An Inter-Organizational Imitation Perspective To FDI-Based Entry Mode Choices Of Emerging Market Firms And Their Impact On Performance

Abstract

This thesis investigates the role of mimetic influences in the FDI-based market entry mode decisions of emerging market firms (EMFs). Drawing upon inter-organizational imitation literature and anecdotal evidence from internationalization experiences of Indian firms, this thesis seeks to explain the determinants of ownership decision, which distinguishes the choice between a joint venture (JV) and a wholly owned subsidiary (WOS). The internationalization of EMFs has challenged the sufficiency of extant theories to explain the emerging patterns of international activity. The dominant perspectives in entry mode research, such as the transaction costs perspective and Dunning’s OLI paradigm, have come under criticism from researchers who recommend integrating efficiency considerations with behavioural and strategic considerations. Recent attempts to capture the role of formal and informal institutions on entry mode choice have been criticized of having marginal and unsubstantiated impact. This study responds to calls for context-specific theory building by providing a complementary explanation to an EMF’s choice of FDI-based market entry modes.