This paper examines the complex relationship between the embeddedness of multinational enterprises (MNEs) in host-country political networks and their long-run competitive positions in host emerging ...markets. We report the findings of a longitudinal study of the Chinese automobile sector from the early 1980s to the mid 2000s. Using data from 142 interviews over 11 years, and a wide range of secondary sources, we explore the process through which the value of political embeddedness changed over time in the face of profound and rapid changes in host-country business environments. On the basis of this longitudinal study, the paper unravels the underlying mechanisms that lead to the declining, and even negative, value of deep political embeddedness by MNEs in a politically stable emerging economy.
Research Summary
This study aims to broaden the understanding of effectuation and causation by investigating their effectiveness for small and medium enterprises (SMEs) in the emerging market context ...during adverse economic conditions. We embrace a holistic view of the performance implications of these behavioral logics, theorizing and empirically testing their impact not only on the level of firm performance but also on its variability. The findings suggest that emerging market conditions create significant contingencies in the relationships between effectuation, causation, and firm performance, substantively affecting their effectiveness. In particular, we demonstrate that for the firms affected by adverse conditions, causation brings marginal performance improvements while also making it highly unreliable (variable), whereas effectuation leads to performance improvements coupled with higher reliability.
Managerial Summary
Entrepreneurial actions can be based on one of two behavioral logics: causation (rigorous forward‐looking analysis, relying on well‐prepared plans, pre‐defined goals, and required resources) or effectuation (leveraging the existing resources and controlling the environmental uncertainty through creating new markets, products, and opportunities). We investigate the effectiveness of these logics for Russian SMEs navigating adversity in the emerging market context. The results suggest that causation leads to performance improvements, yet these become marginal and highly unreliable if a firm finds itself in adverse conditions. Effectuation, on the other hand, is a costly and unreliable strategy in stable times, yet leads to reliable performance improvements in volatile contexts.
This article presents a strategic intent perspective (SIP) to analyze the foreign acquisitions made by Chinese firms. It suggests that Chinese firms strategically use cross-border acquisitions to ...achieve goals, such as acquiring strategic capabilities to offset their competitive disadvantages and leveraging their unique ownership advantages, while making use of institutional incentives and minimizing institutional constraints. The SIP is supported by the evidence from three firms that we studied, where dozens of interviews were conducted, including the one with the founder of Lenovo. This study contributes to extant international business theories by incorporating the SIP to examine internationalization strategies of firms from developing countries.
Buckley et al.’s (J Int Bus Studi 38(4):499–518, 2007) pioneering work concluded that the determinants of outward foreign direct investment (OFDI) from China were similar to those observed in ...developed countries – but with a few modifications. In this commentary, we suggest continuing their effort to understand what is distinctive about Chinese multinational enterprises (CMNEs). We look for underlying explanations that are analytically useful and potentially generalizable, unlike a firm’s nationality, which is a catch-all variable with no analytical value. Based on prior research and Ramamurti (Glob Strategy J 2(1):41–47, 2012a), we argue that the following variables help explain distinctive aspects of CMNE internationalization: (1) their “stage of evolution as a multinational enterprise,” with most CMNEs being infant MNEs rather than mature MNEs; (2) the “global context for internationalization,” which has helped CMNEs internationalize faster than it was possible in earlier decades; (3) “government-created advantages,” which complemented China’s natural endowments and for the most part improved CMNEs’international competitiveness; and (4) “leapfrogging advantage,” which allowed late-mover Chinese firms to gain a competitive advantage in smokestack industries and some sunrise industries. These variables may also explain the behavior of MNEs from other emerging economies and are therefore candidates for inclusion in general models of the internationalization process.
