State Ownership and International Expansion: The S-Curve Relationship

Global Strategy Journal, Forthcoming

33 Pages Posted: 6 Jun 2019

See all articles by Kiattichai Kalasin

Kiattichai Kalasin

National Institute of Development Administration (NIDA) - NIDA Business School

Alvaro Cuervo-Cazurra

Northeastern University - Department of International Business and Strategy

Ravi Ramamurti

Northeastern University - D’Amore-McKim School of Business

Date Written: February 19, 2019

Abstract

We study how state ownership affects the international expansion of emerging-market firms. Building on agency theory and the resource-based view, we propose an S-curve relationship: Firms with a low level of state ownership have a limited level of international expansion, those with a medium level of state ownership have an increasing level, and those with a high level of state ownership have a decreasing level. This S-curve is the outcome of the interaction between the “hindering hand” of state ownership, arising from multilevel agency problems, and the “helping hand,” arising from state-ownership advantages. Analyses of 674 publicly traded firms from 16 emerging markets support these ideas and reveal that the inflection points in the S-curve appear at state-ownership levels of 20 percent and 43 percent.

Keywords: State Ownership, International Expansion, Foreign Direct Investment, S-Curve Relationship, Agency Theory, Resource-Based View, Emerging-Market Firms

JEL Classification: G32, F23, M16, M21

Suggested Citation

Kalasin, Kiattichai and Cuervo-Cazurra, Alvaro and Ramamurti, Ravi, State Ownership and International Expansion: The S-Curve Relationship (February 19, 2019). Global Strategy Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3390721

Kiattichai Kalasin

National Institute of Development Administration (NIDA) - NIDA Business School ( email )

Bangkok
Thailand

Alvaro Cuervo-Cazurra (Contact Author)

Northeastern University - Department of International Business and Strategy ( email )

D'Amore-McKim School of Business
313 Hayden Hall, 360 Huntington Avenue
Boston, MA 02115
United States
16173736568 (Phone)
16173738628 (Fax)

HOME PAGE: http://cuervo-cazurra.com

Ravi Ramamurti

Northeastern University - D’Amore-McKim School of Business ( email )

360 Huntington Ave.
Boston, MA 02115
United States

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