Abstract
Multinationals usually face challenges of new business practices, dynamic consumer preferences, location choices for different value chain activities, and effective co‐ordination of global operations. Suggests that multinationals cultivate global experience curve advantage by improving technology and marketing capabilities for coping with rapid changes in the global marketplace. Uses the PIMS database to examine the impact of such capabilities on a firm’s performance. Indicates that companies with higher technology and marketing capabilities tend to expand into international markets earlier and to enjoy better performance. In addition, a synergy effect between technology and marketing capabilities suggests that multinationals improve both simultaneously in raising market share to a desired level. Discusses a framework for developing global experience curve advantage and presents cases illustrating how multinationals utilize their technology and marketing capabilities successfully to create competitive edge for reaching higher overall performance.
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