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Article
Publication date: 22 February 2021

Ru-Shiun Liou, Lee Warren Brown and Dinesh Hasija

Many multinational corporations that originate from emerging economies (emerging market multinational corporations (EMNCs)) opt for acquiring a target firm in a developed…

Abstract

Purpose

Many multinational corporations that originate from emerging economies (emerging market multinational corporations (EMNCs)) opt for acquiring a target firm in a developed market to expediently upgrade their strategic capabilities. To successfully achieve their strategic goals in the developed markets, EMNCs may use market actions and nonmarket actions to mitigate the potential risk derived from the national political differences between their home emerging economy and host developed economy. This paper aims to extend the legitimacy-based view of political risk to study the influence of political animosity – defined as misalignment of the host-home countries’ national interests – on the EMNCs’ market and nonmarket strategy in a developed market.

Design/methodology/approach

In this paper, we examine all EMNCs that made cross-border acquisitions of the USA targets from 2005 to 2011. The final sample consists of 252 acquisitions originating from 25 emerging markets. This paper used Tobit regression analysis to test the direct and moderating hypotheses.

Findings

Facing a high level of political animosity between their home country and the host developed economy, EMNCs use a market strategy by acquiring less ownership stake in the developed market, as well as engage in a nonmarket strategy by increasing lobbying activities. In addition, because of the heightened legitimacy concerns of developed market shareholders, cross-listed EMNCs have a greater tendency than non-cross-listed EMNCs to improve their legitimacy through their market and nonmarket strategy.

Originality/value

The current paper sheds light on EMNCs’ international strategy in developed markets by examining both market and nonmarket actions. EMNCs are shown to be strongly motivated to engage in acquisitions in developed markets so they can acquire invaluable strategic resources, such as brands and distribution channels, to compete with the developed market multinationals. A sophisticated ownership strategy and corporate political activities are invaluable for EMNCs to catch up with developed market multinationals.

Article
Publication date: 9 April 2018

Ru-Shiun Liou, Rekha Rao-Nicholson and David Sarpong

Addressing the unique challenge facing emerging-market firms (EMFs) of branding and marketing in their foreign subsidiaries, the purpose of this paper is to evaluate the…

Abstract

Purpose

Addressing the unique challenge facing emerging-market firms (EMFs) of branding and marketing in their foreign subsidiaries, the purpose of this paper is to evaluate the foreign subsidiary’s corporate visual identity (CVI) transitions during the post-acquisition period.

Design/methodology/approach

Data on 330 cross-border acquisitions from five emerging markets, namely, Brazil, Russia, India, China and South Africa (BRICS) are used. The cross-sectional multivariate analyses are used to test the hypotheses.

Findings

Utilizing a sample of worldwide acquisitions conducted by EMFs originated from BRICS, this study establishes that various cross-national distances do not consistently cause the targets to take on the parent’s CVI. While economic distance and formal institutional distance increase the likelihood of an acquired subsidiary’s CVI change, cultural distance decreases the likelihood of CVI change.

Practical implications

Lacking international experience and shaped by national differences between the host and home markets, EMFs often grant foreign subsidiaries substantial autonomy to respond to diverse stakeholder demands in subsidiary branding. Contrary to extant literature, the findings show that some distances are more pertinent to CVI transformation in the subsidiaries than others in the context of the EMFs.

Originality/value

This research shows that the formal institutional distance and economic distance will increase the likelihood of CVI changes in the subsidiaries, whereas, the cultural distance requiring soft skills like the cultural adaptability from the EMFs will decrease the CVI change possibility. The findings presented in the paper have significant implications for future research and strategic application.

Details

International Marketing Review, vol. 35 no. 2
Type: Research Article
ISSN: 0265-1335

Keywords

Article
Publication date: 10 January 2018

Tyson Ang, Ru-Shiun Liou and Shuqin Wei

This paper aims to investigate if perceived cultural distance (PCD) negatively affects service quality and customer satisfaction through customers’ social judgements of…

1132

Abstract

Purpose

This paper aims to investigate if perceived cultural distance (PCD) negatively affects service quality and customer satisfaction through customers’ social judgements of the service providers’ warmth and competence in intercultural service encounters (ICSE), and if this negative effect can be mitigated through customer participation (CP).

Design/methodology/approach

A 2 × 2 between-subjects experimental design with an online consumer panel was conducted using a series of intercultural service encounter scenarios (in the weight loss service context) to manipulate CP (high vs low) and pictures of service providers to induce PCD (high vs low).

Findings

As hypothesized, in the context of ICSE, PCD negatively impacts customers’ social judgements of the service providers’ warmth and competence, which in turn influence service quality and customer satisfaction. However, the negative impact of PCD is alleviated when the level of CP is high.

