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Research on Location Determinants

Research on Location Determinants

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Article
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The extant literature had studied the determinants of the firms’ location decisions with help of host country characteristics and distances between home and host countries. Firm resources and its internationalization strategies had found limited attention in this literature. To address this gap, the research question in this dissertation was whethe...

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Context 1
... of these studies have investigated the determinants affecting FDI from a specific home country into several host countries or inward FDI into a specific host country from several home countries, whereas others have used datasets that includes multiple home and host countries. A tabular synopsis of some of the research studies on this topic follows in Table 2. (i) four types of distances namely psychic distance, cultural distance, geographic distance, and economic distance; ...
Context 2
... p-value (p < 0.001) for fixed effect indicates that G000 is significantly different from 0. The deviance for the unconditional model is 1917.6509 with number of estimated parameters = 3 as shown in model 1 of Table 22. Summary of the model specified in equation format is as given below: ...
Context 3
... between purpose and KMSW: As can be seen in Model 7 of Table 22 Interaction between purpose and wagebillperemployee: As can be seen in Model 8 of Table 22 Indian software firm without CMMI level-5 appraisal locating in a developed country with a labor-seeking strategy is only 17%, whereas the probability of an Indian software firm with CMMI level-5 appraisal locating in a developed country with a labor-seeking strategy is 85%, all else being equal. The probability of an Indian software firm without CMMI level-5 appraisal locating in a developed country with a market- seeking strategy is 91%, whereas the probability of an Indian software firm with CMMI level-5 appraisal locating in a developed country with a market-seeking strategy is 94%, all else being equal. ...
Context 4
... between purpose and KMSW: As can be seen in Model 7 of Table 22 Interaction between purpose and wagebillperemployee: As can be seen in Model 8 of Table 22 Indian software firm without CMMI level-5 appraisal locating in a developed country with a labor-seeking strategy is only 17%, whereas the probability of an Indian software firm with CMMI level-5 appraisal locating in a developed country with a labor-seeking strategy is 85%, all else being equal. The probability of an Indian software firm without CMMI level-5 appraisal locating in a developed country with a market- seeking strategy is 91%, whereas the probability of an Indian software firm with CMMI level-5 appraisal locating in a developed country with a market-seeking strategy is 94%, all else being equal. ...
Context 5
... summary of the results obtained is presented in Table 23 below: such that Indian software firms when pursuing a market-seeking strategy are more likely to locate in a developed country than the firms pursing a labor- seeking strategy, which, in turn, are more likely to locate in an emerging country. ...

