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"A Balancing-Process Approach to Firm Internationalization"

Min-Young Kim, Joseph T. Mahoney, and Danchi Tan

 

First Author :

Min-Young Kim
Business Administration
University of Illinois at Urbana-Champaign, College of Business
1206 S. Sixth St., MC 706
Champaign, IL 61820
USA

mkim229@illinois.edu


Second Author :

Joseph T. Mahoney
Business Administration
University of Illinois at Urbana-Champaign, College of Business
1206 S. Sixth St., MC 706
Champaign, IL 61820
USA

josephm@illinois.edu

http://www.business.uiuc.edu/faculty/mahoney.html


Third Author :

Danchi Tan
International Business
National Chengchi University
64, Zhi-nan Rd., Sec. 2
Wenshan Taipei 116
Taiwan

886-2-9393091 ext. 81139

dctan@nccu.edu.tw

 
 
Abstract :
 
Drawing on the resource-based view of the firm, this paper develops a balancing-process approach to explain the motivations and location choices of foreign direct investment (FDI). In this approach, FDI is viewed as a means to balance a firmís portfolio of resources and capabilities through utilizing foreign strategic factor markets with the ultimate goal of achieving growth and sustainable competitive advantage. This approach joins exploitative and explorative FDI in a single framework and helps explain why a firm can conduct both types of FDI simultaneously.
 
 
Keywords :
 
balancing process, exploitation-exploration., Foreign direct investment, location choice, motivation, Penrose
 
 
Footnotes & Acknowledgements :
 
We thank CIBER at the University of Illinois at Urbana-Champaign for providing funding in support of this research. We also thank Ruth Aguilera, Marcleo Bucheli, Joe Cheng, Glenn Hoetker, and Rose Luo as well as the anonymous reviewers for the 2009 Academy of International Business (AIB) conference in San Diego, CA. The usual disclaimer applies.
 
 
Manuscript Received : 2010
Manuscript Published : 2010
 
 
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