Strategic For Direct Investment: Market Entry Dynamics And Policy Implications For Multinational Corporations

Authors

  • Ram Paudel Doctor of Business Administration, International American University, Los Angeles, CA
  • Alex Sherm Professor and Chairperson, Doctor of Management, International American University, Los Angeles, CA
  • Sanaz Tehrani Professor, International American University, Los Angeles, CA

DOI:

https://doi.org/10.58471/esaprom.v3i02.4602

Keywords:

Direct investment, Market entry dynamics, Political implication

Abstract

Examining the complex international of marketplace entry strategies, this research zeroes in at the direct investment strategies utilized by market heavyweights like Sony, PepsiCo, and CEMEX. The studies elucidate the numerous benefits of direct investment in overseas markets by inspecting the strategic selections and operational dynamics of these multinational businesses. The studies indicate, via a thorough literature analysis and case studies, that direct funding offers organizations unrivaled manipulation, flexibility, and marketplace insights; this, in flip, helps them adapt their offerings to one of a kind cultural context, reduce regulatory chance, and shield their highbrow assets. The study also assesses government guidelines on FDI, drawing interest to the necessity to strike a balance among protecting the kingdom's protection and encouraging free alternatives. Furthermore, it delves into the impact of political ideologies on foreign direct funding guidelines, highlighting the vital position that they've in molding funding environments. In sum, the findings of this look at have important outcomes for lecturers, businesspeople, and politicians on the strategic imperatives and problems of entering new markets.

References

Barro, R. J., & Lee, J. W. (2013). A new data set of educational attainment in the world, 1950–2010. Journal of Development Economics, 104(15902), 184–198. https://doi.org/10.1016/j.jdeveco.2012.10.001

Bauerle Danzman, S. (2019). Foreign direct investment policy, domestic firms, and finan-cial constraints. Business and Politics, 22(2), 1–28. https://doi.org/10.1017/bap.2019.13

Boylan, B. M., McBeath, J., & Wang, B. (2020). US–China relations: Nationalism, the trade war, and COVID-19. Fudan Journal of the Humanities and Social Science, 14(1), 23–40. https://doi.org/10.1007/s40647-020-00302-6

Brakus, J. J., Schmitt, B. H., & Zarantonello, L. (2009). Brand experience: What is it? How is it measured? Does it affect loyalty? Journal of Marketing, 73(3), 52–68.

https://journals.sagepub.com/doi/10.1509/jmkg.73.3.052

Campanella, E. (2016). Global inequality: A new approach for the age of globalization. International Affairs, 92(5), 1269–1270. https://doi.org/10.1111/1468-2346.12723

Chen, W. (2011). The effect of investor origin on firm performance: Domestic and foreign direct investment in the United States. Journal of International Economics, 83(2), 219–228. https://doi.org/10.1016/j.jinteco.2010.11.005

Chesbrough, H. (2020). To recover faster from Covid-19, open up: Managerial implica-tions from an open innovation perspective. Industrial Marketing Manage-ment, 88(1). https://doi.org/10.1016/j.indmarman.2020.04.010

Czinkota, M. R., Kotabe, M., Vrontis, D., & Shams, S. M. R. (2021). Market segmentation, positioning, and branding. Springer Texts in Business and Economics, 15(7), 283–340. https://doi.org/10.1007/978-3-030-66916-4_7

Djankov, S., & Hoekman, B. (2000). Foreign investment and productivity growth in Czech enterprises. The World Bank Economic Review, 14(1), 49–64. https://doi.org/10.1093/wber/14.1.49

Dubrau, C. (2015). The digital revolution. Research World, 2015(51), 38–42. https://doi.org/10.1002/rwm3.20213

Dunning, J., & Lundan, S. M. (2008). Multinational enterprises and the global economy. Transnational Corporations, 19(3), 103–106. https://doi.org/10.18356/43ce1fe7-en

Dutt, P., & Mitra, D. (2005). Political ideology and endogenous trade policy: Empirical investigation. Review of Economics and Statistics, 87(1), 59–72. https://doi.org/10.1162/0034653053327621

