Down with MNE-centric theories! Market entry and expansion as the bundling of MNE and local assets
AbstractBoth Anderson and Gatignon and the Uppsala internationalization model see the initial mode of foreign market entry and subsequent modes of operation as unilaterally determined by multinational enterprises (MNEs) arbitraging control and risk and increasing their commitment as they gain experience in the target market. OLI and internalization models do recognize that foreign market entry requires the bundling of MNE and complementary local assets, which they call location or country-specific advantages, but implicitly assume that those assets are freely accessible to MNEs. In contrast to both of these MNE-centric views, I explicitly consider the transactional characteristics of complementary local assets and model foreign market entry as the optimal assignment of equity between their owners and MNEs. By looking at the relative efficiency of the different markets in which MNE and complementary local assets are traded, and at how these two categories of assets match, I am able to predict whether equity will be held by MNEs or by local firms, or shared between them, and whether MNEs will enter through greenfields, brownfields, or acquisitions. The bundling model I propose has interesting implications for the evolution of the MNE footprint in host countries, and for the reasons behind the emergence of Dragon MNEs.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Journal of International Business Studies.
Volume (Year): 40 (2009)
Issue (Month): 9 (December)
Contact details of provider:
Web page: http://www.palgrave-journals.com/
Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
Other versions of this item:
- Jean-Fran�ois Hennart, 2009. "Down with MNE-centric theories! Market entry and expansion as the bundling of MNE and local assets," Journal of International Business Studies, Palgrave Macmillan, vol. 40(9), pages 1591-1591, December.
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Gómez Plana, Antonio G. & Latorre, María C., 2013.
"When multinationals leave: A CGE analysis of the impact of divestments,"
Economics Discussion Papers
2013-45, Kiel Institute for the World Economy.
- Gómez-Plana, Antonio G. & Latorre, María C., 2014. "When multinationals leave: A CGE analysis of the impact of divestments," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 8(6), pages 1-41.
- Cesaroni, Fabrizio & Giarratana, Marco S. & Martínez-Ros, Ester, 2012.
"Technological capabilities and cost efficiency as antecedents of foreign market entry,"
UNU-MERIT Working Paper Series
049, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology.
- Cesaroni, Fabrizio & Giarratana, Marco S. & Martínez-Ros, Ester, 2012. "Technological capabilities and cost efficiency as antecedents of foreign market entry," MERIT Working Papers 049, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
- Marlene Grande & Aurora A. C. Teixeira, 2011. "Linking entry mode choices of MNCs with countries’ corruption. A review," OBEGEF Working Papers 008, OBEGEF - Observatório de Economia e Gestão de Fraude & OBEGEF Working Papers on Fraud and Corruption.
- Christopher Melin, 2011. "Le Management De Projets Des Firmes Multinationales Comme Un Mecanisme De Coordination Des Relations Siege-Filiales," Post-Print hal-00690839, HAL.
- Jean, Ruey-Jer Bryan & Tan, Danchi & Sinkovics, Rudolf R., 2011. "Ethnic ties, location choice, and firm performance in foreign direct investment: A study of Taiwanese business groups FDI in China," International Business Review, Elsevier, vol. 20(6), pages 627-635.
- Karhunen, Päivi & Ledyaeva, Svetlana, 2012. "Corruption Distance, Anti-corruption Laws and International Ownership Strategies in Russia," Journal of International Management, Elsevier, vol. 18(2), pages 196-208.
- Eckert, Stefan & Dittfeld, Marcus & Muche, Thomas & Rässler, Susanne, 2010. "Does multinationality lead to value enhancement? An empirical examination of publicly listed corporations from Germany," International Business Review, Elsevier, vol. 19(6), pages 562-574, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elizabeth Gale).
If references are entirely missing, you can add them using this form.