Essays on the role of location in strategy

Abstract

This dissertation consists of three essays that examine the role of location in fundamental issues in strategy and international management. The first essay estimates the locus of profitability in four OECD countries and addresses methodological issues related to location-specific influences on profitability. The second and third papers examine factors driving pharmaceutical laboratories' adoption of "science-oriented" organizational practices. The results in the second essay demonstrate that organizational practices are more similar among laboratories within firms and within geographic regions than across these domains. The findings imply that while organizations may be broadly homogeneous within particular environments, simultaneous exposure to multiple environments can yield heterogeneity among a population of organizations. The final paper evaluates the hypothesis that laboratory-level scientific orientation varies systematically across location in a manner that reflects the strength of the local scientific and technical base. The results of both qualitative and quantitative data suggest that pharmaceutical firms' strategic organizing decisions reflect qualities embedded in their local geographic environments. A. set of prominent papers in strategy research explores the locus of firm rent generation by decomposing accounting profits into effects attributable to time, industry, corporate parent, and business segment.

(cont.) The first paper in this dissertation (a) expands the geographic scope of this work to consider whether empirical regularities identified for the United States obtain in other national contexts and (b) addresses methodological issues relevant for assessing the importance of geographic influences on firm profits. The empirical analysis corroborates previous results for the United States - business-specific effects predominate in explaining variance in profits, although industry and corporate parent effects are significant and of important magnitude. Cross-national comparisons demonstrate that this general pattern obtains for samples of firms from Australia, Canada, and the United Kingdom, although results do vary across country. Estimates on national sub-samples of firms in the manufacturing sector provide further evidence of cross-country differences and imply that theories explaining differences in the locus of profitability across countries must operate at levels less aggregate than the national level. In motivating the analysis, the paper describes methodological and analytical considerations that arise from incorporating regional influences into profit decomposition. The second essay exploits a novel dataset to evaluate the separate impacts of firm effects and location effects on organizational practice in pharmaceutical research laboratories. Simultaneously examining the relative salience of firm and location effects enables the paper to assess quantitatively how multiple environments shape organizational characteristics. The results indicate that both firm-specific and location-specific effects have a significant and quantitatively important impact on the extent to which laboratories engage in science-driven drug discovery, a practice associated with enhanced research productivity in the 1980s and 1990s ...