《What Causes Multinational Companies to Increase Resource Commitments During Financial Crises in Emerging Markets.doc》由会员分享，可在线阅读，更多相关《What Causes Multinational Companies to Increase Resource Commitments During Financial Crises in Emerging Markets.doc（4页珍藏版）》请在三一文库上搜索。
1、WHAT CAUSE MULTINATIONAL COMPANIES TO INCREASE RESOURCE COMMITMENTS DURING FINANCIAL CRISES IN EMERGING MARKETS?Tao Gao, Northeastern University Talin E. Sarraf, Prudential Douglas Elliman Real EstateAbstractThis paper explores the effects of changes in host government policies, market demand, firm
2、strategy, and infrastructural conditions on multinational companies propensity to increase resource commitments during financial crises in emerging markets. Model was tested using data collected from the 2001-2002 Argentine financial crisis. IntroductionTo many multinational companies (MNCs), the te
3、rm “emerging markets” means growth opportunities. Yet, the constant changes of events typical to emerging markets represent both exciting opportunities and considerable risks for multinational businesses. Perhaps the most relentless challenge in doing business in emerging markets is the risk of bein
4、g caught up in a financial crisis. Crisis situations call for crisis management responses and MNCs must expect and deal with a financial crisis as it occurs (Bartels and Freeman 2000; Goodman 2002; Singh and Yip 2000; Thompson and Poon 2000) and changing the amount of resources to be committed in an
5、 emerging market under crisis is perhaps the most important strategic decision for a firm. This decision redefines the scale of the foreign operation and largely shapes the MNCs control in the local operations and its level of risk exposure (cf. Anderson and Gatignon 1986).Research ObjectivesIn an e
6、ffort to address the limits of the prior literature on firm-level studies on responses to financial crises in emerging markets, we conducted a survey of MNCs during the recent Argentine crisis (October-November of 2002) to achieve two research objectives:1. To understand under what antecedent condit
7、ions multinational companies would increase their resource commitments during a financial crisis in an emerging market.2. Identify antecedent variables that best predicted multinational companies willingness to increase resource commitments during the Argentine financial crisis.HypothesesBecause the
8、 decision on the level of resource commitment in a foreign market has been extensively studied in the foreign market entry mode and FDI literatures, we reviewed numerous studies in these areas of research (e.g., Anderson and Gatignon 1986; Buckley and Casson 1998; Hill, Hwang, and Kim 1990; Kogut an
9、d Singh 1988; Stopford and Wells 1972; Davidson 1980; Agarwal and Ramaswami 1992; Bello and Lohtia 1995; Erramilli and Rao 1993; Gatignon and Anderson 1986; Klein, Frazier, and Roth 1990; Koechlin 1996; Gao 2004; Root 1994; Sharma 2002). Based on this extensive literature review and accounting for m
10、ajor specific events that occurred during the Argentine financial crisis (e.g., freezing of bank deposits, social unrest, and major changes in government leadership), we identified a series of 22 host country and firm strategic factors. In making selections of antecedent factors, we used as a criter
11、ion their particular relevance to changes of foreign market entry modes in times of a financial crisis in an emerging market. We expected these factors, organized into four groups (market demand, local infrastructural conditions, government policies, and strategic motivations), to be used by MNCs in
12、 deciding on changing their resource commitments during financial crises in emerging markets. Hypotheses were development as a result of the literature review. MethodologyThe hypotheses were tested with data collected in a survey of 82 MNCs during the recent Argentine financial crisis (late 2002). W
13、e analyzed the dimensions structure of the 22 individual antecedent factors by performing an exploratory factor analysis, and confirmed a four-dimensional structure. In order to identify antecedent variables that would best predict multinational companies willingness to increase resource commitments
14、 during the Argentine financial crisis, we tested the hypotheses using both the correlation and regression analyses.ConclusionWhile all four categories of variables were considered by the respondents as generally important reasons for increasing resource commitments during a crisis, only favorable c
15、hanges in government policies significantly influenced MNCs decision to change the level of resource commitments during the Argentine financial crisis. The research, managerial implications, and policy-making implications are discussed. REFERENCESAgarwal, S. and S. N. Ramaswami (1992), “Choice of Fo
16、reign Market Entry Mode: Impact of Ownership, Location, and Internalization Factors,” Journal of International Business Studies, 23 (1), 1-27.Agodo, Oriye (1978), “The Determinants of US Private Manufacturing Investments in Africa,” Journal of International Business Studies, 9 (3), 95-107.Anderson,
