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Strategic Response to Inward Foreign Direct Investment: A Study of Indian Family Firms.

Authors :
Mondal, Arindam
Lahiri, Somnath
Ray, Sougata
Source :
Management International Review (MIR); Apr2021, Vol. 61 Issue 2, p207-233, 27p
Publication Year :
2021

Abstract

International business scholarship suggests that inward FDI (IFDI) may elicit a wide variety of strategic response from host country firms. While few studies have examined emerging market firms' outward FDI (OFDI) strategy as a response to IFDI by foreign MNCs, no study has examined if and how family firms—a common occurrence in emerging markets—initiate similar response. Drawing on three streams of literature (competitive dynamics of emerging market firms, institutional development, and family firms), this study empirically examines a sample of Indian family firms over a six-year time-period. Results suggest that family firms increase their existing OFDI in response to IFDI announcements by foreign MNCs. Results also demonstrate that the OFDI-growth response varies across firms and is shaped by heterogeneity in management type (professional/family-based), extent of foreign institutional ownership (high/low), and family CEO's international experience (possessed/not possessed). These findings are new to the literature. The study concludes by discussing the theoretical and managerial implications of the findings, and highlighting fertile avenues of future research. [ABSTRACT FROM AUTHOR]

Details

Language :
English
ISSN :
09388249
Volume :
61
Issue :
2
Database :
Complementary Index
Journal :
Management International Review (MIR)
Publication Type :
Academic Journal
Accession number :
150748520
Full Text :
https://doi.org/10.1007/s11575-021-00441-2