The Internationalization and Localization Choices of Italian Firms in India

The IUP Journal of Knowledge Management, Vol. XI, No. 2, April 2013, pp. 63-80

Posted: 7 May 2013

See all articles by Massimo Cortili

Massimo Cortili

University of Insubria

Alessia Pisoni

University of Insubria - Department of Economics

Alberto Onetti

University of Insubria

Date Written: May 7, 2013

Abstract

Emerging markets of today are represented by companies with international growth ambitions and new opportunities to be exploited. This study explores the characteristics of the Italian Foreign Direct Investment (FDI) in India and aims to fill the gap identified in literature by providing a comprehensive empirical analysis of this issue. The study specifically focuses on the localization drivers of Italian MNCs that internationalized in India. In order to investigate the research questions, a unique database of Italian firms that invested in India was created. The number of Italian companies with subsidiaries in India was found to be low. In terms of geographical distribution, the sample showed prevalence in New Delhi, followed by Mumbai and Bangalore. The main driver for localization choice was found to be the general economic importance of the city, and a majority of the sampled companies chose the place of establishment of their Indian subsidiary mainly based on the location of their clients (prospect and actual). This data was consistent with the idea that ‘market seeking’ is the primary strategic goal for the companies analyzed. A typical ‘multidomestic’ approach was adopted by customizing products and services to the local needs and demands. This supports the progressive embeddedness of the subsidiary into the local market. Under this perspective, FDIs could also represent a way to access local knowledge to be combined at a global scale to contribute to the overall performance of the MNC.

Suggested Citation

Cortili, Massimo and Pisoni, Alessia and Onetti, Alberto, The Internationalization and Localization Choices of Italian Firms in India (May 7, 2013). The IUP Journal of Knowledge Management, Vol. XI, No. 2, April 2013, pp. 63-80, Available at SSRN: https://ssrn.com/abstract=2261534

Massimo Cortili (Contact Author)

University of Insubria ( email )

Via Ravasi 2
Varese, 21100 21100
Italy

Alessia Pisoni

University of Insubria - Department of Economics ( email )

Via Monte Generoso, 71
Varese, 21100
Italy
+39 0332 395804 (Phone)
+39 0332 395509 (Fax)

Alberto Onetti

University of Insubria ( email )

Via Monte Generoso, 71
Varese, 21100
Italy

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