Determinants of Corporate International Expansion Beyond the Home Region: An Empirical Examination of U.S. Multinational Enterprises Expansion to Europe and Asia-Pacific

2017 ◽  
Vol 7 (4) ◽  
pp. 400-426 ◽  
Author(s):  
Alfredo Mauri ◽  
Sangcheol Song ◽  
João Neiva de Figueiredo
Keyword(s):  
Multinational Enterprises ◽  
Asia Pacific ◽  
International Expansion ◽  
Empirical Examination ◽  
Home Region

The subsidiaries of multinational enterprises operate regionally, not globally

2015 ◽  
Vol 23 (4) ◽  
pp. 328-354 ◽  
Author(s):  
Quyen T.K. Nguyen
Keyword(s):  
Multinational Enterprises ◽  
Geographic Location ◽  
Statistical Technique ◽  
Simultaneous Equation ◽  
Asia Pacific ◽  
Data Set ◽  
Content Type ◽  
And Performance ◽  
The Impact ◽  
Home Region

Purpose – The purpose of this paper is to examine the determinants of home-region strategy of the multinational subsidiary and the impact of such a strategy on its performance. The author draws upon new internalization theory to develop a theory-driven model and empirically tests the simultaneous relationships between home-region strategy and performance of the subsidiary. Design/methodology/approach – The author tests the model using a simultaneous equation statistical technique on an original, new data set of publicly listed multinational subsidiaries operating in the ASEAN region, with parent firms’ headquarters across the broad triad. Findings – There are three significant findings. The first finding is that subsidiary-level downstream knowledge (marketing advantages), and the geographic location of the subsidiary in the same home region as of the parent firm are key antecedents of a subsidiary’s home-region strategy. The second finding is that a subsidiary’s profitability reduces home-region orientation; however, home-region strategy has an insignificant effect on performance. The third finding is that these subsidiaries generate on average 92 per cent of their total sales in the home region (the Asia Pacific). Originality/value – The author advances the existing literature on the regional nature of parent-level multinational enterprises by demonstrating that their quasi-autonomous subsidiaries also operate mainly on a home-region basis.

scholarly journals Effective strategies followed by multinational enterprises expanding into Africa

2020 ◽  
Vol 13 (1) ◽  
Author(s):  
Zihné Coetzee ◽  
Henri Bezuidenhout ◽  
Gabriel Mhonyera
Keyword(s):  
Multinational Enterprises ◽  
Market Potential ◽  
Sub Saharan Africa ◽  
Retail Sector ◽  
International Expansion ◽  
Structured Interviews ◽  
International Partnerships ◽  
Managerial Implications ◽  
Sub Saharan ◽  
Value Add

Orientation: Retail sector multinational enterprises (MNEs) face challenges and follow diverse strategies when they expand into foreign markets.Research purpose: The major aim of this article is to determine how three well-established retail sector MNEs, namely, Walmart, Carrefour and Shoprite, addressed the challenges they faced and structured their market entry strategies in the African continent.Motivation for the study: While the opportunities in Africa are perpetual, breaking into the African market is not so straightforward. It is in this regard that the importance of determining the challenges faced by established retail MNEs in Africa and the valuable lessons that can be drawn by small and upcoming MNEs, from the experiences of these prominent MNEs studied, is exposed.Research approach/design and method: This article employs a mixed-method approach (i.e. case study and semi-structured interviews) to determine the challenges faced by Walmart, Carrefour and Shoprite when they expanded into Africa, and how they overcame those challenges.Main findings: The findings reveal that Walmart and Shoprite possess a substantial footprint in sub-Saharan Africa, while Carrefour enjoys a substantial footprint in North Africa and Francophone Countries of west Africa. Furthermore, Walmart follows a risk-averse approach when expanding into the African continent and only expands into new foreign markets based on the market potential and the ability to succeed. Carrefour’s main strategy is to achieve international expansion into Africa through the acquisition of international partnerships with local and regional firms. Shoprite, on the other hand, maintains that no written strategy was followed when the retail MNE expanded into Africa. It is also evident that external factors are significant for MNEs seeking to invest in Africa.Practical/managerial implications: Not all MNEs expanding into Africa have been successful. Accordingly, the practical value of this article rests upon the lessons that small and upcoming MNEs can learn from the experiences of MNEs that are now well established in African markets.Contribution/value-add: This article contributes to existing foreign direct investment (FDI) literature by identifying challenges that Walmart, Carrefour and Shoprite faced when they expanded into Africa. In addition, lessons that aspiring and small MNEs, specifically in the retail sector, can learn from these three retail MNEs that are now well established in African markets are drawn.

