The impact of manager's animosity and ethnocentrism on multinational enterprise (MNE) international entry-mode decision

2018 ◽  
Vol 61 (2) ◽  
pp. 413-423
Author(s):  
Mamoun Benmamoun ◽  
Morris Kalliny ◽  
Wootae Chun ◽  
Seung H. Kim
Keyword(s):  
Multinational Enterprise ◽  
Entry Mode ◽  
Mode Decision ◽  
International Entry ◽  
The Impact

scholarly journals Inward internationalisation and cross-border acquisitions by EMNEs: The moderating role of ownership heterogeneity

2021 ◽  
Author(s):  
◽  
Sharmistha Chowdhury
Keyword(s):  
Boundary Condition ◽  
Agency Theory ◽  
Ownership Structure ◽  
Multinational Enterprises ◽  
Entry Mode ◽  
Institutional Ownership ◽  
Organisational Learning ◽  
Experiential Knowledge ◽  
Cross Border ◽  
The Impact

<p>Unlike Advanced Economy Multinational Enterprises (AMNEs), Emerging Economy Multinational Enterprises’ (EMNEs) dominant participation in international trade and investment is a recent phenomenon. Still, EMNEs are found to adopt bold strategies in the early stages of their internationalization and show path departure in the selection of their entry mode, such as cross border acquisition (CBA). CBA is not only a widely adopted EMNE internationalisation strategy but also distinguished EMNA internationalisation behaviour from that of AMNEs. CBA, entailing a high level of risk, requires considerable experiential knowledge that EMNEs lack. This knowledge deficit increases the perceived cost and risk associated with internationalisation and decreases the likelihood of engaging in foreign investment. There is a gap in the knowledge around how EMNEs compensate for their lack of experiential knowledge and how this experiential knowledge influences EMNEs’ adoption of CBA. Drawing from organisational learning as a theoretical lens, this study proposes that learning from inward internationalisation facilitates EMNEs’ CBA decisions. From an organisational perspective, experiential knowledge, especially externally sourced, is valuable when the acquired knowledge fits the recipient organisations’ existing dominant logic and values. Therefore ownership structure, such as family, institutional or corporate ownership, acts as a boundary condition and may influence the impact of inward internationalisation on CBA decisions. This idea is grounded in agency theory. This study argues that EMNEs compensate for their lack of internationalisation experiential knowledge through inward internationalisation (externally sourced experiential knowledge) which serves as a resource based antecedent leading EMNEs to make risky CBA decisions. Further, from an agency theory perspective, the study proposes that inward internationalisation – CBA relationships are likely to vary for different types of ownership categories.  The study uses a quantitative approach to test the hypotheses in an Indian context. India, being a large emerging economy, provides an appropriate backdrop to test the study’s conceptual model. For this study, a sample of 369 CBAs conducted by 205 public listed companies from 2009 to 2017 was collected from the SDC platinum database. The sample generated a panel of 1845 firm-year observations. Through a negative binomial regression analysis, it is found that inward internationalisation has a positive impact on the likelihood of Indian MNEs’ CBA decision. Regarding the moderating effect of ownership, it is found that family ownership reduces the impact of inward internationalisation, whereas foreign institutional ownership increases the impact of inward internationalisation. No moderating effects are found for domestic institutional ownership, nor are they found for domestic or foreign corporate ownerships.  This research contributes to the understanding of the EMNEs’ risky internationalisation behaviour through CBA. The present study adds to this stream of research by focusing on inward internationalisation and ownership structure influencing risky CBA decisions. In doing so, it contributes to organisational learning literature by suggesting that the impact of experiential knowledge may not necessarily be the same across the firms. This heterogeneity is attributable to EMNEs (knowledge acquiring organisation) who show varying motives, objectives and governance structure depending on their ownership structure. By examining the boundary condition of ownership heterogeneity, this study also contributes to Principal–Principal (PP) agency theory that ownership concentration along with owner’s identity is not only confined to strategy formulation but also extends to entry mode (CBA) decisions. Goal incongruence due to PP conflict between owners also decides whether experiential knowledge acquired from inward internationalisation fits with the firms or not in the resulting CBA decision. Finally, this study provides deep insights on different owners’ attitudes and their supporting or confining roles in moderating the impact of inward internationalisation on Indian EMNEs’ risk-taking behaviour during internationalisation.</p>

Innovation and Information Technology in the MNE

2009 ◽  
Author(s):  
John Cantwell
Keyword(s):  
Information Technology ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Multinational Enterprise ◽  
Product Cycle ◽  
Cycle Model ◽  
Transfer Of Technology ◽  
The 1950S ◽  
The Impact

This article focuses on the roles innovation and information technology play in the multinational enterprise. In recent years there has been a steady expansion in the literature that relates the internationalization of production to the development and transfer of technology by multinational enterprises (MNEs). It is a literature that can be dated back at least to John Dunning's (1958) seminal study of the impact of US MNEs upon UK technology and productivity, and Ray Vernon's (1966) development of the product cycle model (PCM) as an explanation of the technological dynamism associated with the growth of US foreign direct investment (FDI) in Europe in the 1950s and 1960s.

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