business Studies, 36(6): 655-675.
106. Venkatraman, N., & Grant, J. 1986. Construct measurement in organizational strategy research: A critique and proposal. Academy of Management Review, 11(1): 71-87.
107. Vernon, R. 1966. International investment and international trade in the product cycle. Quarterly Journal of Economics, 80(2): 190-207.
108. Wells, L., & Mint, A. 2000. Marketing a country: Promotion as a tool for attracting foreign investment, (revised edn). Foreign Investment Advisory Service-Occasional papers, 13.
109. Williamson, O. E. 1981. The economics of organization: A transaction cost approach. American Journal of Sociology, 87(3): 548-577.
110. World Bank. 1994. Expanding the measure of wealth: Indicators of environmentally sustainable development, Environmentally Sustainable Development Studies and Monographs Series No. 7, World Bank, Washington DC.
111. World Economic Forum. 2007. The global competitiveness index 2004-2005. Geneva: World Economic Forum.
112. World Health Organization. 2008. WHO statistical information system. http://www.who.int/whosis/en/index.html, accessed 5 March 2008.
113. Yung, K. 2002. Value of multinationality: Internalization, managerial self-interest, and managerial compensation. Journal of Business Finance and Accounting, 29(1-2): 55-75.