Playing Football on a Soccer Field:Value Chain Structure, Institutional Modularityand Success in Foreign ExpansionMichael

When do firms expand abroad? Theory to date suggests that global expansion happens when firm-specific competitive advantages outweigh country-specific difficulties in operating abroad. Differences in culture, in legislation, in administrative practices, and in the overall institutional structure, all of which operate at the level of the country, have been extensively studied as factors affecting global expansion. We suggest that in addition to these country-level factors, a major determinant of the prospects and potential for global expansion is the structure of the value chain, which is both country- and sector- specific. Value chain structure, i.e. the way that labor is divided between different types of vertical participants evolves in a path-dependent, country-specific way....