scholarly journals The impacts of institutional differences in relation to intellectual property rights protection on foreign market direct investment: FDI inflows and modes of foreign market entry

2021 ◽  
Author(s):  
◽  
Xiaoxin Mo
Keyword(s):  
Logistic Regression ◽  
Linear Regression ◽  
Host Country ◽  
Entry Mode ◽  
Foreign Market ◽  
Institutional Distance ◽  
Foreign Market Entry ◽  
Host Countries ◽  
Fdi Inflows ◽  
Ipr Protection

<p>This Master‘s thesis seeks to consider the impacts of institutional distance regarding IPR protection on Foreign direct investment’s (FDI) internationalization strategies. Estimated at approximately US$ 1.8 trillion in 2015 and sitting at its highest level since the global economic and financial crisis in 2008 (UNCTAD, 2016), FDI flows are fast becoming a focal issue of global business. Developing Asia, for example, has emerged as the world’s largest FDI recipient region in the world, which has attracted a wide and public attention. China, in particular, is the largest recipient of FDI among the emerging economies. In 2014, it overtook the US as the most popular destination for multinational enterprises (MNEs). To date, most academic interest has focused on how the institutional environment of the host country affects both the overall volumes of FDI (e.g., Lee & Mansfield, 1996; Smarzynska Javorcik, 2004), and the modes of entry strategy (e.g., McCalman, 2004; Dikova & Witteloostuijn, 2007). However, other areas of research also consider institutional distance, and the magnitudes and asymmetric effects of institutional distance (e.g., Cuervo-Cazurra & Genc, 2011; Phillips, Tracey, & Karra, 2009; Zaheer et al., 2012). In this context, this thesis, uses China as a sample of FDI recipient to seek to understand how the directions of institutional distance affect FDI’s flows and MNEs’ choice of entry mode into the host country. In particular, the research questions being addressed in this study are: (1) How does the bidirectional distance between home and host country regarding IPR protection affect FDI’s inflows to China? and (2) How does this bidirectional distance regarding IPR protection influence MNEs’ choice of entry mode?  Using a quantitative research design, two dependent variables are examined in this study: FDI inflows and entry mode (wholly-owned subsidiaries (WOS) versus joint ventures (JVs)). Using the institutional theory as its theoretical underpinning, this study hypothesizes that IPR distance between home and host countries negatively affects FDI inflows to the host market. It also hypothesizes that IPR distance is positively related to MNEs’ choice of WOS as an entry mode as opposed to JVs. Both hypotheses build on the new notion regarding the directions of institutional distance that MNEs’ strategies and behaviours are divided into positive and negative directions. This consideration of directions of institutional distance differs to that of the general institutional approach, which typically clusters all regulative, normative and cognitive pillars within the institutional distance. However, this research focuses on the single regulative distance of IPR protection. Using the 691 collected observations of FDI flows to China from 2006 to 2012, hypothesis 1 was tested by employing the estimation techniques of panel linear regression. To further assess hypothesis 2, 801 instances of foreign market entry of FDI in China between 2008 and 2012 were analysed by logistic regression.   From the panel linear regression model, the empirical results show that the larger the distance of IPR protection between home and host countries, the fewer the flows of FDI that entered into China. Such results are consistent with previous mainstream literature suggesting that greater institutional distance significantly diminishes the MNEs’ intentions to invest (e.g., Du, 2009; Berry et al., 2010). Moreover, logistic regression for hypothesis 2 reveals that IPR distance appears to be significantly and positively associated with the choice of WOS. This means that the tendency of MNEs from countries with a higher distance of IPR protection to enter China’s market by means of WOS (as opposed to JVs) will decrease. This result is in line with previous studies that note that larger institutional distance is associated with a lower level of equity ownership mode, such as JVs over WOS (e.g., Xu et al., 2004; Xu & Shenkar, 2002; Estrin et al., 2009).   The greatest takeaway from this study is that it advances knowledge about the impact of the directions of IPR distance and provides new opinions on the debate around the asymmetric effect of institutional distance on internationalization decisions. This study also offers practical implications for both firm managers and public policy makers.</p>

