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Title: Explaining the effect of rapid internationalization on horizontal foreign divestment in the retail sector. An extended penrosean perspective
Authors: Mohr, A
Batsakis, G
Stone, Z
Keywords: Foreign divestment;Penrose effect;Internationalization speed;Regional strategy theory;International experience;Retailers
Issue Date: 2016
Publisher: European International Business Academy
Citation: Proceedings of European International Business Academy (EIBA), Vienna, pp. 1-37, (2016)
Abstract: Building on and extending Penrosean logic we argue that rapid international expansion by firms might lead to a breach of Penrosean constraints on efficient expansion and to subsequent divestment of international operations to bring firm scope back into Penrosean constraints. We further predict that intra-regional concentration and international experience moderate the above effect because they influence firms ability to avoid a breach of Penrosean constraints and/or weaken the consequences of such a breach. Using data on the international expansion and divestment of large retail MNEs over the period 2003-2012 we find empirical support for the proposed extended Penrose effect in explaining international divestment as well as for the moderating effects of intra-regional concentration and international experience. Our study contributes to the development of Penrosean logic and to our understanding of the factors that drive firms to divest overseas operations.
Appears in Collections:Brunel Business School Embargoed Research Papers

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