Research limitations/implications

Using a single service context (weight loss services) may restrict the generalizability of findings. Future research may explore other service contexts.

Practical implications

To improve customers’ experience, managers in service firms with multicultural customers may create more engagement opportunities by designing the service delivery process in ways in which more CP and involvement is allowed.

Originality/value

This research is among the first to highlight the importance of consumers’ social judgements about culturally dissimilar service providers, which at baseline come with disadvantages but that can be altered through marketing actions (e.g. enhanced CP).

Details

Journal of Services Marketing, vol. 32 no. 5
Type: Research Article
ISSN: 0887-6045

Keywords

Book part
Publication date: 8 June 2012

Ru-Shiun Liou, Alex S. Rose and Alan E. Ellstrand

We view emerging-market multinational corporations (EMNCs) as agents for global isomorphism. EMNCs seek to enter developed markets not only to expand their business…

Abstract

We view emerging-market multinational corporations (EMNCs) as agents for global isomorphism. EMNCs seek to enter developed markets not only to expand their business operations but also to acquire advanced knowledge to enhance their core competencies. In entering these markets, EMNCs are subject to coercive, normative and cognitive pressures as they seek legitimacy. Once these firms gain legitimacy in advanced markets through the adoption of local business practices, they transfer these approaches to their headquarters in developing markets, establishing best practices in their home markets. Further, EMNCs may engage in efforts aimed at changing the institutional environment in the developing market to facilitate the transfer of learned practices from the developed market. Thus, we propose that these best practices lead to global isomorphism, but also note instances where symbolic adoption of developed market practices may slow the isomorphic process.

Details

Institutional Theory in International Business and Management
Type: Book
ISBN: 978-1-78052-909-7

Content available
Book part
Publication date: 8 June 2012

Abstract

Details

Institutional Theory in International Business and Management
Type: Book
ISBN: 978-1-78052-909-7

Article
Publication date: 8 October 2021

George O. White III, Tazeeb Rajwani and Thomas C. Lawton

The international strategies of multinational enterprises are increasingly augmented by insights on, and approaches to, external stakeholders and nonmarket dynamics. The…

Abstract

Purpose

The international strategies of multinational enterprises are increasingly augmented by insights on, and approaches to, external stakeholders and nonmarket dynamics. The rise of populism and increased geopolitical uncertainty have accelerated these efforts, particularly for business leaders anticipating and engaging external agents, events, and issues that challenge the strategic objectives of their enterprises.

Design/methodology/approach

In this paper we explain why the increased preponderance of populism and geopolitical uncertainty are concurrently posing an existential threat to the post-Cold War global economy predicated on free trade and (relatively) open borders and, consequently, challenging the structures and strategies of international business.

Findings

We provide an overview of the four papers in our special issue and consider how each advances insights on how multinational enterprises effectively navigate the nonmarket uncertainties of the contemporary global economy. We then advance four important areas for international business research on multinational nonmarket strategies: (i) resilience and legitimacy; (ii), diversification; (iii), market and nonmarket strategy integration; and (iv), institutional arbitrage.

Research limitations/implications

We anticipate that nonmarket strategy scholars can build on these themes to assess how nonmarket strategies can better enable multinational enterprises to survive and thrive in an age of heightened global risk and uncertainty.

Originality/value

This paper and the related special issue provides novel theoretical insights by drawing attention to the relatively under-researched realm of multinational enterprise nonmarket strategy, particularly in populist contexts and during periods of geopolitical uncertainty. Importantly, we identify four promising domains – resilience and legitimacy, diversification, the integration of market and nonmarket strategy, and institutional arbitrage – for international business scholars investigating nonmarket strategy to consider. We anticipate that our paper, as well as other papers in this special issue, contribute further momentum to this burgeoning area of research.

Details

Multinational Business Review, vol. 29 no. 4
Type: Research Article
ISSN: 1525-383X

Keywords

Book part
Publication date: 8 June 2012

Jagdish N. Bhagwati is professor of economics and law at Columbia University and one of the most prolific scholars on globalization. He has a BA in economics from…

Abstract

Jagdish N. Bhagwati is professor of economics and law at Columbia University and one of the most prolific scholars on globalization. He has a BA in economics from Cambridge and a PhD in economics from the Massachusetts Institute of Technology. He has served as an external advisor to the director general of the World Trade Organization, as a special policy advisor on globalization to the United Nations, and as an economics policy advisor to the director general of the General Agreement on Tariffs and Trade. Before moving to Columbia University he was professor at the Massachusetts Institute of Technology. Professor Bhagwati currently serves on the Academic Advisory Board of Human Rights Watch (Asia) and on the board of scholars of the Centre for Civil Society. He is senior fellow of the Council on Foreign Relations.

Details

Institutional Theory in International Business and Management
Type: Book
ISBN: 978-1-78052-909-7

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