Host country’s environmental uncertainty, technological capability, and foreign market entry mode: Evidence from high-end equipment manufacturing MNEs in emerging markets

Li, Kun-Sha; Xiong, Yongqing

doi:10.1016/j.ibusrev.2021.101900

Cited by 14 publications

(9 citation statements)

References 81 publications

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“…However, in recent years, many emerging market economies have thrived, which has influenced the image of emerging economy markets in various foreign countries (Madhavan and Gupta, 2017; Pant and Ramachandran, 2012). In particular, China has made great progress in various industries and has drawn attention from other countries (Li and Xiong, 2021; Witt, 2019). As the competence of some industries in China increases, host countries may worry that Chinese firms will become leaders in some industries (Witt, 2019) and that firms in the host countries will not be able to compete with those Chinese firms in the future [2].…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

How does liability of origin influence cross-border acquisition completion? Evidence from Chinese firms

Jiang

Yang

et al. 2022

CMS

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Purpose The environment of international business (IB) and the capabilities of emerging market multinational enterprises (EMNEs) as well as their home countries have changed significantly, leading to some new features of liability of origin (LOR). This paper aims to extend the LOR literature by particularly focusing on the LOR of Chinese multinational enterprises (MNEs) and by taking into account the heterogeneity among industries and across individual MNEs. Design/methodology/approach Based on the stereotype content model and organizational legitimacy perspective, this study explores how LOR influences Chinese MNEs’ cross-border acquisition completions. Several hypotheses were tested by using a binary logistic regression model with panel data techniques based on data of 780 Chinese MNEs’ acquisition deals between 2008 and 2018. Findings The results of this study show that when the competence dimension of China’s LOR is perceived as high in the host country, Chinese MNEs are less likely to complete cross-border acquisitions. Moreover, deals are less likely to be completed when the warmth dimension of China’s LOR is perceived to be low. Global experience and the foreign-listed status of individual Chinese MNEs can alter the relationship between the LOR and deal completions. Originality/value This study advances and enriches the LOR research. It shows that a high level of competence in the home country has led to LOR for Chinese MNEs rather than the low level of competence proposed by existing LOR studies; and the LOR for Chinese MNEs is also determined by the perceived low level of warmth in the home country resulting from the geopolitical conflicts between two countries. In addition, the LOR suffered by EMNEs could vary based on certain industry- and firm-level characteristics. The findings of this study provide important practical implications for emerging economy governments and for firms intending to go abroad.

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Section: Literature Review and Hypothesesmentioning

confidence: 99%

How does liability of origin influence cross-border acquisition completion? Evidence from Chinese firms

Jiang

Yang

et al. 2022

CMS

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“…Many scholars study the influence of country risk, that is, the degree of political and economic volatility (Agarwal 1994) and found that companies tend to avoid markets with high investment risks and environmental constraints (Agarwal and Ramaswami 1992;Blevins et al 2016). However, if they enter such markets, they favor conservative exporting (Li and Xiong 2022) or partnership modes instead of wholly owned models (Gatignon and Anderson 1988;Kim and Hwang 1992;Contractor and Kundu 1998). López-Duarte and García- Canals (2002) similarly show that when entering risky countries, firms prefer joint ventures over full or partial acquisitions.…”

Section: Macroenvironment Target Countrymentioning

confidence: 99%

“…Moreover, prior research widely evaluates isolated phenomena, such as experience (Kuo et al 2012), strategy (Kim and Hwang 1992), socio-cultural distance (Drogendijk and Slangen 2006), and institutional factors (Yiu and Makino 2002). However, some articles already examine certain moderating effects, such as firm-specific factors on socio-cultural distance (Agarwal 1994;Slangen and Hennart 2008), institutional variables (Li and Xiong 2022;Dikova and van Witteloostuijn 2007), and asset specificity (Erramilli and Rao 1993). Such research is particularly interesting, as it sheds light on seemingly contradictory effects (Brouthers 2002).…”

Section: Future Research Agendamentioning

confidence: 99%

Build, buy, or partner? A systematic literature review on the choice between alternative modes of growth

Ego

2022

Manag Rev Q

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When pursuing growth opportunities, organizations can, most fundamentally, choose between three different modes: internal development, mergers and acquisitions, and partnerships. Strategic management research investigates the decision of whether to “build, buy, or partner” and its determining factors from various theoretical perspectives, which led to the emergence of related, but largely independent, research streams. As such, this review consolidates the scattered literature landscape and provides a comprehensive understanding of the antecedents associated with the choice of corporate growth modes. To do so, an integrative research framework is proposed that encompasses internal, external, and decision-related factors. Based on this framework, the review provides a synthesized overview and critical assessment of 74 past empirical contributions and develops a detailed roadmap to guide future research.

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“…Replicating strategic wins Quality control Recipe for success Statements showing reactions to external uncertainty and country risks, and whether managers' goals were short term or long term (Nisar et al, 2012;Pinho, 2007) Power structure Supporting longer-term vision Decision-making style Sentiment Statements showing whether managers considered any alternatives to a specific entry mode (Li and Xiong, 2022;Nummela et al, 2022)…”

Section: Status Quomentioning

confidence: 99%

Motivations behind SME greenfield investment in emerging markets

Ng²,

Rasiah³

2022

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PurposeThis paper identifies the motivations for small- and medium-sized enterprises (SMEs) when they undertake greenfield foreign direct investment (FDI) into an emerging market. It elucidates the factors that influence SMEs to choose a fully equity-based investment despite the significant risks and commitments involved with greenfield FDI.Design/methodology/approachThis exploratory study uses case study research based on interviews conducted with managers and founders of 16 German SMEs that have established greenfield operations in Malaysia.FindingsBuilding upon the transaction cost theory, five major motivations are identified that drive greenfield choice among the SMEs. The results imply that SME motivation for greenfield is derived from a combination of strategic asset-seeking determinants and culturally driven reactions to external and behavioral uncertainty. The results also ascertain that these motivations have less to do with the size and revenue of the firm, but hinge on the SMEs’ inner antecedents such as asset specificity, international experience, proprietary knowledge and ownership mode.Originality/valueThe findings clarify the literature on equity-based entry mode for SMEs in emerging economies, enabling a closer understanding of the organizational and dynamic experiences and an overview of the auxiliary competencies these companies have to compete in the global market. The conceptual insights and empirical evidence derived from this study contribute to the intellectual discourse and managerial implications in the field of internationalization strategies of SMEs, particularly from developed countries into emerging markets via greenfield FDI.

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Host country’s environmental uncertainty, technological capability, and foreign market entry mode: Evidence from high-end equipment manufacturing MNEs in emerging markets

Cited by 14 publications

References 81 publications

How does liability of origin influence cross-border acquisition completion? Evidence from Chinese firms

How does liability of origin influence cross-border acquisition completion? Evidence from Chinese firms

Build, buy, or partner? A systematic literature review on the choice between alternative modes of growth

Motivations behind SME greenfield investment in emerging markets

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