17、Erin and Hubert Gatignon (1986), “Modes of Foreign Entry: A Transaction Cost Analysis and Propositions,” Journal of International Business Studies, 17 (3), 1-26.Bartels, Frank L. and Nick J. Freeman (2000), “Multinational firms and FDI in Southeast Asia: Post-crisis changes in the manufacturing sect
18、or,” ASEAN Economic Bulletin, 17 (3), 324-341.Bartels, Frank L. and Hafiz Mirza (1999), “Multinational corporations foreign direct investment in Asias emerging markets: Before and after the economic crisis-any changes?” Management International Review, 39 (4), 13- 26. Beck, John C. (2000), “Global S
19、trategy Perspectives: Responding to Global Crises Using the Change Cycle,” Thunderbird on Global Business Strategy, Robert E. Grosse, editor, Thunderbird, The American Graduate School of International Management, 3-32. Bello, D.C. and R. Lohtia (1995), “Export Channel Design: The Use of Foreign Dist
20、ributors and Agents,” Journal of Academy of Marketing Science, 23, 83-93.Buckley, P. J., and Casson, M. C. 1998. Analysing foreign market entry strategies: Extending the internationalization approach. Journal of International Business Studies, 29(3): 539-562. Clifford, Mark L. and Engardio, Pete (20
21、00), Meltdown: Asias Boom, Bust, and Beyond, Paramus, NJ: Prentice Hall Press.Chotigeat, T. and J. Barry Lin (2001), “Coping with the 1997 financial crisis: Policy issues in Southeast-Asia,” Multinational Business Review, 9 (Fall), 52-56.Cooper, James C. and Kathleen Madigan (2002), “No End in Sight
22、 to the Turmoil,” Business Week, 3802 (Oct 7), 38.Courtney, Hugh (2001), 20/20 Foresight, Crafting Strategy in an Uncertain World. Boston, MA: Harvard Business School Press. Davidson, W.H. (1980), “The Location of Foreign Direct Investment Activity: Country Characteristics and Experience Effects,” J
23、ournal of International Business Studies, 11Dunning, John H. (1980), “Toward an eclectic theory of international production: Some empirical tests,” Journal of International Business Studies, 11 (Spring/Summer), 9-31. Elegant, Simon (1998), “Opportunity knocks,” Far Eastern Economic Review, 161 (Marc
24、h 12), 10-14. Erramilli, M.K. and C. P. Rao (1993), “Service Firms International Entry Mode Choice: A Modified Transaction-Cost Analysis Approach,” Journal of Marketing, 57 (July), 19-38.Fan, Xiaoqin and Paul M. Dickie (2000), “The contribution of foreign direct investment to growth and stability: A
25、 post-crisis ASEAN-5 review,” ASEAN Economic Bulletin, 17 (3), 312-323.Fatehi-Sedeh, K., and Safizadeh, M. H. 1989. Association between political instability and flow of foreign direct investment. Management International Review, 29(1): 4-13. Gao, Tao and Talin S. Eshaghoff (2004), “Important Decisi
26、on Factors Considered by MNCs in Their Reevaluation and/or Modification of Foreign Entry Modes during the Argentine Financial Crisis,” Latin American Business Review, 5 (2), 45-69. Gao, Tao and Talin S. Eshaghoff (2004), “MNCs Preferred Responses to the Argentine Financial Crisis: A Classification a
27、nd Empirical Investigation,” Latin American Business Review, 5 (1), 23-44. Gao, Tao (2004), “The Contingency Framework of Foreign Entry Mode Decisions: Locating and Reinforcing the Weakest Link,” Multinational Business Review, 12 (1), 37-68. Gao, Tao and James R. Brown (1998), “Effects of Internatio
28、nal Market Entry Mode Decisions on Firm Global Performance: A Governance Perspective.” In Ajay K. Manrai and Lalita A. Manrai (editors), Special Issue on Designing Competitive Strategies for Global Marketing, Research in Marketing, 14, 45-86. Gatignon, Hubert and Erin Anderson (1988). “The Multinati
29、onal Corporations Degree of Control over Foreign Subsidiaries: An Empirical Test of A Transactional Cost Explanation,” Journal of Law, Economics, and Organization, 4 (2), 305-336.Jun, K.W., and H. Sing (1996), “The determinants of foreign direct investment in developing countries,” Transnational Cor
30、porations, 5 (2), 67-105. Kim, W. Chan and Peter Hwang (1992), “Global strategy and multinationals entry mode choice,” Journal of International Business Studies, 23 (1), 29-43. Poon, J.P.H. and E.R. Thompson (2001), “Effects of the Asian financial crisis for international capital,” Geoforum. 32(1),
31、121-131.Root, Franklin R. (1994), Entry Strategies for International Markets. Washington, D. C.: Heath. Sharma, Varinder M (2002), “Entry into Latin American BEMs: High or low resource commitment modes?” International Journal of Commerce and Management, 12, 41-67. Singh, Kulwant and George S. Yip (2
32、000), “Strategic Lessons from the Asian Crisis,” Long Range Planning, 33, 706-729.Smart, Carolyne and Ilan Vertinsky (1984), “Strategy and the Environment: A Study of Corporate Responses to Crises,” Strategic Management Journal, 5, 199-213.Thompson, Edmund R. and Jessie P. H. Poon (2000), “ASEAN after the financial crisis,” ASEAN Economic Bulletin, 17 (1), 1-14. Thompson, Edmund R. (2001), “Manufacturing foreign direct investment, Asian crisis, regulation and institutions,” Journal of Asia - Pacific Business, 3 (4), 3-20.