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The Exit Advantage: Overcoming Barriers to National Exit

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The Offshoring Challenge

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Abstract

When a firm is engaged in relocationary foreign direct investment (FDI) as part of an offshoring strategy, it offsets its investment in the host nation with a divestment outside it. FDI is viable only if a firm possesses an ownership advantage to counter barriers to national market entry, but if the offshoring firm needs to overcome barriers to national market exit, it must possess an unidentified advantage analogous to, yet distinct from, the ownership advantage. This study attempts to determine how national exit barriers impact on a firm’s reported probability of undertaking RFDI, using an ordinal regression analysis of online survey data specifically collected for the purpose. Results suggest political and strategic exit barriers from the origin nation are significant inhibitors to offshoring. The implications of this finding are discussed.

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Author information

Authors and Affiliations

  1. Department of Management and International Business, The University of Auckland Business School, Private Bag 92019, 1142, Auckland, New Zealand

    Brent Burmester

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  1. Brent Burmester
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Correspondence to Brent Burmester .

Editor information

Editors and Affiliations

  1. Department of Strategic Management, Copenhagen Business School, Kilevej 14, Frederiksberg, DK-2000, Denmark

    Torben Pedersen

  2. Department of Strategic Management, Copenhagen Business School, Sachsenhausenerstr. 43, Schwalbach a. Ts., 3500, Denmark

    Lydia Bals

  3. Center for Strategic Management, Copenhagen Business School, Porcelaenshaven 24, Frederiksberg, DK-2000, Denmark

    Peter D. Ørberg Jensen

  4. Department of Strategic Management, Copenhagen Business School, Kilevej 14, Frederiksberg, DK-2000, Denmark

    Marcus M. Larsen

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Burmester, B. (2013). The Exit Advantage: Overcoming Barriers to National Exit. In: Pedersen, T., Bals, L., Ørberg Jensen, P., Larsen, M. (eds) The Offshoring Challenge. Springer, London. https://doi.org/10.1007/978-1-4471-4908-8_14

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  • DOI: https://doi.org/10.1007/978-1-4471-4908-8_14

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  • Publisher Name: Springer, London

  • Print ISBN: 978-1-4471-4907-1

  • Online ISBN: 978-1-4471-4908-8

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