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| Author: | Luo, Y. |
| Title: | Building a strong foothold in an emerging market: A link between resource commitment and environment conditions |
| Journal: | Journal of Management Studies
2004 : JUL, VOL. 41:5, p. 749-773 |
| Index terms: | Multinational companies Emerging markets Investments Asia |
| Language: | eng |
| Abstract: | This study examines how multinational enterprises (or MNEs) align resource commitment (hereafter as: r-c.) with environmental conditions (challenges & opportunities) when investing in a foreign emerging market (here as: e-m). MNEs often face a dilemma in allocating resources to this environment: without this commitment MNEs cannot build a strong competitive foothold. Yet with over-commitment, there is excessive economic exposure. This paper's analysis of MNEs in a major e-m. suggests that r-c. is an inverse function of market uncertainty and this inverse link is stronger for less strategically proactive MNEs. R-c. is also an increasing function of market opportunities and this function is stronger for firms emphasizing demand-side (as opposed to cost-side) gains. |
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