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Theme 3: MNE Entry modes (Complete Summary)
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Theme III: MNE Entry ModesLecture, Literature & Notes
By AceAcademy ©
, Summary of Dunning (1998) – “Location and the Multinational Enterprise: A
Neglected Factor?”
The core idea is examining global business context trends and their implications.
Evolution of FDI motivations
o Traditional motives like natural resource and market seeking.
o Modern motive of strategic asset seeking.
Global Business Context Trends:
1. Rise of intellectual capital as a key wealth-creating asset.
2. Increased globalization driven by technology and reduced trade/investment barriers.
3. Growing importance of alliance capitalism for value creation.
Factors Reinforcing Trends:
1. Technological advancements.
2. Renewed emphasis on market economies.
Summary of Gao, Murray, Kotabe, and Lu (2010) – “A 'Strategy Tripod'
Perspective on Export Behaviors: Evidence from Domestic and Foreign Firms Based
in an Emerging Economy”
The main idea is investigating factors influencing export propensity (whether to export or
not) and export intensity (the proportion of export sales to total sales).
Export Benefits:
Exporting is the quickest and most straightforward way to enter foreign markets because it:
Requires fewer organizational resources.
Offers greater managerial flexibility.
Entails lower business risks.
Influence of Institutional Environment:
The institutional environment significantly impacts export behaviors, beyond firm
competencies and industry factors.
Differential Effects of Firm Competencies:
The presence of distinct firm competencies has varying effects on export behavior.
Pure cost leadership competencies are insufficient due to rising wages in countries
like China and intense competition from other low-cost nations.
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