Developing international social capital: The role of communities of practice and clustering
Abstract One criteria regarding where to invest in foreign markets is linked to the international social capital (ISC) that exists on the place, which enables the access to local knowledge and other location-specific advantages. There are alternative ways to create and make use of that ISC that are still unexplored by International Business literature. In this paper, we study the geographic communities of practice (CoP) that are formed by FDI firms from the same country-of-origin (the so-called country-of-origin clusters). For that purpose, the paper adopts a qualitative methodological approach through an inductive case study of expatriates from 13 Spanish subsidiaries co-located in China. …
The Chinese Bittersweet Cake in Orbea’s Internationalization
Orbea is the oldest and biggest bicycle manufacturer in Spain and one of the most recognized bike brands in the world. With more than 175 years in the market, in the year 2007 Orbea decided to set up its third manufacturing plant in the Industrial park of Kunshan. After 8 years with activity there, in 2015 the company decided to close down the factory and reallocated its resources closer to the Headquarters. Some of the reasons that influenced its entry and exit decisions had their origin in the specific context of investment (place): China and the country-of-origin (COO) cluster in Kunshan. Other reasons of the reshoring and backshoring were related with the evolution of the sector, public…
The Value of Local Externalities in Country-of-Origin Clusters: Evidence from China
Business cooperation and the exchange of information and knowledge are actions and decisions that firms can build in order to compete more effectively in globalized markets. These options are even more relevant for SMEs to access and expand in new international markets and through more commitment entry modes as foreign direct investment (FDI). While studies on the role of local externalities are well established in the Economic Geography literature, its international dimension is still unexplored in deep. This is surprising when the survival and growth of the subsidiaries depends on the efficient adjustment with its context. The objective of this paper is to analyse the perceptions of the r…