Market entry modes in a multipolar world: Untangling the moderating effect of the political environment

Villa, María Andrea De; Rajwani, Tazeeb; Lawton, Thomas C.

doi:10.1016/j.ibusrev.2014.10.001

Cited by 60 publications

(45 citation statements)

References 99 publications

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“…We provide some support for scholars who have argued that investors do take BITs into account when preparing for investment in developing and emerging countries (Büthe & Milner, 2014;Sachs & Sauvant, 2009). We also provide support for recent advances in institutional theory indicating that events that occur within a nation-state's boundaries can be influenced by activities at other levels, including macro-levels (e.g., at the 20 global level) (De Villa, Rajwani, & Lawton, 2015;Scott, 2014). As Scott noted: "it is oversimplifying...to describe nation-states or organizations or their participants as if they were operating independently of institutional systems at other levels" (Scott: 2014: 105).…”

Section: Theoretical Implicationssupporting

confidence: 74%

“…This provides support to arguments in the tradition of institutional theory that a firm will make key strategic decisions in response to the characteristics of different layers of institutional arrangements in which the firm is embedded (De Villa, Rajwani, & Lawton, 2015;Scott, 2014). The origin and nature of rule emergence, and the environmental concern those rules seek to address together comprise a collective entity that determines MNE strategy and action.…”

Section: Theoretical Implicationssupporting

confidence: 59%

“…The IB literature on international strategy does not, by and large, include treatment of international investment agreements (IIAs) such as BITs in theoretical or empirical work 1 . De Villa, Rajwani and Lawton (2015) recently noted the absence of focus on multi-levels of the political environment in market entry studies.…”

Section: Introductionmentioning

confidence: 99%

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The moderating effect of bilateral investment treaty stringency on the relationship between political instability and subsidiary ownership choice

Williams

Lukoianova

Martinez

2017

International Business Review

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. (2017) 'The moderating eect of bilateral investment treaty stringency on the relationship between political instability and subsidiary ownership choice.', International business review., 26 (1). pp. 1-11.Further information on publisher's website: Use policyThe full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that:• a full bibliographic reference is made to the original source • a link is made to the metadata record in DRO • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders.Please consult the full DRO policy for further details. ABSTRACTWe investigate whether the degree to which a bilateral investment treaty (BIT) protects against expropriation (i.e., its "stringency") influences the international strategy of multinational enterprises (MNEs) as they invest in countries with varying levels of political instability. We draw on institutional logic and insights from political economics to hypothesize that BIT stringency will moderate the established positive relationship between host country political instability and minority ownership. Analysis of a sample of 289 foreign investments made by AEX-listed Dutch MNEs in 34 countries between 2004-2013 provides support: a more stringent BIT will encourage the MNE to choose a majority stake as political instability rises. Robustness tests provide further support for our argument. The results have both managerial and policy implications relating to the role that BIT stringency plays in determining MNE strategy.

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Section: Theoretical Implicationssupporting

confidence: 74%

Section: Theoretical Implicationssupporting

confidence: 59%

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The moderating effect of bilateral investment treaty stringency on the relationship between political instability and subsidiary ownership choice

Williams

Lukoianova

Martinez

2017

International Business Review

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“…Root's (1987, p.5) often-cited definition refers to FMEM as "an institutional arrangement that makes possible the entry of a company's products, technology, human skills, management, or other resources into a foreign country". Across the FMEM literature, entry modes have been categorised as non-equity based modes such as exports and contractual agreements and equity based modes which include wholly-owned operations and equity joint ventures (De Villa, Rajwani & Lawton, 2015;Kumar & Subramaniam, 1997;Pan & Tse, 2000). Because of the large number of FME studies and given the differences in the theoretical underpinnings of equity and non-equity entry mode research (Hennart, 1988;Erramilli, Agarwal & Dev, 2002;Madhok, 1997;Pan & Tse, 2000), this review focuses on equity based FME decisions, sometimes referred to as FME through foreign direct investment (FDI) (Mudambi & Mudambi, 2002).…”

Section: Introductionmentioning

confidence: 99%

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

Surdu

Mellahi

2016

International Business Review

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This paper reviews the theoretical foundations of the equity based foreign market entry (FME) decisions literature. We analyse 1,055 academic FME papers published over four decades . 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.

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“…Extant research indicates that the greater the scope of a company's international activity, the more likely the company will face important differences between the contexts of its home and host markets (Liu & Vrontis, ), including a greater cultural distance (Ghemawat, ; Hofstede, ). Next, an emerging market company's type of international operations can range from exports to full overseas operations, involving increasing degrees of resource commitment (De Villa et al, ; Kumar & Subramaniam, ). Further, the desired growth of an emerging market company's future international operations can oscillate between low and high, depending on the company's resources and appetite for risk, among other factors.…”

Section: Conceptualizing and Measuring The Needs Of International Marmentioning

confidence: 99%

Assessing the needs of international markets against an emerging market company's capabilities: A tool for internationalization

Piedrahíta

Villa

2019

Thunderbird Intl Bus Rev

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Senior managers in emerging markets often strive to ensure that their companies develop sufficient capabilities to confront the needs they encounter in international markets. However, extant research and practice remain unclear as to how senior managers in emerging market companies can approach assessing the needs of their international markets against their own company's capabilities, to aim for a balance between both. This article offers an innovative approach for assessing the needs of international markets against an emerging market company's capabilities. Based on the assessments of 100 senior managers leading emerging market companies, we explain how this approach can provide two key insights. First, evidence of a balance between the needs of international markets and an emerging market company's capabilities, that indicates the company's competitive position is focused; or evidence of an imbalance between the needs of international markets and an emerging market company's capabilities, that indicates the company's competitive position is either vulnerable or overqualified. Second, an understanding of where the gaps between the needs of international markets and an emerging market company's capabilities are, that enables improving the company's competitive position by closing these gaps. Drawing on this approach, we offer an open access tool that allows senior managers in emerging markets to identify and improve their own company's competitive position for internationalization. Using this tool, senior managers can lead their emerging market companies toward a focused competitive position in international markets, providing better chances of successfully capturing potential benefits.

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Market entry modes in a multipolar world: Untangling the moderating effect of the political environment

Cited by 60 publications

References 99 publications

The moderating effect of bilateral investment treaty stringency on the relationship between political instability and subsidiary ownership choice

The moderating effect of bilateral investment treaty stringency on the relationship between political instability and subsidiary ownership choice

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

Assessing the needs of international markets against an emerging market company's capabilities: A tool for internationalization

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