Foreign Investor's Entry Strategies and Sub-national Institutions in Emerging Markets.
Abstract
Foreign investors entering emerging markets have to make strategic decisions on where, when and how to set up their operation. In this paper we demonstrate that the crucial decisions on intra-country location and mode of entry are interdependent. Hence, entry strategy analysis has to consider multiple aspects of entry strategy simultaneously, rather than ceteris paribus as most of the prior literature. Moreover these strategic decisions have to accommodate institutional conditions not only at the national but also at the sub-national level. We thus extend the discussion on institutions and strategy to sub-national level. We analyze these issues for foreign investors in Vietnam based on a survey focusing on intra-country location and entry modes. We find provincial institutional variables to be significant for both dimensions of entry strategy.
Citation
DRC Working Papers, Foreign Direct Investment in Emerging Markets, Centre for New and Emerging Markets, London Business School, No. 14, London, UK, 46 pp.
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