The influence of motivations on international location choice in least developed, emerging and developed countries: evidence from Chinese MNEs

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fernando Angulo-Ruiz ◽  
Albena Pergelova ◽  
William X. Wei
Keyword(s):  
Emerging Markets ◽  
Multinational Enterprises ◽  
Location Choice ◽  
Emerging Market ◽  
Developed Countries ◽  
Asia Pacific ◽  
Institutional Constraints ◽  
Least Developed Countries ◽  
Content Type ◽  
Developed Economies

Purpose This research aims to assess variations of motivations when studying international location decisions. In particular, this study aims to assess the influence of diverse motivations – seeking technology, seeking brand assets, seeking markets, seeking resources and escaping institutional constraints – as determinants of the international location choice of emerging market multinational enterprises (EM MNEs) entering least developed, emerging, and developed countries. Design/methodology/approach The authors develop a set of hypotheses based on the ownership–location–internalization framework and complement it with an institutional perspective. The conceptual model posits that the different internationalization motivations (seeking technology, seeking brand assets, seeking markets, seeking resources and escaping institutional constraints) will impact the location choice of EM MNEs in developed economies, emerging markets or least developed countries. This study uses the 2013 survey data collected by the China Council for the Promotion of International Trade and the Asia Pacific Foundation of Canada. The final sample of analysis of this research includes 693 observations. Findings After controlling for several variables, two-stage Heckman regressions show there is a variation of motivations when EM MNEs enter least developed countries, emerging markets and developed economies. EM MNEs are motivated to enter least developed countries to seek markets and resources. Conversely, those firms enter developed countries in their search for technological assets and to escape institutional constraints at home. While the present study findings show a clear difference in the motivations that lead to location choice in least developed vs developed countries, the results are not as clear for location in other emerging countries. Research limitations/implications The paper offers empirical support for the importance of motivations as crucial determinants of location choice. Originality/value This paper provides a detailed quantitative study on the internationalization location choice of EM MNEs based on their motivations. Though theoretical models underscore the importance of motivations, we know very little about how, in practice, motivations drive location choice. This study contributes to the international location choice literature a deeper understanding of how diverse motivations drive choices of expansion into developed economies, emerging markets or least developed countries.

International expansion for knowledge acquisition or knowledge acquisition for international expansion?

2019 ◽  
Vol 28 (2) ◽  
pp. 177-200 ◽  
Author(s):  
Clarice Secches Kogut ◽  
Renato Dourado Cotta de Mello ◽  
Angela da Rocha
Keyword(s):  
Knowledge Acquisition ◽  
Latin American ◽  
Multinational Enterprises ◽  
Longitudinal Design ◽  
Emerging Market ◽  
Theoretical Perspective ◽  
Multinational Firm ◽  
International Expansion ◽  
Content Type ◽  
Catch Up