CEO characteristics and SME foreign market entry mode choice

2016 ◽  
Vol 33 (2) ◽  
pp. 246-275 ◽  
Author(s):  
Katharina Laufs ◽  
Michael Bembom ◽  
Christian Schwens
Keyword(s):  
Host Country ◽  
Market Entry ◽  
Mode Choice ◽  
Entry Mode ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Content Type ◽  
Entry Mode Choice ◽  
Foreign Market Entry Mode ◽  
Ceo Characteristics

Purpose – Using arguments from the upper echelons perspective this paper aims to examine the impact of CEO characteristics on small and medium-sized enterprises’ (SMEs’) equity foreign market entry mode choice and how these associations are jointly moderated by geographic experience of the firm and host-country political risk. Design/methodology/approach – The empirical analysis draws on data gathered from German SMEs testing triple-interaction effects between CEO’s age, firm tenure and international experience, geographic experience of the firm (organizational level), and host-country political risk (environmental level). Findings – Empirical findings validate that the influence of CEO’s age and firm tenure on SME foreign market entry mode choice varies by managers’ level of managerial discretion (i.e. latitude of action) as determined by the SME’s geographic experience and the level of political risks prevailing in the foreign market. Practical implications – Empirical findings help SME owners and managers to understand how CEO’s age and firm tenure are related with individual’s risk-taking behavior and information-processing demands and how these contingencies vary by the context in which the individual CEO is nested. Originality/value – This study contributes to the growing body of literature focussing on SME foreign market entry mode choice by emphasizing the important role of CEOs in the decision to internationalize. More specific, this study contributes by an examination of the interactive effect of CEO’s age, firm tenure and international experience, geographic experience of the firm and host-country political risk and, therefore, emphasizes the context and boundary conditions under which the association between CEO characteristics and foreign market entry mode choice is more or less pronounced.

scholarly journals Internationalisation processes: an analytical framework

2003 ◽  
Vol 7 (2) ◽  
pp. 137-156 ◽  
Author(s):  
Sérgio Fernando Loureiro Rezende
Keyword(s):  
Host Country ◽  
Market Entry ◽  
Empirical Studies ◽  
Entry Mode ◽  
Institutional Arrangement ◽  
Foreign Market ◽  
Analytical Framework ◽  
Foreign Market Entry ◽  
Foreign Markets ◽  
Subsidiary Development

In this article we propose a framework for analysing internationalisation processes, manifested through a sequence of servicing modes. A servicing turn is, in turn, the institutional arrangement whereby firms operate in foreign markets. The framework borrows conceptual notions from the literature on foreign market entry, internationalisation and subsidiary development. Three implications for empirical studies are subsequently suggested. First, it is argued that internationalisation processes should be analysed in light of intra and inter-organisational relationships embedded in distinct spatial and temporal contexts. Secondly, the framework takes into account not only incremental but also discontinuous internationalisation processes. Thirdly, it is proposed that internationalisation processes are endless phenomena and, therefore, should consider sequences of servicing modes that take place in the foreign market where the entry mode is originally embedded as well as in foreign markets reached from the initial host country.

Revisiting foreign market entry motivations: the case of Korean commercial banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Young Hoon Jung ◽  
Zhu Zhu ◽  
Huy Will Nguyen
Keyword(s):  
Host Country ◽  
Commercial Banks ◽  
Market Entry ◽  
Foreign Market ◽  
Institutional Distance ◽  
Foreign Market Entry ◽  
Sociocultural Factors ◽  
Power Imbalance ◽  
Content Type ◽  
Profit Potential

