 Building a Strong Foothold in an Emerging Market: A Link Between Resource Commitment and Environment Conditions*Yadong Luo Journal of Management Studies, 2004, vol. 41, issue 5, 749-773 Abstract: ABSTRACT This study examines how MNEs align resource commitment with environmental conditions (challenges and opportunities) when they invest in a foreign emerging market. MNEs often face a dilemma in allocating resources to this environment: without this commitment, they cannot build a strong competitive foothold; yet with over‐commitment, there is excessive economic exposure. Our analysis of MNEs in a major emerging market suggests that resource commitment is an inverse function of market uncertainty and this inverse link is stronger for less strategically proactive MNEs. Resource commitment is also an increasing function of market opportunities and this function is stronger for firms emphasizing demand‐side (as opposed to cost‐side) gains. In addition, in a highly volatile industry, resource commitment is negatively associated with cultural distance, but in a relatively stable industry, it is positively associated with cultural distance. And finally, as foreign subsidiaries become older, the influence of cultural distance on resource commitment is weakened. Date: 2004 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:jomstd:v:41:y:2004:i:5:p:749-773 Ordering information: This journal article can be ordered from Access Statistics for this article Journal of Management Studies is currently edited by Timothy Clark, Steven W. Floyd and Mike Wright More articles in Journal of Management Studies from Wiley Blackwell |
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