Multinational Business Groups
Geography, Location, and Strategy
ISBN: 978-1-78714-277-0, eISBN: 978-1-78714-276-3
Publication date: 19 April 2017
Abstract
This paper provides a primer on European multinational business groups (BGs) and their subsidiaries. Firms in these BGs appear to have higher sales performance than firms in domestic groups (15% higher). This leads us to investigate which elements increase the likelihood that a group will transition towards multinational status. BGs’ characteristics matter for foreign acquisition: groups becoming multinational are usually larger, have a more hierarchical structure with respect to the number of layers in a group, and are more diverse in terms of sectors. Groups tend to expand into bordering countries or countries providing particular advantages, such as a large internal market. The first acquisition is a corporate-level decision that appears to be made by the group’s controlling firm and is often a diversification into a different industry.
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Acknowledgements
Acknowledgments
I would like to thank Nitika Bagaria, Johannes Boehm, Esther Ann Boler, Swati Dhingra, John Morrow, Evangelina Pateli, Isabel Roland, Vincenzo Scrutinio, Tommaso Sonno, and Gianmarco Ottaviano and others working at the Centre for Economics Performance at The London School of Economics, Miriam Manchin, Christian Fons Rosen, Giorgio Zanarone, and Zsuzsanna Szemeredi for their valuable comments.
Citation
Szemeredi, K. (2017), "Multinational Business Groups", Geography, Location, and Strategy (Advances in Strategic Management, Vol. 36), Emerald Publishing Limited, Leeds, pp. 87-123. https://doi.org/10.1108/S0742-332220170000036004
Publisher
:Emerald Publishing Limited
Copyright © 2017 Emerald Publishing Limited