How Emerging Market Firms Compete in Global Markets

We posit that contexts in emerging markets are different from developed country contexts. These contextual differences necessitate the development and deployment of unique capabilities and strategies on the parts of companies operating there. While all emerging market countries are not uniform across all of the characteristics described below, there is a great deal of commonality on these conditions within the group of emerging market countries, by virtue of their similar stages of development. Thus, companies that develop their skill sets and products/services in one emerging market are likely to more easily be able to extend them to others. Conversely, there are great differences in these characteristics in the developed group of countries

Market Orientation and Export Performance: The Moderation of Channel and Institutional Distance

Purpose: Market orientation (MO) has been shown to provide a valuable resource-based advantage in domestic markets. How internationalizing firms from emerging markets can benefit from this capability is more complex while facing institutional distance. This research develops and tests theory to suggest that although MO capabilities can enhance export performance, the structure where they are deployed, namely the export channel a firm uses and the market in terms of institutional distance from home, can affect the benefits derived from MO. Design/methodology/approach: With a sample of Chinese exporters and data collected via questionnaire survey, this research uses a multiple regression model to test the hypotheses. Findings: It finds that firms with stronger MO capabilities can improve export performance by using hierarchical channels and by exporting to more institutionally distant markets where MO provide greater value. Originality/value: This research claims to make several important contributions to the literature by providing a better understanding of how firms can successfully deploy MO capabilities when exporting

Keirestsu Centrality - Profits and Profit Stability: A Power Dependence Perspective

Prior studies compare keiretsu member firm and independent firm performance. Here, we use historical and power dependence perspectives to theorize that the Japanese keiretsu system primarily benefits the most central firms. We test this by examining the performance of two types of keiretsu firms (central firms and other member firms) within two types of keiretsu (horizontal and vertical). We hypothesize and find that: (1) central vertical keiretsu firms are more profitable than central horizontal keiretsu firms; (2) central horizontal keiretsu firms have greater profit stability than central vertical keiretsu firms; (3) central vertical keiretsu firms are more profitable than non-central vertical keiretsu firms; and (4) central horizontal keiretsu firms have greater profit stability than non-central horizontal keiretsu firms. Implications for managers and future research directions are discussed. [ABSTRACT FROM AUTHOR

The Impact of Formal and Informal Institutional Distances on MNE Corporate Social Performance

Does country selection affect the corporate social performance (CSP) of multinational enterprises (MNEs)? In this study we suggest that greater institutional diversity within an MNE’s operating environment may adversely affect its ability to maintain higher levels of CSP. Using institutional distance and organizational learning as our theoretical lenses, we investigate the impact of institutional differences on CSP. We conceptualize the MNE as a unique portfolio of locations and use the MNE’s entire operating footprint to explore the effects of average portfolio formal and informal institutional distances on CSP. We hypothesize and find that firms with greater average informal institutional distance within their portfolios have lower overall levels of CSP. Findings also confirm the moderating influence of formal institutional distance; greater formal institutional distance within the MNE portfolio reduces the CSP benefits of international scope

A Longitudinal Study of IJV Performance in Eastern Europe

Why do some international joint ventures (IJV) succeed while others fail? Scholars suggest that cultural differences and trust influence IJV success. Others maintain that ownership and control structures explain performance differences. Still others imply that learning and governmental actions create these differences. We use a longitudinal methodology to examine the impact of all these factors on IJV performance for a sample of Eastern/Western European IJVs. We found that culture, trust, learning, ownership, control and governments all contribute to the success or failure of IJVs.http://deepblue.lib.umich.edu/bitstream/2027.42/39625/3/wp239.pd

Theoretical foundations of equity based foreign market entry decisions: a review of the literature and recommendations for future research

This paper reviews the theoretical foundations of the equity based foreign market entry (FME) decisions literature. We analyse 1055 academic FME papers published over four decades (1970–2013). We identify and analyse the theories that informed and guided FME research over time. Our review indicates that scholars have recently started to challenge some of the core assumptions of established theories, draw on and integrate insights from multiple theoretical perspectives which, in turn, generated a multiplicity of approaches for studying FME decisions and their performance outcomes. The paper discusses the explanatory power of the different theories, assesses the relevance of the different theoretical perspectives to our understanding of current FME phenomena and recommends directions for further research

A Longitudinal Study of IJV Performance in Eastern Europe

Why do some international joint ventures (IJV) succeed while others fail? Scholars suggest that cultural differences and trust influence IJV success. Others maintain that ownership and control structures explain performance differences. Still others imply that learning and governmental actions create these differences. We use a longitudinal methodology to examine the impact of all these factors on IJV performance for a sample of Eastern/Western European IJVs. We found that culture, trust, learning, ownership, control and governments all contribute to the success or failure of IJVs.joint venture, performance, trust, culture, learning, key stakeholder, onwnership, control

Equity ownership in cross-border mergers and acquisitions by British firms: an analysis of real options and transaction cost factors

The authors investigate the factors influencing the share of equity ownership sought in cross-border mergers and acquisitions (CBM&As). Drawing on real options theory and transaction cost economics (TCE), they address and hypothesize key factors linked to commitment under exogenous uncertainty and the separation of desired and non-desired assets’ influence on share of equity sought by acquiring firms in CBM&As. Empirical analysis based on 1872 CBM&As undertaken by British firms in both developed and emerging economies shows that British MNEs are more likely to pursue a partial acquisition in a target foreign firm when those foreign firms are from culturally distant countries. Further, findings support the view that the high cost of separating desired assets from non-desired assets motivates firms to make a partial acquisition rather than acquire the target completely. This is one of the first studies to use real options theory to address the cost of commitment under exogenous uncertainty, as well as TCE logic to address the separation of desired and non-desired assets in the target firm while analysing equity ownership sought in CBM&As. Empirically, this paper contributes by examining CBM&As by British firms in both developed and emerging markets

Antecedents and consequences of effectuation and causation in the international new venture creation process

The selection of the entry mode in an international market is of key importance for the venture. A process-based perspective on entry mode selection can add to the International Business and International Entrepreneurship literature. Framing the international market entry as an entrepreneurial process, this paper analyzes the antecedents and consequences of causation and effectuation in the entry mode selection. For the analysis, regression-based techniques were used on a sample of 65 gazelles. The results indicate that experienced entrepreneurs tend to apply effectuation rather than causation, while uncertainty does not have a systematic influence. Entrepreneurs using causation-based international new venture creation processes tend to engage in export-type entry modes, while effectuation-based international new venture creation processes do not predetermine the entry mod