Wanted: strategic partners for young firms eager to enter foreign markets

2020 ◽  
Vol 41 (1) ◽  
pp. 3-10 ◽  
Author(s):  
Lili Mi ◽  
Yuanfei Kang ◽  
Yulong Liu
Keyword(s):  
Structural Equation ◽  
Multinational Enterprises ◽  
Emerging Market ◽  
Developed Countries ◽  
Content Type ◽  
Investment Projects ◽  
Wholly Owned Subsidiary ◽  
Emerging Market Firms ◽  
Chinese Foreign Direct Investment ◽  
Practical Implications

Purpose This paper aims to investigate the relationship between strategic asset-seeking intent and firms’ entry strategies of foreign investment in the context of emerging market firms. Design/methodology/approach This study is based on survey data of 392 Chinese foreign direct investment projects. Structural equation modelling is used for data analysis. Findings With stronger strategic asset-seeking intent, emerging market multinational enterprises are likely to locate their subsidiaries in developed countries, use a wholly owned subsidiary mode and invest with greater intensity, while they do not have a clear preference in entry timing. Practical implications The strategic asset-seeking intent applies not only to emerging market firms but also to small and medium firms in general that have limited resources and a need to catch up with stronger competitors. This study therefore provides guidance to these firms. Originality/value This study contributes by investigating how the strategic asset-seeking intent affects firms’ strategies. The findings have practical implications for strategic managerial decisions that lead to sustained competitive advantage and improved firm performance.

The influence of motivations on international location choice in least developed, emerging and developed countries: evidence from Chinese MNEs

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fernando Angulo-Ruiz ◽  
Albena Pergelova ◽  
William X. Wei
Keyword(s):  
Emerging Markets ◽  
Multinational Enterprises ◽  
Location Choice ◽  
Emerging Market ◽  
Developed Countries ◽  
Asia Pacific ◽  
Institutional Constraints ◽  
Least Developed Countries ◽  
Content Type ◽  
Developed Economies

Purpose This research aims to assess variations of motivations when studying international location decisions. In particular, this study aims to assess the influence of diverse motivations – seeking technology, seeking brand assets, seeking markets, seeking resources and escaping institutional constraints – as determinants of the international location choice of emerging market multinational enterprises (EM MNEs) entering least developed, emerging, and developed countries. Design/methodology/approach The authors develop a set of hypotheses based on the ownership–location–internalization framework and complement it with an institutional perspective. The conceptual model posits that the different internationalization motivations (seeking technology, seeking brand assets, seeking markets, seeking resources and escaping institutional constraints) will impact the location choice of EM MNEs in developed economies, emerging markets or least developed countries. This study uses the 2013 survey data collected by the China Council for the Promotion of International Trade and the Asia Pacific Foundation of Canada. The final sample of analysis of this research includes 693 observations. Findings After controlling for several variables, two-stage Heckman regressions show there is a variation of motivations when EM MNEs enter least developed countries, emerging markets and developed economies. EM MNEs are motivated to enter least developed countries to seek markets and resources. Conversely, those firms enter developed countries in their search for technological assets and to escape institutional constraints at home. While the present study findings show a clear difference in the motivations that lead to location choice in least developed vs developed countries, the results are not as clear for location in other emerging countries. Research limitations/implications The paper offers empirical support for the importance of motivations as crucial determinants of location choice. Originality/value This paper provides a detailed quantitative study on the internationalization location choice of EM MNEs based on their motivations. Though theoretical models underscore the importance of motivations, we know very little about how, in practice, motivations drive location choice. This study contributes to the international location choice literature a deeper understanding of how diverse motivations drive choices of expansion into developed economies, emerging markets or least developed countries.