Purpose Starting from the knowledge-based view as a theoretical perspective, this study aims to examine how an emerging market multinational enterprise (EMMNE) engages in reverse knowledge transfer (RKT) processes and how such processes are managed by headquarters. Therefore, this paper captures the perspective of top management concerning RKT and the processes used to create, transfer and integrate knowledge. Design/methodology/approach The study uses a longitudinal design based on the case method of investigation. The case selected for the study was a Brazilian company theoretically sampled for being a domestically, regionally and globally important, information-rich company that operates in an industry in which technology plays a crucial role. The company was also selected for having had asset-seeking motives in at least some of its foreign market entries and for having successfully absorbed foreign-acquired capabilities. Findings The study provides counterfactual evidence to the springboard perspective, considering timing and speed of the internationalization and catch-up processes and the size of acquisitions. The study also highlights differences to other emerging market multinational enterprises, concerning the internationalization trajectory and catch-up moves, and to traditional MNEs, regarding RKT challenges and practices. Research limitations/implications The main limitations of the study relate to the case study method, which does not allow for statistical generalization, although it does support analytical generalization. Originality/value The study contributes to the literature by shedding light on the process by which a Latin American multinational firm developed technological capabilities to compete globally, focusing on the symbiotic, self-nurturing relationship between internationalization processes and technology acquisition and integration processes. Moreover, the work provides novel theoretical insights regarding timing, location, size and execution of the RKT activities. Finally, the paper contributes to the understanding of the relational aspects of the RKT process by focusing on building human relationships as the major force behind knowledge integration and examining the resistance of the acquired companies from developed markets to adopt the parent company’s best practices, or to contribute to its integrated knowledge, when the parent company is an EMMNE.

Social Embeddedness, Overt and Covert Power, and Their Effects on CEO Pay: An Empirical Examination Among Family Businesses in India

2000 ◽  
Vol 13 (4) ◽  
pp. 293-311 ◽  
Author(s):  
Rajaram Veliyath ◽  
Kannan Ramaswamy
Keyword(s):  
Agency Theory ◽  
Multinational Enterprises ◽  
Ceo Compensation ◽  
Developing Economies ◽  
Social Embeddedness ◽  
Cross Sectional ◽  
Empirical Examination ◽  
Firm Diversification ◽  
Ceo Pay ◽  
And Performance

The literature on CEO compensation reflects two common biases: (a) the dominant use of the agency theory perspective and (b) the almost exclusive use of U.S. and U.K samples. Agency theory views compensation as a consequence of the incentive contracts and the processes of corporate governance. However, little is known about the determinants of CEO compensation in developing countries. Considering that foreign direct investment of U.S. multinational enterprises increased 10-fold over the past decade, mostly in developing economies, there is a great need to understand the dynamics of pay setting in these foreign contexts. Overall, there is an imperative need to explore alternative theoretical perspectives as well as investigate nontraditional contexts to broaden existing theoretical premises. In an attempt to address this need, this study investigates the CEO's social embeddedness and overt and covert power as determinants of CEO pay in a sample of Indian family-controlled firms. Using a time-series, cross-sectional regression analysis, we find family shareholding and the percentage of inside directors on the board (identified as bases of overt power for the CEO) to be the predominant influences on CEO pay. By contrast, some of the identified bases of covert power, such as the CEO's tenure, age, education, and firm diversification, are not significant. Surprisingly, controls for firm size and performance also exhibit no influence on CEO pay. These findings offer a useful point of reference against which results from western studies can be compared to formulate more holistic theories of CEO pay.

scholarly journals Coping with Growth Transitions: The Case of Chinese Family Businesses in Singapore

2001 ◽  
Vol 14 (2) ◽  
pp. 123-139 ◽  
Author(s):  
Wee-Liang Tan ◽  
Siew Tong Fock
Keyword(s):  
East Asia ◽  
World Bank ◽  
Multinational Enterprises ◽  
Success Factors ◽  
Family Businesses ◽  
Asia Pacific ◽  
Chinese Family ◽  
Depth Study ◽  
Growth Transitions ◽  
National Boundaries

Families control more than half of the corporations in East Asia (World Bank, 1999; World Bank, 1998). The contribution of family businesses to Asia's economic growth is predicated upon successfully growing their businesses. Many family businesses in East Asia, spanning countries such as Taiwan, Hong Kong, Indonesia, Singapore, and Malaysia, are Chinese owned and managed. Some claim that these businesses will never develop into full-fledged multinational enterprises because of their cultural heritage (Redding, 1990). However, some Chinese family businesses have successfully made the transition. This paper presents an in-depth study of five Chinese family businesses in Singapore that have successfully made the transition in growth and size and across national boundaries and family generations. Their business empires extend into the Asia Pacific region. This paper highlights the key success factors of these five noteworthy family businesses that enabled them to make these growth transitions.

