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The role of country alliances in reducing the transaction costs of internationalisation: evidence from Indian multinational enterprises

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  • Peter J. Buckley
  • Surender Munjal
  • Peter Enderwick
  • Nicolas Forsans

Abstract

This paper analyses the role of home-host country alliances in reducing transaction costs in the internationalisation process. We test hypotheses about the role of country-level alliances and firm internationalisation with comprehensive longitudinal multi-industry data on 623 acquisitions made by Indian multinational enterprises (MNEs) between 2000 and 2007 on a panel of 65 host countries. The results show that country alliances reduce the transaction costs arising from the distance between home-host countries, thereby positively influencing the internationalisation of Indian MNEs. However, the extent of that influence depends upon the nature of the alliance. Our findings have significant implications for public policy and theory.

Suggested Citation

  • Peter J. Buckley & Surender Munjal & Peter Enderwick & Nicolas Forsans, 2017. "The role of country alliances in reducing the transaction costs of internationalisation: evidence from Indian multinational enterprises," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 41(3), pages 807-828.
    • Handle: RePEc:oup:cambje:v:41:y:2017:i:3:p:807-828.
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    File URL: http://hdl.handle.net/10.1093/cje/bew062
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    Cited by:

    1. Laura Rienda & Enrique Claver & Diego Quer & Rosario Andreu, 2019. "Family businesses from emerging markets and choice of entry mode abroad: insights from Indian firms," Asian Business & Management, Palgrave Macmillan, vol. 18(1), pages 6-30, February.
    2. Munjal, Surender & Bhasin, Niti & Nandrajog, Divya & Kundu, Sumit, 2022. "Examining the evolution of emerging market multinational enterprises’ competitive advantages: Evidence from India," Journal of Business Research, Elsevier, vol. 145(C), pages 732-744.
    3. Munjal, Surender & Requejo, Ignacio & Kundu, Sumit K., 2019. "Offshore outsourcing and firm performance: Moderating effects of size, growth and slack resources," Journal of Business Research, Elsevier, vol. 103(C), pages 484-494.
    4. Elia, Stefano & Massini, Silvia & Narula, Rajneesh, 2019. "Disintegration, modularity and entry mode choice: Mirroring technical and organizational architectures in business functions offshoring," Journal of Business Research, Elsevier, vol. 103(C), pages 417-431.
    5. Munjal, Surender & Varma, Sumati & Bhatnagar, Ankur, 2022. "A comparative analysis of Indian and Chinese FDI into Africa: The role of governance and alliances," Journal of Business Research, Elsevier, vol. 149(C), pages 1018-1033.
    6. Bhatnagar, Ankur, 2021. "What drives Indian Non-SOE FDI into Africa?," African Journal of Economic Review, African Journal of Economic Review, vol. 9(4), September.
    7. Vaidyanathan Jayaraman & Zuoming Liu, 2019. "Aligning governance mechanisms with task features to improve service capabilities---an empirical study of professional service outsourcing in India," Operations Management Research, Springer, vol. 12(1), pages 19-39, June.
    8. Amar Anwar & Ichiro Iwasaki, 2022. "Institutions and FDI from BRICS countries: a meta-analytic review," Empirical Economics, Springer, vol. 63(1), pages 417-468, July.
    9. Ramya T. Venkateswaran, 2023. "Is there an illusion of symmetry in cultural distance from Asia–pacific Emnes? the role of business groups in navigating cultural distance through ambidextrous learning," Asia Pacific Journal of Management, Springer, vol. 40(3), pages 1169-1215, September.

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