Foreignness, Multinationality, and Inter-Organizational Relationships

Abstract

I examine how foreignness and multinationality affect the propensity of affiliates to form inter-organizational relationships, using local firms as benchmarks to identify the sources of the distinctiveness of foreign affiliates. The empirical testing is based on data on 554 advertising agencies in the US. The findings show that foreign affiliates form fewer inter-organizational relationships than local firms do. Interactions with the MNEs partly explain these differences, and suggest complex relationships between inter- and intra-organizational interactions. The differences between foreign and local firms arise primarily from varying organizational scope, whether single- or multi-unit organizations, while geographic scope is less influential.