Publisher:
Utrecht University, Utrecht School of Economics, Tjalling C. Koopmans Research Institute, Utrecht
Abstract:
This paper develops a model of firm dynamics in global competition and experimentally analyzes multinational growth strategies and optimal coordination of innovative activities. It shows that growth and innovation strategies of operatively engaged headquarters (business or corporate) with a geocentric focus dominate alternative concepts, like ethnocentric, financial or flexible headquarters. The analysis identifies two crucial strategic advantages for successful multinational companies: economies of stability and global learning.