Mitigating the risks of acquiring foreign strategic assets

2019 ◽  
Vol 35 (8) ◽  
pp. 21-23
Keyword(s):  
Design Methodology ◽  
Reading Time ◽  
Emerging Market ◽  
Developed Countries ◽  
Location Strategy ◽  
Content Type ◽  
Strategic Assets ◽  
Pertinent Information ◽  
Timing Of Entry ◽  
Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings This research paper concentrates on a range of entry options available to emerging market companies who intend to expand their global reach by seeking strategic assets in developed countries. The results reveal that the emerging market investor’s appetite for amassing strategic assets, such as Western brands and technologies, materially influences their location strategy, their chosen mode of ownership, and their investment intensity but not their timing of entry. Originality/value The briefing saves busy executives, strategists, and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Liabilities of regionalization and the emerging market firm

2016 ◽  
Vol 31 (3) ◽  
pp. 146-163
Author(s):  
Keith J. Kelley
Keyword(s):  
Multinational Enterprises ◽  
Design Methodology ◽  
Strategic Behavior ◽  
Emerging Market ◽  
Diversification Strategy ◽  
Firm Level ◽  
Content Type ◽  
Strategic Impact ◽  
Strategic Options ◽  
Emerging Market Firms

Purpose The purpose of this paper is to revisit the causal relationships of the liabilities of inter-regional foreignness to show that the process of regionalization itself has affected firms’ strategic capabilities and focus. The constraints of these regions, a consequence of regionalization that limits the strategic options of multinational enterprises, are known as the liabilities of regionalization (LOR). Design/methodology/approach This study reviews previous literature and uses a mixture of theory and inference to make propositions regarding the existence of liabilities attributable to the regionalization process. The propositions discuss macro-level, and industry and firm-level strategic impact on firms of Triad and non-Triad regions. Findings It is argued specific emerging market attributes, in relation to the developed Triad regions, will influence strategic focus of those emerging market firms. This in turn will also influence global strategic behavior and capabilities in the future, creating additional LOR in some cases and reducing them in others. Originality/value Previous scholars have focused on the liabilities of inter-regional and regional foreignness and its effect on international diversification strategy both upstream and downstream. This study attempts to explain the formation of regions that shape the FSAs that limit global strategic diversification, which are characterized as the LOR. More importantly, it discusses them from perspective of emerging market firms, which on the outside of the Triad regions, may form their own regions and FSAs.

scholarly journals Opportunities and challenges for multiple-embeddedness through mergers and acquisitions in emerging economies

2015 ◽  
Vol 28 (5) ◽  
pp. 817-831 ◽  
Author(s):  
Surender Munjal ◽  
Vijay Pereira
Keyword(s):  
Financial Crisis ◽  
Mergers And Acquisitions ◽  
Cultural Differences ◽  
Emerging Economies ◽  
Multinational Enterprises ◽  
Quantitative Methods ◽  
Global Financial Crisis ◽  
Developed Countries ◽  
Content Type ◽  
Practical Implications

Purpose – The purpose of this paper is to examine opportunities and challenges from multiple-embeddedness of developed countries multinational enterprises (DMNEs) in emerging economies. It further investigates the effect of global financial crisis on the DMNE’s embeddedness strategies. Design/methodology/approach – Utilising POLS regression on secondary data bases, such as World Bank Development Indicators, over two period, first, from 2003 to 2007 (pre global financial crisis period), and second, from 2008 to 2012 (post global financial crisis), this study models the advantages and challenges faced by DMNEs into emerging markets. Findings – Findings suggest that challenges in terms of institutional and cultural differences have decreased over time. This may be due to the DMNE’s experience of operating in emerging economies. Research limitations/implications – Since the global financial crisis is on-going, further changes in terms of opportunities and challenges are yet to be uncovered. Further investigations using qualitative designs are also warranted because many qualitative phenomena, such as cultural differences, cannot be captured through purely quantitative methods. Practical implications – There are two practical implications. First, policy makers can appreciate the change in the economic gravity in the current scenario. Openness of economies may further bring in economic equilibrium in favour of emerging economies. Second, managers of businesses looking to internationalise should pay attention towards changing market conditions and requirements in emerging economies. Social implications – This paper portrays the importance emerging economies which consist of a large proportion of the world’s population. Originality/value – In the current economic scenario, this paper seeks to highlight the opportunities and challenges for multiple embeddedness through mergers and acquisitions in emerging economies, which is seen to be timely and topical and at the same time advances the theoretical knowledge and practical implications.

