Title: Competition barriers and foreign subsidiary growth: propositions on the contextual role of strategic orientation

Authors: Anders Pehrsson; Tobias Pehrsson

Addresses: School of Business and Economics, Linnaeus University, SE35195 Växjö, Sweden ' School of Business and Engineering, Halmstad University, P.O. Box 823, SE30118 Halmstad, Sweden

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.

Keywords: competition barriers; subsidiary growth; strategic orientation; entrepreneurial orientation; market orientation; entrepreneurship; foreign subsidiaries; international business strategy; Sweden; USA; United States; customer access barriers.

DOI: 10.1504/IJBCG.2015.070661

International Journal of Business Competition and Growth, 2015 Vol.4 No.1/2, pp.3 - 23

Received: 13 Aug 2014
Accepted: 26 Dec 2014
Published online: 16 Jul 2015 *

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