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The interplay of knowledge distance, linguistic distance, and industry relatedness in foreign divestment

Ha Nguyen & Marianna Marra

Long Range Planning2026https://doi.org/10.1016/j.lrp.2026.102621article
AJG 4ABDC A*
Weight
0.50

Abstract

This paper extends our understanding of the link between foreign divestment and knowledge distance between the home and host countries. We consider how knowledge distance affects the MNEs decision to divest their foreign operations. We theorize and find evidence that, given the embedded nature of knowledge in a given context, MNEs aiming to source knowledge in a foreign country characterised by a high level of knowledge distance will be less likely to divest their operations in these countries. Elaborating on a firm's ability to leverage knowledge distance, we also consider how linguistic distance positively moderates the relationship between knowledge distance and foreign divestment. Results from a comprehensive panel of 1,718 foreign subsidiaries made by 255 manufacturing Finnish MNEs operating in 70 host countries reveal robust support for these arguments.

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https://doi.org/https://doi.org/10.1016/j.lrp.2026.102621

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@article{ha2026,
  title        = {{The interplay of knowledge distance, linguistic distance, and industry relatedness in foreign divestment}},
  author       = {Ha Nguyen & Marianna Marra},
  journal      = {Long Range Planning},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1016/j.lrp.2026.102621},
}

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The interplay of knowledge distance, linguistic distance, and industry relatedness in foreign divestment

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.