Corporate fraud and information asymmetry in emerging markets

2019 ◽  
Vol 26 (1) ◽  
pp. 95-112 ◽  
Author(s):  
Abdul Ghafoor ◽  
Rozaimah Zainudin ◽  
Nurul Shahnaz Mahdzan
Keyword(s):  
Emerging Markets ◽  
Information Asymmetry ◽  
Event Study ◽  
Capital Market ◽  
Emerging Market ◽  
Developed Countries ◽  
Governance Mechanism ◽  
Ols Regression ◽  
Content Type ◽  
Practical Implications

PurposeThe purpose of this study is to examine changes in firms’ level of information asymmetry in emerging market of Malaysia for the period of 2000-2016. Specifically, the study focuses on changes in the quoted spread and quoted depth following the fraud announcement.Design/methodology/approachThe study uses a unique set of fraud sample using enforcement action releases (EARs) identified from the Security Commission of Malaysia and Bursa Malaysia. To estimate the result, the authors use event study methodology, OLS regression and simultaneous model on a set of 67 fraudulent firms.FindingsThe results of event study, OLS regression and simultaneous equation models suggest that information asymmetry increases on fraud discovery. The authors also use the analysis on subsamples classified by the type of regulator (who issued the enforcement release) and type of fraud committed. However, the authors find no evidence of a difference in information asymmetry across these groups. Overall, the results support the reputational view of fraud that it damages the firms’ reputation and increases uncertainty in the capital market.Research limitations/implicationsThese findings provide valuable insights into understanding the information asymmetry around fraud announcements, especially for Malaysia, where the majority of the public-listed companies are family-controlled and under significant state control. The results of this study call for the active role that regulators can play to achieve a transparent and liquid capital market.Practical implicationsThe research has practical implications. Specifically, for Malaysia, fraud is the primary area for National Results Areas (NKRA) in the Government Transformation Program (GTP). Therefore, for regulators and policymakers to ensure a liquid and transparent capital market, identifying the factors that elicit the fraudulent behavior and improving the related governance mechanism are necessary steps to prevent the fraudulent practices.Social implicationsDue to increased information asymmetry on fraud announcements, the demand for equity decreases that may affect not only the fraudulent firms but also results in negative externality for non-fraudulent firms, thus impairing their ability to fund equity.Originality/valueA significant majority of studies have focused on corporate frauds in developed countries such as the USA that is characterized by dispersed ownership system and a strong capital market. One of the vocal critics of the agency theory is that it neglects the social and institutional framework within which companies operate. In emerging markets, such as Malaysia, the published academic papers on fraud and information asymmetry are very limited. As emerging markets practice different cultures, corporate governance mechanisms and market regulations, the study is significant to investigate the behavior of investors in such markets.

Internationalisation commitment of emerging market firms

2018 ◽  
Vol 25 (2) ◽  
pp. 201-221 ◽  
Author(s):  
Constanza Bianchi ◽  
Jorge Carneiro ◽  
Rumintha Wickramasekera
Keyword(s):  
Latin America ◽  
Emerging Markets ◽  
Latin American ◽  
Structural Equation ◽  
Emerging Market ◽  
Empirical Studies ◽  
Institutional Environments ◽  
Cross Sectional ◽  
Content Type ◽  
Emerging Market Firms

