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Research

The Hassle Factor

Schotter, A., Beamish, P.W., 2013, "The Hassle Factor: An Explanation for Managerial Location Shunning", Journal of International Business Studies, 44(5): 521 - 544.

Abstract 

This study investigates the widely overlooked phenomenon of MNE location avoidance, utilizing a multi-method research design and data on 131 foreign investment locations. It complements economic choice based location research by adding contextual dimensions at the country level that matter to managers personally and affect decisions at the firm level. We provide a connection between international business research, the behavioral stream in economic geography and the micro-foundations stream in the strategic management literature. The results suggest that in addition to traditional location choice criteria (including investment potential, internationalization strategy, and various geographic and psychic distances), foreign location decisions in MNEs are influenced by how troublesome it is for managers to travel to or live in certain places. An eleven-item measure composed of travel inconveniences shows a significant negative moderating effect on the relationship between foreign direct investment potential and investment intensity. The effect is stronger for non-resource-seeking industries. We call this phenomenon the “Hassle Factor.”

For a full text copy of the article contact Andreas Schotter at: aschotter@ivey.ca