Entry mode choice in emerging markets: is there any difference between emerging and developed country multinationals? Online publication date: Thu, 29-Apr-2021
by Ana Valdés-Llaneza; Pablo Sánchez-Lorda; Esteban García-Canal
European J. of International Management (EJIM), Vol. 15, No. 4, 2021
Abstract: Previous research has documented that, when investing abroad, emerging market multinationals (EMMs) have a higher tolerance for risk than developed country multinationals (DCMs), highlighting their propensity to make bold acquisitions and to form alliance networks. In this paper we examine the differences between EMMs and DCMs when it comes to choosing between these options of external growth. We argue that EMMs have a higher propensity than DCMs to choose joint ownership options and, among them, those involving complex partnerships, so as to leverage their routines and imprinted capabilities to deal with partners. In order to carry out the study, we consider the differences in entry mode patterns in emerging markets by multinationals from USA, European Union, BRIC, and Next-Eleven countries between 1996 and 2012. Our results supported our hypotheses.
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