Open Access Article

Title: Demerged multinational enterprises: a study of post-demerger international strategies

Authors: Wouter Fabian Merkestein; Johan Paul Lindeque

Addresses: Amsterdam Business School, University of Amsterdam, Amsterdam, The Netherlands ' School of Business, University of Applied Sciences and Arts Northwestern Switzerland FHNW, Riggenbachstrasse 16, 4600 Olten, Switzerland

Abstract: Demerged Multinational Enterprises (DMNEs) that emerge with an independent corporate status after a demerger from a parent multinational enterprise (MNE) are unique firms with a great variety of post-demerger strengths, weaknesses and international strategic responses. This paper adopts a firm-level internalisation theory approach to MNE strategy to empirically explore the characteristics and post-demerger strategies of four focal case DMNEs. Five years of post-demerger data from annual accounts, newspaper articles and databases were analysed. Analysis of the strategic responses of the four DMNEs has allowed a typology that distinguishes four DMNE types to be proposed. This typology explains the international strategies of DMNEs by the degree of post-demerger strategic dynamism that is possible and the need to address the quality of the firm specific advantages endowed to the DMNE in the demerger.

Keywords: multinational enterprise; demerger; demerged multinational enterprise; post-demerger; international strategy typology; case study.

DOI: 10.1504/EJIM.2020.103801

European Journal of International Management, 2020 Vol.14 No.1, pp.55 - 91

Accepted: 25 Mar 2018
Published online: 29 Nov 2019 *