51 Flavors: Regional Resource Configurations and Foreign Multinational Market Entry in the U.S. Biopharmaceutical Industry

Roberto S Santos,Denise R Dunlap

doi:10.3390/su13179763

Abstract

Creating a sustainable regional economy requires not only attracting new local ventures, but also foreign multinationals. In this regard, understanding which resources are influential in market entry decisions is crucial given that there are different resource needs between developed (DMNE) and emerging market (EMNE) multinationals. Answering calls for more neo-configurational studies in the literature, our study uses a fuzzy-set qualitative comparative analysis (fsQCA) approach to examine foreign multinational entry decisions in 51 regions of the U.S. We constructed a novel dataset comprised of 3287 foreign firms from 61 countries and territories operating in the biopharmaceutical industry. We find that there are substantial differences in the configuration of resources that attract DMNEs and EMNEs to regions. The resource configurations in our models account for over 80% of the factors influencing DMNE and EMNE market entry location decisions. Some resources played a more important role in these decisions, such as FDI stocks, cluster size, and manufacturing intensity. Our findings show that EMNEs seek out regions with a greater abundance of different resources than DMNEs. This study provides practical implications for firms entering foreign markets as well as for policy makers who want to attract these firms to bolster their regional economic development.

Highlights

In response to rising regional economic polarization around the globe, there is renewed interest among scholars and policy makers to advance research that examines what regions can do to enhance their prosperity and attractiveness e.g., [1]
We find that a high level of foreign direct investment (FDI) stock features prominently across six DMNE configurations (i.e., 3–6, 10, and 14) and six emerging market (EMNE) configurations (i.e., 3–5 and 7–9), suggesting that a region’s
We go beyond many existing studies by exploring foreign multinational location decisions in the U.S from the neo-configurational perspective, which is grounded in the use of fuzzy-set qualitative comparative analysis

Summary

Introduction

In response to rising regional economic polarization around the globe, there is renewed interest among scholars and policy makers to advance research that examines what regions can do to enhance their prosperity and attractiveness e.g., [1]. Today’s foreign multinationals, from developed (DMNEs) and emerging countries (EMNEs), are increasingly drawn to locate in strategic regions in search of new sources of innovation and knowledge [8,9,10]. A good understanding of what combination of regional resource configurations make one region, within a country, more attractive to foreign multinationals than another remains elusive because of the heterogeneity of resources available across regions. Given the disparities in knowledge and innovation across countries, industries, and regions e.g., [12,13], national and local governments have attempted to emulate the success of high-technology sectors, such as the Silicon Valley model, in the hopes of creating comparable high-growth entrepreneurial ecosystems that propel regional development and prosperity [14,15].

Methods

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Discussion

Conclusion