Objetivo: Por meio de uma revisão da literatura sobre digitalização em países emergentes, analisamos como as empresas que operam nessas regiões desenvolvem e implementam estratégias para navegar na ...era digital. Originalidade/valor: O surgimento de novas tecnologias tem reconfigurado a sobrevivência das empresas e a competitividade no mundo, entretanto, pouco se sabe sobre as estratégias digitais empregadas pelas empresas em mercados emergentes. Revisando a literatura, escassa nesse contexto, nós contribuímos apresentando exemplos de estratégias digitais que as empresas têm implementado. Em conformidade com os nossos achados, propomos uma agenda de pesquisa que pode guiar estudos futuros. Des/gn/metodologia/abordagem: Foi feita uma revisão semissistemática de revistas de negócios e gestão, chegando, por fim, a uma amostra de 30 artigos de diferentes campos do conhecimento. Os achados são apresentados em três categorias temáticas e outras subcategorias. Resultados: Os achados sugerem que os vazios institucionais que limitam a inovação das empresas (falta de regulamentação clara, de força de trabalho qualificada, de acesso a dados e de recursos financeiros) são os desafios principais que as impedem de se digitalizar. No entanto, empresas desenvolvem capacidades que permitem que elas aproveitem oportunidades, apesar dos desafios, e implementem estratégias digitais que apoiam o processo de digitalização. Palavras-chave: digitalização, países emergentes, países em desenvolvimento, estratégia, revisão semissistemática Purpose: Through a review of the literature on digitalization in emerging countries, we analyzed how companies operating in these regions develop and implement strategies to navigate the digital era. Originality/value: The emergence of new technologies has reconfigured businesses' survival and competitiveness worldwide, however, little is known about the digital strategies employed by companies in emerging markets. By reviewing the literature, scarce in this context, we contributed by presenting examples of digital strategies that businesses have implemented. In line with our findings, we propose a research agenda to guide future studies. Design/methodology/approach: We performed a semi-systematic review of business and management journals, comprising a total sample of 30 articles from different fields of knowledge. We present our findings in three thematic categories and other subcategories. Findings: Our findings suggest the institutional voids that limit firms' innovation (e.g., lack of clear regulations, skilled workforce, access to data, and financial resources) are the main challenges keeping them from digitalizing themselves. Nevertheless, firms develop capabilities to scout opportunities, despite the challenges, and implement digital strategies that support their digitalization process. Keywords: digitalization, emerging countries, developing countries, strategy, semi-systematic review
The relationship between R&D and firm performance is highly dependent on the external environment. Therefore, this paper examined the effects of country level investor protection (safeguards) and ...governance mechanisms (systems) on the relationship between R&D and firm performance. Using GMM estimation and elasticity testing of panel data for 423 firms from 12 emerging countries, we find that a country's safeguards tend to moderate the relationship between R&D and firm performance more than the system of a country. The results indicate that safeguarding is relatively more important for the relationship between R&D and firm performance than other country level governance mechanisms, as the former can easily attract outside capital when it is strong. These results have significant implications for innovation policy. In particular, managers may wish to strengthen investor protection to promote high R&D investment in order to increase firm performance.
This paper examines the issue of cross-border acquisitions by companies from emerging economies in industrialised countries: an important phenomenon that has recently found increasing emphasis in ...international business research. In analysing Chinese acquisitions of German firms in the machinery and equipment industry, the paper addresses the question of why firms from industrialised countries are sold to companies from emerging economies. Several real and imagined reasons may induce the German side not to sell; nevertheless, this type of acquisition occurs with increasing frequency. Using case study evidence and interview data, the study finds explanations for the decision to sell to a Chinese company. The results show that German firms can gain substantially from the global ambitions of the Chinese firms for advancement of their own business objectives. This is due to complementarities in the motivations for engaging in the deals, as well as the underlying strategic needs of both firms. In addition, the specific nature of the cooperation between both firms instils in the German managers a sense of control and security—either real or merely perceived—creating conditions that are favourable to the selling decision. Most importantly, in the context of emerging economy enterprises acquiring advanced economy firms, motivations on both sides of the acquisitions appear to go beyond the commonly known goals such as capital transfer and additional market access, as the acquisitions provide the companies involved with conditions favourable to expansion into previously inaccessible market segments. The findings of this study provide useful guidance for the development of future strategic relationships between firms from industrialised and emerging economies.
The purpose of this paper is to develop a generalized 7 P-theoretical framework for strategic planning as part of international marketing (Potential, Path, Process, Pace, Pattern, Problems and ...Performance) with theoretical propositions. Although the 7 P-framework is based on the literature on internationalization of Latin American firms, we present it as a benchmark typology for firms wanting to succeed in international marketing from any similar geographical regions, cultures, or industries, particularly, firms from emerging countries. It was found that firms from developing countries such as Latin America face many challenges such as Cognitive Bias, Liability of foreignness and Resource constraints, while internationalizing their operations. Finally, we provide several recommendations for future research.
This article discusses the ten research papers compiled for the
Journal of Academy of Marketing Science
(
JAMS
) Special Issue, which has the express purpose of laying new groundwork for the ...understanding of business model innovations in emerging markets. Altogether, the papers delineate a new organizational framework for doing business in emerging markets and for optimizing gains from emerging market innovations. This Special Issue defines and clearly differentiates emerging market innovations (EMIs) from developed market innovations (DMIs) and provides a generalizable framework. The proposed framework corresponds to the process whereby developed market firms do business in emerging markets, capitalize on the innovative potential therein, reap the benefits and drawbacks of reverse innovations back to developed markets, and, finally, continually refine and optimize their innovation strategies. This study offers crucial managerial guidance through discussion on marketing to the Bottom-of-Pyramid (BoP), the importance of Grassroots Innovation (GRI), the necessity of Corporate Social Responsibility (CSR) strategies, and the role of employees in open innovation. Lastly, this Special Issue posits conceptual and methodological limitations and future research direction to capture the emerging market phenomena entirely.
PDF
