Does Institutional Distance Still Matter?: Industry Standards and Global Sourcing Location Choices

Marcus Møller Larsen, Stephan Manning

    Publikation: Bidrag til konferencePaperForskning

    Resumé

    This paper adds nuance to our understanding of institutional antecedents of foreign investment, in particular in global services sourcing. While prior research has stressed the various risks and effects associated with home-host country differences in national-level institutions, e.g. legal systems, we argue that industry-specific, yet often transnational field institutions, e.g. standards, have become critical factors in driving sourcing location decisions. Using data from the Offshoring Research Network, Kaufmann institutional indicators, and data on ‘capability maturity model integration’ (CMMI) process standard adoption, we show that sourcing location choices are indeed negatively impacted by institutional differences between home and host country, i.e. ‘distance’ still matters, but they are positively impacted by CMMI standard adoption in host countries, and standard adoption negatively moderates the importance of distance. Findings promote a more contextual, multi-level understanding of institutional antecedents of foreign firm location choices, which also has important policy implications in particular for emerging economies.
    This paper adds nuance to our understanding of institutional antecedents of foreign investment, in particular in global services sourcing. While prior research has stressed the various risks and effects associated with home-host country differences in national-level institutions, e.g. legal systems, we argue that industry-specific, yet often transnational field institutions, e.g. standards, have become critical factors in driving sourcing location decisions. Using data from the Offshoring Research Network, Kaufmann institutional indicators, and data on ‘capability maturity model integration’ (CMMI) process standard adoption, we show that sourcing location choices are indeed negatively impacted by institutional differences between home and host country, i.e. ‘distance’ still matters, but they are positively impacted by CMMI standard adoption in host countries, and standard adoption negatively moderates the importance of distance. Findings promote a more contextual, multi-level understanding of institutional antecedents of foreign firm location choices, which also has important policy implications in particular for emerging economies.

    Konference

    KonferenceLocation Decisions of Multinational Enterprises
    LokationFæstningens Materialgård (The Fortifications Depot)
    LandDanmark
    ByCopenhagen
    Periode11/05/201512/05/2015
    Internetadresse

    Emneord

    • Institutional distance
    • Organizational field
    • Industry standards
    • CMMI
    • Global sourcing
    • Outsourcing
    • Location choices
    • Multinational enterprises

    Citer dette

    Møller Larsen, M., & Manning, S. (2015). Does Institutional Distance Still Matter? Industry Standards and Global Sourcing Location Choices. Afhandling præsenteret på Location Decisions of Multinational Enterprises, Copenhagen, Danmark.
    Møller Larsen, Marcus ; Manning, Stephan. / Does Institutional Distance Still Matter? Industry Standards and Global Sourcing Location Choices. Afhandling præsenteret på Location Decisions of Multinational Enterprises, Copenhagen, Danmark.36 s.
    @conference{cc817e328b4643608bd2b5e4a8f07c5f,
    title = "Does Institutional Distance Still Matter?: Industry Standards and Global Sourcing Location Choices",
    abstract = "This paper adds nuance to our understanding of institutional antecedents of foreign investment, in particular in global services sourcing. While prior research has stressed the various risks and effects associated with home-host country differences in national-level institutions, e.g. legal systems, we argue that industry-specific, yet often transnational field institutions, e.g. standards, have become critical factors in driving sourcing location decisions. Using data from the Offshoring Research Network, Kaufmann institutional indicators, and data on ‘capability maturity model integration’ (CMMI) process standard adoption, we show that sourcing location choices are indeed negatively impacted by institutional differences between home and host country, i.e. ‘distance’ still matters, but they are positively impacted by CMMI standard adoption in host countries, and standard adoption negatively moderates the importance of distance. Findings promote a more contextual, multi-level understanding of institutional antecedents of foreign firm location choices, which also has important policy implications in particular for emerging economies.",
    keywords = "Institutional distance, Organizational field, Industry standards, CMMI, Global sourcing, Outsourcing, Location choices, Multinational enterprises",
    author = "{M{\o}ller Larsen}, Marcus and Stephan Manning",
    year = "2015",
    language = "English",
    note = "null ; Conference date: 11-05-2015 Through 12-05-2015",
    url = "http://kraksfondbyforskning.dk/summary_conference-on-location-decisions-of-multinational-enterprises-markets-cities-or-clusters/",

    }

    Møller Larsen, M & Manning, S 2015, 'Does Institutional Distance Still Matter? Industry Standards and Global Sourcing Location Choices' Paper fremlagt ved Location Decisions of Multinational Enterprises, Copenhagen, Danmark, 11/05/2015 - 12/05/2015, .

    Does Institutional Distance Still Matter? Industry Standards and Global Sourcing Location Choices. / Møller Larsen, Marcus; Manning, Stephan.

    2015. Afhandling præsenteret på Location Decisions of Multinational Enterprises, Copenhagen, Danmark.

    Publikation: Bidrag til konferencePaperForskning

    TY - CONF

    T1 - Does Institutional Distance Still Matter?

    T2 - Industry Standards and Global Sourcing Location Choices

    AU - Møller Larsen,Marcus

    AU - Manning,Stephan

    PY - 2015

    Y1 - 2015

    N2 - This paper adds nuance to our understanding of institutional antecedents of foreign investment, in particular in global services sourcing. While prior research has stressed the various risks and effects associated with home-host country differences in national-level institutions, e.g. legal systems, we argue that industry-specific, yet often transnational field institutions, e.g. standards, have become critical factors in driving sourcing location decisions. Using data from the Offshoring Research Network, Kaufmann institutional indicators, and data on ‘capability maturity model integration’ (CMMI) process standard adoption, we show that sourcing location choices are indeed negatively impacted by institutional differences between home and host country, i.e. ‘distance’ still matters, but they are positively impacted by CMMI standard adoption in host countries, and standard adoption negatively moderates the importance of distance. Findings promote a more contextual, multi-level understanding of institutional antecedents of foreign firm location choices, which also has important policy implications in particular for emerging economies.

    AB - This paper adds nuance to our understanding of institutional antecedents of foreign investment, in particular in global services sourcing. While prior research has stressed the various risks and effects associated with home-host country differences in national-level institutions, e.g. legal systems, we argue that industry-specific, yet often transnational field institutions, e.g. standards, have become critical factors in driving sourcing location decisions. Using data from the Offshoring Research Network, Kaufmann institutional indicators, and data on ‘capability maturity model integration’ (CMMI) process standard adoption, we show that sourcing location choices are indeed negatively impacted by institutional differences between home and host country, i.e. ‘distance’ still matters, but they are positively impacted by CMMI standard adoption in host countries, and standard adoption negatively moderates the importance of distance. Findings promote a more contextual, multi-level understanding of institutional antecedents of foreign firm location choices, which also has important policy implications in particular for emerging economies.

    KW - Institutional distance

    KW - Organizational field

    KW - Industry standards

    KW - CMMI

    KW - Global sourcing

    KW - Outsourcing

    KW - Location choices

    KW - Multinational enterprises

    M3 - Paper

    ER -

    Møller Larsen M, Manning S. Does Institutional Distance Still Matter? Industry Standards and Global Sourcing Location Choices. 2015. Afhandling præsenteret på Location Decisions of Multinational Enterprises, Copenhagen, Danmark.