Garrido, E., Gomez, J., Maicas, J. P., & Orcos, R. (2014). The institution-based view of strat-egy: How to measure it. BRQ Business Research Quarterly, 17(2), 82–101. https://doi.org/10.1016/j.brq.2013.11.001

Grassl, W. (2000). Strategic brand management: Building, measuring, and managing brand equity. Journal of Consumer Marketing, 17(3), 263–272. https://doi.org/10.1108/jcm.2000.17.3.263.3

Handoyo, S., Suharman, H., Ghani, E. K., & Soedarsono, S. (2023). A business strategy, op-erational efficiency, ownership structure, and manufacturing performance: The moderating role of market uncertainty and competition intensity and its implication on open innovation. Journal of Open Innovation: Technology, Market, and Complex-ity, 9(2), 100039. ScienceDirect. https://doi.org/10.1016/j.joitmc.2023.100039

Huang, K.-P. (2023). Support for democracy in the age of rising inequality and population aging. Social Indicators Research, 166(1), 27–51.https://doi.org/10.1007/s11205-023-03061-5

Husted, B. W., & Allen, D. B. (2006). Corporate social responsibility in the multinational

enterprise: Strategic and institutional approaches. Journal of International Business Stud-ies, 37(6), 838–849. https://doi.org/10.1057/palgrave.jibs.8400227

Irwin, D. A. (2002). Long-run trends in world trade and income. World Trade Re-view, 1(1), 89–100. https://doi.org/10.1017/s1474745601001057

Javorcik, B. S. (2004). Does foreign direct investment increase the productivity of domes-tic firms? In search of spillovers through backward linkages. American Economic Review, 94(3), 605-627.https://doi.org/10.1257/0002828041464605

Jensen, N. M. (2003). Democratic governance and multinational corporations: Political re-gimes and inflows of foreign direct investment. International Organization, 57(3), 587–616. https://doi.org/10.1017/s0020818303573040

Kaufmann, D., Kraay, A., & Mastruzzi, M. (2010). The worldwide governance indicators: Methodology and analytical issues. Hague Journal on the Rule of Law, 3(02), 202-246.

https://doi.org/10.1017/s1876404511200046

Kitching, J., Hart, M., & Wilson, N. (2013). Burden or benefit? Regulation as a dynamic in-fluence on small business performance. International Small Business Journal: Re-searching

Entrepreneurship, 33(2), 130–147. https://doi.org/10.1177/0266242613493454

Lee, H., Biglaiser, G., & Staats, J. L. (2014). The effects of political risk on different entry modes of foreign direct investment. International Interactions, 40(5), 683–710. https://doi.org/10.1080/03050629.2014.899225

Lessard, D., & Lucea, R. (2009). Embracing risk as a core competence: The case of CEMEX. Journal of International Management, 15(3), 296–305. https://doi.org/10.1016/j.intman.2009.01.003

Limakrisna, N., Komar Priatna, D., & Roswina, W. (2018). Building customer loyalty.

International Journal of Engineering & Technology, 7(2.29), 412–416. https://doi.org/10.14419/ijet.v7i2.29.13664

Louahabi, Y., Moustaghfir, K., & Cseh, M. (2020). Testing Hofstede’s 6-D model in the north and northwest regions of Morocco: Implications for human resource develop-ment. Human Systems Management, 39(1), 105–115. https://doi.org/10.3233/hsm-190615

Luo, Y., Xue, Q., & Han, B. (2010). How emerging market governments promote outward FDI: Experience from China. Journal of World Business, 45(1), 68–79. https://doi.org/10.1016/j.jwb.2009.04.003

Milsom, P., Smith, R., Baker, P., & Walls, H. (2021). International investment liberalization, transnational corporations and NCD prevention policy non-decisions: a realist re-view on the political economy of tobacco, alcohol and ultra-processed food. Globalization and Health, 17(1), Article 134. https://doi.org/10.1186/s12992-021-00784-3

