Which Resources Matter How and Where? A Meta-Analysis on Firms' Foreign Establishment Mode Choice

Firm resources play an important role in explaining the foreign establishment mode choice. However, a theoretical framework that simultaneously a) differentiates between heterogeneous types of resources, b) provides a rationale that consistently explains how firms adapt their establishment mode choice to their resource base, and c) reflects on contextual factors that intervene in the consistency of the direct relationships is largely missing. The present paper draws on the resource-based view (RBV) to develop such a framework. More specifically, we study the effect of knowledge-based and experience-based resources on a firm's establishment mode choice and the moderating impact of cultural distance on these relationships. We validate our theoretical framework by a meta-analysis (integrating 31 studies with 13,559 establishment mode choices) and find that knowledge-based resources enhance a firm's propensity for greenfield investments, while experience-based resources more likely lead to acquisitions. Further, cultural distance increases knowledge-intensive firms’ preference for greenfield investments.