Strategic Knowledge Creation in Multinational Enterprises

2020 ◽  
pp. 108-132
Author(s):  
Lars Håkanson ◽  
Philip Kappen ◽  
Ivo Zander
Keyword(s):  
Environmental Change ◽  
Knowledge Creation ◽  
Multinational Enterprises ◽  
Nature Management ◽  
Strategic Knowledge ◽  
Competitive Advantages ◽  
International Expansion ◽  
Creation Process ◽  
Geographical Patterns ◽  
The Way

Unique knowledge and proprietary innovations are key to the competitive advantages on which most multinational enterprises (MNEs) are expected to base their initial international expansion. Moreover, their subsequent fortunes and survival typically depend on MNEs’ continued ability to upgrade and renew these advantages, as competition, imitation, and environmental change erode the value of existing ones. This chapter reviews key literatures around the nature, management, and effects of knowledge creation in MNEs. The chapter centers on the processes through which geographical patterns of international R&D have evolved, along with the structures, systems, and procedures through which MNEs have sought to govern and coordinate these activities. Finally, the chapter offers a summary and critique of the way that much of the inherited literature has portrayed and interpreted the strategic knowledge creation process in MNEs.

Analysis of Reverse Logistics Operations for a Computer Company

2011 ◽  
Vol 4 (4) ◽  
pp. 67-75
Author(s):  
Albert Wee Kwan Tan ◽  
Arun Kumar ◽  
Balan Sundarakani
Keyword(s):  
Reverse Logistics ◽  
Serial Correlation ◽  
The United States ◽  
Asia Pacific ◽  
Upward Trend ◽  
Empirical Examination ◽  
Managerial Implication ◽  
The Status ◽  
Material Information ◽  
A Company

As reverse logistics is a relatively new field in supply chain management, especially in Asia, a detailed study is conducted to understand the status of companies practicing reverse logistics to support their Asia Pacific operations. This paper discusses an empirical examination of a company performing reverse logistics in Asia with Singapore being the coordination hub with the United States (US). Data on the transaction volumes and other material information are collected over a period of two years to understand the behaviour and trends of reverse logistics in this company. Statistical tools such as serial correlation, seasonality and trend analysis are performed on the data to understand their behaviour and its managerial implication. The study has shown that there is an upward trend for the return volume and how financial closing has an impact to the return volumes.

International Expansion Selection Model by Machine Learning—A Proprietary Model

2020 ◽  
Author(s):  
Ping-Chi Hsieh ◽  
Der-Juinn Horng ◽  
Hong-Yi Chang
Keyword(s):  
Machine Learning ◽  
Multinational Enterprises ◽  
Complex Problem ◽  
Selection Model ◽  
International Expansion ◽  
Business Managers ◽  
Business Decisions ◽  
Expansion Strategy ◽  
Strategic Model ◽  
Resources And Capabilities

Abstract This study aims to explain a simple but crucial complex problem often faced by multinational enterprises: why multinational companies choose to enter the markets of certain countries. Accordingly, this study developed an international expansion selection model by using the machine learning method. The priority targets for enterprises’ international expansion and the strategic country groups for classification can be identified on the basis of ideas expressed in three primary business concepts, namely ‘market attractiveness’, ‘enterprise’ resources and capabilities’ and ‘customer-oriented approach’; the identified priority targets and strategic country groups are useful for multinational enterprises when designing different configurations for limited resources and can ultimately assist the business managers with making international business decisions. Models can elucidate the complexity behind enterprise decisions. By contrast, strategic grouping based on simple rules can aid the managers to make instantaneous decisions and respond according to the changing market. This study constructed an exclusive strategic model based on the international expansion strategy selection modes adopted by a leading Taiwan enterprise in electronics industry and the unique characteristics possessed by this enterprise.

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