Foreign affiliates of the multinational firms in the wine and spirits industry: location-specific advantages and cultural distance Online publication date: Thu, 29-Dec-2016
by Jean François Outreville
International Journal of Economics and Business Research (IJEBR), Vol. 12, No. 4, 2016
Abstract: In the past 20 years there has been a major restructuring of the largest wine operators into multinational enterprises (MNEs). Many firms in the wine, beer and spirits sectors have increased their foreign direct investment and acquired other companies in part because of the belief that only very large players will have the cost advantages necessary to remain competitive in global markets. This study examines the location-specific advantages of the host country as determinants of investment preferences of the largest MNEs. The internationalisation of the largest wine multinational firms is analysed and the list of the most-favoured locations for affiliates of these firms is presented. In the empirical section, the factors that explain the choice of these locations by multinational firms are categorised as resources seeking, market seeking, efficiency seeking variables and cultural distance variables.
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