Cultural distance and internationalization: the world's largest food and drink multinationals

Fragkiskos Filippaios, Ruth Rama

Research output: Contribution to journalArticlepeer-review

9 Citations (Scopus)

Abstract

The authors analyze the expansion of the world's largest food and beverage multinational enterprises (hereafter, F & B MNEs) over 1996–2002 using a database that provides detailed information on the location and activities of more than 8,000 affiliates. The research provides abundant empirical support to the view that F & B MNEs operate on a worldwide scale and although their share of foreign to total affiliates is lower than in the average MNE they have a wide country spread. The great physical dispersion of the F & B MNEs' assets, however, does not necessarily imply expansion to cultural distant areas. World leaders in this industry are more likely to expand their operations to countries that display cultural characteristics similar to those of the home country. The authors observe differences concerning cultural distance among different companies. Western F & B MNEs seem more culturally rooted than Japanese ones, probably owing to differences in the product mix and the activities developed by the companies. A comparison of 1996, 2000, and 2002 data shows that F & B MNEs are gradually expanding to increasingly unfamiliar environments. Complementary analysis of 3,507 M&A operations involving the sampled MNEs between 1987 and 2003 confirms these findings. [Econ Lit classification: F230, L660, M210].
Original languageEnglish
Pages (from-to)399-419
JournalAgribusiness
Volume27
Issue number4
Early online date23 Sep 2011
DOIs
Publication statusPublished - 12 Oct 2011

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