Intrinsic and extrinsic factors of expatriation strategy - a proposed framework for foreign subsidiaries

Abstract

The expatriation strategy is related to the decision to assign people to meet the international demands of multinational companies (MNCs). The study aimed at answering the question: What are the strategies related to intrinsic and extrinsic factors determining the decision of expatriation of Japanese multinational companies? It had the objective to analyze the intrinsic and extrinsic factors of the decision of expatriation. This was a quantitative study with secondary data of Japanese foreign investment published by Toyo Keizai. A total of 107 subsidiaries of Japanese multinationals were analyzed in Latin America, 2006-2012, through multiple regression with panel data. It was proposed an expatriation strategy framework. The conclusion was that cultural distance, institutional and operational control dissimilarity determine the strategy for expatriation of international operations.