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EMERGING ECONOMY MULTINATIONALS: THE ROLE OF BUSINESS GROUPS

EMERGING ECONOMY MULTINATIONALS: THE ROLE OF BUSINESS GROUPS The early/rapid internationalization through outward FDI (OFDI) by firms from emerging nations is a well-recognized phenomenon. This study posits that an important explanation for it is the Corporate Business Group affiliation of many of the emerging economy multinational enterprises, EMNEs, as the Business Group affiliation enhances the effective resources of the firm. This study analyzes the potential role of Group strengths in facilitating OFDI by the firm. Further it attempts to illustrate this through an intensive case study of Tata Motors, a flagship company in the Tata Group, one of India’s largest conglomerates. Tata Motors itself is a Business Group. The Group resources and competencies are examined here in terms of the competitive assets of the Tata Group as a whole, as well as particularly those of the domestic subsidiaries and substantial-equity associates of Tata Motors which operate in automotive or allied sectors. This study relates the OFDI by Tata Motors to its standalone competencies combined with the Group-derived strengths. JEL: F21, F23, L14, L22 Keywords: outward FDI, EMNEs, corporate business groups, OFDI case study, automotive sector, India http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Economics, Management, and Financial Markets Addleton Academic Publishers

EMERGING ECONOMY MULTINATIONALS: THE ROLE OF BUSINESS GROUPS

Economics, Management, and Financial Markets , Volume 6 (1): 142-181 – Jan 1, 2011

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Publisher
Addleton Academic Publishers
Copyright
© 2009 Addleton Academic Publishers
ISSN
1842-3191
eISSN
1938-212X
Publisher site
See Article on Publisher Site

Abstract

The early/rapid internationalization through outward FDI (OFDI) by firms from emerging nations is a well-recognized phenomenon. This study posits that an important explanation for it is the Corporate Business Group affiliation of many of the emerging economy multinational enterprises, EMNEs, as the Business Group affiliation enhances the effective resources of the firm. This study analyzes the potential role of Group strengths in facilitating OFDI by the firm. Further it attempts to illustrate this through an intensive case study of Tata Motors, a flagship company in the Tata Group, one of India’s largest conglomerates. Tata Motors itself is a Business Group. The Group resources and competencies are examined here in terms of the competitive assets of the Tata Group as a whole, as well as particularly those of the domestic subsidiaries and substantial-equity associates of Tata Motors which operate in automotive or allied sectors. This study relates the OFDI by Tata Motors to its standalone competencies combined with the Group-derived strengths. JEL: F21, F23, L14, L22 Keywords: outward FDI, EMNEs, corporate business groups, OFDI case study, automotive sector, India

Journal

Economics, Management, and Financial MarketsAddleton Academic Publishers

Published: Jan 1, 2011

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