An Entropy Model for Matching Expatriates to Destination Countries during Overseas Expansion

Abstract

When expanding businesses overseas, companies must consider the dispatch of international personnel. However, overseas dispatch requires a large amount of money. In case of failure, the company will incur substantial losses. To ensure success, it is necessary to study the characteristics and select an appropriate destination country for each expatriate. In this study, we propose an entropy model to capture the characteristics of destination countries for international human resources. Specifically, we construct a model using the CAGE Framework and elements of overseas subsidiaries. While the prior studies have focused on individual factors, the relative influence of factors affecting international human resource dispatch can be ascertained through analysis using the model in this study. We conduct an empirical analysis that realistically supports previous research concerning the importance of geographic location and the number of expatriates in the destination country. In addition, we found that culture and institutions proved to be important considerations.