Journal of Strategic Management Journal
Volume 26, Issue 7, July 2005, Pages 595–615
 

Sea-Jin Chang, Sekeun Park
http://onlinelibrary.wiley.com/doi/10.1002/smj.464/full
DOI: 10.1002/smj.464

Abstract
This study identifies and examines sources of network externalities that influence MNCs to agglomerate their foreign operations in specific regions. Using data for Korean firms that invested in China, this study found that network externalities were sensitive to the types of firms constituting a regional network. It also found stronger network externalities within firms than across firms, from firms of the same nationality than from those of different nationalities, and from firms in the same industry than from those of different industries. As we defined the types of firms more precisely, distinctive curvilinear relationships between network externalities and the likelihood of co-location emerged. Copyright © 2005 John Wiley & Sons, Ltd.