Firm Centred Perspectives
Edited by Mehmet Demirbag and Geoffrey Wood
Chapter 9: Equity commitment and company resources: evidence from Nordic multinational enterprise strategies in transitional periphery economies
This chapter addresses equity commitment undertaken by multinational enterprises (MNEs) in transitional periphery economies. Using the resource-based view (RBV) as the theoretical basis, the authors specifically hypothesize and analyse the influences of company resources such as size, product diversity, international experience, and host country experience, on equity commitment at the time of market entry. The empirical context of this chapter is based on foreign direct investment undertaken by Nordic (Danish, Finnish, Norwegian and Swedish) MNEs in the transitional periphery economies of Belarus, Bosnia, Croatia, Georgia, Kazakhstan, Serbia, Ukraine and Uzbekistan during 1990_2009. The study results show that size and international experience are non-significant in the specific context of the transitional periphery, while host country experience is an important determinant of equity commitment. Moreover, in-depth analysis revealed different influences of company resources on equity commitment depending upon size of the host market and time period of investment.
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