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Management International Review

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26.05.2021 | Research Article

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

verfasst von: Arindam Mondal, Somnath Lahiri, Sougata Ray

Erschienen in: Management International Review | Ausgabe 2/2021

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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.

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Nächster Artikel IPR Law Protection and Enforcement and the Effect on Horizontal Productivity Spillovers from Inward FDI to Domestic Firms: A Meta-analysis

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In this study we focus on family firms and do not compare such firms with non-family firms in India. Question may arise if these two groups are different in OFDI behaviour. Our data base suggests that there are indeed differences across few key variables. We will be happy to share such information with interested readers. We thank an anonymous reviewer for directing our attention to this issue.

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Titel: Strategic Response to Inward Foreign Direct Investment: A Study of Indian Family Firms
verfasst von: Arindam Mondal
Somnath Lahiri
Sougata Ray
Publikationsdatum: 26.05.2021
Verlag: Springer Berlin Heidelberg
Erschienen in: Management International Review / Ausgabe 2/2021
Print ISSN: 0938-8249
Elektronische ISSN: 1861-8901
DOI: https://doi.org/10.1007/s11575-021-00441-2

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