Levels of Internationalization of Multinational Spanish Firms: The Role of the Amount of Committed Equity and the Managerial Attitudes toward Foreignness

Abstract

In this study, we investigate how the level of equity invested in foreign ventures and the orientation of the senior management team towards foreign cultures and international markets influence the degree of internationality of multinational Spanish firms. We postulate and empirically illustrate that a geocentric approach (based on a global mindset that remains perceptive to local differences) is associated with a higher level of internationalization. Conversely, modes of entry that imply a greater commitment relative to the equity investment made in the host country, such as the creation of wholly owned subsidiaries, are not necessarily related to the highest degree of internationality. In the current international scenario, the flexibility offered by the establishment of international alliances that imply a lower commitment of equity investment in the foreign country allows for the optimization of the investment made and a significant increase in the level of internationality.