Centre for India & Global Business

Doctoral Research Project

Going Global: Why Some Firms from Emerging Markets are more Successful at Internationalisation than Others

Sourindra Banerjee, BP PhD Scholar

The recent rapid internationalisation of emerging market firms has generated a great deal of interest among academics and practitioners alike. How did firms that were operating in protected and relatively backward economies achieve such remarkable global expansion? In this paper we argue that the CEOs of emerging market firms have played an influential role in their internationalisation. In particular, we argue that firms with CEOs who gained foreign market knowledge through international education or international experience are more successful at internationalisation than others, especially if these firms belong to a business group. We also argue that CEOs with foreign market knowledge made the firms affiliated to business groups more competitive internationally. We test our hypotheses using a uniquely compiled archival database of 23 years (1986 to 2008) on 255 domestic, non-state owned firms from the BSE 500 index of the Bombay Stock Exchange. Our findings suggest that emerging market firms affiliated to business groups used CEOs foreign market knowledge to overcome their unfamiliarity with international markets and to make them internationally competitive. Greater familiarity with foreign markets and greater international competitiveness helped the emerging market firms affiliated to business groups internationalise more.

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