Purpose Enhancing firm commitment towards internationalisation is an important step towards ensuring successful international performance. However, there is limited research on this topic for emerging market firms. The purpose of this paper is to investigate the factors that influence the internationalisation commitment of emerging market firms located in two Latin American countries with different institutional environments. Design/methodology/approach This study proposes and tests a conceptual model that includes drivers and barriers of internationalisation commitment. Data were collected from Chilean and Brazilian firms. The model uses confirmatory factor analysis to develop the underlying multi-item constructs and structural equation modelling to test the model. Findings The results show that managers’ perceptions of firm resources and capabilities are significant drivers of internationalisation commitment in both countries. In addition, perceptions of internal firm-specific barriers, such as a manager’s lack of international experience and knowledge, are negatively related to internationalisation commitment in Chile, but not in Brazil. Finally, external environmental barriers are negatively related to internationalisation commitment in Brazil, but not in Chile. Practical implications The context for the study is Chile and Brazil. Both are important emerging markets in Latin America, with a strong focus on firm internationalisation. The research design is cross-sectional and so does not allow for any causal claims to be made. The findings have important implications for internationalisation efforts of managers and export promotion agencies of emerging markets with different institutional environments. Originality/value This research contributes to the relatively scant but increasing number of empirical studies which investigate emerging market internationalisation in Latin America.

Drivers of brand equity of television news channels: evidences from emerging market

2017 ◽  
Vol 35 (1) ◽  
pp. 147-162 ◽  
Author(s):  
Madhupa Bakshi ◽  
Prashant Mishra
Keyword(s):  
Brand Equity ◽  
Structural Equation ◽  
Negative Impact ◽  
Positive Impact ◽  
Emerging Market ◽  
Television News ◽  
Content Type ◽  
The Social ◽  
Media Channels ◽  
Practical Implications

Purpose The purpose of this paper is to map the variables that affect the customer-based brand equity (CBBE) of media channels (television news) in an emerging market context. Design/methodology/approach The study adopted structural equation modelling (SEM) to investigate the causal relationships between CBBE and the variables that affect brand equity for television news channels. Findings The analysis revealed that localization, ideology, credibility and entertainment are the variables that influence CBBE of television news channels (media brands). Subsequent analysis using SEM indicated that apart from the sole negative impact of entertainment, all the variables had positive impact on brand equity. Research limitations/implications This study is confined to one of the metros of emerging market hence it cannot be generalized. Also the variables that indicate brand equity have been tested only for television news channels hence they may not hold true for other form of television stations. Practical implications For marketers of news channels this study identifies the factors that they need to focus on if they want to garner the equity of the brand in an emerging market scenario. Social implications The content factors identified that influence television news brand equity are reflections of the social requirements of an emerging market. It indicates what the audiences in such markets expect from their television news channels and is part of the social discussion. Originality/value The study contributes to brand equity literature by finding the antecedents that can influence any media brand in the emerging market scenario.

Technology readiness of teenagers: a consumer socialization perspective

2018 ◽  
Vol 32 (5) ◽  
pp. 592-604 ◽  
Author(s):  
Anubhav Mishra ◽  
Satish S. Maheswarappa ◽  
Charles L. Colby
Keyword(s):  
Digital Media ◽  
Structural Equation ◽  
Emerging Market ◽  
Developed Countries ◽  
Equation Modeling ◽  
Technology Readiness ◽  
Consumer Socialization ◽  
Content Type ◽  
Self Construal ◽  
Parent Child

Purpose The purpose of this study is to explore the role of culture-specific socialization factors such as antecedents to technology readiness index (TRI) scale to understand the adoption of cutting-edge technologies among teenagers. Design/methodology/approach The conceptual model was empirically tested using survey data from 381 teenagers. The data were analyzed using structural equation modeling. Findings Parent–child communication, peers, media and self-construal have varying influence on technology readiness of teenagers. The effects of parent–child interactions are mediated by self-construal, which reaffirms the importance of identity during adolescence. Research limitations/implications The culture-specific characteristics are critical antecedents to teenagers’ TRI. Moreover, the TRI 2.0 scale needs minor refinement to address culturally diverse marketplace where people are less familiar with the technical terms used in developed countries and display low levels of technology awareness. Practical implications Marketers need to tailor their communication strategies to have a strong presence on digital media to engage with teenagers. Firms should utilize media for providing information and develop content that should resonate with teens and potentially enhances their online impression to increase the adoption of technology. Originality/value This is the first study to investigate the antecedents of technology readiness of teenagers in an emerging market. The study uses a multidisciplinary approach to examine culture-dependent factors using theories from marketing literature (consumer socialization theory) and developmental psychology (self-construal).

