Competition barriers and foreign subsidiary growth: propositions on the contextual role of strategic orientation
by Anders Pehrsson; Tobias Pehrsson
International Journal of Business Competition and Growth (IJBCG), Vol. 4, No. 1/2, 2015

Abstract: A foreign subsidiary's way of breaking through exogenous barriers to competition triggers growth of the subsidiary and the firm as a whole. This article contributes to literature on international business strategy by developing a conceptual framework that underscores the contextual role of subsidiary's strategic orientation in breaking through the barriers. Propositions are developed based on analysis of four high growth subsidiaries of Swedish industrial firms operating in the USA. The propositions distinguish types of exogenous competition barriers encountered by the foreign subsidiary, and types of strategic orientation. First, it is proposed that the more extensive the foreign subsidiary's entrepreneurial orientation the weaker the negative association between a scale barrier and subsidiary's growth. Second, it is proposed that the more extensive the foreign subsidiary's market orientation the weaker the negative association between customer access barriers and subsidiary's growth. Contributions to literature and practical implications are discussed.

Online publication date: Thu, 16-Jul-2015

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