The asymmetric effect of institutional distance on international location: Family versus nonfamily firms

The asymmetric effect of institutional distance on international location: Family versus... Research Summary: This study examines international location choice by considering the potential effects of institutional distance on the decision comparing family and nonfamily firms. We argue that the magnitude and direction of institutional distance matter and that institutional distance has an asymmetric effect on location choice. However, we argue that family involvement has a moderating effect on this relationship because family firms manage institutional distance differently than nonfamily counterparts. Our results, using a sample of Italian firms (2000–2013), reveal that firms are more likely to choose locations for which the positive institutional distance is greater. Additionally, when compared to nonfamily firms, family firms are more likely to choose locations with greater negative institutional distance and less likely to enter countries with greater positive institutional distance. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Global Strategy Journal Wiley

The asymmetric effect of institutional distance on international location: Family versus nonfamily firms

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Publisher
Wiley Subscription Services, Inc., A Wiley Company
Copyright
Copyright © 2018 Strategic Management Society
ISSN
2042-5791
eISSN
2042-5805
D.O.I.
10.1002/gsj.1203
Publisher site
See Article on Publisher Site

Abstract

Research Summary: This study examines international location choice by considering the potential effects of institutional distance on the decision comparing family and nonfamily firms. We argue that the magnitude and direction of institutional distance matter and that institutional distance has an asymmetric effect on location choice. However, we argue that family involvement has a moderating effect on this relationship because family firms manage institutional distance differently than nonfamily counterparts. Our results, using a sample of Italian firms (2000–2013), reveal that firms are more likely to choose locations for which the positive institutional distance is greater. Additionally, when compared to nonfamily firms, family firms are more likely to choose locations with greater negative institutional distance and less likely to enter countries with greater positive institutional distance.

Journal

Global Strategy JournalWiley

Published: Jan 1, 2018

Keywords: ; ; ; ;

References

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