Motives for foreign direct investment: a view from emerging market multinationals

2015 ◽  
Vol 23 (1) ◽  
pp. 77-86 ◽  
Author(s):  
Pavida Pananond
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Emerging Market ◽  
Global Value Chains ◽  
Value Chains ◽  
Content Type ◽  
Emerging Market Multinationals ◽  
Emerging Market Firms ◽  
Selection Of

Purpose – The purpose of this paper explains how the framework on motives of foreign direct investment (FDI) needs to be rethought when analyzing emerging market multinational enterprises (EMNEs). It argues that the weak position of emerging market firms and their interdependent relationship with lead firms in global value chains (GVCs) modify the selection of internationalization motives. Design/methodology/approach – The arguments are illustrated through a critical review of the literature on FDI motives and a discussion on how the literature can be extended from looking through the lens of emerging market multinationals, particularly those with early development as suppliers in global value chains. Findings – The weak position of emerging market firms and their interdependent relationship with lead firms in global value chains modify the selection of internationalization motives on two aspects. First, internationalization decisions of EMNEs in GVCs are not undertaken in an independent manner. Rather, decisions are influenced by the initial position along the value chain and the dynamic relationships that these EMNEs have with lead firms. Second, the selection of FDI motives of these EMNEs reflects both their international expansion strategy and the upgrading effort they wish to pursue to undertake higher value-adding activities along the GVCs. Originality/value – These implications addressed in this paper add more nuances to the interpretation of FDI motives. Previously viewed mainly from the perspective of lead firms, FDI decisions are considered as independent alternatives that multinational enterprises (MNEs) can undertake to fulfill their internationalization strategy. Revisiting the FDI motives from the perspective of EMNEs reveals further insights on the interdependent nature of their internationalization, particularly reflecting the weaker position of EMNEs and their interdependent relationship with lead firms in their industry.

The impact of market orientation and learning orientation on organisational performance

2016 ◽  
Vol 18 (1) ◽  
pp. 90-108 ◽  
Author(s):  
Justin Beneke ◽  
Simon Blampied ◽  
Nadine Dewar ◽  
Linda Soriano
Keyword(s):  
Market Orientation ◽  
Structural Equation ◽  
Emerging Market ◽  
Developed Countries ◽  
Learning Orientation ◽  
Large Contribution ◽  
Organisational Performance ◽  
Content Type ◽  
Economic Output ◽  
The Impact

Purpose This study aims to consider the impact of market orientation and learning orientation on organisational performance in the context of small- and medium-sized enterprises (SMEs) in Cape Town, South Africa. SMEs play a vital role in developing countries’ economies given their large contribution towards employment and the economic output (gross domestic product). However, many SMEs struggle to implement practices that are used to successful ends by their corporate counterparts. In view of this, this study sought to probe this issue within an emerging market context. Design/methodology/approach A survey of 162 enterprises, using partial least squares -structural equation modelling path modelling, was used to link the constructs of market orientation, learning orientation and organisational performance. Findings The results revealed a significant relationship between market orientation and organisational performance. However, in contrast to other studies in the developed world, this study found that learning orientation has neither a significant effect on organisational performance nor a moderating effect on the relationship between market orientation and organisational performance of SMEs. Practical implications The implications of these findings suggests that, inter alia, the organisation’s implicit marketing plans should be made explicit and shared with employees throughout the enterprise. Moreover, owners and senior managers should embrace a positive marketing philosophy and optimal organisational structure, as well as be willing to assume risks to achieve organisational objectives. However, further research is advocated to understand the nuances distinguishing developing and developed countries. Originality/value This is one of the first studies to consider the interrelationships between market orientation, learning orientation and organisational performance in the context of SMEs within an emerging market setting. To the best of the authors’ knowledge, this is pioneering research in the South African domain.

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