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Family businesses from emerging markets and choice of entry mode abroad: insights from Indian firms

Laura Rienda (), Enrique Claver (), Diego Quer () and Rosario Andreu ()
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Laura Rienda: University of Alicante
Enrique Claver: University of Alicante
Diego Quer: University of Alicante
Rosario Andreu: University of Alicante

Asian Business & Management, 2019, vol. 18, issue 1, 6-30

Abstract: Abstract Internationalization of family businesses (FBs) is an interesting topic that has received extensive attention in the literature during the last decades. Prior studies emphasized the conservative attitude toward risk of FBs. However, studies addressing international decisions of emerging-market FBs (EMFBs) are still scarce. We investigate whether home and host countries matter when EMFBs choose the entry mode abroad. By doing so, we discern whether they follow the same behavioral pattern as developed-country multinational enterprises (MNEs) or they show a distinctive strategic behavior. Drawing on a sample of 298 foreign market entries carried out by Indian MNEs, our results show that Indian FBs prefer acquisitions instead of greenfield investments. Moreover, host country factors matter, since outward foreign direct investment (OFDI) of Indian FBs in developed markets is associated with a preference for acquisitions, whereas OFDI in developing countries is associated with greenfield investments.

Keywords: Family business; Entry mode; Emerging markets; Indian MNEs (search for similar items in EconPapers)
Date: 2019
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