PurposeThis study examines what motivates firms to go and remain abroad despite uncertain profit potential. In a departure from probing traditional market-seeking, profit-driven motives, the authors explore how domestically driven, sociocultural motivations may shape the foreign market entry decisions of Korean commercial banks (KCBs). The authors argue that, due to the power imbalance between KCBs and their chaebol clients within the historical and cultural contexts of their relationships, KCBs' foreign market entries may depend more on their clients' presence in these markets than on their profit potential.Design/methodology/approachThe authors focus on the foreign market entries of KCBs and their client firms. Using the data of 8 KCBs and their client firms belonging to the 60 business groups (chaebols) of Korea, the authors analyze 6,577 observations involving the dyadic relationship between a KCB and its client firm in 15 host countries from 2005 to 2014.FindingsThe authors find that the number of clients' subsidiaries operating in foreign markets may increase the likelihood of KCBs entering these markets. Moreover, when KCBs earn more domestic profit from client firms, the potential Korean market in the host country is greater, and the institutional distance between the host country and Korea is smaller.Practical implicationsIn addition to the critical role of a bank-centered financing system in advancing a developing country and its firms, the authors’ findings suggest that firms should pay attention to the local diaspora and the institutional distance between the host and home countries in order to manage power-imbalanced relationships and make them sustainable.Originality/valueThe study contributes to the literature on foreign market entry by demonstrating how the home country's sociocultural factors may worsen the power imbalance, thereby pushing firms to make seemingly irrational decisions to go and stay abroad. That is, KCBs' foreign operations may be a way of seeking relational benefits with client firms, which would serve as a source of long-term domestic market profits. The authors’ findings thus highlight the need to consider how sociocultural factors may also shape firms' decision-making in their international business.

Foreign Business Environments and Entry Mode Choice

2012 ◽  
pp. 165-181
Author(s):  
Maud Oortwijn
Keyword(s):  
Host Country ◽  
Joint Venture ◽  
Mode Choice ◽  
External Environment ◽  
Entry Mode ◽  
Entry Modes ◽  
Host Countries ◽  
Entry Mode Choice ◽  
Business Studies ◽  
Business Environments

The entry mode choice is at the core of International Business studies (Oortwijn, 2011a). IB research concerns the organization of firm activities across country borders and thus across different cultures and business contexts. These host country differences impact the firm’s way of working internally within the organization and in interaction with the external environment in the host country. Companies can consider a broad range of entry modes to organize across country borders, including partnership, trade, joint venture (JV), and wholly owned enterprise (WOE). The entry mode defines what activities are internalized within the firm and how the firm interacts with the external environment in different host countries.

scholarly journals DOES THE FOREIGN MARKET ENTRY MODE CHOICE AFFECT EXPORT PERFORMANCE? THE CASE OF THE SPANISH HOTEL INDUSTRY / AR ĮĖJIMO Į UŽSIENIO RINKĄ STRATEGIJOS PASIRINKIMAS TURI ĮTAKOS EKSPORTO SKATINIMUI? ISPANIJOS VIEŠBUČIŲ SEKTORIAUS PAVYZDYS

2011 ◽  
Vol 12 (2) ◽  
pp. 301-316 ◽  
Author(s):  
Juan M. Berbel-Pineda ◽  
José M. Ramírez-Hurtado
Keyword(s):  
Market Entry ◽  
Export Performance ◽  
Meta Analysis ◽  
Entry Mode ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Performance Variables ◽  
Analysis Technique ◽  
Starting Point ◽  
Foreign Market Entry Mode

Knowing the factors that affect the export performance has become one of the most recent research lines in the literature relative to business internationalisation. In this sense, several works based on the meta-analysis technique have come up in the two last decades in order to recapitulate the set of studies which have analysed such a topic. Taking these reviews as a starting point, we may establish that there is not a clear relationship between the entry mode and export performance variables. With a study on a sample of 122 Spanish hotels all over the world, we have the intention of analysing the existence and sense of the relationship between both variables. As a conclusion, we may state that the market entry mode has a positive and significant influence on export performance. Santrauka Veiksniai, turintys įtakos eksportui ir jo skatinimui, buvo vienas svarbiausių aspektų atliekant mokslinės literatūros analizę verslo internacionalizacijos tematika. Remdamiesi atliktais moksliniais darbais, reziumuojančiais atliktų tyrimų per keletą dešimtmečių rezultatus būtent šia tematika, autoriai kaip atskaitos tašką ėmė prielaidą, kad nėra aiškaus ir stipraus ryšio tarp pateikimo rinkai bei eksporto skatinimo. Straipsnyje iškeltas tikslas remiantis 122 Ispanijos viešbučių, išsidėsčiusių visame pasaulyje, analize nustatyti sąryšio laipsnį tarp pasirinktų kintamųjų. Analizės ir tyrimo rezultatai parodė, kad pateikimo rinkai strategija turi teigiamą ir labai reikšmingą poveikį eksporto skatiminui.

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