Does ownership structure of emerging-market firms affect their outward FDI? The case of the Indian automotive and pharmaceutical sectors

Sumon K. Bhaumik, Nigel L. Driffield, Sarmistha Pal

Research output: Contribution to journalArticle

Abstract

This paper examines the impact of ownership structures of emerging-market firms, which are shaped by local institutions, on the decision of these firms to undertake outward FDI. Our results suggest that family firms and firms with concentrated ownerships (both ubiquitous in emerging markets) are less likely to invest overseas, and that strategic equity holding by foreign investors facilitates outward FDI. We conclude that organisational forms such as family firms, which are optimal outcomes of institutions prevailing in emerging markets, may be suboptimal in a changing business environment in which outward FDI is necessary for access to resources and markets.
Original languageEnglish
Pages (from-to)437-450
Number of pages14
JournalJournal of International Business Studies
Volume41
Issue number3
Early online date29 Oct 2009
DOIs
Publication statusPublished - Apr 2010

Fingerprint

Drug products
Industry
Pharmaceuticals
Emerging market firms
Outward FDI
Ownership structure
Family firms
Emerging markets
Resources
Organizational form
Concentrated ownership
Equity
Local institutions
Foreign investors
Business environment

Bibliographical note

This is a post-peer-review, pre-copyedit version of an article published in Journal of International Business Studies. The definitive publisher-authenticated version Bhaumik, Sumon K.; Driffield, Nigel L. and Pal, Sarmistha (2010) Does ownership structure of emerging-market firms affect their outward FDI? The case of the Indian automotive and pharmaceutical sectors. Journal of International Business Studies, 41 (3). pp. 437-450. ISSN 0047-2506 is available online at: http://www.palgrave-journals.com/jibs/journal/v41/n3/abs/jibs200952a.html

Keywords

  • institutions
  • ownership/control structures
  • family firms
  • foreign investors
  • outward FDI
  • emerging-market MNEs

Cite this

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Does ownership structure of emerging-market firms affect their outward FDI? The case of the Indian automotive and pharmaceutical sectors. / Bhaumik, Sumon K.; Driffield, Nigel L.; Pal, Sarmistha.

In: Journal of International Business Studies, Vol. 41, No. 3, 04.2010, p. 437-450.

Research output: Contribution to journalArticle

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