Larimo, Jorma and Nguyen, Ha (2022) To exist or to exit? Dynamic managerial capabilities and global connectedness in foreign divestment. In: Batas, Spiros, Olli, Kuivalainen and Rudolf, Sinkovics (eds.) Megatrends in International Business: Examining the Influence of Trends on Doing Business Internationally. Palgrave Macmillan, pp. 251-272. ISBN 9783030955267

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Abstract

International business scholars have recognized a crucial role of top managers at headquarters in strategic decisions and organizational performance. However, the managerial roles in making foreign divestment decisions are neglected. We extend the dynamic managerial capabilities (DMC) view in foreign divestment literature and explore influences of managerial human capital, managerial social capital, and managerial cognition on foreign divestment probability. Elaborating further on the managerial network perspective, we examine a moderating effect of global connectedness differences on the main hypotheses. Based on a sample of 657 foreign investment cases made by 241 Finnish MNEs in 36 host countries during 2005–2015, our results confirm the significantly negative effects of dynamic managerial human and social capital on the divestment rate. Notably, managerial cognition measured at cultural cluster level is found to significantly decrease divestment probability. We also provide empirical evidence for the moderating effects of global connectedness differences on the main hypotheses. On the basis of our results, we encourage future researchers to focus on managerial involvement in foreign divestment research and urge MNEs to consider their dynamic managerial capabilities.

Item Type:	Book Section
Schools and Departments:	University of Sussex Business School > Strategy and Marketing
SWORD Depositor:	Mx Elements Account
Depositing User:	Mx Elements Account
Date Deposited:	15 Feb 2023 12:16
Last Modified:	15 Feb 2023 12:16
URI:	http://sro.sussex.ac.uk/id/eprint/110703

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