Ownership choices of emerging market micromultinationals (mMNEs) under uncertainty: A real option approach

Panagiotis Kyriakopoulos, Rose Narooz and Junzhe Ji

International Business Review, 2025, vol. 34, issue 6

Abstract: We use a real option lens to investigate how emerging market micromultinationals (mMNEs) employ foreign operation modes to address different sources of external uncertainty. Drawing from 564 mMNEs from 22 emerging markets, we firstly examine the mMNEs’ choice between high commitment operation mode (wholly owned subsidiary) and low commitment operation mode (international joint venture) in response to both economic and political uncertainty in host countries. We further investigate three enablers of strategic flexibility (multinationality, industry type and foreign investment experience) and their moderating role in the relationship between mMNE ownership choices and external uncertainties. Our results show that emerging market mMNEs choose low commitment foreign operation modes in response to economic uncertainty rather than political uncertainty when making their operation mode choice, and both multinationality and industry type moderate the economic uncertainty-operation mode relationship.

Keywords: Real options; Strategic flexibility; Emerging markets; Uncertainty; Foreign operation modes (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1016/j.ibusrev.2025.102403

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