Cluster Internationalization to Tax Havens by Multinational Enterprises: An Exploration of Imitative Behaviour

Abstract

This paper explores the factors that influence the internationalization of multinational enterprises (MNEs) from clusters, with a particular focus on the use of tax havens. Institutional Theory is used as our theoretical framework, with mimetic isomorphism highlighted as a primary mechanism connecting cluster characteristics to MNE internationalization. By analyzing firm-level data for the UK and Germany from 2008-2019, we show that institutional features within clusters—such as imitation, the co-location of professional services, and industrial concentration—facilitate this form of internationalization. Furthermore, the findings improve research on cluster internationalization, indicating that the imitation effect is amplified by firm leadership and experience.