Multinational firms' relative performance - mechanisms

History links (HLs) between home and host nations has been shown to be a significant predictor of multinational enterprises’ (MNEs’) relative performance in the foreign host markets. This research aims at shedding light on the mechanisms that underlie this observed relationship between HLs (indicating institutional propinquity) and relative MNE performance. We hypothesize that HLs engender propinquity among home actors (managers in the HQ), which enhances their willingness (especially credible home managers) to be mobilized (expatriated) to the linked host nation; in turn, this drives HQ willingness to commit greater capital and technology to that host nation. HLs likely also facilitate the greater use of local (host) resources. The end result is hypothesized to be superior host country performance.