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The limits to the growth of multinational firms in a foreign market

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  • Danchi Tan

    (Department of International Trade, National Chengchi University, Taipei, Taiwan)

Abstract

Theories of growth for firms have suggested that slow managerial growth is a major constraint why firms cannot grow faster. This paper is built on such a view and explores the factors that may influence the growth rate of Japanese firms in a given US industry. It is found that Japanese firms that allocated more internal and international managerial resources (proxied by expatriates) to their US operations tended to achieve higher growth rates. Japanese firms that were geographically diversified and those that spread their international investment projects evenly over time also achieved higher growth rates. Copyright © 2003 John Wiley & Sons, Ltd.

Suggested Citation

  • Danchi Tan, 2003. "The limits to the growth of multinational firms in a foreign market," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 24(8), pages 569-582.
    • Handle: RePEc:wly:mgtdec:v:24:y:2003:i:8:p:569-582
    DOI: 10.1002/mde.1129
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    References listed on IDEAS

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    Cited by:

    1. Hutzschenreuter, Thomas & Horstkotte, Julian, 2013. "Managerial services and complexity in a firm’s expansion process: An empirical study of the impact on the growth of the firm," European Management Journal, Elsevier, vol. 31(2), pages 137-151.
    2. Thomas Hutzschenreuter & Johannes Voll, 2007. "Internationalisierungspfad und Unternehmenserfolg — Implikationen kultureller Distanz in der Internationalisierung," Schmalenbach Journal of Business Research, Springer, vol. 59(7), pages 814-846, November.
    3. Tan, Danchi & Mahoney, Joseph T., 2005. "The Dynamics of Japanese Firm Growth in U.S. Industries: The Penrose Effect," Working Papers 05-0121, University of Illinois at Urbana-Champaign, College of Business.
    4. Duanmu, Jing-Lin & Norbäck, Pehr-Johan & Lu, Jane Wenzhen & Clegg, Jeremy, 2022. "Contraction under minimum wages? Operational and financial advantages of multinational subsidiaries in China," International Business Review, Elsevier, vol. 31(2).
    5. Hutzschenreuter, Thomas & Horstkotte, Julian, 2013. "Performance effects of international expansion processes: The moderating role of top management team experiences," International Business Review, Elsevier, vol. 22(1), pages 259-277.
    6. Riaz, Suhaib & Glenn Rowe, W. & Beamish, Paul W., 2014. "Expatriate-deployment levels and subsidiary growth: A temporal analysis," Journal of World Business, Elsevier, vol. 49(1), pages 1-11.
    7. Róisín Donnelly & Saptarshi Purkayastha & Tatiana S. Manolova & Linda F. Edelman, 2024. "Institutional distance, slack resources, and foreign market entry," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 55(2), pages 194-211, March.
    8. Thomas Hutzschenreuter & Julian Horstkotte, 2013. "Performance effects of top management team demographic faultlines in the process of product diversification," Strategic Management Journal, Wiley Blackwell, vol. 34(6), pages 704-726, June.
    9. Alex Mohr & Georgios Batsakis & Zita Stone, 2018. "Explaining the effect of rapid internationalization on horizontal foreign divestment in the retail sector: An extended Penrosean perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(7), pages 779-808, September.
    10. Danchi Tan & Joseph T. Mahoney, 2007. "The dynamics of Japanese firm growth in U.S. Industries: The Penrose effect," Management International Review, Springer, vol. 47(2), pages 259-279, March.
    11. Alain Verbeke & Wenlong Yuan, 2007. "Entrepreneurship in multinational enterprises: A Penrosean perspective," Management International Review, Springer, vol. 47(2), pages 241-258, March.
    12. Thomas Hutzschenreuter & Fabian Guenther, 2009. "Complexity as a constraint on firm expansion within and across industries," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(6), pages 373-392.

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