Does Direct Investment in Complementary Businesses make Business Sense to Foreign Companies in an Emerging Economy? Case of British American Tobacco in India, 1906–2004

Amar K.J.R. Nayak
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Amar K.J.R. Nayak: Amar K.J.R. Nayak is an Associate Professor, International Business and Strategy at the Xavier Institute of Management, Bhubaneswar, Orissa, India.

Global Business Review, 2007, vol. 8, issue 2, 189-204

Abstract: The objective of this article is to find out if direct investment in complementary businesses is important for success of a foreign company in the context of an emerging economy like India. The article analyses the case of British American Tobacco (BAT) with regard to its nature, timing and scope of investment in India from 1906 to 2004 to explain the determinants of its success in India. From a sample of 51 foreign companies that have been operating in India prior to 1991 and that showed consistency in their financial performance, the case of BAT was chosen for the study. While the study shows the importance of holistic investment approach for success of a foreign firm in an emerging economy, it argues that investments in complementary businesses contributes significantly to the success of direct investment in the context of an emerging economy.

Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:sae:globus:v:8:y:2007:i:2:p:189-204

DOI: 10.1177/097215090700800201

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