How Does De‐Globalization affect location decisions? A Study of managerial perceptions of risk and return

Tina C. Ambos*, Beate Cesinger, Felix Eggers, Sascha Kraus

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

6 Citations (Scopus)
23 Downloads (Pure)

Abstract

Our understanding of how managers take international location decisions is still scarce. Building on the microfoundations view, we explore managers’ perceptions of risk and return in a discrete choice experiment with 2,618 decisions in 2013 (a globalizing world) and 2017 (a de‐globalizing world). While managerial perceptions vary over time due to economic and political changes, such as the current de‐globalization trend, decision heuristics remain remarkably stable: locations perceived as least risky offer the highest expected returns. We also find that distance is a good proxy for managerial perceptions. Investigating the microfoundations of decision‐making we show that international experience, risk‐taking propensity and shareholder status affect heuristics. In sum, our study provides novel insights into the microfoundations of location decisions and extends the behavioral perspective on internationalization.
Original languageEnglish
Pages (from-to)210-236
Number of pages27
JournalGlobal Strategy Journal
Volume10
Issue number1
Early online date8-Jan-2019
DOIs
Publication statusPublished - 11-Feb-2020

Keywords

  • Internationalization
  • Locations decision
  • Managerial perception
  • Microfoundations
  • Risk-return
  • PSYCHIC DISTANCE
  • ENTRY-MODE
  • CULTURAL DISTANCE
  • INTERNATIONAL ENTREPRENEURSHIP
  • SOCIOCULTURAL INTEGRATION
  • DIVERSIFICATION STRATEGY
  • MULTINATIONAL-FIRM
  • EXPERIENCE
  • MICROFOUNDATIONS
  • PERFORMANCE

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