Are governance mode and foreign location choices independent?

Abstract

This article explores the relationship between organizational governance and location choices. While the existing literature provides significant intuition regarding the factors that influence these choices, it often assumes that governance and location choice are independent from one another. This article tests the veracity of this assumption in the global semiconductor industry. We report evidence of significant correlations across choices regarding how to govern and where to locate production, evidence of a reciprocal relationship between governance and location choices, and evidence suggesting how interdependence between governance and location choices affects the stability of relationships highlighted by extant theories. We conclude with implications for future theoretical and empirical research based on the existence of these interdependent effects.