Citations

... Previous researchers also looked into firm-related factors, such as accumulation of experiential knowledge and capabilities based on prior entry experience; enhanced organizational capabilities (Lu et al., 2014); firm's strategic interactions (Lu et al., 2014); resources and internationalization strategy using market-seeking and labour-seeking strategy (Jain, 2010); financial strength ((Abdul- Aziz & Wong, 2008); ((El-higzi, 1999),(Che Ibrahim, Mohd Baki, Mat Isa, Endut, & Ghani, 2009)); project management skill and international network (Che Ibrahim, Mohd Baki, et al., 2009); local competition; technological capability; trained workforce; connection and degree of business interaction (Abdul- Aziz & Wong, 2008) together with profit repatriation, desire to expand strategically; and company strength in know-how (Abdul- Aziz & Wong, 2008). In addition, project management capabilities are linked with the organizational and managerial processes which include efficiency in the organizational structure, mechanisms of efficient coordination, knowledge and skills of employees and managerial competences (Villaverde & Ortega, 2007). ...
Article
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Market expansion into international markets has been increasingly important for Malaysian construction firms. Thus, firms must adopt effective strategies to face various challenges in unfamiliar environments. Entry location (EL) consideration is the first and most critical business strategy for firms to determine "where the markets are", in order to exploit opportunities available in international markets. However, there are many important factors that must be considered by firms in choosing the location for their projects. The main objective of this study is to determine the significant locational factors influencing EL decision of Malaysian construction firms to enter international markets. Sixty-two managers responded to the questionnaires sent to firms registered under Construction Industry Development Board (CIDB) Malaysia. Fifteen most significant factors grouped under country, market, firm and market were determined and ranked using the logit measure order by employing Rasch Model analysis. It was found that the significant country factors were related to the host and home government's attitude and support, while the significant market factors were related to market potential and demand. In addition, the significant firm factors entail firm's tangible and intangible resources, while the significant project factors constitute project fund, experience and contract types adopted. The findings show that the EL decisions are related to various issues, namely the host-home government supports, market conditions, firm's resources and project funds. These issues have been of particular interest and were found critical for construction firms' early stage of internationalization. Thus, firms could not afford to make poor or wrong EL decisions in assigning their limited resources to diminishing markets while avoiding the attractive or growing markets. © 2016, Construction Research Institute of Malaysia. All rights reserved.
... The firm factors being studied were the profit repatriation, desire to expand strategically, firm's strength in know-how (El-higzi 1999), capital requirement, local competition, technological capability, geographical distance, trained workforce, ease of obtaining financial funding (Abdul-Aziz & Wong 2010), enhanced organizational capabilities, accumulation of experiential knowledge and capabilities based on prior entry experience (Lu et al. 2014), strong financing capacity, experience in similar works (Mat Isa et al. 2013), prior experience in the local market (Zhu et al. 2012), resources of firms, firm internationalization marketseeking and labor-seeking strategies (Jain 2010), financial strength, project management skill, and international network (Che ). ...
Article
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This paper proposes a model for entry location (EL) and entry timing (ET) decisions to guide construction firms in accessing targeted international markets. Neglecting to properly choose the right combination of the entry location and entry timing (ELET) decisions can lead to poor performance of the firms' international ventures. The sampling frame was from the Malaysian construction firms that have undertaken and completed projects abroad. Survey questionnaires sent to 115 firms registered with Construction Industry Development Board (CIDB) Malaysia, operating in more than 50 countries, achieved a 39.1 per cent response rate. Based on a comprehensive statistical analysis of survey data it was found that the mutually inclusive significant factors that influenced the firms' ELET decisions were: the firm's ability to assess market signals and opportunities, international experience, financial capacity, competencies and capabilities (project management, specialist expertise and technology), resources (level of knowledge based on research and development), experience in similar works, financial support from the home country banks, technical complexities of projects and availability of funds for projects. Hence, the present research builds on and extends the literature on the ELET decisions in a more integrated way.
... Table 1 shows previous studies carried out on factors related to EL decision by construction firms relative to country, market/industry, firm and project aspects in international markets. Boeh and Beamish (2012) Travel time and liability of distance Buckley et al. (2012) Host-home country linkages; Host-home country specific advantages Zhu et al. (2012) Local density of home-country affiliates; Prior experience in the local market Gaston-Breton and Martín (2011) Market attractiveness (market size/potential); Consumer level (personal and social values) Jain (2010) Resources of companies; Firm internationalization strategy (market-seeking and labor-seeking strategy) Ibrahim et al. (2009) Cost of doing business; Availability of transportation and utilities; Special financial packages; Financial strength; Project management skill; International network. Malhotra et al. (2009) Previous studies show that country factors were amongst the important factors considered by the firms in their entry location decisions. ...
... It started with the firms" vision and mission with the desire to expand using market and labor seeking strategies. Some of the firm factors under previous studies were the profit repatriation; desire to expand strategically; firm"s strength in know-how (El-higzi, 1999); capital requirement, local competition, technological capability; geographical distance; trained workforce, ease to get financial funding (Abdul-Aziz & Wong, 2010); enhanced organizational capabilities; accumulation of experiential knowledge and capabilities based on prior entry experience (Lu et al., 2014), strong financing capacity; experience in similar works (Mat Isa et al., 2013), prior experience in the local market (Zhu et al., 2012), resources of firms; firm internationalization market-seeking and labor-seeking strategies (Jain, 2010), financial strength; project management skill, international network (Che Ibrahim et al., 2009). The previous studies indicate that by targeting the profit repatriation and using the firm"s know-how and in project management skill, international network, accumulated experiential knowledge and enhanced organizational capabilities, the firms were motivated to penetrate even the highly and risky international markets. ...
Conference Paper
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International market expansion is inevitable in a borderless and increasingly globalized world. It involves a process where firms move from operating in their domestic domain to international markets. Three main strategic decisions of firms that plan to engage in the international trades are the entry location (EL), entry timing (ET) and entry mode (EM). However, these decisions depend on the analysis of the various factors to be considered in the firm's strategic planning and management. Thus, this study explores and determines the entry location and entry mode (ELEM) decisions by Malaysian construction firms to enter international markets. Questionnaire surveys were sent to the firms registered with Construction Industry Development Board (CIDB) Malaysia with international experience operating in more than 50 countries. From 115 target firms, 45 have responded a response rate of 39.1 per cent. Logistic regression analysis was used to determine the most preferred ELEM decisions, while factor analysis was carried out to determine the significant factors influencing the ELEM decisions. Logistic regression model reveals that 90.6 % of construction firms were correctly classified as firms that have chosen the non-ASEAN countries, while 55.6% have chosen the ASEAN country with 82.9% of the sample population was correctly classified. While, the multi-nominal logistic regression model has correctly classified 71.1% of the respondents have chosen both equity (EQ) and non-equity (NEQ) modes while the other 28.9 % has been classified under the EQ modes with 0% classified under NEQ modes and shows the overall case of the model has correctly classified 60.0% of the respondents. This paper presents further background on the most significant factors influencing to the firms' ELEM decisions, the establishment of relationships among the variables in the proposed ELEM decision model. The most significant factors influencing the ELEM decisions are the product/service market growth; firm's ability to assess market signals and opportunities; firm's resources (level of knowledge & research and development); management quality (product, service, human resource) and firm's experience in similar works. The present study builds on and extends the literature on the ELEM decisions in a more integrated way and brings forward the most significant factors influencing both decisions. Hence, the findings offer valuable information to construction firms planning to further penetrate international markets.
Article
The study aims to determine the principal motives of inward foreign direct investment by foreign multinational companies in India. The study undertakes to find out the impact of motives of inward foreign investment of multinational firms on benefits as perceived by the managers. The paper uses a survey approach to collect data about motives and its impact on benefits. Statistical tools, namely confirmatory factor analysis, structural equation modeling have been used. The study found that principal motive for foreign multinational firms to undertake investment is market-seeking followed by resource-seeking and efficiency-seeking motive. The strategic-asset seeking motive does not significantly influence foreign direct investment in India. The study found a positive impact between perceived benefits and motives of inward foreign direct investment in India.