Mujtaba, B. G., & Patel, B. (2017). McDonalds success strategy and global expansion through customer and brand loyalty. Journal of Business Case Studies (JBCS), 3(3), 55–66. https://doi.org/10.19030/jbcs.v3i3.4857

Nayak, B. S., & Scheib, D. (2020). Cultural logic of German foreign direct investment (FDI) in service sector. Journal of Economic Structures, 9(1), Article 27. https://doi.org/10.1186/s40008-020-00203-7

Nugroho, A. D., Bhagat, P. R., Magda, R., & Lakner, Z. (2021). The impacts of economic globalization on agricultural value added in developing countries. PLoS ONE, 16(11), Article e0260043. https://doi.org/10.1371/journal.pone.0260043

Rapetti, M., Skott, P., & Razmi, A. (2012). The real exchange rate and economic growth: Are developing countries different? International Review of Applied Eco-nomics, 26(6), 735–753. https://doi.org/10.1080/02692171.2012.686483

Rehman, S. ul, Gulzar, R., & Aslam, W. (2022). Developing the integrated marketing communication through social media: The modern marketing communication ap-proach. SAGE Open, 12(2). https://doi.org/10.1177/21582440221099936

Root, F. R. (1979). Empirical determinants of manufacturing direct foreign investment in developing countries. Economic Development and Cultural Change, 27(4), 751–767. https://doi.org/10.1086/451139

Shapiro, C. (2019). Protecting competition in the American economy: Merger control, tech titans, labor markets. Journal of Economic Perspectives, 33(3), 69–93. https://doi.org/10.1257/jep.33.3.69

Skog, D. A., Wimelius, H., & Sandberg, J. (2018). Digital disruption. Business & Infor-mation Systems Engineering, 60(5), 431–437. https://doi.org/10.1007/s12599-018-0550-4

Sornarajah, M. (2009). The international law on foreign investment (3rd.ed.). Cambridge University Press. https://doi.org/10.1017/cbo9780511841439

Stigler, G. J. (1971). The theory of economic regulation. The Bell Journal of Economics and Management Science, 2(1), 3–21. https://doi.org/10.2307/3003160

Teece, D. J. (2018). Business models and dynamic capabilities. Long Range Plan-ning, 51(1), 40–49t. https://doi.org/10.1016/j.lrp.2017.06.007

Verbeke, A. (2008). Multinational enterprises and the global economy. Journal of Interna-tional Business Studies, 39(7), 1236–1238. https://doi.org/10.1057/palgrave.jibs.8400426

Vrontis, D., & Pavlou, P. (2018). The external environment and its effect on strategic mar-keting planning: A case study for McDonald’s. Journal for International Business and Entrepreneurship Development, 3(3/4), 289–307. https://doi.org/10.1504/jibed.2008.019163

Watson, G. F., Weaven, S., Perkins, H., Sardana, D., & Palmatier, R. W. (2018). Interna-tional market entry strategies: Relational, digital, and hybrid approaches. Journal of International Marketing, 26(1), 30–60. https://doi.org/10.1509/jim.17.0034

Wei, S.-J. (2000). How taxing is corruption on international investors? Review of Eco-nomics and Statistics, 82(1), 1–11. https://doi.org/10.1162/003465300558533

Yang, D., Xiao, T., & Shen, H. (2009). Pricing, service level and lot size decisions of a sup-ply chain with risk-averse retailers: Implications to practitioners. Production Plan-ning & Control, 20(4), 320–331. https://doi.org/10.1080/09537280902843672

Younsi, M., & Bechtini, M. (2019). Does good governance matter for FDI? New evidence from emerging countries using a static and dynamic panel gravity model approach. Economics of Transition and Institutional Change, 27(3), 841–860. https://doi.org/10.1111/ecot.12224

Downloads

Published

2024-06-03

How to Cite

Paudel, R., Alex Sherm, & Sanaz Tehrani. (2024). Strategic For Direct Investment: Market Entry Dynamics And Policy Implications For Multinational Corporations. Jurnal Ilmiah Multidisiplin Indonesia (JIM-ID), 3(02), 89–102. https://doi.org/10.58471/esaprom.v3i02.4602