Session 128

Emerging Markets

Track G

Date: Monday, October 5, 2015

 

Time: 13:45 – 15:00

Common Ground

Room: Plaza Court 1


Facilitator:

  • Alvaro Cuervo-Cazurra, Northeastern University

Title: All Things are Difficult before They are Easy: R&D Investment, Learning Barriers, and Corporate Performance in an Emerging Economy

Authors

  • Llipeng Ge, Hong Kong University of Science and Technology
  • Jiatao Li, Hong Kong University of Science and Technology

Abstract: As emerging economies transit towards more market-oriented systems, emerging market firms (EMFs) allocate more resources to R&D. This study predicts a U-shaped relationship between EMFs’ R&D investment and performance, and proposes that information screening effect, disruption effect, and learning effect work simultaneously to form the U-shaped relationship. Specifically, information screening effect refers to the negative impact of an EMF’s incapability to screen information and invest in promising R&D projects. Disruption effect refers to the negative impact involved in an EMF’s shift toward an innovation-driven strategy. And learning effect refers to performance benefits gained through the establishment of absorptive capacity. Moreover, it shows that a better developed institutional environment and ample resource endowments help EMFs overcome a barrier to obtain benefits from R&D investments.

Title: Alliances in an Emerging Economy

Authors

  • Grigorios Livanis, Northeastern University
  • Anna Lamin, Northeastern University

Abstract: We explore the conditions under which emerging economy firms are likely to pursue alliances as a way to expand their operations. We account for alliances with both domestic and foreign partners. With foreign partners, we differentiate between firms from developing vs. developed countries. We examine how both industry and firm factors influence the propensity to form an alliance with either domestic or foreign firms. We also investigate how business group affiliation, specifically the alliance experience, diversification, and internationalization of the group influence the likelihood of forming a domestic or foreign alliance. Identifying all alliances of public limited Indian firms during 2000-2013, we test our hypotheses using a sample of 114,710 observations with 2,842 alliances of 1,405 unique Indian firms.

Title: Effect of Control and Crossvergence on Knowledge Building in Emerging Markets: Evidence from Japanese Multinationals

Authors

  • Koichi Nakagawa, Osaka University
  • Kazumi Tada, Hokusei Gakuen University
  • tomomi imagawa, Osaka University
  • Mitsuru Nakagawa, Japan University of Economics
  • Hiroyuki Fukuchi, Toyo Gakuen University

Abstract: This study focuses on the problem of managing knowledge within the emerging market subsidiaries, which are headquartered in developed country. Based on our preliminary interview research and previous research, our prediction is that the subsidiary performance in an emerging market is improved not by knowledge transfers from headquarters but by knowledge creation within that subsidiary; and a wel1-used way of control by headquarters only increases knowledge transfer; and the knowledge creation within the subsidiary is yielded by the “crossvergence” approach, which refers to the mixing of the parent culture and way of operating with the local culture and approach. We examined those predictions by using data from 145 subsidiaries in emerging countries of the companies headquartered in Japan.

Title: Embedded to Stand Out? Overseas R&D in Emerging Markets and GVC

Authors

  • Ziliang Deng, Renmin University of China

Abstract: This research aims to re-conceptualize the R&D internationalization from a global value chain (GVC) perspective. As production network has been fragmented into much wider presence around the world, there have been salient ramifications in how technologically-advanced MNE subsidiaries in emerging markets are involved in such a complicated network. The competence-creating subsidiaries may engage in reverse innovation, i.e. leverage their local knowledge and R&D in emerging markets to help export their products back to technologically-advanced economies. Their R&D may also boost sales to the other emerging markets. On the contrary, the superficially embedded assembly-type subsidiaries can not effectively leverage the market knowledge obtained in the host markets to boost their overseas sales. We employ data of OECD MNE subsidiaries in China the preliminary empirical findings justify our hypotheses.

Title: Resources vs. Agency: The Impact of Government Ownership on the Performance of Emerging Economy Firms

Authors

  • Kiattichai Kalasin, China Europe International Business School
  • Miguel Rivera-Santos, Babson College
  • Pierre Dussauge, HEC-Paris

Abstract: We investigate the impact of varying levels of government ownership on the performance of emerging economy (EE) firms. Grounding our reasoning in the resource-based view and in agency theory, we argue that, contrasting with developed market firms for which government ownership is typically associated with lower levels of financial performance,the relationship between government ownership and EE firms’ performance follows an inverted-U curve. Specifically, we predict that low levels of government ownership improve the performance of EE firms, whereas high levels of government ownership decrease their performance. We test our hypotheses on a sample 400 (EE) firms from nine emerging economies.The results support our hypotheses and suggest that the inflection point in the inverted-U curve relationship is a little below 50% of government ownership.

Title: Understanding Emerging Market Environmental Influences and Strategic Responses of EMNCs: A Typology of Strategies and Absorptive Capacity Configurations

Authors

  • Indu Ramachandran, Texas State University
  • Joshua J. Daspit, Mississippi State University

Abstract: Emerging markets are increasingly becoming important contributors to the global economy and account for a significant share of the global foreign development investment outflows. Emerging market multinational corporations (EMNCs), however, are often resource constrained compared to well-established multinational corporations from developed economies, and compete in markets plagued with uncertainty. To understand how EMNCs could possibly create competitive advantages for themselves, we offer a typology identifying strategic responses for EMNC internalization appropriate for unique environmental contexts. Specifically, we suggest that depending on the presence of certain institutional factors and local density, EMNCs are well suited to adopt an identified strategic response for internationalization. Further, using a knowledge-based perspective, we suggest that EMNCs make appropriate configurations with respect to absorptive capacity capabilities in pursuit of the respective internationalization strategy. Through outward and inward investments in absorptive capacity, EMNCs are thus able to create strategic alignment and enhance competitive advantage.

All Sessions in Track G...

Sun: 08:00 – 09:15
Session 32: Microfoundations of international strategic management: Opportunism, trust, and bounded reliability
Sun: 09:45 – 11:00
Session 279: Formal theory in strategy - A primer
Sun: 11:15 – 12:30
Session 33: Methodological challenges in publishing international strategy research
Sun: 16:15 – 17:30
Session 209: Institutions and Emerging Markets
Sun: 17:45 – 00:00
Session 315: Global Strategy Business Meeting
Mon: 08:00 – 09:15
Session 126: Entry Mode & Cross-Border Acquisitions
Mon: 11:15 – 12:30
Session 149: Management and Coordination of Multinationals
Mon: 13:45 – 15:00
Session 128: Emerging Markets
Mon: 16:45 – 18:00
Session 151: Networks and Collaborative Arrangements
Tue: 08:00 – 09:15
Session 129: Foreign Direct Investments
Tue: 11:00 – 12:15
Session 127: Institutional Context
Tue: 14:15 – 15:30
Session 266: Offshoring
Tue: 15:45 – 17:00
Session 130: International Diversification
Session 150: Location and Geography
Tue: 17:30 – 18:45
Session 208: Internationalization Strategies and Performance


Strategic Management Society

Denver