Foreign Investment Strategies and Sub-National Institutions in Emerging Markets: Evidence from Vietnam

31 Pages Posted: 14 Jan 2005

See all articles by Klaus E. Meyer

Klaus E. Meyer

China Europe International Business School (CEIBS); Copenhagen Business School - Center for East European Studies (CEES)

Hung Vo Nguyen

National Insitute for Science and Technology and Strategy Studies (NISTPASS)

Abstract

Foreign investors entering emerging markets have to take strategic decisions on where and how to set up operations. These decisions have to accommodate institutional conditions that vary not only between countries, but also within the host economy. We offer a theoretical framework to analyse how institutions in an emerging economy influence entry strategy decisions. On this basis, we analyse the determinants of two key aspects of entry strategy: location and entry mode in Vietnam. We find that sub-national institutional variables have a significant influence on both dimensions. The availability of scarce resources affects the location of FDI and the likelihood of Greenfield entry. Institutional pressures arising from incumbent state-owned firms and the domestic market orientation of the investor lead to a preference for joint venture entry.

Suggested Citation

Meyer, Klaus E. and Nguyen, Hung Vo, Foreign Investment Strategies and Sub-National Institutions in Emerging Markets: Evidence from Vietnam. Journal of Management Studies, Vol. 42, No. 1, pp. 63-93, January 2005. Available at SSRN: https://ssrn.com/abstract=648744

Klaus E. Meyer (Contact Author)

China Europe International Business School (CEIBS) ( email )

Shanghai-Hongfeng Road
Shanghai 201206
Shanghai 201206
China

HOME PAGE: http://www.ceibs.edu/faculty/facultylist/09/100132.shtml

Copenhagen Business School - Center for East European Studies (CEES) ( email )

Porcelanshaven 24
2000 Frederiksberg
Denmark

HOME PAGE: http://www.klausmeyer.co.uk

Hung Vo Nguyen

National Insitute for Science and Technology and Strategy Studies (NISTPASS) ( email )

Hanoi
Vietnam

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