The home‐region orientation of Spanish exporting firms

Abstract

Purpose

Building on the recent literature on regionalization, the purpose of this paper is to explore the home‐region orientation of Spanish new multinationals in the manufacturing sector and investigate the impact of the liability of foreignness (LOF) on Spanish firms.

Design/methodology/approach

The source of the empirical work is the Survey on Business Strategies from 2000 to 2008. The sample is fully representative of exporting Spanish manufacturing firms and collects more than 1,000 firms per year on average. The study defines and calculates the regionalization and multinationality ratios of home‐region oriented firms. Three moderating factors that affect the international behaviour of Spanish firms are introduced and analysed – the degree of foreign ownership, the level of advertising intensity and the level of research intensity.

Findings

The results demonstrate a strong home‐region orientation for Spanish exporting firms in manufacturing and that the three moderating factors are critical to their regional orientation and degree of multinationality. Furthermore, the results are linked to the LOF.

Originality/value

The paper sheds light on the regionalization topic, so far unexplored in the Spanish context. The original triad defined by Rugman is modified by dividing the world into three groups – the European Union, Latin America and the rest of the world – in order to fit Spanish interests. This paper contributes to understanding how firm specific advantages affect firms' behaviour and how they are related to the LOF.

Citation

Almodóvar, P. (2011), "The home‐region orientation of Spanish exporting firms", Multinational Business Review, Vol. 19 No. 3, pp. 213-228. https://doi.org/10.1108/15253831111172649